If food must move from distant farms to fork on your dining table and if your online shopping packages must arrive in time, the wheels of these loaded trucks on roads must keep moving the economy. However, with logistics expenses accounting for about 14% of the GDP and middle-mile trucking alone being as big as USD 100 Bn, the trucking industry today needs a rehaul to compare to global benchmarks of logistics expenses as 7% of the GDP.
The numbers come as no surprise when one makes note that trucking is yet to go digital – 2 lakh offline brokers try crude ways of registers and phonebook contacts to help a truck get a load. The task isn’t rendered easier by the fragmented trucking space – 75% of fleet owners of the 10 million trucks own less than 5 trucks.
Thus, shippers looking to have goods reached to their destinations are left with suboptimal ways to find a truck and the truckers are left at a disproportionately high element of ‘luck’ to find a return load. While these blind spots continue despite the economy having healthy demand and supply of trucking services, the cost of transportation of goods moves northwards as well, thereby making profits lower for the manufacturer or the costs higher for the end-user.
Enter Raaho, the online marketplace for intercity trucking. Fast growing to be a smartphone-only freight network, RAAHO uses technology and data-science to ensure a reliable truck to a shipper and a load for a trucker’s favourite lane. With real-time freight tracking and reliable transparent operations Raaho works to remove operational efficiencies in an otherwise opaque fragmented offline industry.
“Raaho comes from the hindi word Raah meaning journey, path or road – and we want to improve the lives of truckers and drivers by using technology and data-science. These are people who practically live on the road to keep the economy running. We are a young brand determined to streamline the tedious and broken processes of the trucking industry,” says Imthiaz, the Co-founder & CEO, who is also a serial entrepreneur.
Started in 2017, the founding team is indeed a dream team with friends and ex-colleagues for even as long as a decade coming together. As for Raaho, all of them have led a trucker’s life as well: Imthiaz (Co-founder & CEO), Vipul (Head- Product), Muralidharan (Chief Technology Officer), Fahad (Head- Operations) and Joshua (Head- Customer Experience) – each of them drove and managed 10 trucks across India for a year to understand the ground realities – from the broker’s manual freight matching to the payment delays that keep even a loaded vehicle waiting for a filled fuel tank. It did not take long for the team that has seen the phenomenal rise of data usage in telecom to understand that if optimized matching of millions of trucks with loads has to happen, technology and data science have to step in – and it cannot be done manually. Surely, not by 2 lakh brokers.
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Having understood the pain points of different stakeholders and the directional solve, the team embarked on the journey to win the last bastion of Indian economy to go digital – and change the face of the old economy industry by leveraging technology and data-science.
Identifying and addressing the real concerns of the shipper of immediately finding a reliable truck closeby, and that of the trucker of finding a return load rather than going empty have paid rich dividends to Raaho. “We have grown 5x in the last 10 months, and our annualized revenue run-rate today is USD 20 Mn. All of us at Raaho are committed to get to an annual revenue of USD 1 Bn by 2025,” says Imthiaz with confidence in his voice that is difficult to miss.
Behind the confidence is the ‘basics done right’ formula. Asset-light and capital-efficient, Raaho has spent as little as USD 1.2 Mn to come this far. Each transaction made on Raaho’s platform has positive unit economics – unlike many other startups that are waiting for enough traction before they monetize it.
Ask Imthiaz what is it that he does differently from his competition to come so far so quick and he answers in a monosyllable “Trust”.
“In an industry where trust is broken everyday with no formal agreements between the broker and the trucker or the trucker and the driver, Raaho ensures a layer of transparency and reliability on the discovery layer.” To give proof points, he continues “Using InstaPay on our Trucker app, Raaho ensures immediate payments to the truckers – no hidden charges or deductions ever. Thus, the trust.”
The journey though has been rife with challenges. From boasting today of customers like Delhivery, Loadshare, Om logistics, Expeditors, Okay logistics, SLB, East India, Ezy Haul and Varuna to name a few, to ensuring trucks to ferry their loads, it has indeed been a long journey. “The biggest hurdle to cross everyday is making people believe ‘going digital is inevitable’ – right from the shippers to the truck driver. However, the pandemic came with a silver lining for us – the adoption of digital platforms across education, e-commerce and payments helped open minds. Moreover, smartphone penetration has increased thanks to affordable price tags, digital transactions have shot up thanks to UPI and PayTM adoption, and FASTtags have become commonplace – all of this has helped strengthen the belief of even the truck driver. Raaho’s trucker app is today used on 100% of the trips. This, in turn, is encouraging shippers to go digital. And once they experience the digital freight matching of Raaho, they will never want to go back to the opaque offline world again,” says a bullish Imthiaz who has seen the good side of the pandemic with lasting effects. Business at Raaho has increased manifold from pre-Covid levels too.
Raaho is set to be the trucking Unicorn in the years to come. With around 6% being the current brokerage commission of the USD 100 Bn intercity trucking market, Raaho – the fastest-growing Smartphone ONLY Freight Network – is all set to tap this with their aim of annual revenue of USD 1 Bn by 2025. “What fuels us at Raaho everyday, is the impact we are out to make: reduced carbon footprint with adequate return loads to otherwise empty trucks, and an economically northward drive for the 15% of India’s population that earns their livelihood through trucking in some way or the other,” signs-off Imthiaz.
