CEO Avishai Trabelsi on Quicargo’s ambitions and the future of digital logistics platforms

CEO Avishai Trabelsi on Quicargo’s ambitions and the future of digital logistics platforms

The speedy development of digitalisation in the logistics industry means that truck owners can better maximise their available capacity than in years gone by. However, it is no secret that there are still significant improvements to be made in this area. The good news is that there is no shortage of innovative companies developing solutions for the LTL market. Among them is digital logistics and shipping platform Quicargo, established in 2016 by Roni Liberman and Avishai Trabelsi.

The company, which boasts the likes of supply chain expert Wolfgang Lehmacher on its advisory board, has enjoyed strong success in the Benelux countries in particular, and now has plans to expand in both Germany and the UK.

Keen to learn more about Quicargo’s ambitions, as well as how the market will evolve and mature as the development of trucks and digital platforms intensifies, we reached out to the company’s CEO, Avishai Trabelsi.

Thanks for taking the time to talk to us at Trans.INFO. Back in Autumn 2019, when you presented at the Noah 90 conference in London, you highlighted a figure that showed half of the 13 million trucks in Europe were travelling empty. One would like to think things have improved since then. However, we’ve had Brexit, which has resulted in many trucks bound for the EU from the UK heading out empty. How big a factor has this development been and what will be key when it comes to maximising truck capacity?

If we look at the gaps in the market, whether it be a lack of drivers, a lack of capacity and infrastructure, increased transport costs, and pollution – for all of the major objectives that we hear about, the utilisation of existing assets, collaboration between companies and data sharing are the solutions for that.

As for Brexit, I can tell you that we’re providing our service to around 2,000 businesses. A significant part of these companies just literally stopped selling in the UK because we and other logistics solutions weren’t sufficient enough to provide a good timeline and service to the UK.

I hope and believe that things will improve over time, because Brexit has been a significant change for the different stakeholders in the supply chain.

Unfortunately, it will harm trade in the short term. We sit in between Europe and Great Britain and Brexit has created a lot of interesting dynamics within the UK, but also here. I believe in the optimistic side of the story though; in a few years I think you’ll see higher trade than before.

I think with Brexit, it was envisioned in one way but the execution was different. We really felt it in our business. It’s definitely one of the largest impacts and significant events that’s attracted a lot of attention in the industry.

During the aforementioned presentation, you also explained how you believe an all-in-one solution combining strategic, operational and technical needs is required. With this in mind, do you feel it is inevitable that companies specialising in specifics like a TMS or carrier network will have to merge, acquire or be acquired?

We see two trends; firstly consolidation, and secondly software collaboration.

At the moment, this is still restricted to specific domains. However, looking further ahead, the data that we’re retrieving from different parties or other aggregators is different. That’s because among the transport companies there are many different TMSs.

This means the data you retrieve is not standardised, and thus it’s difficult to use the data to make it one transaction.

So the situation is quite challenging, but we see tremendous improvement in the ETA and visibility with project44 and other great companies. This is really helping the industry to advance.

Although it’s still far from being one ecosystem, in the end, we believe that it will happen. We are investing a lot in integrating with existing software. We’re not forcing or asking parties to use our software. They can choose if they want to use our interfaces or if they want us to connect to their current software.

We just have to be really strict with the data. Is it accurate, and how can we try to standardise it into one dataset for shippers so that they can use the data to connect between parties?

So these are the two trends. One is consolidation for parties that won’t be able to connect and collaborate in one data set. The other, which I think is a major part of the future development in the logistics space, will actually be collaboration between software. This collaboration shall provide strong stability and visibility with regards to data aggregation.

That’s what we think will happen, and we are connecting to many different platforms to make sure transactions from A to Z can be covered by that.

Earlier this year, you announced you had doubled your R&D team. Is there any area of your business that you are focusing your development on?

We’ve already tripled the R&D team now – it’s never enough!

When I started the company 6 years ago with my partners, we assumed that the market would be faster in its adoption of technology. That would therefore bring about an improvement in the market.

Although that wasn’t initially the case, because of the gap between the demand and supply – particularly the demand driven by the pandemic and e-commerce and digitalization, consumers and businesses eventually began to feel the same.

