Cargo space from thin air

Roughly 20,000 domestic passenger flights take off every day in the United States. Each has about two tons of cargo capacity, but much of that space remains empty. What if there were a platform that allowed airlines to plug into modern shipping and e-commerce networks and fill that cargo capacity?

COURTESY OF MILIND TAVSHIKAR

That was the question Milind Tavshikar, SM ’06, first began investigating for an MIT Sloan class on new enterprises. The result was SmartKargo, the cloud shipping and logistics company he founded, which now operates around the world.

Tavshikar turned his initial class project into a master’s thesis and then a business plan that became a finalist in MIT’s 100K Entrepreneurship Competition. Soon after, in 2006, the MIT Enterprise Forum invited him to present to a group of investors, one of whom offered him seed capital. Getting funding is always a hurdle, but Tavshikar credits the MIT ecosystem with making the process easy. “Through and through we can attribute it to the good work that MIT does in the entrepreneurial area,” he says.

Of course, FedEx, UPS, and USPS already use airplanes to ship goods to consumers. “But it’s taken billions of dollars and decades of work by these three large organizations to put together the technology platform required to run that kind of business,” Tavshikar points out.

To allow commercial airlines to take advantage of the new revenue streams cargo offers, SmartKargo built a virtual hub that connects them to sites like Amazon to find packages in need of shipping, as well as to companies that sort those packages in their warehouses; ground transportation companies that move the packages to the airport and later deliver them to buyers; and tracking services that keep buyers informed about delivery. It’s plug-and-play shipping—and all airlines need to supply is planes.

It took Tavshikar and his product team six years to develop their system, but the delay paid off. “In 2006, e-commerce was not a big thing,” he says. After a decade, it started to heat up—and as the covid-19 pandemic sent demand for online shopping to stratospheric heights, SmartKargo hit its stride. 

Today, the company serves more than 25 airlines, including Delta, Emirates, Indigo, Volaris, and WestJet. Its work enables airlines to make more revenue from the same routes, while shippers and buyers get faster service at lower cost—and the environment benefits from fewer trucks on the roads, even as airplane fuel use remains steady. “It’s a win-win-win,” Tavshikar says.