Logistics startup Trucknetic employs AI along with ML to provide digital freight services on the roads

Arham Partap Mechanical engineering graduate of NorthCap University, Gurugram, realized the need for improvement in the logistics industry while working for his family’s business that involved trading bulk commodities.

“In February of 2019 the company was struggling. I was in charge of managing logistics, an essential aspect of any trade business. We had our own tankers and trucks However, I realized how difficult the whole process was. Within the space of six months, I could detect many flaws in the processes , and I was wondering why they hadn’t been addressed,” Arham recalls.

This is when the entrepreneurial bug stung him, and he embarked on the quest to find the root of logistics issues, expand his knowledge of the field and improve the efficiency of the supply chain of his company.

“I had the privilege of interacting with a variety of stakeholders, including truck drivers, transporters, and fleet owners. I received real-world information and insights as well as pain points. I then applied the lessons and improved the logistics for my family’s business” the CEO says.

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In September, Arham launched tech-first logistics startup Trucknetic. Arham started with one client then landed another and in 2019 he quit his family’s business to operate the company full-time.

The company is headquartered at New Delhi with offices in Gujarat and Uttarakhand, Trucknetic is a digital freight platform that connects shippers and carriers. Its marketplace makes use of AI machines, machine-learning, and other software that is proprietary to serve as a central platform for both front and return loads.

Trucknetic was founded in the year 2000 with an investment starting at Rs . 3 crore.

What is the problem?

The platform consists of two applications: Trucknetic Carrier, for transporters and owners of fleets and Trucknetic Shipper, which caters to traders, individuals, MSMEs, and corporates.

The problem that the startup has solved is the problem of return load that costs an Indian economy as much as $50 billion each year. Most trucks run empty when they come back which results in fuel waste and increased cost for the carrier as well as the shipper.

Trucknetic is a company that aims to cut down on empty running as well as improve the efficiency of equipment to lower transport costs, and eventually reduce carbon footprint.

What is the process?

The logistics startup is an all-in-one service for all kinds of trucks as well as intra-city, inter-city, as well as line hauling across India.

Shippers sign in via the application, enter the details of their movements, such as locations to and from information, details about the commodity and book any available truck. Additionally, they can access credit and insurance services through the platform.

“The functionality is comparable to the functionality of Uber. The shipper can post the details of their trip and load They can also choose in-transit insurance. Shippers typically require funds for their transportation requirements, so Trucknetic can help via our finance partner, who has appealing commercials that are attractive,” Arham says.

The truck drivers on the Trucknetic platform have visibility of the return truck from the point of departure; this reduces the cost of fuel and boosts profits per truck by between 40 and 50 percent.

Carriers also earn “Trucknetic points” for regularly using the platform.

Both carriers and shippers benefit from access to analytics that allow them to track fuel prices and space utilization and route optimization which helps in making better decisions and decreases expenses.

AI plays a crucial part in optimisation of routes and assists businesses to cut down on the time needed to plan by 80% , and also cut down on the expense of fuel and wages for drivers.

Trucknetic is one of the chosen startups in the Microsoft AI innovation–manufacturing and logistics cohort.

Arham states, “Trucknetic is building a prototype to solve the problem of return load together with Microsoft by using AI as well as ML. Our AI-powered platform assists shippers and carriers by utilizing forecasting algorithms. This allows carriers to check the availability of their loads and forecast future demand for transportation, while shippers can monitor availability of trucks at all times.”

Trucknetic has already taken on more than 5 000 transporters as well as more than 1,000 shipping companies. The company has a network of nearly 200 000 Fleet owners and 50, 000 transporters that translates into an extensive network of over 100,000 trucks.

Revenue and business model

The business model of the company includes commissions, arbitrage, and subscriptions. In the moment 90% of revenue is generated by arbitrage and the remaining 10% is from commissions.

“Our main revenue source is the arbitrage model. This is the difference in price of freight between carriers and shippers. For instance when we purchase the truck from a transporter at a cost of Rs 100 We then give it to the shipper at the price of Rs 120. Therefore, Rs 20 is an price of the arbitrage” He says.

“We envisage the mix to change in the near future – 60% of the revenue will come from arbitrage, 30% from subscriptions, and 10% from commissions.”

Trucknetic earns 5percent of the profit from transactions. This translates to between Rs 500 and Rs 1,500 from a trucker per journey and an average of Rs 20 per metric tonne by the shipping company.

The company’s target market is anybody and everybody who would like to move their goods from one location to another. But, it focuses on MSMEs as well as individuals and B2B supply chain startups.

It is home to a variety of high-profile brands on its list of clients, such as Patanjali, Action Tesa, Nuvoco, Gulshan Chemicals, and many more. It has also received numerous prizes and opportunities. This includes the 10 most trusted logistics brands and Supply Chain Brands 2021, Top Placer Logistics 2021, Best Shippers, and Carriers Marketplace Platform (Asia Pacific).

Trucknetic is home to more than 2 lakh+ downloads for the Shipper and Carrier apps with more than 5,000 active users per day.

The company has earned income of 1.4 million in the years 2019-20 and Rs 9 crore in 2020-21, and 14.3 crore by 2021-22.

The Delhi-based firm also has an organization that is non-profit and aims to improve the living and working conditions of over 2 million drivers of trucks which are the core for the MSME economy.

“Numerous challenges force truckers out of the industry. The NGO seeks to create an environment of safety for them with different welfare programs,” Arham says.

The funding process and the path ahead

According to an Redseer report the market for logistics in India is at present $300 billion. Of that, the road transport sector accounts for 60%..

“Although Trucknetic has been able to take just 11% market share, it’s rapidly expanding and growing. Trucknetic also has around 1/10th percent of trucks from India within its network. we hope to double that within over the next 3 years,”” The founder of the company says.

The logistics startup competes against startups such as Rivigo, BlackBuck, and WheelsEye. But, its model is different from the others in that it doesn’t own any trucks , and operates as an online marketplace.

“We focus on MSMEs and B2B startups in supply chain, which is an untapped market. Our primary goal is trucking only; we haven’t yet diversified into other sectors at this point,” Arham says.

Trucknetic is currently in the process of raising an initial round of 10 million dollars. The company plans to utilize the funds to improve its software as services (SaaS) as well as analytics-based supply chain management tools via organic and inorganic methods.

Trucknetic will also improve the reliability of its operation by utilizing an extensible, modular technology platform that can enhance users’ experience as well as aid in building a large trading community.

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