Apr 25, 2016 at 01:02 PM CST
Whenever Indians think of trucks and the trucking business, their minds conjure up the image of a garishly painted, heavily embellished vehicle with a vest-clad, bearded trucker sitting in its cockpit singing loudly to the tune of his radio. The reason behind this image is pretty obvious – the long-haul logistics industry is still very much a brick-and-mortar industry. While the last-mile logistics sector has by and large adopted the benefits that technology brings in, the long-haul segment has resisted the change for years.
The reason for this resistance to a change in approach can be attributed to the way that the industry functions. The logistics industry comprises of a large number of big and small players, with multiple truck operators, logistics companies, brokers and end-consumers operating within its demesne. A truck owner has three to four trucks on average and operates only on specific routes, while most of the truck sourcing is facilitated by intermediaries. These intermediaries identify truck operators and liaise between them and the transportation companies to fulfil the requirements of the end-chain consumers. Needless to say, with so many points of contact within the supply chain and over 85 lakh trucks estimated to be on Indian roads, the long-haul logistics industry has been a very fragmented market segment with little to no organisation.
However, an increase in the internet penetration and a proliferation of digital devices has meant that this is steadily changing. A recent market survey indicated that almost 50% truckers and drivers now have access to smartphones, while the technology adoption rate is also growing by a whopping 50% month on month. Boosted by this rapid adoption of the digital medium, certain tech-driven long-haul trucking aggregators, have recently ventured into the space, which has demonstrated immense potential owing to its growing demand. These aggregators, which focus on streamlining the process of truck sourcing and service fulfilment through latest tech innovations, do away with the traditional hassles that have been associated with the industry. By leveraging cutting-edge technology, these aggregators provide benefits such as centralised sourcing of trucks and transparent bidding for services, competitive rates updated dynamically, faster transactions, fairer pricing and real-time tracking of goods and orders.
How does bringing in the technology-based services of these trucking aggregators help the stakeholders? To begin with, the truck owners are able to optimise their operations and increase their revenue margins through real-time tracking of their vehicles and load demands. The transporters, on the other hand, are also able to facilitate service provision more efficiently and conveniently with a more transparent pricing, while the end-consumers get the benefit of better, faster service fulfilment. All this translates to greater value addition for all parties involved in the entire long-haul logistics chain.
A McKinsey report on the Indian logistics ecosystem expected it to grow at an average of 7-8 percent year on year, while the freight traffic is estimated to demonstrate a 2.5 fold growth till 2020. With their state-of-the-art tech-driven offerings, technology-driven trucking aggregators are well positioned to disrupt the market segment and tap into the massive business potential that is at present locked within the industry, which is currently estimated to be worth $220 billion. The end-game, in this case, is quite obvious – revolutionising the trucking business through tech-driven offerings and adding more value to all the stakeholders in the supply chain.