The accelerated growth of international e-commerce websites is putting a heavy burden on the world's postal services. It is relatively easy and cheap to ship cargoes from one country to another, but the problem usually lies in the segment referred to as the last mile.
The large international delivery companies, retail corporations, and technology giants, such as Google and Amazon.com, are striving to cope with the challenge and find a cheap and effective solution that will make it possible to deliver packages from logistics centers - huge hangers usually located on the edge of town in order to save on rent. The goal is to build, usually with the use of technology, an effective setup for supplying goods on the same day through deliverymen, vehicles, and even drones.
Another player trying to burrow its way into this sphere is new Israeli startup PickPack, founded several months ago, which is attempting to apply the UberX model. Instead of using "professional" deliverymen, whose cost is naturally higher, the company has found and recruited 2,000 deliverymen to date. They make deliveries from time to time, making it possible to offer cheaper prices.
The company has raised $750,000 to date from Shamrock Israel Growth Fund and the Bon Tour travel company, and is currently engaged in another financing round.
PickPack CEO Mati Weinberg told "Globes," "The interesting news about what we're doing is related to two things. The first is the use of mass participation. We have recruited over 2,000 people, and we see that over 90% of the deliveries are made by the social deliverymen. We have taken backup to make sure that we don't get left high and dry, but we have still been pleasantly surprised."
Weinberg adds, "We're focusing on same day delivery. This is of great interest to companies in Israel, especially those operating in e-commerce. The company is working almost everywhere in Israel, and uses a very sophisticated algorithm. You define the delivery through the app, which is accessible on an iPhone and on Android, pay, and you immediately see who the deliveryman is, his name, and the number of his vehicle or motorcycle. You see your package advancing on the map. We're bringing great news to the market."
"Globes": Aren't you afraid that drones operated by Amazon.com and other companies will take business away from you?
Weinberg: "Delivery drones make a nice story. It will take a long time before we see drones making deliveries. There are a lot of problems involving safety with this story, and in Israel, also security problems. I don't really see it happening in Israel. As far as the rest of the world, it's true that there will be drones, just as there will be an automated car. There's still a long way to go before it happens."
More than a few local startups are trying to break into the delivery field.
"I've got a neat table of our competitors in Israel. We know that technologically speaking, we have no competitors, and I'm not saying this out of arrogance or megalomania. I know that they're breathing down my neck, and that's fine - it makes me exert myself. At least on paper, I'm working more than all of them, and I know that a check I did found that right now, at least, we have more to offer than anyone else."
Weinberg is one of PickPack's four cofounders. The three others are graduates of the Israeli Intelligence Corp 8200 unit.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2016
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