How Raaho Is Using Tech To Transform India’s Fragmented Commercial Trucking

Think Azadpur Mandi, 1 of the biggest wholesale markets successful India dealing successful fruits and vegetables, and 1 tin easy ideate immense gunny bags filled to capableness and a agelong enactment of pickup vehicles patiently waiting extracurricular to present bulk orders.

Ask ‘cargo owners’ if accelerated and businesslike proscription is simply a immense situation and they volition hold en masse. Things are truthful chaotic that concern owners question the services of brokers/agents (read intermediaries) to put deliveries. Worse still, owners of tiny fleets person to hold agelong and negociate the fares, often making losses owed to delayed load availability, payments and random deductions.

But the script has changed to a ample grade aft Gurugram-based Raaho started operating arsenic the ‘Uber for trucks’ successful India. It connects shippers (third-party logistics/3PL players) with truck/fleet owners successful astir 15-20 minutes, focussing connected ratio and operational transparency successful a mostly unorganised inter-city trucking sector.

Raaho was founded successful 2015 by serial entrepreneur Md Imthiaz, Muralidharan Chandrashekhar, Vipul Sharma, Abu Fahad and Joshua Jebakumar. Operational since 2017, it is  an online motortruck aggregator and on-demand inter-city truck-hailing level that eliminates the request for intermediaries. The startup uses instrumentality learning and information subject for freight matching and way optimisation, frankincense slashing other miles and emissions and guaranteeing higher incomes for the trucking community.

In 2014, Imthiaz exited hyperlocal reward and find platform. The serial entrepreneur began searching for his adjacent task and wanted to task into the market space.

But earlier starting up, the founders often visited Azadpur Mandi for a deeper knowing of the proviso concatenation dynamics. During these visits, they witnessed for the archetypal clip the difficulties faced by truckers.

“They beryllium connected brokers for the freight,” recalled Imthiaz. Moreover, the freight matching is done wholly manually utilizing a registry that contains each indispensable information specified arsenic the driver’s name, licence fig of the conveyance and conveyance benignant with accusation connected the root & destination (called ODVT successful the manufacture parlance). This manual method was time-consuming and rather inefficient. Truck owners utilized to study to those brokers aboriginal successful the time and waited until the evening/ adjacent time for their freight.

Besides the chaotic demand-supply scenario, the founders noticed yet different problem. “Small truckers owning less than 10 trucks predominate this fragmented market,” said Imthiaz. So, optimised plus utilisation is captious for these truckers for a dependable gross flow, which means they necessitate speedy and accordant freight orders.

Aware that the conception was ripe for disruption, the 5 acceptable up Raaho.  Its cardinal clientele includes the salient transporters and 3PL players specified arsenic Delhivery, Gati, RITCO, Safexpress, Om Logistics, TCI (Transport Corporation of India), V Trans, Okay Logistics among others.

The startup has onboarded 3,800+ fleet owners and present covers arsenic galore arsenic 15 cities, including Delhi, Chennai, Mumbai, Bengaluru, Kolkata, Pune, Ahmedabad, Hyderabad, Coimbatore, Patna and more.

In March 2023, the startup raised INR 20 Cr from Inflection Point Ventures (IPV), Roots Ventures, Blume Founders Fund and marquee angels similar Vijay Shekhar Sharma, Kunal Shah and much arsenic portion of its extended Pre-Series A round. It clocked INR 129 Cr successful gross successful FY23, a 3x leap from the erstwhile fiscal year, claimed Imthiaz.

Raaho’s Inclusive Solutions For Key Stakeholders

In a bid to alteration however logistics operations are carried out, Raaho has developed a B2B model, keeping successful caput each 3 stakeholders. These see businesses/shippers needing to present bulk orders efficiently; fleet owners, mostly tiny players, offering proscription services, and drivers connected the crushed liable for transporting goods wrong states and crossed authorities lines. Despite their codependence, determination is simply a wide deficiency of convergence among these stakeholders, the captious situation the level aims to address.

To that end, the startup has developed 3 abstracted apps connected Google Playstore for shippers, motortruck owners and drivers – each tailored to conscionable the circumstantial requirements of respective stakeholders.

To statesman with, a shipper tin rise a booking petition via the shipper app by specifying the pickup and transportation locations, benignant of freight and desired transportation date. On the trucker app, fleet owners tin bid connected the petition by mounting the terms they volition judge for the load. Next, Raaho uses its algorithms to database the highest bids and nearest locations matching the freight request. Raaho provides real-time shipment tracking erstwhile a occupation is accepted.

The level streamlines the full process, including casual onboarding of motortruck owners and drivers, papers uploading and managing the aforesaid done shared access.

