This feature is an outcome of infoDev, a multi-donor program administered by the World Bank Group, with a focus on entrepreneurs in developing economies. This piece was originally published on January 22, 2018.
Imagine the number of trucks and trains you pass on the highway each day. Now, consider that many of those vehicles are empty or only half-filled — what a waste! In South Africa, as in many other countries, between 30% and 40% of all trucks and rail freight cars travel empty, either on the initial run or the “backhaul.” This inefficiency drives up transportation costs and reduces competitiveness. Worse, these empty trucks increase congestion and carbon emissions unnecessarily, while transport providers miss out on potential income.
The age of digital disruption has helped increase coordination and reduce inefficiencies in many industries, but not yet in logistics.
A growing tide of innovative start-ups are working to change this. After working at top-tier management consulting firms and hearing clients complain about transport costs, Benji Coetzee began prototyping a smart, connected platform to lower costs, improve transparency, and increase utilization.
“I had noticed empty trucks and rail wagons running between Johannesburg and Durban. The oversupply and high costs simply didn’t make sense. Excess supply should lead to lower prices, not higher,” Coetzee explains. “This anomaly is what led me to start EmptyTrips.”
After six months of development and bootstrapping the company with her own savings, Coetzee launched EmptyTrips in April 2017. It matches and connects users to fill spare capacity, using algorithms and competitive bidding for the digital marketplace.
EmptyTrips’ business model is similar to Airbnb, eBay, and other platforms that remain asset-less, lean, and scalable, while also offering add-on services to ensure viable revenue streams (e.g. cargo insurance). EmptyTrips is Africa’s first smart transport marketplace to offer access to vetted transporters and carriers by road and rail.
Coetzee told us, “What excites me most is a renaissance in African rail.” EmptyTrips has aligned with rail operators across Africa to launch an independent rail exchange. With this innovation, Africa could move toward scheduled services for freight rail.
However, being first also has its challenges.
“Creating a digital market where none existed before means that we are building two businesses at once. A database of vetted transporters and operators, and a database of cargo owners and brokers. The marketplace does not function without both. But we have to build capacity first, before we can offer competitive rates to attract more brokers and make more matches,” Coetzee said.
How EmptyTrips ‘Fills Spaces to Places’
EmptyTrips provides users with an easy and flexible process for cargo owners, transport operators, and brokers. Transporters can list their excess capacity online, or wait for a cargo listing to bid on. Shippers are able to list their cargo and the algorithm will search for a possible match to notify the transporter to offer a competitive price (empty rate). Alternatively, if no empty spaces are available, carriers can bid on the cargo.
As carriers undergo a four-step verification process before approval is given, EmptyTrips hopes to bring a level of trust back into the industry. To limit collusion or kickbacks, all parties remain anonymous throughout the auction process, enabling users to maintain their corporate integrity by applying preferred bidder selection criteria including price and quality rating.
EmptyTrips earns a service fee on each transaction, charged equally to both parties. To date, EmptyTrips has registered nearly 300 companies, 100+ transporters have been approved, and shippers have listed over 1,735 trips.
Currently operating in South Africa, the start-up has ambitious plans to expand further and hopes to become the leading logistics platform on the African continent.
“Our platform has the potential to open borders and enable trade for the continent by leveraging data. Transport costs can be a significant hindrance to our growth and our ability to prosper. It is either the backbone or the bottleneck of economies. We help governments better connect stakeholders, reducing inefficiencies that increase costs,” Coetzee said.
“For smaller transporters, EmptyTrips helps them to get on the map and compete with the big corporates trying to monopolize the industry. Our platform helps smaller companies that have no systems in place to better utilize their assets. Because we pay our transporters within 48 hours after a successful delivery, smaller companies will no longer have to stress about cash flow issues. From the shipper’s side, by lowering their transport costs, they become more price-competitive as well.”
Accelerating at Full Speed
In less than a year, EmptyTrips has already gained a lot of mileage.
“Slush gave us a platform to speak to the right people and create awareness for our business,” said Coetzee. “As a lean start-up, we’re forced to get creative with our marketing and investor outreach strategies. Thus, any opportunity to reach audiences and grow our brand is huge.”
In May, Coetzee is heading to Silicon Valley to compete in the Startup World Cup for a chance to win $1 million.
EmptyTrips has a strong team, with a powerful trio of women complemented and supported by two developers, a solution architect, and a research analyst — Salome Kgoale brings over nine years of experience in marketing and design to her role as brand manager; Justine Letard manages client relations and sales, ensuring strong partnerships.
EmptyTrips is one of the start-ups supported by infoDev Digital, an initiative sponsored by the Swedish International Development Cooperation Agency, Norway’s Ministry of Foreign Affairs, the Ministry for Foreign Affairs of Finland, and Denmark’s Ministry of Foreign Affairs (DANIDA).