A Show of Force, and Humanity, on the Front Lines of Last-Mile Delivery

Matt Mulvey

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Apr 6, 2020

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4 MIN

The Covid crisis has underscored the importance of logistics in modern life and it is catalyzing innovation across essential industries

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A little over a month ago, I walked into the office of Eclipse Ventures, ready to embark on the next chapter of my investing career. The email I received from the team said I’d be kicking off my tenure with an on-boarding process. I anticipated the usual transitionary period filled with HR chores to familiarize myself with the inner workings of the fund, and the likelihood of a few early projects to cut my teeth on.

The “quiet before the storm” indeed. What transpired over the next four weeks was nothing short of a Category 5 health and economic hurricane — and the most powerful on-boarding I’ve ever experienced.

If you ever want to measure the true character of a leader or organization, pay attention during moments of crisis. Over the last month, I’ve watched our founders hustle and adapt to unprecedented turbulence. I’ve witnessed the Eclipse community come together to support people they’ve never met, and I’ve seen everyone on my team — each one of us — step up to help the portfolio.

Now, one month in, I have more conviction than ever that industry verticals like logistics, manufacturing and supply chain need to be digitally transformed. This isn’t an academic hypothesis. For many of us, the struggle to obtain household essentials is a daily endeavor. Hospitals can’t get the supplies they need, and the most vulnerable members of our society can’t access basic necessities because our existing infrastructure was built for an analog era.

The entire logistics industry, from global freight shippers to regional delivery companies, is being put to the test by the pandemic’s massive disruption to supply chains and the deluge of online orders it has unleashed on retailers for everyday items.

It’s a test we’re largely failing. Established leaders like UPS and FedEx are struggling to keep up, as are the newer app-based services like Instacart and Good Eggs. And despite Amazon’s continued dominance, things aren’t looking so prime time right now.

That said, delivery companies with a technological core that can scale up rapidly, agile operations, and the best people in place are meeting this unprecedented moment — if not in perfect stride — then certainly with intense hustle and conviction.

That’s what’s happening at Bay Area-based AxleHire, which has seen its same- and next-day deliveries grow by double-digit percentages with each passing week. It’s currently delivering more than 50,000 time-sensitive packages a week to people’s homes: groceries, medications, meal kits and other vital goods.

AxleHire driver delivering meals to hospital workers.

News video of AxleHire delivering free meals to hospital workers, which the company has committed to doing weekly for now. (Credit: KTVU)

High-profile brands using AxleHire include meal-kit makers HelloFresh and Blue Apron and retailers as large as Ikea. The 5-year-old company’s bread-and-butter clients are grocers, pharmacies and e-commerce businesses in major cities up and down the West Coast, as well as in New York City — the regions hit hardest by coronavirus thus far.

“Right now, we’re one of the most flexible logistics companies in terms of handling this,” says Daniel Sokolovsky, Founder and CEO of AxleHire. “Our clients are praising us. As we speak, UPS and FedEx are refusing to deliver their packages.”

Indeed, logistics companies — and especially last-mile services like AxleHire — are playing an increasingly central part in sustaining economies that have been crippled by the pandemic. And just like Amazon and Walmart, both of which are collectively hiring hundreds of thousands of workers in the current crisis, AxleHire is also giving the rapidly growing numbers of unemployed the chance to generate much-needed income.

Over the past month, the company has brought thousands of new drivers and warehouse workers onto its platform. AxleHire expects to add 1,000 workers here in the Bay Area alone, Daniel told a local TV station.

As Daniel describes it, AxleHire is a company that is one-half software and one-half operations. People sign up to be drivers through its app, which also is how retailers request deliveries to their customers. The software takes care of the rest, from paying drivers and tracking mistakes to automating backend processes like sorting packages and sequencing routes.

The technological core allows for rapid scale up, and people are brought onto the platform or into headquarters to fill in any gaps not covered by the software. And right now, there’s plenty of physical work to go around.

But the current crisis is also a time to innovate. One of the newest features AxleHire has launched is a no-touch delivery option, which allows both the driver and customer to minimize human contact by verifying receipt and identity via the app. Customers can now give drivers instructions such as where to leave a package or what access code to use to enter a gated residence.

It’s not that the pandemic caused the company to shift its business strategy. It has had the opposite effect: accelerating initiatives that were already planned. And this has only strengthened Daniel’s belief in AxleHire’s importance to the economy and the community.

There was no greater proof of that than when the Bay Area’s first shelter-in-place orders were announced last month. This prompted Daniel to pull up the ordinance online to read it for himself.

Actually, he took a screenshot — because there, at the top of the order, read a phrase that described AxleHire to a T. Among the entities deemed essential to people’s public health, the first line read: “Businesses that ship or deliver groceries, food, goods or services to residences.”

Not only has this crisis underscored the importance of logistics in modern life, it is catalyzing innovation across essential industries. It has also intensified our desire to work alongside ambitious founders at a time when we truly need their skills, passion and tenacity.

Let’s all roll up our sleeves and transform the verticals that need it the most.

Follow Eclipse Ventures on LinkedIn and Twitter for the latest on the Industrial Evolution.

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