(This article was originally published on www.businessworld.in)
Porter, is an Indian tech enabled intra-city logistics company. It is an online market place which offers mini-trucks (LCVs) to SMEs, small businesses and individuals on demand as well as on fixed arrangement basis. In fixed arrangement, vehicles are provided to industries for managing their first mile, last mile and inter-warehouse movement of goods.
Porter was founded in 2014 by three IIT graduates Pranav Goel, Uttam Digga and Vikas Chaudhary. The company’s goal is to weed out the inefficiencies that plague the existing unorganised intra city logistics market with the use of its proprietary technology platform. By offering the exact location, route monitoring and inventory utilization data to its customers, the company is able to offset the traditional systemic inefficiencies like low capacity utilization of vehicles due to supply demand information asymmetry and opaque pricing. This way, Porter is also able to help drivers increase their earning by providing them wider customer base and by increasing their vehicle utilization.
With a fleet of 3000 vehicles, Porter currently offers its services in Bangalore, Delhi, Mumbai, Hyderabad and Chennai. Customers can book a vehicle on-demand either by using the Porter app or by calling the call centre.
Functioning
On Porter’s booking platform, individuals and SMEs can connect to the nearest available vehicle depending on their requirement. The app offers the convenience of real time tracking of vehicles and also enables payments through the Porter wallet.
The platform reduces the inefficiencies present in the existing market (such as low capacity utilization of vehicles, supply demand information asymmetry, vehicle availability etc) using mobile technology. Currently Porter is present in 5 cities; Delhi, Bangalore, Mumbai, Chennai and Hyderabad.
Major clients
Flipkart, Amazon, Aramex_Delhi_AM OP, Rentomojo, Holachef, DHL Supply Chain India Pvt. Ltd, Delhivery, Rivigo, Pantaloon, VRL LOGISTICS LTD, mSupply.com, Vardhman Pharma Dist Pvt.Ltd, Roadrunnr, Bizlog, Bisleri, ITC etc
Eureka moment
Pranav and Uttam were together in IIT Kharagpur and then worked together in J.P. Morgan as well. They used to discuss ideas and were fascinated by the Uber business model, and the way it had changed the taxi business. One night while returning from office Uttam mentioned that there are a lot of LCVs in the market and he was doubtful whether all these vehicles got enough business. So, they did a survey of some 500 vehicles to understand that this sector is troubled with poor capacity utilisation of vehicles. Where the potential trips are almost 4 trips a day, all that drivers got was 1 trip per day. They thought that if somehow they could increase the capital utilisation, creating a huge economic surplus, then the customers would end up saving 20–25% on logistics and the drivers would earn 50% more revenue. They spoke to customers to understand their pain points which are mainly vehicle unavailability, poor SLAs and lack of visibility etc. This increased the conviction about the market opportunities and they started to conceptualize the business model.
Unique and differentiating features
The processes in Porter are end to end technologically integrated. Because of this automation, minimal manual intervention is needed, resulting in near zero errors and enables the firm to scale rapidly with a lean team.
Porter’s customer mobile application offers a complete user experience by connecting the customer with commercial vehicles for goods to be transported. The app shows the vehicles available nearby and the ETA of the nearest vehicle. Once the trip is booked, customer receives the trip details like driver name, vehicle number etc. Also, the app allows the customers to track their consignment in real time and pay either at pickup or drop.
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 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 this platform get 2.7–2.8 trips a day against the usual 1–1.2.
Future plans
Porter is planning to expand their presence in 15 major cities like Pune, Kolkata, Ahmedabad, Chandigarh, Jaipur, Lucknow and Coimbatore.
Challenges faced
B2B sales cycles are slower than that of B2C. Clients show resistance in getting associated with a new platform and they depend mostly on their regular service providers. The drivers on the supply side are working on small scale basis and to make them understand the advantages of working in an organised system is a huge challenge. Low tech penetration and low literacy rate among owner driver is also a challenge in their adoption.
There are a number of regulatory issues like road tax and no-entry zones, which varies from city to city. Operating with complicated structure of compliances is difficult as the company expands its network.
Opportunity in the logistics space
The addressable market (last mile LCV market size in the top 15 cities) is approximately 15 billion dollars by 2020. Being an unorganized market with a lot of inefficiencies, the last mile logistics space is ripe for disruption. India spends 13% on logistics compared to 8–9% in developed nations, largely because of inefficiencies that exist in the market.
