In recent times, trucking ecosystems across emerging economies are mirroring the trends that have taken shape in the West, thanks to the democratization of technology accessibility and mobilization of venture capital.
But the issues tackled in trucking markets within Africa and Asia are complex. These economies sometimes lack good infrastructure and are steeped in red tape, making them several orders of magnitude more chaotic and difficult to conquer than their Western counterparts.
Trella, an Eygptian digital freight marketplace, is looking to improve conditions by inducing transparency into the logistics sector via digitalization. FreightWaves connected with Omar Hagrass, the CEO and co-founder of Trella, to discuss the company’s origins and the impact it has had on the industry.
Before launching Trella, Hagrass spent considerable time growing Uber in Africa and the Middle East — from the time Uber made 1,000 trips a day in the region to the point where it accounted for more than 100,000 trips a day. “Working at Uber helped me gain understanding on how companies scale, and that experience came in useful when I started working on Trella,” he said.
Trella launched in early 2019 as a digital business-to-business (B2B) marketplace that aggregates demand and supply. “We ask our shippers to tender their loads, which then go online and carriers start picking and moving those loads,” said Hagrass. “However, our eventual goal is not to look only at the marketplace but to be a logistics solution. Alongside our marketplace, we are also building offerings like warehousing solutions and fintech solutions that can facilitate payments and receivables.”
The challenges that Trella faces working in Egypt are a lot tougher than the ones that their peers in the U.S. face, as logistics operations in the African nation are arduous and highly inefficient, according to Hagrass.
“A World Bank report that was published last year showed that the cost of moving goods in the Middle East and Africa is three to five times more expensive than the cost of moving goods in the West,” said Hagrass. “This is obviously due to poor infrastructure and the frequent occurrences of fraud and theft. A lot of dead trucking legs happen in Egypt, and the utilization of fleets on average is less than 15% — a number that is approximately 55% in the U.S.”
Even automating a sliver of the logistics processes can help reduce costs. Hagrass contended that companies using Trella get around 6% savings by cutting down on redundant manual labor. “Efficiency gains we acquire in Egypt are far larger than what we get in the West as our market is highly chaotic, unlike developed countries like the U.S.,” he said.
Trella also has consolidated its position as the largest trucking marketplace in Egypt, acquiring a local rival Trukto in December. Integrating the marketplaces gave Trella more than 10,000 active carriers on its platform. Shippers can enter their marketplaces and have a solid pipeline of carriers to choose from over a transparent setting.
The startup also is connecting with stakeholders within the trucking ecosystem to expand its product offerings — like oil and lubricant dealerships and maintenance sheds — to provide discounted services to Trella’s customers.
Hagrass said it is vital to educate shippers and carriers within the market on the advantages of adopting digital means to improve their operations.
“Getting working capital is also a challenge. You need to pay the carriers every day, and you only get to collect money from shippers every 60 to 90 days, which is not helpful to an early-stage startup like Trella,” said Hagrass. “However, on our end, we are always pushing towards looking into different solutions on how to ease up our working capital.”