In Latin America, a Logistics Startup Supports Supply Chains

April 21, 2020

By Darcy Crowe

MEDELLIN, Colombia - Latin American retailers are moving to retool their online sales platforms as foot-traffic has evaporated under strict lockdowns from Santiago to Mexico City in response to the Covid-19 pandemic.

This quick shift to online platforms has upended the supply networks of some of the region’s largest retailers and forced them to be more agile as they ramp up their online sales, which are now their main lifeline under the economic maelstrom that has shut down their stores, according to business associations.

Liftit, a 3-year old Bogota-based startup, is working with some of these retailers as they navigate the pandemic’s ripple effects. With a technological platform that connects truck drivers with companies that need cargo delivered (similar to a ride-hailing app), it is helping customers that range from furniture outlets in Colombia to fresh-produce stores in Brazil revamp their supply chains to meet the real-time demands of on-line sales.

“If large retailers need 50 trucks with 24-hour notice, it’s not something that a traditional broker can cope with, but our technological platform is designed for this,” Brian York, Liftit’s CEO and co-founder, said in an interview.

Liftit’s platform can help retailers secure delivery trucks on short notice.

This agility is especially critical in Latin America, where truck-transportation brokers continue to rely on inefficient systems --- in some cases pen-and-paper spreadsheets or WhatsApp groups to connect with drivers -- to match large customers with truck fleets that represent a crucial link in the region’s supply chains.

In countries such as Mexico and Colombia, more than 70 percent of truck drivers are independent and rely on third-party transportation brokers to connect them with customers. This system lacks pricing transparency, with high rate fluctuations even for the same routes, and does not have in place the necessary technology to respond to real-time shipping demands.

The logistics sector’s lack of technological changes -- and shipping fees that are much pricier than in other regions – remains a persistent bottleneck in Latin America that hinders trade and the growth of the private sector, experts say. The disruptions created by the Covid-19 pandemic have brought this into sharper focus as retailers move to supply a population that is largely now under lockdown and foot-traffic has evaporated.

Liftit’s platform connects truck drivers with companies that need cargo delivered.

Since the crisis started, York said, “we have seen retailers with sales that essentially went to zero in a couple of days and then they needed to scale up very quickly when they started doing on-line sales. Our business model is ideal to respond to these rapid shifts.”

York added that the pandemic is forcing many retailers to invest more in their online sales platforms, which could help prop up e-commerce in Latin America for years to come.

The Covid-19 pandemic, which according to The World Bank is expected to send economies tumbling by 4.6 percent this year across Latin America and the Caribbean, is also forcing Liftit to quickly venture into new sectors.

“There are some industries that are in desperate need of trucks like the food sector and pharmaceuticals right now, and we are adjusting the roles of our staff every hour. One of our co-founders and sales managers are virtually training truck drivers in real-time on how to handle food delivery, and truck drivers themselves are reaching out to see how they can help in this crisis,” York said.

With more investment in online sales platforms, e-commerce could grow in Latin America.
With more investment in online sales platforms, e-commerce could grow in Latin America.

Liftit truck drivers are driving on deserted roads in Brazil, Chile, Colombia, Ecuador, and Mexico. They say that the empty streets are a stark reminder of how essential their jobs have become.

“I’m doing my best to contribute and help,” said Carlos Velandia, a truck driver with Liftit in Bogota. “We know it’s risky and I’m taking precautions.”

The company has been providing face masks, gloves, and hand sanitizers to the drivers and training them on all the necessary preventive measures such as immediately showering and changing clothes after arriving home from work.

“I’m very proud that we are doing our part in this situation,” Velandia said.

Published in April 2020