Cross-border freight forwarder Nuvocargo announced it has acquired Oncarriage, an Atlanta-based customs broker and third-party logistics provider.
The acquisition gives Nuvocargo access to several key government licenses in the United States — including a customs broker license that normally takes up to three years to obtain, said Nuvocargo CEO Deepak Chhugani.
“We acquired Oncarriage about 10 or 11 months ago, and that kind of helped us a great deal — we inherited some licenses that sometimes are quite difficult to get,” Chhugani said in an interview with FreightWaves. “The customs broker is licensed by the U.S., so we can import products into any port in the United States.”
With the acquisition of Oncarriage, Chhugani said, his New York-based startup has been able to grow at a rate of 70% month-over-month since its founding in August 2019. Today, the company has around 15 employees in New York and Mexico City.
The digital freight forwarder and licensed customs broker has been working with shippers to move cargo between the U.S. and Mexico for a growing number of clients.
“We are starting first with U.S.-Mexico trucking,” Chhugani said. “My co-founder has built software for tech-enabled businesses; we think we have a unique mix to bring technology and digitization to cross-border logistics.”
The trade of goods and services between Mexico and the U.S. totaled almost $700 billion in 2018. Nuvocargo’s clients range from companies in construction, beverages and spirits, to fast-growing early-stage startups, Chhugani said.
One customer is Mexico City-based Grupo Calidra, one of the country’s biggest producers of raw construction materials.
“Exporting from Mexico to the U.S. is a confusing process, with a lot of regulations, security concerns and a dozen potential points of failure,” Juan Sebastian Munoz, director of innovation at Grupo Calidra, said in a statement. “Nuvocargo is the first freight forwarder with a single dashboard to track everything end to end, and a fully bilingual team that can coordinate every detail from start to finish on both sides of the border. It’s a huge improvement on the old way of doing things.”
Chhugani said he sees a lot of opportunity in bigger sectors between the two nations, such as beverage, auto parts, construction, furniture and electronics.
“We think there’s really big pockets where we can really add value. And there’s kinds of moderate complexity shipments where you really need to get things right and you need a partner that’s focused on precision, and visibility,” Chhugani said.
Nuvocargo’s backstory is unusual. Chhugani is a native of Ecuador, but his father is from India.
“I grew up in Ecuador; my Spanish is better than my English,” Chhugani said. “I grew up in a logistics family. My dad, in his late 20s, left India to move to Ecuador to start a small logistics business that was helping Latin American retailers find suppliers abroad, and then move the goods and then finance them. So it’s kind of like a mom and pop version of what we’re building today.”
Chhugani originally founded Nuvocargo as The Lobby, a New York-based startup that helped job candidates connect with insiders at leading financial institutions for career and hiring advice.
The Lobby raised $1.2 million in funding and attracted a lot of interest and a core group of very enthusiastic users, but growth was slow. Chhugani ultimately decided to radically pivot the company into a completely different area — Nuvocargo.
Chhugani said for the future, he sees a lot more growth opportunities.
”We think that Mexico has some very obvious attractive qualities. It’s the same time zone as the U.S. There’s a very shared understanding of different things in terms of work norms and cultures. It’s very close to the U.S., and a lot of things happen on truck. That means shipments get there faster, “Chhugani said. “Things like the United States-Mexico-Canada Agreement and now unfortunately the coronavirus, given who might have been on the fence about considering Mexico as an option, I think these things can be triggers and catalysts to get them to make the move because changing your supply chain is a very big decision.”