How Big Basket spurred this logistics startup to scale new heights
It was when Big Basket was looking for a partner in Pune who could work with them to set up their hub and last-mile operations, the idea of Brring emerged. KB Nagaraju, CEO of (Innovative Retail Concepts Limited, a Big Basket company) shared this problem with Sahil Mehta and Akhilesh Rao, CEO and COO of Sovika Aviations, an aviation company of Sovika Group, a 38-year-old successful Indian multi-business conglomerate (ventured into diverse areas like chemicals, aviation, hospitality, and lifestyle).
Sahil and Akhilesh promised to solve this problem and initiated the concept of Brring as a last-mile partner to Big Basket in November 2014.
Eventually seeing the opportunity of the huge market potential in the perishable and non-perishable industry, with food industry growing at a CAGR of 11 percent and expecting to reach $65.4 billion, Sovika Group decided to help Brring spread its wings.
Abhishek Nehru, who was Service Head (Large Appliances) in Flipkart India from February 2014 to October 2015, was hired as the business head of Brring.
When Brring, under the Sovika banner, earned a total revenue of Rs 18 crore, the idea of creating a separate entity appealed to Abhishek and hence Brring Integrated Logistics Pvt Ltd was born in April 2016. Sovika Group is the promoter of Brring.
Brring offers warehouse management, packaging, fleet management, sourcing of staples and groceries, cold chain solutions, first mile, and last-mile services.
The company was started with a paid-up capital of Rs 15 lakh and working capital and assets worth Rs 4 crore. To count a few of the challenges the company faced during the initial days in their day-to-day operations are vehicle and cost optimisation, productivity, fuel consumption and pilferage, ensuring 100 percent SLA, high customer experience, and satisfaction with zero breach.
“In cold chain operations, maintaining the temperatures throughout the delivery process was a big challenge. Moreover, we also felt the need for green supply chain solutions for reducing the carbon footprint. In a bid to overcome the issues, Brring ensured that all the vehicles are GPS-enabled with live monitoring systems,” says Abhishek, who brings 15 years of experience in IT, ITES and retail operations.
Brring introduced Smart Fleet Card (BPCL), to reduce fuel pilferage. A fixed amount needs to be recharged in these cards and fuelling will be done through cards. Moreover, to ensure maximum vehicle productivity, they leverage the cross utilisation of vehicles. For example, vehicles used for Big Basket operations in the day can be utilised for McDonald's at night.
In partnership with Tata Motors, Brring is now trying to convince local transportation vendors and single vehicle owners to upgrade their vehicles. For the cold chain, the startup has developed eco-friendly and eutectic technology temperature-controlled vehicles, which maintain temperature up to 12 hours and monitored through live temperature monitoring system. To promote green supply chain solutions, the startup has purchased 50 Mahindra electric vehicles (ESupro) and deployed the same for Big Basket operations in Delhi.
Spreading wings
Brring started operations in Pune with one hub and a few vehicles for last-mile deliveries, with tight operational SLAs and on-time deliveries.
After the successful operational setup in Pune, Big Basket wanted to start operations in Mumbai, Delhi, Ahmedabad, Kolkata, and Tier-II cities. Brring has also purchased battery-operated three-wheeler Greenricks to promote eco-friendly deliveries across Bengaluru and Delhi.
Brring has a manpower of over 1,500 and a fleet of over 200 with live operations across 14 cities.
Today, its client list includes Big Basket, Grofers, Udaan, Tokri, Fortis Hospital, Flipkart, Furlenco, McDonald’s, Finger Lix, and Amazon. It is working on creating a hub-and-spoke model for Fortis Hospitals' kitchens, in order to reduce operational inefficiencies. The complete cost of operations (warehouse management fees, manpower, transportation, other costs) is billed back at actuals to the client with a service charge between seven and 10 percent. A fixed cost is charged with a defined SLA. Even the client is charged per package/product delivered to the customer.
Attaining profitability
“We became operationally profitable because 80 percent of the fleet is owned by us giving a better control over the day to day operations and also we are able to optimise cost by cross utilising the vehicles in different operation and across day and night,” says Abhishek.
According to a report by Novonous, India’s road freight comprises around 63 percent of the total freight movement of 2.2 million heavy and 600,000 light-duty trucks. The report further stated that the third-party logistic market in India is expected to be $301.89 billion by 2020. The Indian logistics market is expected to grow at a CAGR of 12.17 percent by 2020 driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors.
In the next two years, Brring wants to expand operations from 16 to 31 cities and set up a sourcing vertical to move perishables directly from the farms to the client warehouse. The company also sets up cold chain warehouses to expand the cold chain fleet and is targeting to grow from a present run rate of Rs 40 crore to Rs 90 crore by the end of next fiscal year. Brring is planning to raise $3-5 million by May or June in 2017.