Truck transportation is a fascinating industry anywhere in the world. It is more so in Bangladesh. It is unstructured and archaic. It is complex and littered with problems like middleman and syndicate that have been a major challenge for the efficiency of the industry. Until recently, the industry used to operate in a silo and digitation was not a thing. Customers, both individuals, and businesses, routinely suffer because hiring trucks is never a good experience and truck owners and drivers suffer from lack of trips and suboptimal business returns.
This reality has started to change, albeit slowly, of late.
Truck Lagbe, a pioneering digital startup that has built a marketplace to connect truck owners/drivers with customers, both individual and B2B, has slowly been transforming the truck transportation industry starting from how individual shippers and businesses find and hire trucks to how truck owners and drivers find trips.
The origin of Truck Lagbe is interesting in the sense that it originates from the same problem that people face when it comes to hiring a truck.
The founders of Truck Lagbe used to deal with trucks for their other ventures and came to see that pricing for truck transportation often fluctuates for untenable reasons. The transportation cost to the same destination for the same amount of products could vary significantly simply due to the origin of a truck - if a truck that came from Khulna takes a return trip to Khulna, the price would be meaningfully low. If a new truck goes to Khulna from Dhaka with the same amount of product, the cost would be significantly higher.
Truck Lagbe founder and CEO Anayet Rashid in an interview with Future Startup on how Truck Lagbe came into being:
“The idea came from a personal experience where we had to deal with truck transportation in one of our other businesses. My co-founder, and my childhood friend, Mir Hossain Ekram, and I regularly discuss what new things we could try. We do this a lot. We have come up with tons of ideas in the last 10 years or so. For instance, we once thought about opening a grocery shop where people could order products over the phone. It was around 2005 when the internet was yet to become a commonplace thing which it is today. Then, there was this one time when we tried to get into the business of selling automobile components and parts. We went quite far with that plan but had to abandon it at one point due to some issues prevalent in that particular line of business. So talking about business ideas is a regular exercise we do.
One day I was looking into the distribution costs of my existing FMCG Company. Our business is wholesale in nature and it involves a lot of heavy transportation, sending products to many different destinations separately. I saw that although my product cost was the same for every unit, the distribution costs varied for change in geographical location. We started to pay attention to the matter when we found out that distribution costs varied with the product value by a maximum of 5%.
Naturally, I first looked for any loophole in the process. While looking for loopholes, a particular incident caught my attention – a one-time transportation to Jessore. There was this one time we sent products on a truck to Jessore. The transportation cost was around Tk. 35,000. We shipped another batch of the same product the following week and it cost us only Tk. 8,000. The destination was the same, only we used a different truck. That was a revelation for us. We were a little surprised to see the difference in cost and that too, to the same destination within a distance of a week.
When I dug deep into the matter and examined the relevant documents, I saw that the transportation cost is extremely volatile in nature. The reason, our distribution manager said, is a mismatch in supply and demand and a lack of proper coordination in the process.
What happened in that particular case of ours was that in the former instance, when we ended up paying extra for a truck, we hired a third-party truck that wasn’t originally from Jessore. So it went to Jessore and estimated that it would not get any deal on its way back from Jessore and they wanted to cover both costs from one trip. That’s why the cost went so high. In the latter case, the truck was originally from Jessore and they were on their way back to Jessore when they took our deal from Dhaka and it was sort of an extra deal for them and they could afford it at Tk. 8,000. The issue here is that when a truck travels from its place of origin to other destinations, it usually doesn’t expect/get any deal while returning to its original destination once the transportation is done and that it would return with an empty cargo. And when they get a deal on their way back, they agree to any deal they get. Because they consider it as an extra because they would have returned anyway.
This was a classic case of inefficiency. On the one hand, shippers were paying more for reasons they can’t control and truck owners were earning less and in between, there was this huge unused capacity.
We have a few of our vehicles on the road. And the case was the same with them too. That was such a waste and, at the same time, a huge opportunity. The idea struck me right at that moment.
I thought if we could ensure better coordination and better matching using technology this could solve a huge problem and improve the efficiency of an industry which we often overlook due to its difficult nature. That’s when I thought that something is going on here.”
This is one aspect of the massive inefficiency that plagues the trucking industry in Bangladesh - as an owner/driver of a truck, you don’t often control the supply of trips. There are many more challenges for consumers and owners that hamper experience and cause massive efficiency loss for businesses.
The second major aspect is the consumer experience of hiring trucks. If you look at how people hire trucks, it is quite a subpar experience and inefficient mechanism.
In simple, Truck Lagbe does a few things for both individual and business shippers as well as truck owners and thus for broader trucking industry: 1) it improves overall experience of hiring a truck in Bangladesh, for both businesses and consumers 2) it enables better coordination 3) reduces friction in the entire process 4) improves efficiency and price for everyone involved.
Let’s take a look at how people used to hire trucks in a world where there was no Truck Lagbe app. When one is tasked with hiring a truck, the person would go to a truck stand, try to find the type of truck he is looking for - the size and price, etc. He would then negotiate the price and other relevant things and then he would move on to hire the truck. For businesses, the process is no different. If you are an SME, you need to have dedicated personnel to manage your truck hiring and related activities.
This is where Truck Lagbe comes in. The company has been changing the old-age industry with technology. Truck Lagbe, which operates as a marketplace, connects truck owners/drivers with shippers. Truck owners could register their trucks and bid for trips. Shippers could download the shipper app and hire a truck with a few clicks on their mobile phones.
