OneRail Raises $ 9 Million Series A to Expand Last Mile Delivery Network

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OneRail, the last mile software-as-a-service platform that connects point-of-sale ordering information directly to a network of 7.5 million couriers, announced Tuesday morning that it had raised $ 9 million from Series A run by a venture capital firm. Ironspring companies.

“We are very grateful for the trust Ironspring Ventures and our valued investors have placed in us as we continue to deliver on our vision of transforming last mile logistics,” said OneRail Founder and CEO Bill Catania , in a press release. “This next chapter is all about the scale and infrastructure required to execute a true omnichannel strategy.”

Austin, Texas-based Ironspring Invests in Early-Stage Startups Digitizing the Industrial Economy; other companies in FreightTech’s portfolio include Plus One Robotics and Mercado Labs. Gaingels joined Ironspring in the cycle as a new investor in OneRail. Previous investors Chicago Ventures, Bullpen Capital, Las Olas, CreativeCo Capital and Alpine Meridian Ventures also participated.

“At Ironspring Ventures, we partner with world-class founders and teams who are revolutionizing the way we design, build, distribute and operate in the physical world,” said Ty Findley, Managing Partner of Ironspring Ventures, who will join the OneRail Board of Directors. “When you think of the end-to-end logistics value chain, we’ve invested in the ‘First Mile’ (Mercado Labs), the ‘Middle Mile’ (Plus One Robotics, Fast Radius), and now with OneRail, we are delighted to support this leader in the “Final Mile” solution that combines best-in-class technology with the essential human element. Last mile logistics have become increasingly critical for shippers as they face even higher expectations for the e-commerce customer experience. OneRail’s year-over-year revenue growth with major Fortune 500 customers is indicative of how well this team is executing in establishing a clear fit with the product market.

OneRail’s Last Mile Logistics Operating System gives shippers access to an extensive network of couriers, including driver networks from Lyft, Uber and PostMates, integrating them directly into shippers’ transportation management systems, warehouse management systems, point-of-sale systems or commercial e-engines.

Although the company was founded as an asset-based courier service named Zapt, Today OneRail acts as a third-party technology-based logistics provider in this space, standardizing and structuring shipping data, aggregating shipper capacity, handling exceptions and providing freight density for shippers. couriers. OneRail collects software as a service revenue from shippers for its platform and monetizes its market as a traditional non-legacy logistics provider. The team has grown from nine to 80 employees in one year and is expected to reach 200 by the end of next year, Catania said.

Catania told FreightWaves that OneRail has made deals with its customers that will bring the business to 2 million deliveries per week in the first quarter of 2022. Current major customers include GoPuff, the consumer goods and food delivery service with hundreds of distribution centers in the United States. , Menards Home Improvement, and American Tire Distributors (ATD). OneRail supports ATD Express, a program that provides 90-minute tire deliveries from 120 warehouses to approximately 80,000 service centers and stores nationwide.

“This capital is execution capital – customer success, implementation and strengthening of our logistics operations team,” said Catania. OneRail’s revenue is currently “north of $ 10 million” and the high return on capital company “could have positive cash flow in February if we wanted to.” OneRail’s highly automated marketplace allows it to achieve an operating margin of 85% on its net sales.

What OneRail promises shippers, in addition to a vast network of capacity and transparent visibility, is something of a holy grail of retail logistics: cost-effective last mile delivery.

Today, a number of inefficiencies are affecting last mile logistics, increasing fulfillment costs and negatively affecting the customer experience, including the difficulty of matching a given shipment to the correct courier service given the dimensions of the shipment. sending, messaging capabilities and corresponding service level agreement. Senders are often forced to subsidize the cost of last mile processing in order to increase sales volume to e-commerce platforms, hampered by the lack of high-fidelity data integrations with couriers.

Catania said OneRail starts with properly sizing the asset: finding the smallest (and cheapest) courier vehicle option that can move the shipment. About 80% of OneRail’s capacity network is made up of light vehicles like sedans and SUVs, and the rest is made up of commercial vehicles, including straight trucks. By purchasing rates for small, efficient assets that can accommodate the cubic size and weight of a shipment rather than maintaining a fixed price contract with a certain courier, OneRail prevents shippers from overpaying for the capacity and capabilities that they do not need. Support for exception handling reduced operating expenses for a major shipper for the last mile by 70%, Catania said. The sender went from around 16 minutes on each shipment – multiplied by 300,000 shipments per year – to outsourcing it completely.

Last mile capacity is driven by market dynamics which are very different from truck freight cycles: in the last mile it is often very short intraday cycles that move the market. Many GoPuff drivers are idle in the morning before GoPuff begins delivery to secondary markets, freeing up capacity for further shipments. The demand for food delivery is concentrated around mealtimes, while the demand for auto parts delivery increases at midday. Longer term, e-commerce delivery capacity generally tightens in November and December, and furniture deliveries increase after the arrival of income tax refund checks in the spring.

“You can find last mile supply in a way you can’t find in truck freight,” Catania said. “In the five verticals in which we operate, we modulate supply and demand intelligently, in a data-driven way. “

Providing high visibility is also easier in last mile logistics. Drivers on a short local delivery trip are more willing to be tracked by a mobile app for the hour or two it takes to complete the shipment than, for example, a truck owner-operator who can haul a charge across the country for three days. There are also fewer exceptions: Catania cited an exception rate of around 10%, most often things like late delivery, missing items or a customer question, and only around half of those must be managed manually by the OneRail operations team.

“In fact, we make last mile delivery cost effective for the shipper,” said Catania.


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