Logistics startup Trucknetic uses AI and ML to put digital freight services on the road
Founded by Arham Partap in 2019, logistics startup Trucknetic operates as an online marketplace that connects shippers with carriers. It aims to transport front haul and backhaul loads to ensure zero waste miles for trucks.
Arham Partap, a mechanical engineering graduate from NorthCap University, Gurugram, realised the gap in the logistics sector while working in his family business involving trading of bulk commodities.
“In February 2019, the business was in turmoil. I had the responsibility of managing logistics, a key component of any trading business. We had our own trucks and tankers, but I realised how cumbersome the entire process was. In six months, I could see many gaps in the processes and wondered why they had not been addressed yet,” Arham recalls.
That's when the entrepreneurial bug bit him and he started on a journey to go to the root of all logistics problems, increase his domain knowledge, and streamline the company’s supply chain issues.
“I was lucky to interact with multiple stakeholders--truck drivers, fleet owners, and transporters--and got legitimate insights and pain points. I later applied the learnings and streamlined the transportation challenges of my family business,” he says.
In September 2019, Arham launched tech-first logistics startup. He started with one customer, got another, and by 2019 left his family business to operat his company full time.
Headquartered in New Delhi with offices in Gujarat and Uttarakhand, Trucknetic is a digital freight platform that connects shippers with carriers. Its marketplace uses AI, machine learning, and other proprietary software to function as a central portal for front loads and return loads.
Trucknetic was started with an initial investment of Rs 3 crore.
What does it solve?
The platform comprises two applications: Trucknetic Carrier, for fleet owners and transporters; and Trucknetic Shipper, which caters to individuals, traders, MSMEs, and corporates.
The pain point the startup is solving is the return load problem, which costs the Indian economy up to $50 billion annually. Trucks usually run empty on their way back, which means fuel wastage and higher costs for the carrier and shipper.
Trucknetic aims to reduce empty running and improve asset utilisation to reduce transportation costs and eventually cut the carbon footprint.
How does it work?
The logistics startup provides a one-stop solution for all types of trucks and intra-city, inter-city, and line haul movements across India.
Shippers log on to the app, fill in their movement details such as to and from location, commodity details, and book from the available trucks. They can also avail insurance and credit facilities on the platform.
“The functionality is similar to that of Uber. A shipper posts load and trip details; they can opt for in-transit insurance. Shippers usually need working capital for their transportation needs so Trucknetic provides them with that through our financing partner with very attractive commercials,” Arham says.
The carriers on the Trucknetic platform get visibility on the return load from the destination; this saves fuel costs and increases revenue per truck by 40-50%.
Carriers also get “Trucknetic points” for regularly using the platform.
Both shippers and carriers have the visibility of analytics to see fuel costs, space utilisation, route optimisation etc, which aids in better decision-making and reduces costs.
AI plays a key role in route optimisation and helps businesses cut planning time by 80% and save significantly on fuel costs and driver wages.
Trucknetic is one of the chosen startups in the Microsoft AI innovation--manufacturing and logistics cohort.
Arham says, “Trucknetic is building a proof of concept to solve the return load problem in association with Microsoft using AI and ML. Our AI-powered platform empowers shippers and carriers with forecasting algorithms. This helps carriers check load availability and predicts future transport demand while shippers can check for truck availability at all times.”
Trucknetic has so far onboarded more than 5,000 carriers and 1,000 shippers. It has a network of close to 200,000 fleet owners and 50,000 transporters, translating to a network of more than one million trucks.
Business model and revenue
The business model includes arbitrage, commissions, and subscriptions. As of now, 90% of the revenue comes from arbitrage and about 10% comes from commissions.
“Our major revenue comes from the arbitrage model, which is the price difference in freight between the shippers and carriers. For example, if we procure a truck from a carrier for Rs 100, we give it to the shipper for Rs 120. So Rs 20 is the arbitrage,” he says.
Going forward, the startup will start selling subscriptions. “Trucknetic charges ₹20/MT for end-to-end logistics service. However, if a shipper commits to ship a certain tonnage of load through us, they get discounts,” Arham adds.
“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 makes 5% of the margin from transactions, which translates to Rs 500-Rs 1,500 from a carrier per trip and Rs 20 per metric tonne from the shipper.
The startup’s target audience is anyone and everyone who wants to ship their products from one place to another. However, its focus is on MSMEs, individuals, and B2B supply chain startups.
It has a host of prestigious brands in its client list, including Patanjali, Action Tesa, Nuvoco, Gulshan Chemicals, etc., and has received numerous awards and opportunities. These include the 10 Most Trusted Logistics & Supply Chain Brands 2021, Top Placer Logistics 2021, Best Shippers, and Carriers Marketplace Platform (Asia Pacific).
Trucknetic has more than two lakh+ downloads of the Shipper and Carrier apps with 5,000 daily active users.
The startup has generated a revenue of Rs 1.4 crore in 2019-20, Rs 9 crore in 2020-21, and Rs 14.3 crore in 2021-22.
The Delhi-based company also runs a non-profit that aims to improve the working and living conditions of more than two million truck drivers, who are the backbone of the MSME economy.
“Numerous problems are forcing truckers to leave this sector. The NGO aims to create a safe space for them through various welfare campaigns,” Arham says.
Funding and the way ahead
According to a Redseer report, the logistics market in India currently stands at $300 billion, of which road transportation comprises 60%.
“Although Trucknetic has been able to capture only 1% of the market share, it is rapidly growing and expanding. Trucknetic also has about 1/10th of the trucks in India in its network; we aim to triple this in the next three years,” the founder says.
The logistics startup competes with startups like Rivigo, BlackBuck, and WheelsEye. However, Trucknetic’s model differs from these as it does not own any trucks and is a marketplace.
“We work primarily with MSMEs and B2B supply chain startups, an untapped market. Also, our core focus is only trucking; we haven’t diversified into other segments yet,” Arham says.
Trucknetic is in the midst of raising a Series A round of $10 million. It plans to use the proceeds from the fundraise to strengthen its existing software as a service (SaaS) and analytics-based supply chain management solutions, through both organic and inorganic routes.
Trucknetic will also enhance operating robustness through a scalable, modular technology platform, which will help augment user experience and assist in building a large trader community.
Edited by Teja Lele