The fact is that many suppliers haven’t been able to cope. They are still very family-oriented businesses with traditional processes, and they cannot cope with this new transition. We’re doing a lot in the market to help, both ourselves and the other platforms, but that gap is still widening. Technology will be the bridge as we see it.

For now, we’re focusing on creating a network of shippers and carriers. During the last few years we feel that we have built a very strong network in Benelux.

Now we want to provide more tools for the sides to use and to help them to adopt this bridge and minimise this gap. So we’re building a new carrier platform that will provide more visibility and more assistance for small transport companies.

The first of these products I hope we will launch within the next two months. After that, we’re building a QC hub. This is a new product for SMEs to manage not only Quicargo transactions as a provider, but also for their other carriers. The target audience of this software are the businesses that don’t yet have a control tower service or a supply chain manager, but they still work with several carriers including Quicargo. This service will mean they can monitor and get more visibility not only from Quicargo, but also other suppliers that will be connected to the platform.

So it’s more of a SaaS model. The last one that we hope to release, also in Q4, is the zero-emission network.

Although the process is taking time, we’re seeing more electric trucks in the middle mile. And we are building our network of those trucks. So now, I hope that by Q4, businesses will be able to decide if they want to ship via a standard delivery or emission free delivery.

Wherever we won’t be able to allocate electric trucks, the emission will be offset in local and verified projects. The idea behind this is to be zero-emission and carbon-neutral emission in one click.

We shall make the entire flow from the emission calculation, offsetting, certificate reporting and BI. You won’t need to make the calculation or the credits or the project. We do everything for you. In one click, you can be green and share this with other platforms or stakeholders and monetize via a green dashboard that will be incorporated in the platform.

Moreover, we are integrating to many different platforms, and we’re constantly checking data and trying to standardise it. That way we can use it regularly and feel comfortable that the data is correct. If the data is not correct, then we have a big problem with the execution in expanding the middleman.

So these are the exciting initiatives we’re working on.

Your carrier network is currently over 300-strong following the addition of more carriers earlier this year. How much more do you aim to grow in this area and what will you need to focus on to achieve this goal?

We know that there are a lot of blockages between demand and supply. The vision is to connect all of them, either directly or with other platforms.

We don’t want to own the entire connection with the different demand and supply parties. Our main focus of direct connection is with family businesses. I come from Israel and a transport company with 20 trucks – I grew up with this gap and understand the pain.

We are focusing on Western Europe. At the moment we’re very strong in Benelux, but soon in the UK we’ll have an ecosystem, as well as in Germany, where we are already working.

We want to invest more to increase the local carrier network. We see the value we can provide to these companies. So our ambition is to go everywhere we can.

What needs to be noted is that we need enough demand for it to make sense to onboard more carriers. There are a lot of carriers that are registered, but we cannot onboard all of them. We have to make sure that the demand for the routes or the area is sufficient, so that within the scope they are working we can really help them.

We want to make things smart. We have a waiting list for companies in some areas, while in other areas we are already open.

Every day we are increasing our footprint and ecosystem and of course the data is the most important thing. We need to make sure that carriers are willing to use our software or to integrate with our system to get the data points we need, as well as the status and the ETA, because without this data we cannot work.

One of things you’ve demonstrated is that via the use of Quicargo, carriers can do journeys whereby the trailer capacity usage is higher due to the extra loads. This usually results in longer journeys, but at the same time, a significantly higher margin. How much has the major rise in fuel costs in recent times influenced this dynamic?

Obviously, it’s impacted things a lot.

If I can just explain about our model for a brief moment. We focus on less than truckload or groupage. So that’s 1-8 pallets, let’s say. So the majority of our transport companies already have the routes scheduled. As a fact, they’re not fully loaded. Normally on the way back to the warehouse, or in between locations, they have more capacity, so we’re injecting demand for new goods for businesses in that area to this existing route directly to their planning the day before.

So for them, it’s really providing extra margin because they are already executing that particular route. As for the relation with fuel prices, again, from our ecosystem, the prices increased drastically by around 9% across countries and domains. We were nonetheless happy to see that the businesses understood the situation and accepted the increase and we didn’t see a lot of companies who left us due to the increase.

