To put the U.S. last-mile trucking market in broader perspective, look at non-U.S. markets. Things are really different over there across the border.
In a fireside chat during the FreightWaves Last Mile Logistics Summit, Liftit co-founder and CEO Brian York outlined how his company is growing its last-mile operations in Latin America, which now span Colombia, Brazil, Mexico, Chile and Ecuador.
Starting up Liftit
York was born in Bogota, Colombia, where he was abandoned and orphaned. He was adopted and grew up in Massachusetts. He returned to Colombia in his 30s when he started Liftit and found his biological family. It turned out his brother was a trucker. He now works for Liftit, recruiting other truckers.
The company raised $14.3 million in Series A funding in February 2019, then $22.5 million in Series B funding this July. “After we closed the B round, we remain focused on the same countries and cities, but we’re going in deeper with the shippers and building out the leadership teams and our balance sheet,” explained York.
The best thing about the Latin American market, he said, is “the greenfield opportunity.”
“It remains pretty untouched. There are so many opportunities to speed up and automate old-school processes.
“You just say a few words and open up your laptop and show the track and trace and the shipper is blown away,” explained York. “You’re competing here against traditional carriers. Many are third-generation family members that don’t have a passion for the business.” And outside of Mexico, he noted, most owner-operators “are really just one guy and one truck.”
It’s the perfect time to focus on Latin America with “e-commerce skyrocketing,” he continued. One example of the e-commerce trend: Liftit trucks in Santiago, Chile, are putting groceries on 1-ton trucks and doing 30-delivery routes of small goods.
Another example: In São Paulo, retailers are converting storefronts into mini-distribution centers and loading up trucks for e-commerce deliveries. “They were doing 2% or 5% e-commerce and they’re doing 100% overnight,” he said.
There are big parallels on the e-commerce front between the U.S. and what York reports in Latin America. There are also big contrasts — particularly on the security and infrastructure fronts.
“If you look at Colombia, from Bogota to Barranquilla, that’s like a five-hour Los Angeles-San Francisco trip, but it takes 18 hours by car and 24 hours in a Mack truck over the mountains and with all the checkpoints,” said York, who explained, “There are all these nuances that make the supply chain that much more difficult and that make it super-important to keep things moving.”
Liftit learned that certain markets aren’t worth the trouble. Certain short-distance store-to-store runs in Colombia “went deep into dangerous neighborhoods and there were a lot of robberies,” he said. What at first seemed like a high-margin business turned out to be a mirage.
York also cited security issues in Mexico. “There is a high level of theft. It’s pretty crazy. We have a truck stolen once a month. We have security guys on motorcycles with guns behind the trucks.”
“We’ve seen it all,” said York of Latin America. “Strikes, social unrest in Chile, now the pandemic. But at the end of the day, goods need to move. Especially by truck.”