Truck drivers bid to pick-up, and/or, drop off of a consignment; this is already a reality TV show, at least one based out of the US.
Forza Logistics Techlabs is a technology-led logistics company that has bought that reality to India.
TruckBhejo is the app that gives drivers and customers access to the platform that, to drop the founders’ elevator pitch line, “reliable, efficient, and capacity-agnostic trucking solutions to companies across every mile of delivery”.
The company serves some major players in the grocery, manufacturing, retail, telecom, and FMCG sectors and is expanding its footprint in the small and medium segment.
All that is currently part of the “define the scale” and monetise it endeavour and this tech-driven logistic service provider.
What fascinates is the idea of truckers bidding for a consignment.
Bid to drive…
Registered vendors are provided access for ‘live’ orders on the platform. For each order, they are able to view the key order details like material, loading location, unloading location, vehicle type required. Vendors then bid for that order by sharing their quote through the app. Similar bids are collected through a pool of vendors who have access to live ranking against their bids.
Vendors have the option to revise their bids and increase their chances of winning the order. Post completion of bidding time, order is allocated to the lowest bidder. Vendor performance is also regularly monitored to ensure qualified vendors operate through the platform and irrelevant vendors are deregistered/blacklisted
Through the mobile app, vendors have access to live bids to win any orders through the platform. These future orders which are under bidding will be visible under the bidding section till closure. Once bids are received then the lowest bidder is allotted the order and these orders are visible under assigned jobs for vehicle deployment.
In the beginning…
Nilesh Ghule comes from a family of truck drivers. Originally from Nashik, he came to Pune in 2005 and completed his engineering education from the College of Engineering Pune (COEP) and after a short stint at Infosys, went on later to get an MBA from the Indian Institute of Management (IIM) Bengaluru, where he met Supreet Kumar, his co-founder.
The duo worked together at Reliance Jio before starting this venture.
Says Ghule, “Logistics was not new to me, but never looked at it as business per say, as I have witnessed this sector from the driver’s viewpoint. After my higher education, I mostly worked with tech and telecom companies. During our tenure at Reliance Jio, while managing the mobility products, we realised for the first time that logistics is a bigger problem for the big companies. They could not get consistent and timely placement of vehicles. The way logistics industry was structured was people had their own way of doing it. Some people were doing only last mile, or middle mile or first mile. Even types of vehicles were different. So, interaction with multiple vendors was necessary to get your requirement fulfilled.”
“Even in 2015-16 most of the business used to happen on calls. We thought that this is the right time when we can actually look at segment like logistics. Secondly, the market itself is extremely huge and fragmented. So, this was the best playground for technology to bring in drastic changes in the logistics’ sector,” he added.
Technology-driven logistics
Ghule and Kumar decided in July 2016 to form their own company which would be tech-driven and address customers’ end-to-end supply chain needs – starting from the first mile to the last mile.
Says Ghule: “It took us six months to go market with a finished product. It has been five years we are operational. The simple mission of our company is to create a technology-led FTL (full trucking logistics) network which would provide end-to-end supply chain coverage to customers. Our services and solutions bring tangible positive transformations as it works to deliver an immaculate customer experience through its three differentiators that are Smart, Scalable and Sustainable. All major functions of business starting from driver management to vehicle deployment, enroute tracking of vehicles, billing, everything happens through an in-house technology platform which we have built.”
Recipe for success
When asked about how they manage the drivers, Ghule said, “We mostly work with owner-drivers, i.e., people who own their vehicle and drive it themselves. That’s how middlemen get removed. We also get reliability from this particular arrangement. The owner-driver would not damage goods, nor steal material. Another benefit is lower costs as middlemen are removed. That is the recipe for our success. We have very close control on the supply side and we optimally deploy this supply – drivers – to the large B2B corporates. We have FTL contracts with all the major players. It has been a fantastic journey and that’s how the business has grown over the years.”
Hearing ‘NO’!
Ghule and Kumar were not accustomed to taking ‘no’ as an answer. That was the first thing which hit them when they started to go the market.
