 "Trucks bound for other states passing through Delhi will now have to pay a green tax for adding to the city's pollution")
BlackBuck is the Uber for the trucking industry, bringing together fleet owners and customers, while the cost of the trip varies based on the demand and supply in real time. Rather than focus on the booming intra-city and hyperlocal logistics space, the firm has set its eyes on the B2B intercity trucking industry.
"A lot of supply chains really don't penetrate to the consumer, so 95 per cent of the overall road transport market is made up of intercity logistics. Hyperlocal and intracity transportation which is often consumer facing only makes up the balance 5 per cent," says Rajesh Yabaji, co-founder and CEO of BlackBuck.
With a minimum haul distance of 160 kilometers, BlackBuck says it currently operates in over 150 cities across India.
The largest player in the space, Transport Corporation of India (TCI), currently generates an annual revenue of Rs 860 crore from its freight forwarding service, Yabaji said..
There are between 4 million and 5 million trucks on Indian roads; however, the market is highly unorganised with 85% of suppliers owning less than five trucks. Omitting partial truck-load and custom hauls, the market for intercity road transport is estimated to be worth $70 billion in India.
The All India Motor Transport Congress (AIMTC), a body that represents 75 lakh truckers in the country, says an app-based aggregator may benefit individual truck owners but would negaitvely affect small operators, who constitute 70% of the Indian truck industry and among the largest employment generators in the country.
"With predatory pricing from Ola and Uber, we have seen small cab operators in south India feel the heat and go bust," said Naveen Gupta, secretary of AIMTC. "It shouldn't be that they (app-based aggregators for trucks) become monopolistic with predatory pricing and affect small operators."
Blackbuck claims that even a transport company with its own trucks can be on the platform and is agnostic to the participants as long as they serve customers effectively.
By listing more vehicles on its platform, BlackBuck wants to solve the problem of discovery at both ends, while offering customers value added services such as quality assurance and tracking. In the short term the company is aiming at a 1 per cent stake of the trucking industry, or 50,000 trucks, which it estimates could drive revenues close to $2 billion.
"The basic nature of the industry which is very good is that it has always been on-demand with varied capacities being in the market. Nobody has sort of entrenched contracts saying that they'll only ply on fixed routes. This is because no customer gives a volume commitment," Yabaji says.
BlackBuck serves customers as large as those ordering 20,000 trucks a day and as small as someone that orders just three trucks a month. Out of its 100 customers, it says it ranges from 10 to 50 per cent of wallet share for some of its larger companies while it is the sole transportation provider for many of its smaller customers.
While large companies such as Unilever will not entrust all their freight needs to a single transportation provider, Yabaji says there's enough volatility in demand for goods for these players to look at on-demand services. Moreover, BlackBuck has also integrated its solution with the Enterprise Resource Planning (ERP) systems of large customers.
