Saurabh Gupta | 02 May, 2017
Many companies do not realize that they can scale their businesses and improve their margins by employing concepts like Total Cost of Ownership (TCO) or Total Value of Ownership (TVO) in their transport operations, said Ganesh R. Rewanwar, Co-founder and CEO – FreightBazaar.com
and Bhaven Shah – Co-founder and COO – FreightBazaar.com.
In an exclusive interview to SME Times they said that Indian transportation industry is quite large with more than USD 50 billion in freight transported across India. More than two-thirds of the freight is moved through road and there are over 50 Lakh trucks.
FreightBazaar.com is an integrated tech-enabled online platform that enables businesses and truck suppliers to manage the end-to-end transportation process including truck sourcing, freight rates negotiations, delivery tracking, payment and documentation.
Excerpts from the interview...
Why did you enter into truck hiring process? What are freightbazaar.com core services at present? Please elaborate your offerings.
My partner Ganesh Rewanwar saw an opportunity in bringing the unorganized transportation sector under a common online platform. Later, I joined the journey with a vision to make FreightBazaar India’s most reliable and efficient inter-city freight platform for businesses. I have always been a big believer in using power of technology, professional services and customer orientation for growing and sustaining businesses. Soon after joining FreightBazaar as a Co-Founder, I had felt that if Amazon can provide an ecommerce delivery platform for better buying experience to consumers then why can’t we build a similar freight transport platform for India’s businesses? Ganesh also saw it as an opportunity to provide technology tools to impact small and unorganized segments. Besides, I realized that through FreightBazaar.com, we can positively impact the entire eco-system including shippers, truck owners, drivers and environment.
FreightBazaar.com is an integrated tech-enabled online platform that enables businesses and truck suppliers to manage the end-to-end transportation process including truck sourcing, freight rates negotiations, delivery tracking, payment and documentation. In addition, FreightBazaar.com is the only platform that provides services for both spot truck hiring as well as for long-term contracted truck hiring services. FreightBazaar offers businesses timely supply of trucks and opportunity to reduce their overall transportation cost through various cost optimization tools. On the other hand, truck suppliers get to increase their truck utilization and get timely payments.
FreightBazaar.com follows a Marketplace-cum-SaaS (Software-As-A-Service) model. The registered members can publish their shipment delivery (also called load) requirements and receive quotations from multiple reliable truck owners or suppliers. Each supplier is qualified and verified to meet platform’s reliability criteria. After the bidding, selected parties receive online confirmation. All inter-city trips are tracked live and pro-active trip status are provided during the entire delivery process. The platform provides tools for ePOD (Proof of Delivery). The platform has many tools for truck supplier and driver community. For example, supplier can receive automatic alerts for matching load. Plus, they can also track and manage trip expenses through the FreightBazaar Smartphone Application. Even Driver can publish his/her return truck availability anywhere in India through our innovative automated IVR facility.
What is the kind of competition you are facing in transportation industry? Can you also highlight the industry dynamics?
Indian transportation industry is quite large with more than $50B in freight transported across India. More than two-thirds of the freight is moved through road and there are over 50 Lakh trucks. However, the truck ownership is quite fragmented with about 75 percent of truck owners having less than 5 trucks. Most businesses rely on traditional trusted network of suppliers and brokers. Due to this there is a major asymmetry of demand and supply. Truck suppliers often struggle to find return loads for their inter city trips resulting in ‘dead miles’ and higher freight charges. Besides, unorganized and unprofessional nature of the industry leads to a lot of inefficiencies in terms of poor communication, delays in deliveries, higher transport cost and poor utilization of trucks.
There are a few companies trying to approach the problem albeit in different ways. For example, there are companies deploying newer trucks with tech-enabled operations. A few other companies are operating like a high-end transporter while a few others are providing a tech-based broker services. The approach FreightBazaar has taken is quite unique and scalable through our marketplace-cum-SaaS business model. We focus on providing reliable service through tech-enabled operations. Our model is asset-light and capital efficient. As a result, we have been able to service more than 200 routes across India. We have member base in 300 cities and 30 states. we have almost 90 percent repeat business and almost 100 percent success rate on trips.
In your views, what are the key challenges in this sector?
Lack of professional mind set is one of the key challenges. Many companies do not realize that they can scale their businesses and improve their margins by employing concepts like Total Cost of Ownership (TCO) and Total Value of Ownership (TVO) in their transport operations.
Many truck owners are reluctant to invest in newer technologies such as IOT devices, which can provide a lot of benefits in reducing operational risk and can create opportunities for them to provide value added services to their customers.
Drivers play an important role in the entire delivery process. However, many suppliers do not pay fair wages to drivers or equip them with Smartphones, which can improve the efficiency of tracking and other delivery operations.
Who are your clients? How you see the small and medium enterprise (SME) sector?
We have a client base across 300 cities and 30 states of India. On shipper side many large as well as SME enterprises in logistics, supply chain and FMCG are using our platform. On truck supplier side, many truck owners and transporters are using our platform. We have over 25,000 trucks available through our platform. Currently, more than two-thirds of our 1200+ customer base would qualify as small and medium (SME) businesses.
Logistics and transportation is the backbone of India’s economy. 40 percent of India’s GDP is driven by the SME sector. Most of the 10 lakh or so truck suppliers or trucking companies would qualify as SMEs. It is extremely important for FreightBazaar to enable the suppliers with proper technology based tools and infrastructure so that they can run their business more efficiently and profitably. FreightBazaar is working towards educating and empowering these transport sector players so that they can provide reliable and efficient services to country’s millions of SME businesses who can focus on scaling their businesses to support the 8 percent-9 percent GDP growth required for India’s sustained development.
Clean Air Asia is your knowledge partner. Please tell more about FreightBazaar and Clean Air Asia Partnership.
It is FreightBazaar’s vision to create a positive impact at economic, social and environmental level. In that regard, FreightBazaar and Clean Air Asia have partnered to create awareness around transport air quality issues. In addition, we have also signed an MOU with the Domain Functional and Advisory Group (DFAG) who is a leading advisory organization on subjects such as smart cities, transport safety and air quality. Through such partnerships, we are also looking at ways in which we can positively impact driver’s lives as well.
What's your most valuable lessons from the business and life? What are your future plans?
The long-haul transport sector is on the verge of transformation. However, it will be a long road ahead as it will take some time for the entire sector to achieve the level of maturity and technology sophistication we have seen in other sectors like e-commerce. Upcoming GST policies will increase the transformation happening in this sector and will bring substantial positive changes in the way transport operations are managed. Having the right people in the team at the right place and the right time is one of the biggest challenges of a start-up organization. We are going to be expanding our operational presence in many metro cities across India. We are looking at a multi-fold increase in turnover in the coming year. At this stage, it is important for us to focus on organic growth and on building a sustainable business. This will ensure long-term value creation for all stakeholders.
Life has been a great teacher for me. I have learnt many things by doing. It’s important to dream big. But, one must set forth towards the dream with confidence, passion, determination and perseverance. Don’t be afraid to try new things. Along the journey, we will meet with some great people and experience some wonderful things. Those will make the difficult journey much more worthwhile and enjoyable.