Says Ghule, “Convincing truck drivers was not a problem. In 2016-17 technology was extremely miniscule when it came to truck drivers. They were using old Nokia phones. Penetrating the application into the driver’s hands, making them aware of the features was also a challenge. We believed that soon complete digitisation will happen in India. That belief of having technology at the core of our operations has actually helped us in the last five years.”
“Second challenge was when we started approaching customers in the market, there was reluctance to new changes. Convincing a customer about the benefits of a technology platform which can bring efficiency to their operations and help their business grow faster was a challenge. The first important lesson we learnt was till the time you don’t provide a service which actually fits the customer’s needs you would find it very difficult to get that first customer. Once you have the minimum viable product (MVP) which is actually addressing the problem of a customer, slowly, steadily you start building your own capability and start building network of customers,” he added.
Operation hubs and customers
TruckBhejo operates across industries starting from e-commerce, e-grocery, telecom and retail and caters to two sets of customers– large corporates and small and medium enterprise (SME). Most of the business for the startup comes from locations like Bhiwandi, Ahmedabad, Vapi, and Pune.
Ghule says, “We onboarded Paper Boat as our first customer in 2016. Today we have 42 customers including some big names like HUL, Nestle, Colgate in FMCG segment; Amazon, Flipkart in e-commerce and Reliance and DMart in e-Grocery and Retail; Larsen & Toubro in infrastructure. We also have a contract with the Central government for Indian Security Press Nashik where we manage very high value cargo. We have a total team of 62 members with offices across Pune, Mumbai, Nashik, Kolhapur, Vapi, Surat, Ahmedabad and Delhi.”
Revenues
Says Ghule, “In B2B contract business, on historical basis, we have done gross margins of about 13 to 15 per cent per transaction. We are in process of audits and hence, we can’t reveal revenue figures for last five years. However, last financial year we have done a revenue of about ₹32 crore. The company has been growing at CAGR 110 per cent.”
“In B2B, our business model is that we provide x rate to the customer based on the type of vehicle and the lane in which the particular vehicle is running. The price which we get from the customer vs price which we pay to the driver is our profit margin. As such there are no platform charges for the B2B enterprises,” he stated.
Funding
Amount of total equity/debt capital raised and capitalisation plan of planned capital raised and its allocation TruckBhejo is currently funded by the Angel investors.
Amount raised by the company as part of seed round with participation from marquee angel investors like Kunal Bajaj, Anshuman Ghosh is Rs1.6 crore in equity + Rs3.75 crore in debt
Initial capital put in by Nilesh Ghule and Supreet Kumar – ₹1 lakh
“Our company has been profit after tax (PAT) positive since inception. We have been on a sustainable growth track and grown in terms of number of vehicles, geographies served, sectors which we cater and the supply chain legs,” says Nilesh Ghule, co-founder, TruckBhejo
Insurance cover
What is the insurance cover for TruckBhejo if a driver dies in an accident or goods are destroyed enroute? “Our clients ensure that there is insurance cover available at all times for the material transported (transit insurance), vehicle insurance and driver insurance (life, medical). Transit insurance is typically covered by the customer as they have large volume of material movement of high value while life/medical insurance is covered by the drivers/vendors where we encourage them to get themselves covered and help them get best rates through our partner network of insurance providers,” sayd Ghule.
Future plans
Road infrastructure is improving which will remove inefficiencies and reduce the logistics cost in the country.
“Considering rising fuel prices, I feel electric vehicles (EV) are the future. However, till the time we get such technology wherein the EV vehicles can run across the difficult terrain and also have the infrastructure around it to charge the vehicles, maintenance. it will take some time for EV, especially in heavy commercial vehicles’ segment, to have good penetration. But in last mile distribution like within cities we are already seeing the uptick. We have also started working on EV project and are in discussion with few of customers to deploy EVs with them,” says Ghule, adding, “In next 3 years, will have presence in around 200 to 250 cities. In terms of fleet strength, would have 20,000 vehicles on the platform.”
