- The logistics industry has been showing steady growth in recent years. Due to the rising number of customers ordering goods online, demand for high-quality logistics solutions is higher than ever.
- COVID-19 caused a significant shift in the logistics industry, leading to more logistics providers developing software and hardware for last-mile delivery, e-commerce, and supply chain visibility.
- AI and the Internet of Things play an essential role in today’s logistics operations. Self-driving vehicles, robotic technologies, and advanced data analytics are at the center of many modern logistics startups. Also, companies are putting increasing emphasis on lowering their carbon footprint and transitioning towards green energy.
The logistics industry is full of inefficiencies and therefore opportunities for innovation. Apps like Instacart and Postmates are perfect examples of what logistics tech companies can achieve today. In the last few years, dozens of logistics tech startups have sought to disrupt the business of moving and storing things by digitalizing and automating as many processes as possible.
These startups are empowering warehouse and retail workers with robotic assistants, building self-driving and self-delivering vehicles, and developing software solutions that enable companies big and small to automate and save on logistics costs. From transport startups delivering food with robots to software companies that allow clients to track products across any shipping medium anywhere in the world, here are the seven best logistics startups we’ve found.
Nuro – autonomous last-mile delivery
Nuro develops autonomous vehicles for last-mile delivery of groceries, medical supplies, and personal packages.
Founded in 2016 by Jiajun Zhu and Dave Ferguson
Funding: Raised $2.13 million over five rounds
Awards: World Future Award 2022 for best self-driving delivery vehicle
Startup market research demonstrates that the global pandemic caused logistics startups in the US and Europe to focus on last-mile logistics and delivery services. Nuro was founded by former Google machine learning engineers who worked on the company’s self-driving project and stands out for its focus on packages and grocery transportation.
Nuro’s vehicles are designed without a driver’s seat and can easily fit up to 12 bags of groceries. Powered by batteries, the self-driving cars can travel at 40 miles per hour with zero carbon emissions. One of the biggest advantages of Nuro’s vehicles is software powered by machine learning and custom-built sense and computing technology that provides great location intelligence.
Nuro is one of the few self-driving logistics tech startups that is actually on the roads today. The company’s vehicles can currently be seen in three states: Arizona, California, and Texas. Nuro has high-profile partnerships with supermarket chain Kroger, CVS Pharmacy, Domino’s Pizza, and FedEx, and recently struck a 10-year deal with Uber, a company known for successful logistics apps like Uber Eats. Nuro is currently shaping the future of fully autonomous delivery services and increasing last-mile supply chain efficiency.
Watch a video of one of Nuro’s vehicles driving around California:
Locus Robotics – optimization of a warehouse’s bottom line
Locus Robotics designs, builds, and programs robots to make warehouses and their workers more efficient.
- Founded in 2014 by Bruce E. Welty
- Funding: Raised $33 million (total for Series A and Series B)
What’s the most inefficient component of current warehouse logistics? Walking. It turns out that most warehouse labor time (and therefore cost) isn’t spent on moving products but on moving the people who carry them. And it’s that inefficiency that Locus Robotics hopes to overcome with their robotic solution.
For now, Locus robots’ key features and automation don’t try to tackle the more difficult tasks that will one day allow robots to replace human warehouse workers completely. Instead, they simply allow warehouses to reduce the distance traveled and the time human workers spend walking on the job by moving products around the floor with robots.
With this strategy, human labor is only required to give things to or take things from a robotic device. This infrastructure not only makes labor less mundane and more bearable for human workers but also improves a warehouse’s bottom line and makes the products customers buy a little cheaper.
Check out this video to get a look for yourself:
Ufleet – AI-powered route optimization to reduce CO2 emissions
Ufleet offers route optimization software powered by an AI engine that allows companies to lower fuel consumption and carbon emissions.
- Founded in 2017 by Angel Nikolov, Atanas Sechkov, and Ivo Sabev
- Funding: $49,000 as a grant from Space3ac
In the last few years, we have witnessed a significant increase in awareness of the environmental impact of various industries, including logistics. Companies working in freight management and delivery services, like freight forwarders and air freight booking platforms, constantly face scrutiny over carbon emissions, and Ufleet offers route optimization and delivery management software to allocate resources efficiently and lower carbon footprint.
Route optimization is an effective strategy not only for lowering carbon footprint but also for reducing delivery costs, increasing efficiency, and saving drivers’ time. Ufleet offers route optimization software (via the SaaS business model) that uses AI-powered algorithms to predict the best road freight routes based on numerous factors. The software takes into account distance, preferred delivery window, weight, truck capacity, and other factors to efficiently optimize routes.
Despite only having three employees and zero venture partners, Ufleet already has more than 100 clients, including retail chains OBI, Metro, and T Market. Ufleet can serve as a great example for anyone who is planning to build an MVP for a startup or create a simple landing page. Even without significant investment, with a great software idea, you can still succeed in logistics. You can learn more about the benefits of the SaaS model by reading out list of fast-growing SaaS companies.
Check out the Ufleet route planner demo:
Starship – neighborhood delivery services handled by robots
Autonomous robotics company Starship is making local neighborhood deliveries cheaper, faster, and more convenient.
- Founded in 2014 by Ahti Heinla and Janus Friis
- Funding: $42.2 million USD raised (and still in seed funding)
- Awards: Golden Computer award for Startup of the Year 2016
Starship is applying autonomous driving on a microscale to make neighborhood deliveries more affordable and ubiquitous. In terms of the technology, Starship’s customer- and business-facing platforms aren’t too different from other food delivery platforms like Uber Eats or Grubhub. The customer orders food from a local restaurant through the Starship mobile app, and then the app notifies the restaurant about what’s been ordered.
