Dive Brief:
- Parcel carrier Better Trucks plans to double its coverage area over the next year, aided by a $15 million funding round, the company announced Nov. 15.
- Better Trucks covers 25 metro areas across 17 states and focuses on next-day and two-day delivery, per a news release. The round led by Lobby Capital, with Corazon Capital and Venture 53 also participating, will allow the company to add warehouse capacity and expedite technology investments.
- Co-founder and CEO Andy Whiting highlighted Texas, Florida and the Carolinas as states Better Trucks plans to ramp up its coverage in. "What we're trying to do is provide a national-level alternative. We think we're well on our way," he said in an interview.
Dive Insight:
Better Trucks is already "silently covering" some of the markets it plans to officially launch in, Whiting said. The company serves shippers with national footprints, so expanding into new markets benefits existing customers more so than if their delivery needs were only tied to existing coverage areas.
"That's definitely a competitive advantage, which is why we want to keep growing aggressively [into] Florida, Texas, the Carolinas and up into the Northeast," Whiting said. "At some point, we'll get to California, but there's all sorts of challenges there."
When Better Trucks started in 2019, it primarily serviced the Chicago area. Explosive growth in parcel volumes and limited capacity amid the COVID-19 pandemic incentivized regional carriers to expand their delivery coverage further.
Shippers have become more receptive to using delivery providers outside of FedEx and UPS, which dominate the marketplace — smaller parcel carriers nearly doubled both their package volume and revenue last year, according to the Pitney Bowes Parcel Shipping Index.
"Customers are usually coming to us because they are frustrated with service from some of the big players," Whiting said. "There's been challenges with either service or price or a combination of the two, or they're looking for alternatives."
Better Trucks has contractors operating fleets in the markets that it serves, similar to the delivery model used by FedEx Ground. But the company also has a gig driver platform that allows it to scale capacity quickly.
"One of our customers had a large sale during July of this year, and their volume basically doubled and we were able to handle that fairly seamlessly," Whiting said of the gig delivery model's flexibility.
Better Trucks isn't the only smaller parcel carrier expanding its U.S. coverage. GLS expanded into Colorado in 2021, while LaserShip/OnTrac plans to expand into Texas next year.
