Mobile Apps. and portals are making it easier to avail of a transport.

Story by: Anirudh Raheja

Dinesh Agnihotri, a small businessman hailing from the city of Meerut is finding it easy to do business. A manufacturer of industrial burners for two decades almost, every time Agnihotri had a load to transfer, in the city or to another city, he had to get down on his knees almost. He had to dial numerous transporters to seek the best possible rate and wait for the truck to report. Timely reporting of the truck was not a normal activity. It now takes him to simply pick up his smartphone and log on to the various Apps. to get the best possible rates. He is also able to stick to his planned schedules of pick-up and delivery. Businessmen like Agnihotri will waste no time in pointing out that the logistics industry is among the prime contenders when it comes to the economic progress of the country. Especially in India, where just 10 per cent of the market is organised. It is easy to understand perhaps therefore, that Agnihotri feels much relieved with the advent of various Apps.

Experts claim that close to USD 45 billion is lost due to logistic inefficiencies. There are those who opine that the middle men manage to capture a large chunk of the revenue leaving little for the transporter or the trucker to earn. It is the middlemen, claim experts, who led to an amount of inefficiency building up into the transportation industry; into the logistics arena. They point out, that idle times for trucks sometimes rises up to 70 per cent for last mile transportation. The lower utilisation of trucks in India significantly goes up as a truck returning to home destination returns empty. Various transport Apps. are bringing about a silent revolution. Idle time is going down, and better deals are coming the way of the transporters. Various start-ups are working relentlessly towards revolutionising the logistics industry. Be it about transportation of goods in the city as well as across the country. Working towards reducing the dependence on intermediaries, each start-up is striving to decode the mindset of various stakeholders for an overall improvement by reducing the huge gap between direct service providers and the end consumers. And it is not that the truck booking is limited to the drivers who own smartphones. Such Apps. are also extending their limits to reach out to the drivers with SMS, and call centers dedicated to truck booking.

‘Uberisation’ of intra city logistics

It isn’t very long after taxi booking Apps. like Uber and Ola invaded the Indian taxi market. They have proved to be popular. One can book a taxi which many a times comes at your doorstep within minutes. One can literally see somewhat similar Apps. on both Android and iOS platforms taking the logistics industry by storm for both intra and inter city load transfer. Based on personal hassles of not getting a truck on time for goods transportation, A. Vasister, a business graduate in supply chain management, founded a platform just like Uber and Ola and co-found GoGo Trucks App. for intra-city goods transfer. “From the time of booking, the truck will be available at your doorstep in less than 30 minutes as availability of truck for intra-city transport of goods is not a major issue,” said Vasister. In order to give out transparent pricing to the customers, Vasister introduced kilometer based pricing so that the customer does not feel cheated and pays for what he has consumed. “In case the truck waiting time is longer than the operational hours, we have also introduced waiting time similar to the case of taxi Apps. so that the customer can get the best value proposition,” mentioned Vasister.

Since its inception in March 2015, GoGo Trucks has completed nearly 1600 orders and Vasister aims to move up to 6000 orders a month before the company hits its first anniversary.

It is not that India has a shortage of supply to meet the ever rising demand in goods transportation. Over two million small commercial vehicles have been sold in last five years which largely make sense for intra-city goods transfer, and are proving to be the pillars of strength for players like GoGo Trucks. The lack of standardisation of service and transparency in quality and pricing makes it painful for SMEs to hire a transporter. And, even though it makes sense for them to make money out of the business. Plying on a similar model of providing trucking solutions for intra-city load transfer, Nithin Balay, Co-founder, TruckSumo, assures that there can be a three-fold increase in the distance a truck covers in a single day. He mentions, “With this type of model, a vehicle that used to run 20 km, can cover up to 60 km in a single day. This also allows to put more money into the pockets of drivers and customers.” Balay is of the opinion that this can bring down transportation costs by nearly 40 per cent along with improved quality of life for the drivers and also allow them to access a larger pool of customers.