But then, instead of handing the order to a human driver of a 1200-pound car who shows up to move a few dishes a few blocks, the restaurant places the order in a small six-wheeled robot called a Starship that scuttles along the city streets and sidewalks to the customer’s door.
Starship is quite a cosmopolitan startup. Founded in Estonia, they recently opened headquarters in San Francisco. The company also maintains offices in London and Washington, D.C. As of April 2023 their robots have driven over 10,000,000 kilometers in more than 100 cities. Starship offers a perfect example of a successful startup product roadmap for aspiring entrepreneurs.
Check out this video of Starship’s recent integration with a US university’s food scene:
Shipbob – outsourced inventory management and order fulfillment
Shipping and logistics tech company Shipbob enables small and medium-sized online retailers to compete with the shipping time and fulfillment perks of online retail giants like Amazon and Walmart.
- Founded in 2014 by Anthony Watson, Dhruv Saxena, Divey Gulati, George Wojciechowski, and Jivko Bojinov
- Funding: $62.5 million (after Series C)
- Awards: Chicago Inno 50 on Fire 2017, Moxie Awards Best B2B Startup 2017
Massive online retailers like Amazon have cornered the online shopping market by enticing internet shoppers with shipping benefits like two-day delivery and free returns. These competitive advantages used to only be feasible for large companies with massive logistics networks and economies of scale. But Shipbob provides a fulfillment experience that enables small and midsize enterprises (SMEs) with great products and services to compete with today’s largest shopping platforms. The company provides game-changing logistics advantages: two-day shipping, automatic fulfillment, and competitive bulk shipping rates negotiated with major postal carriers. If you want to create a groundbreaking solution like Shipbob, start with the basics and check out our guide on how to create a business plan for startup.
But the real power of Shipbob’s logistics platform is its ability to effectively automate an online retailer’s entire shipping process. Shipbob integrates with dozens of online e-commerce businesses, including Crate, Shopify, and Walmart.com. When one of the company’s clients makes a sale on any of their sites, all pertinent information is automatically transferred to Shipbob’s system. Shipbob then pulls, packs, and ships the sold item to the buyer, all without any input required from the seller.
Check out Shipbob’s service explainer video:
AX SYSTEM – industrial traffic solution for high-risk environments
AX SYSTEM provides warehouse workers with smart traffic management solutions to ensure the safe transportation of goods and improve workplace safety.
- Founded in 2019 by Aron Agg, Gabor Nemes, Martina Nemes, and Peter Muranyi
- Funding: $1.1 million
- Awards: IF Design Award 2021
Preventing security incidents is one of the biggest warehouse logistics challenges. Even while carefully operating forklifts and trucks, it can be difficult to avoid collisions due to blind zones, dangerous intersections, and other factors. AX SYSTEM offers businesses AI-powered solutions to significantly reduce the number of security incidents and associated repercussions.
AX SYSTEM provides warehouses with various hardware devices. Compact devices with four built-in cameras to monitor traffic, LED panels, and a buzzer warn employees about danger. Projectors can project signs on walls and floors to warn workers about possible risks. The company’s traffic control system can automatically control gates and doors to avoid collisions.
AX SYSTEM constantly collects traffic and near-miss statistics to improve the system’s performance with the power of machine learning and advanced data analytics. If you are interested in developing AI-powered logistics solutions, you should start with a project discovery phase and create an app requirements document.
Check out how AX SYSTEM implements pedestrian lane protection:
Parallel Systems – zero-emissions option for moving freight
Parallel Systems is developing the future of transportation in the form of autonomous zero-emission electric rail cars.
- Founded in 2020 by Ben Stabler, Brian Ignaut, John Howard, and Matthew Soule
- Funding: $53.3 million
Founded by a group of former SpaceX engineers, Parallel Systems enables the US railroad system to serve new markets and allows businesses to move from truckload deliveries. The two main reasons for the move away from truck-based deliveries are a desire to lower carbon emissions and the commercial truck driver shortage the US logistics industry and trucking companies continue to face..
Each Parallel Systems rail car can drive up to 500 miles before recharging and carry up to 70,000 pounds. Parallel’s cars can form groups, called platoons, of up to 50 cars. Due to high-bandwidth hydraulic brake systems, platoons can stop ten times faster than traditional trains.
Each of Parallel’s rail cars continuously monitors thousands of sensor readings to ensure it is operating safely and efficiently. Also, the company’s software easily integrates into any existing train control system through APIs. In addition to startup investment, Parallel Systems received almost $4.5 million from the U.S. Department of Energy. With the third generation of vehicles now in development, the company’s founders are optimistic about putting self-driving train cars on US railroads in the near future.
Watch Parallel System’s latest demo to see for yourself:
Logistics industry overview
The logistics industry has been steadily growing for a long time, and COVID-19 only strengthened this growth. Statista projects the logistics industry will reach a value of $14 trillion globally in 2028 compared to $5.58 trillion in 2018. During the global pandemic, we witnessed a significant shift in custom logistics software development from freight forwarding, customs brokerage, and construction industry apps towards supply chain financing, e-commerce, and delivery solutions.
Startup market research by McKinsey shows that venture funding for logistics startups doubled in 2021 compared to 2020. The number of funding rounds remained almost the same, but the rounds themselves involved much larger funding amounts on average. During the survey, 39% of European brands stated that after the pandemic, they started prioritizing investments in logistics tech over other areas. So, if you’ve always wanted to create the next Uber for trucks or an app like Postmates, now may be the right time.
Conclusion
These logistics tech startups have proven that the logistics sector is not as conservative as it once was. Top logistics tech companies are open to experiments to increase the efficiency of their processes and reduce logistics costs!
