Started in 2017, Truck Lagbe is an online platform that connects truck owners and drivers with shippers, transforming the logistics landscape in Bangladesh. The story of Truck Lagbe’s inception is rooted in a personal experience faced by its founder and CEO, Anayet Rashid, and his childhood friend and co-founder, Mir Hossain Ekram. This case study explores how Truck Lagbe was created, the challenges it faced, and the lessons learned throughout its journey.
The idea for Truck Lagbe emerged from Rashid's experiences in managing distribution costs for his existing FMCG business. While analyzing these costs, he noticed a significant discrepancy in transportation fees for shipments to the same destination. For instance, one shipment to Jessore cost Tk. 35,000, while another, made a week later using a different truck, cost only Tk. 8,000.
This revelation highlighted the inefficiencies in the trucking industry, particularly the mismatch between supply and demand.
Rashid discovered that many truck owners faced challenges in finding return customers and as a result, they preemptively charged more for one-way trips to cover the return costs, leading to a volatile pricing structure. He noted, "That was such a waste and, at the same time, a huge opportunity." This realization sparked the idea that technology could bridge the gap between truck availability and shipping needs, enhancing efficiency in the industry.
From How Truck Lagbe Is Taking On An Age-old Transportation Industry:
“When I dug deep into the matter and examined the relevant documents, I saw that the transportation cost is extremely volatile. 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, where 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. 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 it returns with 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 couldn’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 there is something going on here.”
After formulating the idea, Rashid shared it with Ekram, who provided critical feedback. The two engaged in extensive discussions, assessing the concept from various angles. They conducted market research by visiting locations like Comilla and Tejgaon and speaking with intermediaries, transport agencies, and truck owners. The response was overwhelmingly positive, with truck owners expressing a strong interest in using a service like Truck Lagbe.
“Naturally, I needed to share it with Ekram first. We are the harshest critics of each other. Whenever one of us tries to do something new, the other helps him to find out the pitfalls in the plan by offering constructive criticism. So, I called him up that night and told him to convince me not to do it.
Initially, he was asking questions and I answered. After some time it was the other way round. We talked all night that day and assessed the idea from every possible angle. We finally decided to visit a few places like Comilla and Tejgaon to study the market situation.
We spoke to as many people as we could, including intermediaries—who booked trucks for us, transport agencies, and truck owners. We got a huge response from the owners. They said that everyone would come running to use our service should we decide to proceed with the idea.
Now we needed to make our plans. For that, we continued our discussions with different stakeholders. When people look at our company from the outside, they think that Truck Lagbe is Uber for trucks. While it has some truth to it at a basic level, our service is very different and way more complex than that.”
In December 2016, Rashid and Ekram decided to move forward with their plan. Recognizing their lack of technical expertise, they sought to hire a chief technology officer (CTO) to help develop the platform. They eventually found a CTO who proposed a cost-effective approach to building the software, allowing them to assemble a team of seven shareholders and four management members by February 2017.
From Anayet Rashid:
“After much thought and research, we couldn’t find any reason for not doing it. So, we decided to go ahead with the plan. It was around December 2016.
Now, this is a technology product and we needed a tech lead to start building the product because neither my co-founder nor I have sound programming knowledge. From January, the following year, we started looking for a tech expert. It’s an interesting story about how we got our chief technology officer.
Previously, I have hired tech experts to develop software for other business ventures. All of them charged 6-figure amounts. But when we interviewed our incumbent CTO, he proposed an unusual deal. He said that there was a way that we could make the software simple and build the back end in a very cost-effective manner. We hired him.
Next, I called up a few of my friends and proposed that they join us. When they came to know the idea, they immediately came on board. Altogether, we formally started our journey with seven shareholders and four people in the management in February 2017.”
In May 2017, while setting up their office, they learned about a startup competition organized by the ICT ministry. Despite their initial reluctance, they submitted their plan at the last minute and successfully secured the championship title. This victory garnered significant media attention, propelling Truck Lagbe into the public eye and attracting interest from potential users.
Truck Lagbe officially launched in 2017 and quickly gained traction. The platform facilitated an efficient connection between truck owners and shippers, improving the overall experience of hiring trucks in Bangladesh. By April 2019, Truck Lagbe raised US$1 million in a pre-series A investment, further solidifying its position in the market. In 2021, Truck Lagbe secured a US$4 million Series A financing round led by the International Finance Corporation (IFC) and co-led by IDLC Venture Capital Fund I.
Today, Truck Lagbe boasts a network of approximately 80,000 vehicles, enhancing coordination and efficiency, reducing friction in the trucking process, and improving the overall experience for everyone involved.
The company has expanded into auxiliary services for the trucking industry, introduced offline centers to make its services more accessible, and launched a GPS tracker for trucks. Rashid emphasized the importance of their service: "Truck Lagbe does a few things for both individual and business shippers as well as truck owners, thus benefiting the broader trucking industry."
In conclusion, Truck Lagbe's journey illustrates how entrepreneurial insight, technological innovation, and strategic collaboration can transform an industry, ultimately benefiting all stakeholders involved. The lessons learned from its inception and growth provide valuable insights for aspiring entrepreneurs looking to make an impact in their respective fields.
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Last Updated: Originally published on 12 December 2019. Updated with new information and details on 20 August 2024.
