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Serial entrepreneur James Chin-Moody is taking on Australia Post at its own game. He believes a novel logistics software platform will help startup company Sendle chisel market share from the government-owned delivery-services monopolist.
Chin-Moody has spent three years navigating Australia's $A5bn delivery-services market, long dominated by increasingly profit-challenged Australia Post and its aggressive transition from letter-carrier to e-commerce facilitator. His earlier startup, TuShare in 2012, facilitated a 'giving network' by sourcing free capacity in courier companies' returning delivery trucks.
He soon realised that model could benefit e-commerce providers sending products to customers' homes. “E-commerce is generally from the warehouse to the consumer, and often their trucks go back empty,” he told Computer Weekly. “They don't have the systems to process orders for lots of consumers.”
The challenge lay in co-ordinating delivery trucks with deliveries in real time. Seven developers, comprising half the company's staff, solved it with a customer-friendly front end integrated with the back-end systems of Australian logistics giants Toll, Fastway and Couriers Please.
Those three companies have 3,000 drivers moving about 80 million packages every year and “give us national coverage at a flat rate”, says Chin-Moody. He points out that Australia Post has “400 to 500 different prices on its rate card – you can walk to the post office and never know how much it's going to cost”.
Dealing with Australia Post is a perennial headache for the country's small businesses, many of whom lug dozens or hundreds of packages to the local outlet to pay distance-based charges on each box. Where Australia Post charges $34.95 to courier a 3kg satchel nationwide, Sendle will ship a 5kg box for $A14.75. A 25kg box costs just $A24.75 and frequent senders' prices start at $A5.81.
“That's the difference between e-commerce and monopoly rates,” says Chin-Moody.
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Sendle's secret sauce is its software, which tracks packages through the courier firms' back-end systems and networks. “We're not a logistics company trying to do software,” says Chin-Moody. “We're a software company that has recognised a big opportunity in logistics – and we think of that as a very big competitive advantage.
“The interesting thing about logistics, compared to a lot of software projects, is that there are a lot of exceptions and you need to be able to manage all of those. We've wrapped synchronous systems with an asynchronous software layer to make it robust, so we can harmonise across different courier SLAs.”
Sendle's dashboard was recently integrated with cloud-accounting provider Xero to streamline bookings with customer accounting systems. This is the latest innovation for a business that is using software smarts to outwit a bigger adversary on its own turf – and Chin-Moody is only just getting started. “We constantly see 100 things left to do and we'll keep building that,” he says. “In software, the platform is never finished.”