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Technology is acting as an enabler in making surface transport more organised. Pranav Goel, Co-founder and CEO, Porter, provides a glimpse into how technology is transforming the trucking sector. For sure, one can expect a win-win situation for both shippers and the truckers with better supply – demand matching, decrease in logistics spend, better first mile and last mile connectivity, increased capacity utilisation and better earnings for truckers
Q Please provide a brief outline about Porter’s proprietary service offerings and how is it redefining logistics industry in general and surface transport industry in particular in terms cost and time efficiency? How technology and innovation of business model is helping to bring efficiency in logistics industry? What kind of benefit that you translate to your customers?
Porter is an online marketplace for logistics which aims to reduce the inefficiencies present in the existing market such as low capacity utilization of vehicles, supplydemand information asymmetry, vehicle availability etc using mobile technology. By addressing these concerns, the logistic spend of the customer will tremendously reduce and the driver’s earning potential will increase. We provide minitrucks (LCVs) to businesses on demand as well as on fixed arrangement basis. Ondemand customers can book a vehicle either by using our mobile application or by calling our call centre. In fixed arrangement, we provide vehicles to industries for managing their first mile, last mile and interwarehouse movement of goods.
We have seen that customers end up saving 20 per cent on their logistics spend and earnings of our partners-drivers increasing by more than 50 per cent.
Q In the coming years what role technology is going to playing as far as trucking and other surface transport sector is concerned?
Technology is going to help improve convenience, reliability and efficiency in the logistics’ space. Technology aids in better visibility and helps in enabling in matching demand-supply in a friction less manner. This has far reaching benefits in terms of costs, service level agreements (SLAs) and transparency.
Q Information and technology, data, and real time mapping and analysis has changed peoples’ movement in the country (refer Ola, Uber etc). Shall we expect a similar evolution to take place in the surface transport sector?
Yes, the core problem remains the same – poor supply demand matching, lack of visibility and transparency. Technology is going to disrupt surface transportation in a similar fashion, though the means to achieve and business models may be different than passenger segment like OLA or Uber.
Q What is your observation about the change that is taking place in the trucking industry after the advent of information & technology driven service providers like yours? How the trucking industry which was so far unorganized and unstructured is transforming to provide seamless first mile and last mile connectivity?
We have seen an increase in the capacity utilization of vehicles from 1 trip per day to 3 trips per day creating an economics surplus, and thus enables us to change the economic dynamics of the entire market. We are able to offer a saving of 20 to 25 per cent on logistics spend to our customers alongside a hassle free experience that a tech enabled service provider brings like better SLAs, structured pricing, product safety etc. Not just demand side, we effectively impact the supply side as well by exposing them to broader customer base. Our partner drivers get a stable platform (increase in 50 per cent revenue) reducing vulnerability in their business, thus helping them get respectable income and better lifestyle.
We are seeing majority of our transactions (70 per cent) already happening through app without any human intervention. This is as seamless as requesting a cab these days without calling, negotiating etc.
Q Road transport sector is already giving stiff competition to rail, hence will it further disrupt other modes of transport?
How the face of the trucking industry will be in future?Moreover, What is your vision for Porter? I think road transport is already much larger than rail and will remains so. The asset utilization is very poor as there is poor demand/ supply matching. With the advent of technology, this will improve and will have a spillover effect on pricing, convenience and reliability. I think technology will be an enabler and will equip even the smaller unorganized players to create a supply chain which is much more convenient, reliable and efficient. Porter’s vision is to become a one stop solution for logistics – if logistics is one of the worry for a business, it should no longer be after associating with Porter. We want to become a default option whenever a customer requires logistics support.
Q In recent times lot of interest has been shown by investors for technology companies in the logistics space. What makes these logistics technology solution providers an interesting proposition to investors?
Indian logistics has as much as 13 per cent GDP contribution, where developed countries have a much higher share of 89 per cent. The main reason behind this are the inefficiencies in the market. By addressing these inefficiencies through technology, we can create an economic surplus and benefits of which can be distributed to all the stakeholders involved. This makes it a very exciting opportunity for investors.
Q How is the market growth for technology enabled logistics companies? What kind of investment that you see surface transport industry is making on technology? I see technology enabled companies growing at 4-5x every year. The market size is very big and there is huge scope for optimization. I see a significant portion of investment happening in technology by these companies usually 20-25 per cent of the investment spend in a year on technology.
Q What is the major challenge before the companies like yours? Why a number of tech-driven logistics start-ups have not been able to sustain?
The technology is very complicated to build and the difficulty is compounded by the nuances that exist in the market. It is very difficult to create a product which fits all requirements and yet is simple to use. There are multiple structural issues arising out of poor infrastructure in the country such as poor telecom network, poor mapping of cities and highways digitally, number of entry issues, POD issues, poor adoption of tech in supply and demand, shadow economy, vehicle overloading and oversizing etc. This business model works on network effects and one needs to invest in creating networks effects. Many companies have not been fortunate enough to be able to create these .
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