We then directly reflected this price increase and paid it to our carrier partners. We also moved to a weekly fuel price check. Every week we update it, thereby creating more visibility and transparency with the price dynamics. This really helps with doing fair trade with all the sides.

So, to answer your question and sum things up, it [the fuel cost increase] has had an impact, but because we can increase prices, the utilisation of the truck still brings about a huge improvement for margins.

How do you see the transition towards electric trucks and the simultaneous evolution of Quicargo?

I think the Netherlands are quite advanced here – they give a lot of subsidies for electric trucks. Still, the return on investment case is very tough.

You see a lot of electric vans today; we can do every transaction within the city all electric. In the middle mile though, when you need to drive into this cross docking model it’s just more expensive.

So the ROI is still even, with the subsidy, and it still doesn’t make sense. We see some of our partners have invested in those trucks and are trying to utilise them in the best way as a future investment.

We have tried to help them, so if you have an electric truck today, we can give priority in the matching process, and you can fill the entire work schedule with us. So we can try to get the ROI better, but it is still challenging.

We can assume that the technology of the batteries and charging infrastructure will be more advanced and the price will go down – indeed it’s already declined drastically in the last three years. Even so, it still needs to go down further to make sense in the middle mile.

We want to be the first in the electric middle mile carrier network. We’ll do that by taking into consideration routes with charging infrastructure, and giving priority to businesses booking electric trucks right away. Even if they don’t have that option today, we still can offer the indirect solution to offset.

I think at this moment, the economy is very difficult; there’s a lack of drivers, inflation and so on. Sustainability is nonetheless for the long term and will be the main challenge for us as a society. Of course this applies to transportation and supply chain – it is the backbone of the economy and we must be part of it.

We hope to launch this solution this year with the help of our partners.

You’ve talked about how the way you do things differs from the brokerage-focused digital forwarders who operate within your space. What advantages do you feel you have by working in this way?

Well, we’re focusing on the middle mile. If you look at the entire supply chain, you have the first mile ride – the full truckload, or even the freight trains, ships and planes. Then you have the local transaction from the ports/manufacturing plants to the hubs or the distribution centre, and after that there’s the last mile.

We can see a lot of development in the first mile and the last mile to solve problems, but you don’t see many technical, digital solutions in the middle mile. I can understand why, as it’s very difficult. This is mainly because of the challenge to retrieve solid data from the different data sources and to use it for matter matching, predictions and operational excellence.

For instance, if you take one truck that already has several delivery and pick up points, and inject into its existing route new demand – it must be done in a very accurate way. If we inject two pallets during the early stage of the route and it takes 45 minutes instead of the 30 that was expected, the entire route can be lost on this transaction.

The empty capacity in the middle mile is much bigger than the full truckload business (the first mile). As a consequence, we needed to use different technology and be more based on supply data rather than the demand data.

That’s created a different dynamic in our system, and we believe that within our scope in the middle mile, this is the only way to do it. We need to get more transparency on the available capacity, to consider physical datasets from all sides – the shipper, recipient and the transport company. We also need to add a layer taking into account factors like congestion and severe weather – anything that can impact the transaction.

Finally, the last layer is AI and learning from the transactions themselves. For instance, if there is a place where the shipper is informed of the need to wait 30 minutes, but at the end of the track, we’re waiting 45 minutes, we will take this into account next time. So the system is learning by itself to make sure that we are accurate. If we aren’t accurate, we’re not going to do our job correctly.

Obviously, there is also a lot of room for disruption in the first mile and the last mile too. I don’t know the exact numbers, but for last year, even taking all of the platforms together, we’re not even covering something like 3% of the goods market in Europe. We thus have huge steps to take ahead.

If you look at the next few years ahead, I believe that digital platforms or networks will need to communicate together. Every region and domain requires different requirements and regulations, which means it is very difficult to support the entire supply chain in one platform. I believe that instead of one takes it all, it will be strong partnerships and data driven, collaborative platforms that will form the base of logistics in the future.

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