(This article as originally published on www.thehindubusinessline.com)
Porter, an intra-city freight logistics start-up, is investing in technology to tide over network issues and grow its business.
The company provides app-based goods transportation services by cutting down the wait time for drivers, helping them discover more cargo and providing navigation services. To deal with bad network areas, it also provides drivers with a back-up through SMS.
The app is a win-win for all stakeholders, says the company, as increased asset utilisation creates additional income from each small truck ensuring higher income for the driver, lower freight rates for customers and a 20-per cent gross margin for Porter.
“For intra-city drivers, the waiting time is usually four-five hours a day after a customer’s call. We raised customer awareness on the value of time for intra-city drivers, 90 per cent of whom are owner-drivers,” Pranav Goel, co-founder, Porter, told BusinessLine.
The app ensures return cargo or a going-forward trip to 85 per cent of its driver-users, a move that also enables higher income for drivers. “Drivers on our platform get 2.7–2.8 trips a day against the usual 1–1.2,” Goel said.
Return cargo, coupled with additional income for drivers, has also helped lower transportation charges by up to 20 per cent for freight customers, says the company. “Earlier, when drivers were unable to find return cargo (from destination to origin), they used to build in portions of return transport cost into the freight charges,” said Goel, who started the company with Vikas Choudhary (CTO) and Uttam Digga (COO) in 2014. The job of finding additional cargo also lets Porter charge 20 per cent of each transaction as a fee.
The fleet on the platform include Tata Ace (0.8 tonne), Super Ace (1.2 tonne), Mahindra Bolero (1.5 tonne) and Tata 407 (2.2–2.5 tonne). It also uses four wheeler Eeco, and three-wheeler Champion in Delhi. From an initial fleet of two vehicles and five customers, the app now has 3,000 vehicles on its platform in Delhi, Bengaluru, Hyderabad, Mumbai and Chennai.
Porter, which claims to not have vehicles older than four years old in its fleet, says it gets better financing terms for its drivers and better annual maintenance contracts from its dealers. It is now trying to get better insurance terms for its users.
Its customers include e-commerce, logistics, pharma and FMCG firms such as Amazon, Flipkart, eCart, ITC, Bisleri, Gati, VRL Logistics, Aramex, Holachef, Roadrunnr, DHL Supply Chain and Vardhman Pharma. But its major revenue drivers are small and medium enterprises.
“Fifteen per cent of our customers are institutional customers, who account for 30 per cent of the revenue. With some institutional customers, Porter has long-term agreements, while some others call us for ad hoc requirements.”
For the drivers, Porter has developed an intuitive, colour-code app with versions available in Tamil and Telugu. The app also has a real-time demand heat-map. The firm’s navigational software helps raise red flags, such as where route delays are traffic-driven or if the driver is intentionally delaying.