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Nashville logistics tech startup nets $1.5 million
Qualle will roll out its platform in all 360 U.S. and 560 Canadian ports
The pandemic magnified and exacerbated the bottlenecks within the logistics industry. Where the world saw problems, investors saw opportunity and began pouring cash into logistics startups. Last year, venture investors pumped a record $41 billion into startups developing technology to unsnarl and optimize supply chains, according to Pitchbook data.
Qualle — a Nashville-based software company that aims to move shipping containers more efficiently — benefited from the 2022 logistics investment rush.
Today, the startup’s CEO, Tyler Sellers revealed his company pocketed $1.5 million in a pre-seed round last June. Plug n Play Ventures, Lynett Capital and the Filipski group all signed checks.
The tardy announcement comes as the once stealthy company prepares to roll out its platform in all 360 U.S. ports and all 560 Canadian ports, over the next 12 months. Sellers says the newly injected capital will be used to mature its software and support this North American expansion.
Since launching nine months ago, Qualle has gained major traction. The platform is already being utilized in six seaports — Los Angeles, Long Beach, New York, New Jersey, Savannah, Houston — and in Memphis’s inland port. More than 500 trucking companies across the country are employing the software, including notable heavyweights JB Hunt, Swift and Knight Transportation.
“The traditional system is wildly inefficient,” says CCIM Chief Economist and Ports and Logistics Expert KC Conway. “This type of technology is long overdue.”
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In the traditional system, Sellers explains, importers drive to the port to pick up shipping containers filled with goods. After unloading the freight at a warehouse, the drivers hustle back to return the empty containers before the last free day (LFD) — the last day a container can be out of the port before the importer is fined. These fines, better known as demurrage fees, range from $300 to $600 a day. Last year, U.S. importers incurred more than $850 million in demurrage fees.
Meanwhile, nearby exporters are also en route to the port, says Sellers. They need empty containers to haul goods from their warehouses back to the shipyard. It’s not uncommon for drivers to spend hours waiting to procure a container or unload a shipment, as ports quickly become crowded with traffic and stacks of empty containers.
For both carriers, it makes more sense to perform a street turn. A street turn is a transportation term that refers to the reuse of an empty import container by an exporter. The lateral move prevents both parties from racing to the port twice, reducing transportation costs and congestion in the ports. This significantly increases capacity and improves delivery times.
But street turns require a lot of legwork. Exporters call multiple so-called “container brokers” or “street turn coordinators'' to identify and connect them to a driver with an empty cargo container. Then, using paper and pen, brokers and coordinators manually document dozens of data points to track and report the street turn.
Qualle automates and streamlines this Rube Goldberg. With just a few clicks, import freight haulers can mark a container as available. Exporters eager for empty containers can view available containers in their area and directly request a street turn via the app.
“It eliminates the traditional blast emails or group messages and creates instant visibility and records actions,” says Lisa Wan, the Director of Operations for Roadex America, a California-based logistics company and Qualle client.
Street turns minimize the amount of miles traveled, curtailing carbon outputs. Companies can track and quantify how much each street turn offsets their emissions through the platform. Sellers says the average street turn is 8.4 miles, contracting CO2 emissions by 86.1 kilograms — the size of a standard backyard swimming pool.
“This feature will become even more critical as corporate ESG regulations are handed down and companies have to delineate the measures they are taking to decrease emissions,” says Conway.
“Qualle (pronounced Kwa-lay) is the German word for jellyfish,” Sellers explains. “Jellyfish are the most energy efficient creatures on the planet. We developed our technology with a goal to make container flow as energy efficient as possible.”