Maergo Parcel Delivery Service Closes Its Doors

Former employees reported on LinkedIn that the firm faltered as leading carriers increased their aggressive pricing.

Dive Brief:

Maergo has suspended operations and will no longer provide parcel delivery services, according to a carrier update released on July 25 by software supplier EasyPost.
Maergo previously used existing carrier capacity to deliver parcels throughout the United States in one to three days. According to an archived version of the company's website, it had middle-mile package transportation partnerships with all major passenger airlines in the United States, as well as last-mile partners.

Executives at Maergo, including CEO Mark Lavelle, did not reply to requests for comment before publication. The delivery company's website and LinkedIn page are no longer available. Additionally, Shippo, another shipping software vendor, stated that it withdrew the company from its list of supported carriers early this month.

Dive Insight:

Maergo, originally known as X Delivery, witnessed significant expansion during the COVID-19 epidemic, as shippers struggled for capacity to meet increased home delivery demand. In November 2021, it claimed rising revenues and an expanding workforce.

The following year, it completed a $20 million funding round, with Ryder's venture capital arm among the backers. When the company announced the funding, it had delivered over 8 million packages and had Saks Fifth Avenue, Allbirds, and Chubbies as customers.

"With the growth of e-commerce and the resulting capacity constraints, shippers are looking for more flexible parcel solutions," Karen Jones, Ryder's chief marketing officer and head of new product development, stated in 2022. "Through Maergo's tech-first approach to parcel delivery, they're leveraging existing capacity to offer an end-to-end solution."

Since then, the parcel delivery business has altered, with a more cautious investment environment, a slowdown in volume growth, and large carriers' pricing behavior putting certain startups under pressure. Point Pickup, a same-day delivery startup, halted operations earlier this year before Delivered bought its assets.

Former Maergo employees stated that aggressive pricing by big carriers posed a problem to the company.

According to Sandy Gregory, Maergo's vice president of logistics, the company had difficulty competing with "bare bones" FedEx and UPS pricing and convincing retailers that its two-day and three-day shipping speeds were worthwhile.

"That was Maergo's downfall," Gregory stated. "We were able to distinguish our services. Our existing customers loved us. We had an incredible product. It was difficult to get shops to support a name they had never heard of."

Comparably, Kevin Noto, head of product and product operations at Maergo, expressed on LinkedIn that the challenges facing the nascent company in the shipping industry were insurmountable.

Noto stated, "We could have accomplished great things in a different economic climate, but our model was not intended for the low-cost, slower shipping options shippers are currently leaning towards."