Technology

Walmart inks deal with Chile’s SimpliRoute to optimize delivery time in Latin America

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Over the past two years, Latin America’s digital transformation has been amazing to witness firsthand. The shift to digital has spurred major changes in how businesses in the region interact with their customers and vice versa. 

As LatAm businesses continue to shift online, established companies and growing startups in the region have begun experimenting with ways to apply machine learning to update antiquated business practices. 

The industry where we’ve seen these changes prove to be the most disruptive has been the logistics sector, with a particular emphasis on last-mile delivery companies. In a region where many delivery companies still mainly rely on pen and paper, AI is now being applied to help solve issues that have plagued companies for decades. 

Here’s how one startup’s new solution caught the attention of one of the biggest retailers in the US.

Taming urban sprawl

Latin American capitals often serve as their country’s main financial, cultural, and logistics hub.

Bogota, The Capital of Colombia

But because these capital cities tend to sprawl outwards from a dense urban core into oftentimes unplanned suburbs, slums, and exoburbs (all without centralized public transportation in place) the main population and employment centers of many Latin American countries are paralyzed by a daily, hours-long snarl of traffic.

Rather than wait 80 years on a proposed metro system (as is the case in Colombia’s capital Bogotá) to help alleviate traffic, entrepreneurs in the region have begun applying AI-enabled algorithms to hack traffic and help find the path of least resistance for inter-urban drivers. 

Practical applications emerge

The Chilean startup SimpliRoute, which began as a university project that applied route-optimization algorithms to successfully help fire response units decrease their response time by 40% (and save 1,400 lives) recently applied their algorithm to big problems facing last-mile delivery companies. 

“We discovered that most emergency journeys relied on the drivers’ expertise to choose a route, and those routes often weren’t the most efficient,” said SimpliRoute’s Founder and CEO, Álvaro Echevarría in an interview with Novobrief, “We knew that we could apply these takeaways to other sectors. We saw the potential to integrate AI into a broader scope of industries, to lower travel times and make a real impact in one of the most polluting industries in the world.”

The results of their cutting-edge route planning software have been phenomenal. As of 2021, SimpliRoute calculated routes totaling 790,619,144 kilometers (or 491,267,960 miles) — the equivalent of roughly seven trips to the sun. Along the way, the app saved approximately eight Olympic swimming pools’ worth of fuel, and the amount of CO2 that 378,000 trees can store in a year. This also equates to roughly 600 trips to the moon in terms of kilometers of travel.

Developed economies will undoubtedly benefit

Having recently raised $8 million to expand its services to Brazil, Canada and now the US, SimpliRoute is applying lessons learned from the most complex and congested cities in the world to solve optimization issues facing the biggest retailers on the planet — including a newly inked partnership with retail giant Walmart in the US.

“The fully realized, AI-driven SaaS solution streamlines middle and last-mile delivery and has empowered companies of all sizes to optimize their delivery operations by providing faster, smarter, and cleaner navigation routes,” said Echevarría

With record inflation and a looming recession now constituting major reasons organizations of all sizes should begin cutting costs and widening profit margins by optimizing their last-mile delivery processes. 

“Meanwhile, the mission has stayed the same from day one,” Echevarría says. “To help the planet and make people happy.”

Disclosure: This article mentions a client of an Espacio portfolio company.

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