With Truck Lagbe, you have a digital medium to hire a truck. The very simple fact that you could hire trucks using a mobile phone is a massive leapfrog for an industry that has a reputation for being unfriendly and tough.
Truck Lagbe directly connects truck owners with people who need to hire trucks. This is a direct connection, which means you are peeling off a long list of middle-men and syndicates that used to operate in between truck owners/drivers and shippers. Truck Lagbe has made the entire process efficient for both the truck owners and the customers. Both parties now could save money - owners could earn more and users could hire trucks at a better price.
In doing all these, Truck Lagbe has markedly improved the experience of hiring trucks for customers. Now you could hire a truck from the comfort of your home which was not the case before.
For truck owners, finding customers in a return trip has always been a challenge, which usually contributed to the overall volatile nature of pricing in the industry. With Truck Lagbe, finding customers in a return trip is much more likely and almost predictable for a truck driver which improves overall business for truck owners and helps stabilize pricing for everyone.
In simple, Truck Lagbe does a few things for both individual and business shippers as well as truck owners and thus for broader trucking industry: 1) it improves overall experience of hiring a truck in Bangladesh, for both businesses and consumers 2) it enables better coordination 3) reduces friction in the entire process 4) improves efficiency and price for everyone involved.
You can put Truck Lagbe services into three categories:
1. B2C: Customers who need to hire trucks for one time and mostly, immediately. The defining characteristic is that they need it for one time and in most instances, the nature of need is instant or in short notice.
Truck Lagbe has launched a home-shifting package for this category recently. In home-shifting, the company provides both truck and labor benefits. The company provides a supervisor who monitors everything and is adding more benefits to this service such as electricians and so on. This is the consumer segment.
2. Business solution: The characteristics of a business customer, as Truck Lagbe defines it, is that the pickup location is the same but the destination is different. This is how Truck Lagbe identifies SME business clients - mostly small businesses. These companies need above and below 10 trips a month. For these clients, Truck Lagbe provides business solutions.
3. Enterprise solution: For large businesses, Truck Lagbe provides enterprise solutions where it offers a dedicated account manager, price consistency benefits, and provides support in terms of managing legal documents such as VAT, Tax, and AIT. The company also provides generic support such as 24/7 support and everything.
Truck Lagbe has built an intuitive product that offers an excellent user experience. Truck Lagbe apps, both shipper and truck driver, are designed in a manner that enables users to get their things done easily.
For shippers, you simply download the shipper app, put your pick up and drop off location, select type of truck you want and when you need it. Once you put this information into the app, you will be tagged with a truck shortly. For one ton and below, you can hire instantly from Truck Lagbe fixed price option or through Truck Lagbe bidding process where truck owners bid for an order and you choose the best price.
For B2B and enterprise customers, Truck Lagbe usually gets into an understanding beforehand. The company tries to understand the monthly requirements of a client and then assigns an account manager who takes care of everything for that client. The company is working on a host of other features for business clients.
For truck owners and drivers, Truck Lagbe provides a dedicated app. If you are an owner, you just need to install the app and register your vehicle. Once you have registered a truck, you could see and bid for relevant trips that are available for your vehicle type.
Truck Lagbe aims higher. The company says its ambition is to build a platform where “a single click will move anything”. They have already laid out the foundation for that. Today, using Truck Lagbe you could hire a truck instantly and move things anywhere in Bangladesh. Home shifting is not a hassle anymore - press a button on your Truck Lagbe app, your truck plus other relevant supports for shifting will arrive in no time. For businesses, you simply focus on building your business, Truck Lagbe is there to take care of your transportation needs.
Truck Lagbe serves three groups of customers - individual shippers, business shippers, and truck owners. For each group, Truck Lagbe offers distinct benefits. Let’s take a look into what offers to different users.
Over the past years, Truck Lagbe has evolved both as a business and as a platform. Later in 2018, the company opened up its platform and changed the commission structure for truck owners. This year, it has launched multiple new products and introduced updates to its platform. It has invested in customer service.
Truck Lagbe aims higher. The company says its ambition is to build a platform where “a single click will move anything”. They have already laid out the foundation for that. Today, using Truck Lagbe you could hire a truck instantly and move things anywhere in Bangladesh. Home shifting is not a hassle anymore - press a button on your Truck Lagbe app, your truck plus other relevant supports for shifting will arrive in no time. For businesses, you simply focus on building your business, Truck Lagbe is there to take care of your transportation needs.
Over the next couple of years, Truck Lagbe says it aims to build a platform at the intersection of truck transportation and relevant services. Truck Lagbe is a two-sided marketplace: truck owners and shippers. However, if you pay closer attention it is not that simple. The list of stakeholders is long. For clarity, there are owners, truck drivers, and then there are shippers, and then over time, service providers, utility and product sellers would also take an interest in the platform and so on. The beauty of a platform is that you are essentially building infrastructure at the beginning and then once the infrastructure is ready, you can decide how you want to take the benefits of it to the point it does not break.
For Truck Lagbe, it is a two-sided marketplace but over time, the company expects that it will be able to activate different parties in this two-sided transaction, starting from services to products to more, which is now only truck owners and shippers, and in the process transform truck transportation industry and make life easier for everyone involved.
Truck Lagbe has been transforming how you hire and find trucks in Bangladesh. Using the Truck Lagbe app, truck owners/drivers could register their trucks and bid for trips. Individual customers and businesses who need to hire trucks could download the shipper app and hire a truck with a few clicks on their mobile phones. Hire your next truck using the Truck Lagbe app. Learn more here.
This story was developed by Storylab.
