Technology is Driving Another Old World, Unorganized Sector towards Efficiency and Agility “The Trucking Business”. A Fleet of Startups is Following an Uber like Model to Organize Truckers, Track Consignments and take the Unreliability Out of the Logistics Sector.
Hi Everyone Today We will Talk About How Startups are Helping Trucking Industry to Bring More Efficiency & Agility to the System
E-Commerce Logistics Service Delhivery was Dependent On Local Truck Operators and Drivers to Transport its Shipments Within Cities. Delhivery Decided to try Something Different. They Signed Up with Truck Logistics Startup LetsTransport to Move Packages. LetsTransport Provided Something Delhivery had Been Struggling to do for Years: It let Delhivery Track the Trucks On a Real Time Basis and Helped with Invoicing.
“I Get a Notification Every Time the Vehicle Reports to Our Warehouse. Most Important, whenever a Truck Breaks Down, We Get an Alert in Half an Hour,” says Manobottom Jash Fleet Manager Delhivery. Delhivery Could Now Account for Every Minute, know about Delays, and Track its Parcels more Efficiently.
Founders Of LetsTransport: Sudarshan Ravi, Pushkar Singh & Ankit Parasher
LetsTransport Aggregates Truck Operators and Uses Geo-Fencing Location to Help Businesses Track Last Mile Logistics All About 20% Cheaper than Offline Players. Of the 20 Vendors Delhivery’s Bengaluru Unit Uses, Half are with Online Truck Logistics Players LetsTransport and ThePorter. “If you Look at the Past 20 Years, the Trucking Industry hasn’t Changed Much,” says Pranav Goel, IIT Alumnus and Former JP Morgan Analyst, who Started ThePorter in August 2014. “We’re Trying to Fix that.”
Startups Using Uber Like Model to Organise Trucking Business
The Unorganized Trucking Business in India is Getting a Shove from New Players who are Using Technology to Streamline the Segment. There are a Lot of Inefficiencies, Starting from Loading and Unloading. A 15 Minute Pick Up Would take 2 Hours Because No One had Any Incentive to be On Time. So Trucks Ended Up Doing One Trip a Day and Charging a Lot of Money. On The Porter’s Platform, a Truck Does 3 Trips, while Ensuring that the 3,000 Registered Trucks are Not Empty on Return Trips.
Startups Allows Anyone who Owns or Operates Trucks to Join the Platform
Each Company is Approaching the Problem Differently. While Players like ThePorter and LetsTransport Operate Only Within Cities, Companies like Rivigo, Blackbuck and Truckola Cross State Boundaries.
Founded by former IITians Rajesh Yabaji Chanakya Hridaya & Ramasubramaniam B, Blackbuck Works with Over 150 Companies, Including PepsiCo, Unilever and Asian Paints. An App Based Aggregator, it Allows Anyone who Owns or Operates Trucks to Join the Platform. The Corporate Customer Logs In, Browses the Availability of Trucks, Manages Freight and Tracks the Trucks from the Time of Loading. “On the Supply Side, the Owner Can See the Location of the Trucks and Can Browse the Demand Pan India,” says Yabaji. Blackbuck has 35,000 Trucks in 200 Locations and Charges a Commission of 10-15% On Every Transaction.
Truckola Operates More as a Reorganizer than an Aggregator. Once a Customer Asks for a Truck, Truckola Buys a Trip from the 5,000 Odd Truck Owners on its Platform. It has 60 Customers, and about 1 Lakh Trucks at its Disposal.
All the Platforms say they are Operationally Profitable Although they Refuse to Reveal Numbers. For ThePorter, which Charges a 20% Commission, Close to 75% of Its Revenue Comes from Small and Medium Enterprises. The Rest Comes from Large Institutions like Amazon, Flipkart, and Pharmaceutical Companies. The Main Challenge the Companies Face is Getting Truckers to Adopt Technology.
Blackbuck’s Yabaji says Technology Penetration Among Truckers is Not High and Not Many Operators and Drivers have Smartphones. “We are Also Trying to Make All Transactions Cashless So that there are No Cash Flow Issues,” He says. Its App is Available in Hindi so that it’s Accessible to More Drivers.
Getting a Return Trip for An Inter-city Journey is Another Issue Yabaji is Trying to Solve. Currently, many Trucks are Forced to Take Longer Routes On the Way Back as they Don’t Get a Perfect Return Trip. And they Carry a Tenth of their Capacity.
Startups are Making Apps Available in Hindi so that it’s Accessible to More Drivers.
Mohan Kumar of Norwest Venture Partners Believes that When the Industry Matures with Demand and Supply Going Online, a Truck will have a Better Chance of Getting More than Half its Capacity Utilized On its Way Back to Its Home Base.
Since Many of the Customers are Small Businesses, Payments Don’t Always Come On Time. Accel Backed Truck Network Platform 4TiGo, is Relying On Its Partnership with Federal Bank to Counter this Problem. It has Implemented a B2B Electronic Payment Platform with the Bank and Developed a Special Credit Programme to Provide Working Capital Support for Companies.
“Unlike the Other Players Who Focus On the Truck Owners and End Customers, We are Trying to Encompass the Entire Network, from the Fleet Owner to the Driver to the Truck Financier,” says 4TiGo Founder and CEO Anjani Mandal.
India has 4.5 Million Trucks. It’s a Very Fragmented Market, so there’s a Great Role to Play in Organizing the Market.
Bread and Biscuit Maker Bonn Food Industry has Been Using Delhi Based TruckMandi’s Platform. Narendar Singh, Who Takes Care of Logistics for Its Ludhiana Factory, Says the Company Requires 4 or 5 Trucks a Day to Send its Bakery Products from the Factory to Jammu, Delhi, Haridwar, and the Rest of Punjab. It’s Found that TruckMandi’s Prices are 10%-15% Lower than the Market Price. Singh says they Wanted to Give New Players a Chance. So, 3 Months into Operation when TruckMandi Halted Business After One of the Co-Founders Quit, Bonn Didn’t Think Twice Before Trying the Services of Another Delhi Based Startup, TruckBulls, Which Operates On a Similar App Based Model.
“Truck Logistics is a Huge Sector. India has 4.5 Million Trucks. It’s a Very Fragmented Market, so there’s a Great Role to Play in Organizing the Market. Customers Get a Good Deal, Truckers Get More Business,” says Nandan Nilekani, who is Backing 4TiGo. Since there are So Many Players, there will be Different Business Models, He says, Adding: “It may Not be like B2C But it’s the Heart of India’s Economy.”