Logistics startup Trucknetic uses AI and ML to put digital freight services on the road

Arham PartapA mechanical engineering graduate from NorthCap University, Gurugram realized the gap in the logistics industry while working in his family business involving bulk commodity trading.

“In February 2019, the company was in turmoil. I was responsible for managing logistics, a key part of any business venture. We had our own trucks and tanks, but I realized how cumbersome the whole process was. In six months, I could see many gaps in the processes and wondered why they hadn’t been resolved yet,” Arham recalls.

That’s when the entrepreneurship bug bit him and he began a journey to get to the root of all logistical issues, increase his domain knowledge, and streamline the company’s supply chain issues. .

“I had the chance to interact with multiple stakeholders (truck drivers, fleet owners and carriers) and got some legit insights and pain points. Later, I applied the learnings and streamlined the transportation challenges of my family business,” he says.

The Trucknetic team

In September 2019, Arham launched Trucknetic, the first tech logistics startup. He started with one client, got another, and in 2019 left his family business to run his business full time.

Based 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 frontloads and backloads.

Trucknetic was launched with an initial investment of Rs 3 crore.

What does it solve?

The platform includes two applications: Trucknetic Carrier, for fleet owners and carriers; and Trucknetic Shipper, which caters to individuals, traders, MSMEs and businesses.

The problem the startup solves is the back-charging problem, which costs the Indian economy up to $50 billion a year. Trucks typically run empty on the return trip, which means wasted fuel and higher costs for the carrier and shipper.

Trucknetic aims to reduce empty running and improve asset utilization to reduce transportation costs and ultimately reduce carbon footprint.

How it works?

The logistics startup provides a one-stop solution for all types of trucks and intra-city, inter-city and liner movements across India.

Shippers log into the app, fill in details of their movements, such as location to and from location, cargo details, and book from available trucks. They can also benefit from insurance and credit facilities on the platform.

“The functionality is similar to Uber. A shipper views load and trip details; they can opt for in-transit insurance. Shippers typically require working capital for their transportation needs. so provides that through our financial partner with very attractive advertisements,” says Arham.

Trucknetic platform carriers gain visibility into the return load from the destination; this saves fuel costs and increases revenue per truck by 40-50%.

Carriers also earn “Trucknetic Points” for regular use of the platform.

Shippers and carriers have the visibility of analytics to see fuel costs, space utilization, route optimization, and more, which helps in better decision-making and lowers costs.

AI plays a key role in route optimization and helps companies reduce planning time by 80% and significantly save fuel costs and driver salaries.

Trucknetic is one of the startups chosen in the Microsoft AI – Manufacturing and Logistics Innovation Cohort.

Arham says, “Trucknetic is building a proof of concept to solve the return load problem in conjunction with Microsoft using AI and ML. Our AI-powered platform empowers shippers and carriers with predictive algorithms. This helps carriers check load availability and forecast future transport demand, while shippers can check truck availability at any time. »

Trucknetic has so far integrated over 5,000 porters and 1,000 shippers. It has a local network 200,000 fleet owners and 50,000 carriersresulting in a network of more than one million trucks.

Business model and revenues

The business model includes arbitration, commissions and subscriptions. Currently, 90% of revenue comes from arbitration and about 10% comes from commissions.

“Our main income comes from the arbitrage model, which is the freight price difference between shippers and carriers. For example, if we buy 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 an end-to-end logistics service. However, if a shipper commits to shipping a certain tonnage of cargo through us, they get discounts,” adds Arham.

“We expect the mix to change in the near future – 60% of revenue will come from arbitration, 30% from subscriptions and 10% from commissions.”

Trucknetic makes 5% of the trades margin, which translates to Rs 500-Rs 1,500 from a carrier per trip and Rs 20 per metric ton from the shipper.

The startup’s target audience is anyone who wants to ship their products from one location to another. However, it focuses 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 Top 10 Most Trusted Logistics and Supply Chain Brands 2021, Top Placer Logistics 2021, Best Shippers and Carriers Marketplace Platform (Asia-Pacific).

Some of Trucnetic’s best customers

Trucknetic has over two lakh+ downloads of Shipper and Carrier apps with 5,000 daily active users.

The startup generated 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 organization that aims to improve the working and living conditions of over two million truckers, who are the backbone of the MSME economy.

“Many problems are forcing truckers to leave this sector. The NGO aims to create a safe space for them through various wellness campaigns,” says Arham.

Funding and way forward

According to a Redseer report, India’s logistics market is currently worth $300 billion, of which road transport accounts for 60%.

“Although Trucknetic was only able to capture 1% of the market share, it is growing and expanding rapidly. Trucknetic also has about 1/10th of India’s trucks in its network; we aim to triple that over the next three years,” says the founder.

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 mainly work with MSMEs and start-ups in the B2B supply chain, an untapped market. Also, our primary focus is trucking only; we haven’t diversified into other segments yet,” says Arham.

Trucknetic is in the process of raising a Series A of $10 million. It plans to use the fundraising proceeds to bolster its existing software as a service (SaaS) and analytics-based supply chain management solutions through organic and inorganic means.

Trucknetic will also improve operational robustness through a modular and scalable technology platform, which will help improve the user experience and create a large community of traders.