Local online Trucking platforms https://businesspostbd.com/post/29838

M S Siddiqui

29 Sep 2021 00:52:07 | Update: 29 Sep 2021 00:52:07

Bangladeshi logistics performance is not satisfactory in the global context. The

ease of doing business and cost of doing business ranking is unfavourable due

to poor logistics particularly internal transportation system. Road transport is

the most popular form of commercial transport in Bangladesh, carrying 70

per cent of passengers and cargo. There are about 4 lakh registered trucks

(small pickups to large trucks) in Bangladesh presently, of which 1 lakh runs

on the road every day. Despite considerable expansion, truck businesses in

Bangladesh face multiple challenges.

Truck services are operated manually since the initiation of the trucking industry.

Most of the truck service companies do not have proper booking centre. This

makes it very inconvenient for customers to book trucks and for the truck owners

to find a ready stream of customers. There are some intermediaries to link between

truckers and customers. The agreement is most of the time on verbal and heavily

relied on word of mouth.

However, some companies have taken initiative to make things easy and

convenient by digitising all the manual processes integrated in the industry with

digital platform. Some of those platforms are ‘Truck kothay’, ‘Shohoz truck’ and

‘Truck lagbe’. These companies have introduced platforms and those act like the

bridge connecting the customers and shippers, offering the former a quick and easy

way to book trucks at the tap of a button.

The situation has dramatically improved with introduction of Truck hiring online

platforms. It has similar features of stock market, where customer can give the

input of the requirement of truck and the time. Truck owner bids on that offer from

customer. Among all those bids, customer chooses the best rate from the app and

completes the hiring process. These platforms are offering to find trucks at a

competitive price for transportation, so that businesses can save their time and

money. They’re offering real-time visibility on the progress of the shipment until

delivery with their advanced truck monitoring system. It has been reported that the

truck fare has been reduced by 17 per cent from long time non-negotiable fixed

rate settled by the brokerage houses.

These platforms are building a network of trucking facilities all over Bangladesh

with lowest possible fare and creating hassle free truck hiring experience. These

have become a dependable marketplace for both truck owner and customer

particularly for the exporters and agricultural products.

They are also serving another segment of market of household customers who

orders for truck to get pack-and-shift facilities. Some of the customers require the

service to get one-time benefit to move new household items like furniture or

locker. Reasonable pricing is a reason the platform is growing popular day by day.

It has some other options to improve the services. This digital system has brought

an extra layer of transparency to the truck industry by promising to show

customers the exact amount of fare that they have to pay at the end of the service,

diminishing any unfair dispute over fare etc. To ensure that the trucks show up on

time, there is a rating system for every truck. If any truck owner accepts any offer

but doesn’t show up on time, their rating will be affected and the probability of

getting trip from the platform will be reduced. Besides, if any causality occurs, it is

matter of a few minutes for the customer to find another alternate truck.

The other benefits of introducing technology in any industry are that the entire

system becomes more transparent. Currently the transactions are negotiated

through intermediaries and entire system remains in dark from the stakeholders –

the truck owner, the drivers and service recipients. As a result, many owners and

drivers suffer losses and compromise in profit. The digital truck platform brings

transparency of transactions by keeping the price open to all stakeholders.

For consumers, hiring trucks was a challenge before. Now consumers have a

digital platform and can hire a truck by pushing a few buttons on their phone. It

saves time, effort, and money. Consumers can hire a truck without the hassle and

that too at a far better price. It is convenient and on-demand.

In the trucking industry, trust is a huge issue. Be it an owner or driver, shipper or a

middleman. These platforms offer best possible price, dedicated account manager,

trust and security, guaranteed customer service, wide coverage and so on. The

transparency of bidding and fixing the fare are done in a transparent manner.

The platform offers to verify and train drivers to ensure the safety and security of

the interest of its customers. These platforms are trying to improve the service

through educating the stakeholders. They are actively working with the drivers’

community to train and educate them. At the same time, it aims to work on the

consumer side to improve the perception of people who work in the truck industry.

Eventually, they aim to play a leading role in positioning truck driving as a

respectable profession that a lot of young people will be attracted to in the future

helping create employment and economic benefits for all.

Additionally, Bangladesh also needs safety and security of export loaded

containers in the internal route to seaport. Bangladesh does not have technology to

improve the service to desired level at a competitive price. The sector requires

foreign direct investment to bring capital and technology. Unfortunately, FDI is

restricted in this sector although joint venture companies are allowed.

These online companies have revolutionised the sector by attracting overseas

investments. Hong Kong-based early-stage venture capital firms – Mount Parker

Ventures and Aria Group – provided Truck Lagbe with the key portion of

$1.75million in seed investments. Mount Parker is the investor of Asia's first app-

based goods delivery platform GoGoVan, which already extended its services to

over 300 cities and registered 80 lakh drivers under its network. Aria Group's

portfolio includes on-demand-same-day-delivery-service-platform LaLaMove,

which expanded into two dozen markets across Asia and America, including the

United States of America.

The International Finance Corporation (IFC), private sector investment wing of the

World Bank Group, has offered an equity investment of US$2.5 million in

Bangladeshi digital trucking platform Truck Lagbe Inc., as per news published in

Daily newspaper “Business Post”. Truck Lagbe is in the process of raising Series

A financing of $5 million. Series A funding comes after initial seed investments to

help a start-up expand its business further.

The online trucking companies are in the process of upgrading trucking services

with competitive internal transportation, international standard secured transport

service, bringing the technology and attracting overseas investments. The

continuous improvement and digitalization of the service will improve Bangladesh

ranking in sub-index of cross border trading of ease of doing business. The image

of the country among the local and overseas investors will improve further.

Bangladesh is going ahead for cross border logistic service system with overseas

investment to make the exports competitive for the overseas buyers. The

development of online trucking system will improve Doing Business Index as well

as confidence of overseas investors.

The writer is a legal economist

E-mail: mssiddiqui2035@gmail.com