Deutsche Post DHL Group has launched SmarTrucking, a TechLog company that aims to lead a global change in freight transportation starting with India.
Story & photos:
Ashish Bhatia
Forming a technology enabled logistics solutions (TechLog) company as part of its newly formed business vertical, Corporate Incubations, Deutsche Post DHL Group, in an effort to lead a global change in freight transportation in India, has launched a new entity in India called ‘SmarTrucking’. Structured such that it will offer innovative trucking solutions, SmarTrucking will use line haul express road network of DHL. Leveraging DHL’s existing footprint in the country, the startup will move freight between distant cities with an aim to turn into high volume operations in the freight transportation sector. Claimed to be DHL’s first official move to accelerate the development of technology-enabled logistics solutions the world over, SmarTrucking aims at building a 10,000 strong IoT enabled and temperature controlled fleet in India by 2028, albeit fully-owned. Estimated to provide employment to over 20,000 drivers, the operation is expected to transfer 1,00,000 tonnes of cargo every day over a distance of approximately 40 lakh kilometres. “With greater efficiency from DHL SmarTrucking, we expect to transport 100,000 tonnes of cargo and cover a distance of approximately four-million kilometres across India daily,” announced Juergen Gerdes,
Board Member for Corporate Incubations, Deutsche Post DHL Group. He mentioned, “India is an incredibly important market. Presently, road freight comprises majority of the freight movement, and is the largest transportation segment in India.”
Leveraging IoT
Announcing the launch of SmarTrucking post three months trial covering 27,000 kms, DHL is banking heavily on Internet of Things (IoT). It showcased a BharatBenz 1214 truck fitted with a GPS sensor and a dedicated customer care switch by Bangalore-based iTriangle Infotech Pvt. Ltd., at the launch event in Mumbai. Claiming that each vehicle in the fleet will be fitted with temperature sensors, OBD, ‘door open’ sensor, fuel sensor, GPS device (telematics), and data driven insights for route optimisation, Neeraj Bansal, CEO, DHL SmarTrucking, announced, “Features will reduce transit times by up to 50 per cent in comparison to traditional freight transportation.”
Confident of offering more than 95 per cent reliability and ease of use, Bansal mentioned that the IoT enabled sensors will monitor real-time temperature and track location through the company’s centralised control tower. Providing end-to-end consignment visibility, temperature controlled capabilities and real-time tracking,
SmarTrucking will provide customers information alerts and status updates. DHL SmarTrucking teams will execute the task. Subjecting SmarTrucking drivers to a rotational duty where the first driver will hand over the truckload to the next driver at a predetermined stop and return to the point of origin with another truckload, DHL, said Malcolm Monteiro, Chief Executive Officer eCommerce, Asia Pacific, is looking at a new transportation model that optimises efficiency and reduces driver fatigue. SmarTrucking drivers, he added, will spend less time on the road, and more time with their families. Keen to grow as the demand for temperature-controlled transportation in India grows (it is expected to grow at 15 per cent per annum by 2020), DHL wants to cater to those availing of transportation services, and are able to scale up as well as streamline their business operations. Compliant with international standards, SmarTrucking is set to extend freight solutions to sectors like automotive, dairy, e-commerce, packaged foods, pharmaceuticals and Quick Service Restaurants (QSR) among others.
Asset-heavy
Asset-heavy, SmarTrucking contradicts most new business startups in its segment, which are inherently asset-light. If this reflects the confidence of the company, DHL, according to Monteiro, has structured the business model such that it will achieve good deal of standardisation. Also, engineered to achieve the objective of exercising better control, use cutting-edge solutions to lift quality to a new high, and meet customer needs with a completely new class of service through ownership of assets, SmarTrucking stands a good chance of achieving what it has set out to. Given India’s growing impetus on the logistics sector by way of investments, policies and administrative changes, SmarTrucking could provide DHL a front-runner advantage. Taking into account stiff competition and a low entry barrier, what could help DHL to propel SmarTrucking to greater heights is the announcement by the Ministry of Commerce to grant ‘Infrastructure’ status to the logistics sector. Add to it the
other government initiatives like ‘Make in India’, GST, 100 per cent FDI in warehousing, Bharatmala project, and trade infrastructure for exports scheme, and the chances of the initiative succeeding are far higher. Describing government initiatives as concrete moves, and growth oriented, Monteiro said, “We see a significant opportunity to bring in improvement as a key differentiator.” With indirect costs in the sector pegged at 13 to 14 per cent of the GDP, and with 85 per cent of road transportation sector claimed to be unorganised, it does not come as a surprise that DHL is looking to fill in the void by adopting technology and finding new ways to retain drivers as well as overcome driver shortage.
Looking at addressing the shortcomings in temperature compliance for cold chain logistics, DHL, through SmarTrucking could offer far more than a conventional logistics model would. Concluded Monteiro, “We want to address customer pain points by offering faster road transport; reduce inventory carrying costs and improve service levels. Our aim is to improve on-time performance and facilitate better planning.Through SmarTrucking we want to offer end-to-end visibility across supply chain to improve ease of doing business, offer reliable temperature control logistics for perishable goods.”
Neeraj Bansal, CEO, DHL SmarTrucking
Q. How do you plan to become the largest trucking company in India?
A. We are committed to bringing disruption to the Indian logistics sector through an innovative use of new and emerging technologies. We are banking on the use of new and emerging technologies that are customised to serve the complex needs of industries and various other sectors that we serve. We plan to put 10,000 fully-owned SmarTrucks on Indian roads by 2028. Our vision is to become a leader in the Technologically enabled Logistics (TechLog) space. We want to be agile in our offerings, and not restrict ourselves in terms of fleet acquisition targets, specification norms, vendors or technologies. We want to venture beyond the mere prospect of becoming a company with a large fleet size. We believe that there’s more it than just the accumulation of a certain fleet size.
Q. How do you look at the truck aggregator business model that is being practicised by new entrants?
A. While there are a number of companies operating in this segment in India, there is no single player like DHL SmarTrucking in the Indian logistics landscape. DHL Group has been in the logistics space for a very long time. It is amply supported by a global, skilled and knowledgeable team. We have to our credit around four decades of working experience in India. It gives us the advantage of understanding the requirements of the Indian customer and thus contribute positively to the logistics sector.
Q. What led to the concept of SmarTrucking?
A. The Indian logistics industry is evolving. Policies and processes are being implemented to create growth opportunities and eliminate sector-specific bottlenecks. Smart solutions in the form of SmarTrucking will be a great enabler in this scenario. It can transform the Indian logistics sectors. Businesses have become highly competitive and many sectors are in for a change. Technical innovations are increasing, new entrants are disrupting the industry, and customers are becoming more and more judicious in their use of services. To remain in the reckoning, it was found to be necessary to find a novel way to differentiate the offerings to the customers. SmarTrucking was born out of the confidence that logistics will be a key differentiator. It can help businesses unlock customer value as it supports their business vision and enables them to focus on their core competencies. Through DHL SmarTrucking and DHL SmarTrucking Coldchain, we are providing road freight solutions for all sectors and for all requirements. Our extensive pan-India line haul road network, dedicated workforce and fully-owned fleet are facilitating 95 per cent reliability, and up to 50 per cent reduction in transit times in comparison to conventional trucking.