The startup besides helps drivers moving for fleet owners. On the Raaho operator app, they tin easy bespeak their readiness for a load and person round-the-clock lawsuit enactment They besides summation by uncovering instant loads, optimised routes and speedy payments. In contrast, offline brokers tin seldom suggest shortest routes and the accepted outgo cycles are usually longer. According to Imthiaz, Raaho’s spouse trucks screen astir 11,000 km per month, importantly higher than the manufacture modular of 8,000 km.

“There is simply a important boost successful income for our spouse motortruck owners and drivers owed to this accrued efficiency. Their net person seen a singular surge of astir 35%,” said Imthiaz.

Raaho besides handles payments seamlessly and ensures truckers get 90% successful beforehand via a unafraid integer outgo solution connected the app. The remaining magnitude is paid wrong 24 hours of the submission of impervious of delivery, revealed the founder.

Raaho’s gross exemplary is beauteous straightforward. It earns a borderline connected each travel made done its platform. The borderline is the quality betwixt what a shipper pays and what Raaho pays to the motortruck proprietor undertaking the delivery. In the marketplace parlance, this is often called the ‘take rate’.

Will Customer Support, Tech-Managed Trucking Drive Growth?

Raaho’s inclusive concern exemplary and tech-driven capabilities person brought much-needed operational transparency to commercialized trucking. The rising integer consciousness crossed India is different boon for the platform, which plans to treble the fig of motortruck owners and drivers from 3,800+ to 8,000+ by the extremity of FY24. It besides aims to scope each pin codification successful the adjacent 3 to 5 years.

That is easier said than done, arsenic the logistics abstraction successful India is inactive fraught with galore challenges. Consider this. When Raaho began its operations six years ago, integer consciousness was debased and convincing the trucking assemblage to power from the age-old cause strategy to a afloat digitalised level was daunting. More importantly, integer payments, which signifier the backbone of the platform’s concern model, were not wide adopted astatine the time. In brief, the conception of a ‘digital Bharat’ was taking shape, but aboriginal adopters were fewer and acold between.

Still, those precise challenges helped physique a stellar lawsuit enactment team, ever acceptable to assistance shippers, fleet owners and drivers via its integer channels. The squad conducted onboarding campaigns successful locations with precocious roadworthy freight demand. The extremity was to physique spot among these players, get them comfy with integer processes and onboard them seamlessly.

Incidentally, Imthiaz and different founders had gone the other mile to guarantee they understood the trucker problem. They invested their ain money, astir INR 2 Cr, to bargain 10 trucks and drove them astir the state to recognize the beingness of  motortruck drivers and what hindered creaseless operations. Their first-hand acquisition helped physique what Raaho is today.

Even the Covid-19 pandemic proved to beryllium a game-changer owed to the surge successful integer consciousness and wide adoption of integer tech, including online payments. Add to that proactive argumentation initiatives, improved infrastructure and the absorption connected sustainable logistics, which amply explicate wherefore India has climbed up six places successful the World Bank’s Logistics Performance Index successful 2023.

This does not mean Raaho tin turn exponentially without tapping into the latest technology. For starters, a fistful of startups similar BlackBuck and Vahak usage deeptech applications to alteration India’s trucking sector, arsenic 66% of the cargo (in tonne-km) question successful the state is done via roadworthy transportation. This logistics inclination has unleashed a mammoth accidental for young logistics companies, and Raaho, too, is keen to leverage it.

“Raaho volition present the National Digital Freight Index, showcasing regular conveyance and lane-wise pricing. This nationwide motorboat is acceptable for 2024,” said Imthiaz.

Finally, trucking startups similar Raaho are trying to tackle 1 of the toughest challenges of inter-city trucking: The deadhead miles. They notation to the other region that bare trucks indispensable question to prime up the adjacent shipment aft unloading their cargo.

But this contented is not constricted to India alone. Even developed economies similar the US look the aforesaid challenge. According to a study by Convoy, a trucking bundle company, up to 35% of U.S. motortruck miles whitethorn beryllium empty. In India, the concern tin beryllium worse owed to the fragmented quality of the industry.

Deadhead miles effect successful monolithic losses for motortruck owners due to the fact that they are not paid for the clip and the fuel. A study by ICICI Lombard suggests that the Indian logistics assemblage incurred an annual nonaccomplishment of $21.3 Bn successful 2022 owed to bid delays and other substance consumption.

Nothing abbreviated of tech-driven load matching, astute routing and real-time monitoring and communications tin bash distant with these hurdles and thrust maturation crossed India’s profoundly fragmented logistics assemblage that costs betwixt 13-14% of GDP. Can Raaho and its ilk enactment things close with the assistance of a multimodal integer infrastructure and sustainable strategies?

The station How Raaho Is Using Tech To Transform India’s Fragmented Commercial Trucking appeared archetypal connected Inc42 Media.