According to ICRA, the logistics industry in India is expected to grow at 8-10 per cent over the medium term. For the last five years, the industry witnessed a 7.8 CAGR and is currently estimated to be valued at $160 billion. As per the Economic Survey of 2017-18, the sector will touch $215 billion over the next two years.
This catchy numbers inspired Afzal P N & Zaheer Khan to start their own logistics firm called TruckzIndia. Founded in August this year, the startup provides a comprehensive range of transportation and logistics services tailored according to business needs. With all the resources, a good team, and extensive technology, TruckzIndia facilitates the shipment from origin to a destination quickly, carefully and efficiently.
The Bengaluru-based startup was the brainchild of one of the co-founders. Prior to founding TruckzIndia, one of the co-founders worked in a similar firm for more than 3 years. He understood the markets very extensively and analyzed what problems were not being solved by the firm. And he found a lot of gaps to be filled. So he started his own startup to solve all the on-ground problems.
The first problem with the logistics industry is the underutilization of available fleet of vehicles. Zaheer and Afzal have built a technology and a mobile application for truckers which provides a standardized service and drive efficient utilization of the available fleet of trucks. Consequently, this reduces the operational costs and enables them to offer 20-30 per cent lower prices to their customers.
We all know that starting up is not easy. Every entrepreneur faces problems while getting initial traction. The founders understood that there is a huge demand for commercial vehicles in the market. And by analyzing this demand and supply gap, they approached a number of companies. After a lot of conversations and meetings, they finally signed up Bluedart as their very first client.
Another problem that is prevalent in the logistics industry is the lack of discipline in the transaction timings. Truck and commercial vehicle owners had a very bad experience in the market as they did not receive timely payments. This emerged as a major challenge for the founders because there was a lack of trust among the truck owners. It took time and a lot of hard work to gain trust. But by making timely payments, they earned word of mouth promotion among the truck owners.
The duo started exploring the intra-city logistics market in India in early 2018 and they witnessed that it was fragmented and inefficient. There was a lack of standardized pricing and technology was the only option to solve this problem. Moreover, there isn’t any organized player and traditional firms are unable to deliver their promises on fixed contracts. All of them are asset heavy and lack primitive technology platforms.
The technology platform provides 24-hour real-time monitoring, reports on attendance, delays, and extra miles covered, a capturing photo feature to ensure transparency, dedicated call support, complaint tracking system as well as geofencing features like reporting location and specific radius near the warehouse.
The startup is currently operational in Bengaluru and plans to expand to cities like Pune, Delhi, Mumbai and Hyderabad in the upcoming years. TruckzIndia provides all sorts of commercial vehicles including Tata 407, Bolero Pickup, Tata Ace, Eeco, Motorbikes and Bicycles with riders. It serves clients like Bluedart, Croma, Ninjacart and FuelFill.
The startup has raised invoices of more than INR 1 lakh just after inception in the month of August and has witnessed an exponential growth in sales since then. TruckzIndia generated invoices of INR 2,98,000 in September, INR 8,67,000 in October and a whopping INR 11,82,000 in November. The startup currently operates on Attached Vehicle mode of business but is planning to foray into the On Demand Vehicle segment in January next year.
The transportation and commercial vehicle market are highly unorganized in India. TruckzIndia aims to build a platform that will aggregate and organize the fragmented market of mini trucks and commercial vehicles in the upcoming years.
The logistics industry in India employees more than 22 million people. There is a huge opportunity for technology-enabled logistics startups as they provide seamless movement of goods across the country. According to the CBRE report, the Indian market for warehouse automation is estimated to grow by 10-12 per cent to US$ 3.49 billion by the year 2020.
According to an industry expert, “Tech-enabled startups have a huge scope to grow as well drive the growth of the sector. Not only they are attracting heavy investments, but they also have the potential to make export procedures hassle-free by reducing unnecessary paperwork, in turn reducing delays in delivery.”
Warehousing sector is emerging as an attractive investment is another dominant trend in the Indian logistics sector. Some of the key investors include Ascendas-Singbridge, Morgan Stanley, and Warburg Pincus, besides others. The investment burst in the sector is leading to the development of new and better warehousing facilities.
The last couple of years have seen significant development for this industry which is reflected in the global rankings. According to the Global Ranking of the World Bank’s 2016 Logistics Performance Index, India jumped to 35th rank in 2016 from 54th rank in 2014 in terms of overall logistics performance. The report also showed that India’s logistics sector has improved its performance on all the six parameters used in the ranking. This is a huge jump of 20 ranks and clearly indicates the growth of the sector.