Growing A Logistics And Supply Chain Business Through The Course Of A Global Crisis
Growing the logistics and supply chain business in the time of lockdowns may sound impossible, but the current challenging circumstances have actually worked in this startup's favor.
The COVID-19 pandemic has taught us many lessons, but the one key takeaway I would like to emphasize is the importance of resilience. It was the resilience -and courage- of our drivers and teams at my company, TruKKer, the MENA region’s largest on-demand truck aggregator, that ensured all our 15 offices remained operational during the crisis. This helped us not only to weather the storm, but actually to grow our business as a reliable service provider for our clients.
Growing the logistics and supply chain business in the time of lockdowns, border closures, and demand destruction may sound impossible, but the current challenging circumstances have actually worked in our favor. Microsoft CEO Satya Nadella recently noted that the world has seen two years’ worth of digital transformation in just two months. This dramatic pace of change has impacted not just technology companies, but also those in sectors that have traditionally been slow to transform, such as the logistics and road freight industry.
The pandemic has jolted organizations in our corner of the world into accelerating their digital transformation journeys, and this is precisely where we stand to gain. Our business model, at its core, is about consolidating smaller suppliers into one digital platform. I have often said that TruKKer aspires to become the first freight exchange with digitized transactions for our users, and the COVID-19 pandemic has given us the opportunity to accelerate on that vision.
Over the last few months, we have focused our energies on acquiring market share, by helping those most impacted by the pandemic- smaller transporters who were struggling or even considering pausing their business in the face of mounting financial difficulties. TruKKer managed to acquire key clients, and even though the overall demand for trucking might have come down temporarily, we continued to grow in an extremely large sector.
Across the world, the road freight sector is highly fragmented- large fleet owners account for less than 5% to 10% of the total supply of trucks, while the rest is made of individual owner-operators and small fleet companies. We doubled down on empowering small transporters and individual operators with advanced tools and technology interfaces that improve service quality and reliability. At the same time, the business accelerated customer acquisition to constantly feed more to the platform.
TruKKer was one of the earliest to take precautionary steps while the pandemic was still getting closer to the region. I remember briefing our teams across three markets in March 2020, and urging them to brace for what was coming. No one knew how to deal with it, and anxiety levels were high all across. We have also been one of the early organizations to preach and practice optimism. We cheered ourselves in June and took a contrarian approach, saying that the bad times were behind us and that we needed to stop hiding from the virus, and to instead take necessary precautions. In June, we were back to rapid hiring across all our stations and markets.
This strategy worked wonders for us. March 2020 was our best-ever month of operations pre COVID-19, while in the following months, we experienced some dip in transaction due to large-scale lockdowns. However, we reported a typical vshaped recovery with July crossing March numbers, and August putting us back on a 20+% month-on-month growth.
The larger picture
The logistics sector is, to some extent, pandemic-proof. Our basic human needs are food, shelter, and clothing, and all of those require the wheels of supply chain to function. Our operations did not come to a complete standstill because of the pandemic, as we continued to transport essentials such as pharmaceuticals, health care equipment, food, and consumer goods. The next few months and years will be very interesting and fulfilling for the road freight sector in the region. We expect regulatory focus on improving asset quality, stricter environmental and performance norms, better safety standards, and all of these create a stronger case for technology based operators like TruKKer to thrive.
Our data sciences constantly provide us key parameters that drive utilization improvements– a key competitive advantage over traditional fleet owners or brokers. TruKKer is generating thousands of data points every day that are creating multiple monetization opportunities. This will be complemented by our dealmaking abilities and collaboration with asset owners, and financing institutions.
As for the road ahead, I believe that organizations that innovate and adapt will emerge as sector leaders in our post-pandemic future, while “old-school” businesses will be forced to innovate, or they will get challenged. The mobility sector too is at a crossroads, and we have seen an increasing number of consumers and businesses moving towards digitization of all processes and functions. I am delighted to see how quickly the region is adopting technology, with Saudi Arabia leading the charge at both public and private sector led innovation.
The pandemic has made our clients more price sensitive, and this has resulted in increased traction for digital platforms like TruKKer that deliver efficiencies based on shared economic principles. It has also highlighted the need for automation at all levels in the road freight sector, and we see a huge opportunity for technology-driven businesses. Though in this sector, there cannot be a one-size-fits-all solution- the technology that meets the needs of a truck driver will be very different from what works for a freight forwarder, or a warehouse operator, or an e-commerce fulfilment business.
I believe “cool” tech, like artificial intelligence, machine learning, blockchain, internet of things, and all other buzzwords will continue to progress, but those that produce immediate commercial advantages will thrive. I believe that autonomous driving tech will first see large-scale adoption in the trucking business, before it becomes mainstream in cars. To sum up, I foresee efficient and technology-based operators, like TruKKer, that are also adequately capitalized, to benefit the most in the months ahead, as the world emerges from the shadows cast by the pandemic.
But despite all this, we have to take care to not forget the human touch in our business. The pandemic has been most devastating in its impact on livelihoods. TruKKer has attempted to be most empathetic and balanced. We did not undergo any large-scale redundancies, and our teams stood by us to share the pain. Recently, we distributed food to thousands of truckers, facing hardships during the Islamic festival of Eid.
TruKKer has also ramped up its investment in supply infrastructure and driver welfare to ensure that the job of a trucker, which is one of the hardest jobs, is duly recognized and appreciated. In the coming months, TruKKer will announce major initiatives and programs focused on drivers and the creation of infrastructure for enhanced cargo safety and security.
At the end of the day, I strongly believe that any organization is only as good as the people working for it. TruKKer is built of a group of high energy, ambitious hustlers who do not give up, and constantly innovate their path to success.