Cargomatic ousts CEO in shakeup
Cargomatic Inc., a Venice Beach, Calif.-based logistics software startup, has ousted CEO and cofounder Jonathan Kessler just weeks after laying off half its staff in a severe shakeup at a firm that is part of the "Uber for trucking" sector, a source close to the company says.
The company did not respond to requests for comment.
Cargomatic's software platform connects shippers, freight brokers, and motor carriers in the $77-billion-a-year short-haul less-than-truckload (LTL) business. The company launched in 2014 pledging to bring new efficiencies to freight hauls of less than 200 miles by aggregating and rationalizing capacity.
Kessler will step down today, industry sources confirmed. Cargomatic also abruptly laid off about half its total workforce, numbering 50 to 60 employees, during the first quarter of 2016, published reports say.
The drastic corporate realignment raises the question of how long Cargomatic will continue to survive in the industry. Venture capital money has flowed in to the "Uber for trucking" niche in recent years, helping launch providers such as 10-4 Systems Inc. and BoxSmart LLC. Cargomatic works with freight brokers and is itself a licensed broker. At this time, the firms are all fighting for share of the LTL market, which has been hit hard in recent months by a slowdown in industrial production, the sector's bread and butter.
Cargomatic had been rapidly expanding in recent months. Just a year after launching in Los Angeles, the company expanded into New York and San Francisco, and made no secret of plans to extend its network into Canada and Mexico.
The company also named two logistics-industry veterans to leadership roles in March, hiring Chuck Oeleis from Carlile Transportation Systems as executive vice president of sales, and Meaghan Diem from XPO Logistics Inc. as vice president of enterprise sales.
