As Ti’s second report of the year, Latin America Logistics and Transport, gets set for publication later this week, curiosity of the region’s logistics’ startups got the best of me so I decided to see what was up. What I found was that Uber-like delivery start-ups are popping up in this region and in particular in Brazil.
Indeed, there is a good article on this subject posted on the website, Nearshore Americas. In its article, “In Latin America’s Booming e-Commerce Sector, Start-ups Aim to Improve on Logistics”, the website highlights Brazilian start-up Loggi. Based in Sao Paulo, about 35% of Loggi’s sales come from e-commerce. It has been operating since 2013 and provides motorcycle and bicycle courier express services via an app – place an order and the closest messenger will be notified to make the delivery. Customers are also able to monitor the delivery in real time as well.
In 2014, the company introduced a digital delivery service in which after delivery, the customer can view the digital signature of the person responsible for receiving.
While the main customer base of the company is corporate, Loggi is working towards attracting more consumers. According to the Istoe Dinheiro website, the startup has about 500 couriers and 2,000 registered customers. On an average day, it registers a thousand deliveries with sales of R $500,000 per month (about USD $154,000/month).
Yes, there is some resemblance to the Uber app, and in fact one of the original investors of Loggi was Kees Koolen, a former director of the Uber application and former president of Booking.com. However, Loggi is quick to note that there are differences between them and Uber. Most importantly, Loggi works with a biker base licensed by the Government of São Paulo.
While it sounds promising, Loggi faces growing competition from the likes of other similar start-ups such as Rapiddo and MovMov.it. How will each of these businesses differentiate themselves? Is this business model sustainable? Lots of questions and fun to watch as it plays out. Traditional couriers such as US-based companies FedEx and UPS offer domestic services within parts of Brazil as well and you can bet each one is closely following this trend of “Uber-style courier services” in not only Brazil but around the world as more of these start-ups pop up elsewhere. Will it impact FedEx and UPS negatively? probably not but the technology/ease of requesting delivery may create changes in how one request such services.
So, I plan to spend the next week looking for some more interesting Latin American logistics start-up companies and will write on what I find for the next blog post. If you know of any and would like to share them with me, drop me a line.