With an on demand model, App. based players are not only serving B2C customers, they are also targeting B2B customers. GoGo trucks, for example, is about to launch dedicated fleet management services for B2B clients. “We are already serving Burger King on a monthly contractual basis where 10-15 trucks are deployed to take goods from their warehouse to retail outlets,” said Vasister, who aims to improve his order completion target by 30 per cent riding on the success of this model. While building a relationship is important in the B2B space, Arun Rao, co-founder of TruckSumo feels that it is important to develop an ecosystem for the overall improvement in logistics. “Strategic partnerships with vehicle dealerships, vehicle insurance companies are of prime importance as vehicle fitness and new age technologies should not be compromised at the hands of the drivers,” said Rao. Since the travel distance is short during an intra-city movement, both the players offer trucks as small as a Tata Ace and as big as a 18 ft. truck. Such vehicle owners are largely operators themselves. They do not mind going a few extra miles since they understand that the stakes are high. They also understand that if they can offer superior service, the chances of attracting business are more. It is not surprising therefore, that such models have factored-in better reliability and authenticity apart from decent incentives, which are linked to the performance of the driver.

‘Olafying’ inter-city goods movement

In case of an inter-city run, it is often the case that the trucks return empty. This has a significant bearing on the costs, a good deal of which or even the whole of which is tied to the amount a consumer pays. Brokers and agents play a critical role in this. Apps. are coming to play an important role, and successfully. Rising beyond their success model as far as intra-city transportation goes, Apps. like TruckMandi, TruckSuvidha and ReturnTrucks are aiming to make it easier for the transporter as well as the consumer to arrive at a beneficial arrangement. Apart from eliminating the lack of transparency, the transport sector is currently witnessing, Apps. are slowly and certainly transforming the inter-city transportation scene as well. “The ecosystem will slowly expand with the introduction of the third player – the direct user. Matching their needs with the available supply of vehicles won’t be possible if the vehicle pilot community can’t access the service properly,” expressed Sudhakar Vintha, Founder, ReturnTrucks. He feels that the need to create an awareness about such technologies at the ground level is important.

It is due to lack of proper communication between the driver and the consumer, that such Apps. have boomed. They have facilitated better gains to many stakeholders in the business; one to benifit most has been the consumer. Based on personal experiences, Ankit Singh co-founded a portal called TruckMandi.com. Based on an algorithm, TruckMandi matches the load and supply. “We currently have 300 transporters and 500 corporates who have registered with us. Since we ride new age technologies like GPS, transparency is easier to achieve, and this is especially beneficial for a consumer for tracking a consignment,” said Singh. Charging 2 per cent commission for every transaction, TruckMandi is focusing on the B2B segment where the demand for inter-city transport is more. TruckMandi is an established player in North India whereas ReturnTrucks is an established player in South India. Both are eyeing expansion opportunities. They are keen to invade new markets; new territories. They want to go for a pan-India presence. “Various routes and states have different kind of paper work invloved, so the question of reliability is not the only issue. This will not slow us down however,” Singh opined.

Driver skill enhancement and pilferage aversion

Though drivers are considered to be the most ignored element of the logistics industry, the men behind the development of transport Apps. is helping them to upgrade. To uplift their status, skills and confidence. It is in-line with these Apps. that most drivers and operators are ensuring to deliver a hassle-free experience. They now stress upon transferring the goods only after the paper work is in place. “While training is important for the drivers for safe driving, co-ordination of various agencies and industry leaders is also necessary. We are in talks with industry leaders to create highway stoppages to address basic needs of the drivers at an affordable cost,” averred Sudhakar. The focus is not just to help the drivers to address their basic needs, but also to foster an entrepreneurial spirit in them. Apps. like TruckSumo are planning to devise strategic partnership initiatives. “Training of such a nature, that it includes an insight into new age technologies will be a boon for drivers. It would also need to include an insight into customer centricity and training into how to protect self,” said Rao. He added yet another perspective; mentioning vehicle discounts and better financing rates as a means to increase the scope of employment in the sector. Awareness creation will get a shot in the arm through tried and tested ways like word of mouth publicity, it is clear. What makes it interesting is the interest of various stakeholders to drive a change, and not just the men behind the development of transport Apps. Said Vasister, “Recently as many as 100 drivers participated in a road safety program which we organised with Mahindra & Mahindra. Apart from this, we also talk to drivers every 45 days; conduct meets for them so that they can share their experiences with the network.”

