Industry welcomes new India budget boosting transport and logistics infrastructure
Transport and logistics companies have welcomed India’s latest budget, announced on Saturday, which saw the ...
DHL has entered India’s crowded digital trucking market with the launch of DHL SmarTrucking.
Under the newly formed Corporate Incubations board department, SmarTrucking aims to build an IoT-enabled owned fleet of 10,000 trucks within 10 years.
Juergen Gerdes, board member for Corporate Incubations, Deutsche Post-DHL Group, said: “We expect to transport 100,000 tonnes of cargo and cover a distance of approximately four million km across India daily.”
Over a three-month pilot period covering 2.7m km, DHL said SmarTrucking’s IoT-tech and data-driven route optimisation helped cut transit times by up to 50% compared with traditional trucking.
The venture is the latest in a string of digital logistics start-ups looking to transform India’s highly fragmented trucking sector – of some 12m trucks plying the roads, 90% are owned by single operators.
But trucking represents around 60% of the country’s annual freight volumes and, with the latest government forecast valuing the logistics industry at $215bn by 2020 – a 10.5% annual growth rate – it’s easy to see why investors are pouring money into the sector.
For example, there are at least 10 logistics tech start-ups providing solutions designed to optimise pricing, payments and documentation and reduce empty truck miles. Two of the biggest funding recipients are line-haul relay innovator Rivigo ($180m) and logistics marketplace Blackbuck ($107m).
Rivigo’s relay system allows it to reduce transit times by up to 70%, the company said, and reduce working hours for drivers. The start-up’s $50m funding round in January brought its value to $945m.
BlackBuck, on the other hand, is one of the largest FTL players in India, with its online marketplace model increasing truck availability to 95%, compared with the industry average of 70-80%, it claimed.
Other trucking platforms include FreightBazaar, Trukky, GoBOLT, LoBB, 4TiGO and LogiNext.
According to ReturnTrucks, a load matching service claiming to be one of the fastest-growing logistics aggregators in India, the sector is plagued by a lack of digitisation.
Founder and chief executive Sudhakar Vintha said: “India’s trucking industry is dominated by small and medium truck operators, and 80% of these truck owners don’t have any digitisation in their day-to-day operations.
“The problem areas are the lack of connected transport operators, high lead times to get loads, lack of simplified fleet management systems, industry control by unions in some parts of the country and very minimal use of vehicle tracking solutions.”
ReturnTrucks has more than 25,000 trucks on its platform, helping shippers book loads and hire drivers on an ad hoc basis. Its transport management systems are all iPad compatible, which allows truck operators to use the applications on the go.
In addition to well-funded technical innovation, India’s trucking sector received a major boost last year with the introduction of the Goods & Services Tax (GST), which opened up new opportunities for inter-state trucking, a practice previously hampered by cumbersome border checks.
“GST is a revolutionary step in the Indian economy,” said Mr Vintha. “We have enough stats to confirm it has had a positive impact on the trucking industry.
“Transport and logistics infrastructure is getting streamlined, resulting in greater up-time for trucks, fewer idle hours and faster turnaround.
“Furthermore, post-GST implementation is good news for maximising the road traffic movement efficiency across the country by filling up serious infrastructure gaps,” he added.