For Spanish entrepreneur Inigo Juantegui, Brexit fears have driven up demand for his company’s product to levels normally only seen during peak shopping periods such as Christmas.
His startup, OnTruck, lets companies rent freight capacity for short periods from fleets that have excess room. Ahead of what’s gearing up to be a disorderly exit of Britain from Europe, that’s exactly what businesses in the U.K. are doing as they rush to hoard inventory, Juantegui says.
“We are seeing a big increase in activity, in some cases double the usual demand," OnTruck Chief Executive Officer Juantegui said in an interview. “Based on my conversations with clients, we believe this is related to storing inventory ahead of Brexit.”
OnTruck’s software matches companies that need to move products, with lorries that have idle space. The model is similar to Uber Technologies Inc.’s -- the freight company doesn’t operate its own fleets, but connects those that do with customers needing to move goods.
Uber hasn’t been blind to the development: it’s already announced plans to expand its freight service into Europe.
Ahead of the original March 29 deadline for Britain to leave the European Union, companies began to fear that if governments couldn’t agree an exit deal, border crossings between the U.K. and Europe would be significantly disrupted. Associated British Foods Plc and Rolls Royce Holdings are among the companies that announced plans to stockpile inventory, and Mayor of London Sadiq Khan has said he’s concerned about disruptions to the supply of essential medicines as well.
“These kinds of tense situations drive companies to up their inventory because they’re not sure what tomorrow will be made of,” Maxime Legardez, the founder of France-based Everoad, an OnTruck competitor, said in an interview. “It happens when there are rail strikes, and we’ve seen it with Brexit -- either way that tension is favorable for our business.”
OnTruck focuses on short-haul trips, operating within a 200-kilometer (124-mile) radius around cities such as Barcelona, Madrid, Paris and London, while Uber’s freight service targets longer routes. Everoad does both, and offers cross-border trips for customers like Procter & Gamble, Nestle SA, and Schneider Electric SE.
The European companies have some notable backers. OnTruck has taken investments from private equity firms Atomico and Cathay Capital, and oil producer Total SA. Former Apple Inc. executive Tony Fadell, and French telecoms tycoon Xavier Niel, have helped fund Everoad.
Timely, incisive articles delivered directly to your inbox.