ELIMINATING EMPTY MILES
Three Babson MBA alumni use a sharing-economy approach to maximize the efficiency of the cargo-shipping industry.
Success stories from the sharing economy typically involve consumer-to-consumer resource sharing: Travelers rent rooms from hosts, not hotels, on Airbnb; drivers share their personal vehicles and provide rides for others on Uber. But, businesses can benefit from the shared resources model, too.
Just ask Francine Gervazio MBA’16, Murilo Amaral MBA’16, and Alfredo Keri MBA’16, founders of Cargo42, which applies the sharing-economy concept to the shipping and logistics industry. The company’s technology connects short-distance carriers and small-batch shippers, optimizing the way each does business.
For those unfamiliar with the shipping industry, the concept may seem complex. But, for Gervazio, who identified the opportunity before coming to Babson, it was simple. While working in logistics and managing a freight budget for a company in Brazil, she noticed that some shipments were exponentially more expensive than others, even when the shipping distance was shorter. Why? The shipping companies had nothing in their trucks on the return route. “When companies have no backhaul cargo, they need to charge more expensive rates to mitigate that loss,” she says. “I found out that 48 percent of trucks travel empty in Brazil—a huge number!”
A big number and a big opportunity for Gervazio, who soon discovered that this problem was not specific to Brazil. She came to Babson hoping to spin that opportunity into an idea. That’s when she met Amaral and, eventually, Keri.
“Francine told me about the idea and I immediately thought it had huge potential,” says Amaral. Having previously owned a manufacturing company, he was familiar with the complexities of shipping. “That’s why I fell in love with the Cargo42 concept. It felt simple.”
Though Keri had no familiarity with or attraction to the shipping industry at the time, he was interested in technology and applying the sharing-economy concept to the idea. Cargo42 has since grown into a company with a simple premise: it’s a platform where customers can post their shipping needs, and shippers can make an offer to carry that cargo. This B2B spin on the sharing economy reduces costs for shippers, and eliminates empty miles for carriers.
Almost a year has passed since the company’s founding, and it already has completed a successful pilot program with the help of a connection Keri made through Babson’s Managing Talent: Your Own and Others coaching program. Through that pilot, the team identified pain points and kinks in their system, and prepared for launch in their new location, Miami.
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The founders hope to continue to leverage their Babson network for advice, contacts, and other resources that will put them on the path for continued success.
“We’ve learned that action trumps everything,” says Keri. “We planned too much at the beginning, but now we’re out here, making connections, meeting people, gathering feedback, and making it happen.”