In this episode of Add To Cart, we are joined by William On and Rob Hango-Zada, Co-Founders and Co CEO’s of Shippit
Shippit is a multi carrier shipping software specifically for Ecommerce. After seeing eye to eye at uni (quite literally) and watching their Attlassian mates do well, Rob and Will decided to get in on the action and launch their own logistics solution. Now, millions of packages are sent with the help of Shippit every month, and the company has expanded beyond Australia and New Zealand to Singapore and Malaysia with revenue of more than $66 million. In this chat, Will and Rob share how they use data to optimise delivery performance, the pros and cons of brands owning their own fleets and a surprising shipping paradox which has led to the pioneering codeshare solution they have in development.
“Smart routing offers an opportunity to carriers to play a role as a node in a bigger network.”
Rob Hango-Zada
Optimisation
(Will) I think there was a realization that shipping a fishing rod for BCF was more expensive in shipping fees than the actual cost of the good. And so what our business aims to do is help optimize that last mile carrier set and help provide the most efficient delivery route and pricing and performance as possible for a retailer.
So we’ve got close to 50 integrations with most demand side channels. That’s point of sales, warehouse management systems, e-commerce platforms, ERPs, etc. And then we connect into close to 200 suppliers across Southeast Asia and Australia, New Zealand.
In house fleets
(Rob) “E -commerce has kind of become mainstream and there’s enough volume now for retailers to really look in their own backyard. We’ve been doing so many analyses around our own fleet product and saying, where’s the opportunity to attach this product? Who needs this? And you’re finding businesses which would otherwise be known as a mid -market business, if you just looked at the freight volume that they’re shipping within Sydney Metro, for example, if you’ve got a Sydney -based warehouse, it actually makes more sense for them to buy a van, pay a driver full time and run their own fleet for those deliveries than it does to just pay to put in the old postal network.
And it really comes down to the appetite and how deeply the businesses think of themselves as a logistics business that happens to be selling a certain type of product. The bigger guys who have the scale, we’re seeing a lot more adoption and uptake in those spaces.
I think Woolies and Coles have shown us how own fleets can work for delivering things online. And the challenge is vastly different when you’re buying groceries online to when you’re buying products where you can get better densities and stuff. There’s a massive opportunity. It just comes back to retailer willingness.”
Smart routing
(Rob) “The average parcel in Australia will travel 722 kilometers from origin to doorstep. However, there is a growing percentage of what we call local commerce. So 15% of all deliveries actually get delivered to within 15 kilometers of the origin.
So, if you think about that, there’s a massive inefficiency that exists in the market. Why does that happen? You have carriers who are doing an exceptional job in their traditional networks, which might require them to hub and spoke in different areas. So they’re always going out West in Sydney or in Melbourne or wherever it is hubbing, then sending it back out. And you’ve got a lot of points to point carriers who are doing shortest distance, but the economics are a bit different. And we’ve been pioneering a bit of a model, which we call the code share for the logistics industry, we call it smart routing.
And what smart routing does is it offers an opportunity to carriers to play a role as a node in a bigger network. So if you think about a leg rather than an end to end delivery, you can really optimize the distance between point A and point B and make sure everybody wins in that equation. But it’s such a new model that there’s a lot of fear in the industry to say, well, oh, well, I don’t really want to hand over a delivery to a competitor, because I want to own the whole customer experience journey. So that is kind of what I’m talking about around collaboration and we call it co-op petition, which is you can compete, but you can also collaborate to really economize.”
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