Hiring trucks for intra-city freight at affordable price-point is a big pain for businesses. Businesses usually encounter multiple challenges such as unavailability of vehicle at right time, unstructured pricing and concern about product safety, among others.
Simultaneously, vehicle owners depend on a few clients for their daily business, resulting in inconsistent and lower income.
Addressing the problem of information asymmetry existing between supply and demand, Porter is able to increase the earning potential of the vehicle owners and simultaneously help the customer to save upto 20-25 per cent logistic spend on each trip.
Porter is a Bengaluru-based tech enabled intra-city logistics company which offers mini-trucks Light Commercial Vehicle (LCVs) to SMEs, small businesses and individuals on demand as well as on fixed arrangement basis. Currently, Porter is operational in five cities — Delhi (NCR), Mumbai, Hyderabad, Bengaluru and Chennai.
“The increased capacity utilisation of vehicles from single trip everyday to three trips per day creates economics surplus, and thus enable us to change the economic dynamics of the entire market,” says Pranav Goel, co-founder, Porter.
Founded by IIT alumni, Pranav, Uttam Digga and Vikas Choudhary, the company claims to save 20-25 per cent on logistics spend for its clients, and brings better Service Level Agreements (SLA), structured pricing, product safety et al for them. Since its launch in 2014, Porter claims to have witnessed phenomenal traction. Currently, it has a customer base of 50,000 regular clients and 1,00,000 one time users.
Porter’s growth figures in terms of business and reach:
By offering the exact location, route monitoring and inventory utilization data to its customers, Porter is able to offset the traditional systemic inefficiencies like low capacity utilization of vehicles due to supply demand information asymmetry and opaque pricing.
Porter leverages technology to optimize inefficiency
Features like e-consignment note, wallet and automated toll charges help in streamlining the payment procedures which reduces the workload on accounts and finance team, at the same time creating a transparent and convenient process for the customers.
With automatic notifications Porter makes sure that both the vendor and the client get timely updates. We also provide analytics to businesses helping them make their last mile supply chain more effective and efficient.
Technology is transforming this unorganized sector into an organized space by making it more transparent. “At Porter, we address these inefficiencies and can create an economic surplus, the benefits of which can be distributed to all the stakeholders involved,” mentions Pranav.
The company’s operational processes are technologically integrated. Customer can book a trip either by using the mobile app or through the call centre. By using the app, a customer can choose from a variety of vehicle options depending on his requirement. Customer can see the estimated time of arrival (ETA) of the nearest available vehicle.
On the lines of on-demand cab companies like Uber and Ola, Porter offers heat maps for drivers that indicate the higher demand areas thereby providing a greater visibility to drivers. This ensures maximum vehicle utilization and a guaranteed return trip.
How Porter works?
When a booking is made by the customer, it is allocated to the nearest available vehicle and the booking details (like vehicle number, driver name, estimated fare etc) are notified to the customer. During the trip, customers can track the vehicle movement in real time.
After the completion of the trip, an e-invoice is generated which is delivered to the customer via SMS as well as email. The system automatically tracks each and every ride. If any trip is found to deviate from normal course, the sophisticated monitoring system generates a flag and notifies to the concerned team to take immediate action.
As most of the processes are automated, the system requires minimal human intervention thus ensuring seamless experience for all the customers.
Regulatory challenges by government are major headache for intra-city logistics. “Regulations like no-entry zones, added to infrastructural issues like network issues made us to reassess and improve on technological fronts,” says Pranav.
With the team of 250 employees across five cities, Porter plans to expand its presence in 15 major cities like Pune, Kolkata, Ahmedabad, Chandigarh, Jaipur, Lucknow among others.
In 2015, The Porter had raised Rs 35 crore in an early stage funding from venture capital firms Sequoia, Kae Capital, and other investors.
Quick market overview and competition
Roadway logistics is a $150 billion industry in India, of which $30 billion is the last mile delivery. Currently, the market size of last mile delivery in urban cities is estimated to be around $10-12 billion.
The above figure tends to look very attractive for technology startups. Subsequently, over the past couple of years, many startups including Porter ventured into this space. However, very few have been able to keep afloat.
Payment cycle is the biggest challenge in overall logistics space (intra or inter city), thus it makes things difficult for new startups. Most of the startups struggle to survive with credit cycle of 45-60 days. Last year, about 10 startups including Trucksumo, Loadkhoj, Zaicus, TheKarrier, Truckmandi had ceased operations as they failed to fund credit cycle.