Funding on the rise

Rather than owning trucks, transport Apps. are acting as aggregators by connecting consumers with truck owners. In a market like India, where corruption continues to play the role of a draining parasite, the men who developed the Apps. are trying their best to eliminate it. They are looking at bypassing the same and devise a system that is transparent and sincere. TruckSuvidha.com is working on a subscription based model; GoGo Trucks is trying to go an extra mile to dole out additional incentives to both corporates and B2C customers along with the driver. GoGo Trucks and TruckSuvidha are self funded. With venture capitalists showing interest in such start-ups, those like Truckfirst have secured Rs.61 crore funding from SAIF Partners. Other Apps., ThePorter and Blowhorn, raised Rs.3 crore from Kae Capital by diluting 15 per cent stake, and a seed round of investment from Unitus Seed Fund respectively.

Future looks bright

With no dearth of orders in the logistics industry, the future is looking bright for transport Apps. They could grab a share of the USD 130 billion market. Experts claim that the market will nearly triple by 2020, riding on ecommerce, retail and pharmaceutical boom. Expressed Singh, “The global spending on logistics sector is seven per cent whereas in India it is nearly double at 13 per cent. There is still a lot of inefficiency prevalent in India, and there is a good amount of scope.” Sudhakar opined, “Though infrastructural support has increased leading to an average travel of over 450 km (from 350 km), building an overall ecosystem is the only way to optimise the cost of transportation and cut down the turn around time for trucks in the industry.”

Mahindra’s smart App for transportation

Mahindra has introduced a smart App. to connect cargo owners and transporters for inter-city cargo movement. Built to connect cargo owners and transporters to address inefficient movement of intra-city cargo using Small Commercial Vehicles (SCVs) for Micro, Small and Medium Enterprises (MSME) among others, the smart App. is called the SmartShift. Speaking at the launch, Dr Pawan Goenka, Executive Director, Mahindra & Mahindra, exclaimed. “Goods transport is all set to shift albeit disruptively and the seeds of such a disruption have already been sown by the (Mahindra) Group.” A technology enabled platform, SmartShift will be rolled out in Mumbai. Currently in the pilot mode, the App. is usable across mediums like android based phones, websites and over voice-based services. Built on a Google Cloud platform, the App. will be supported by a full blown website, and a call centre dedicated to transporters. Those transporters that are wary of incurring unaccounted data costs, have the option of using their feature phone to connect with the call centre. Salient features of the App. include booking of a vehicle in less than three minutes; negotiating the best price through a unique ‘bid’ feature; choosing from a range of certified, and trained SmartShifters and track the selected SmartShifter to ensure secure and timely delivery of the consignment. Transporters can avail of features like securing more business with the help of the App’s in-built algorithm; have the option of accepting or declining a delivery request based on pricing or availability of vehicles; have the opportunity to explore and expand to other markets, and look forward to a higher earning potential. SmartShift may be Mahindra’s first foray in the ecommerce space, expectations are to attract five million transactions per year. This stems from the Group’s rising focus on the commercial vehicle industry. Terming it as an independent start-up with internal funding, Mahindra is looking at achieving many firsts like transparent pricing, an efficient simple one-click booking process and the ability to track cargo after it has been dispatched. Explained Dr. Anish Shah, Group President (Strategy), Mahindra & Mahindra, the first impression of the App. is promising. Looking ahead, the success of SmartShift App. will depend upon its adoption by transporters and the concerned stakeholders in the transportation sector.