In many ways, the Indian freight market tussles with problems that are relevant in the West, but only more pronounced – like issues related to transparency and the information opacity in the industry. Much like the U.S. trucking industry, its Indian counterpart also struggles with fragmentation and a seeming indifference to technology, which is now slowly changing across the landscape.
Vaahika, a freight logistics startup from New Delhi, India, is trying to set the equation straight by connecting small fleet owners with small and medium scale businesses looking to ship freight. “On the execution side, it is a demand-supply search mapping engine, whereas on the backend side, it is a logistics ecosystem for all the key stakeholders in the market,” said Siddharth Jain, co-founder and CEO of Vaahika.
Before floating his startup venture, Jain worked in the transportation and automotive vertical for nearly a decade – a transition which was made easy by his habituation to the logistics industry which his family has been around for four decades.
Jain spoke about the complications that arise while being a technology startup in an industry that has been inundated with traditional practices since time immemorial. “Our end customers and transporters are not very educated and it becomes important for us to develop our technology as per the user’s convenience,” he said. “You have to make them learn on how to use the technology and at the same time, you have to design that technology to suit their IQ. And more importantly, you have to go and convince the end user that this is for his benefit.”
However, Jain also indicated that the scenario has changed drastically over the last few years, with customers coming forward to use Vaahika out of their own volition. “From a recent internal survey conducted this June, we saw close to 84% of our vendors believing in technology adoption in the near term,” he said. “It is also because data usage costs in India has got drastically down and smartphones are now available at throw-away prices, which is helping us a lot.”
One of the challenges faced by freight digitization enablers such as Vaahika is to bring as many shippers and carriers to their platform. Companies active in this space in India have taken disparate approaches towards this goal. While some have focused on LTL sector, others have focused on TL. Some of the market participants have focused on intra-city logistics, while others such as Vaahika have focused on regional and national routes.
“India is a large freight market with a good mix of rail and road transportation. We could have strived to be a one-size-fits-all solution, but we deliberately focused on certain specific logistics subsegments within specific regions of India,” said Jain. “This enabled us to gain specialty and market dominance and also test our solution with greater efficacy.” This approach has led Vaahika to become a dominant force in certain segments in regional markets.
“There are two ways through which you can disrupt the market. You can either use business as a module to build technology adoption, or use technology to change business,” said Jain. Vaahika banks on the former, by bringing business for stakeholders with fleet owner clients gaining substantial traction through their association with the startup. Conversely on the shipper side, Vaahika has been able to create freight reduction and thus reduce costs.
Jain contended that Vaahika was able to achieve this through carefully constructed solutions, that came about over the course many trial runs that the company did before its public launch in 2016. “We ran a beta test for almost seven months. We had different modulations in terms of doing research, its applications, usage practice, and consumer behavior,” he said.
Even after this, the startup had its work cut out in gaining initial traction. Shippers in general look at experience before they entrust loads to a company, and since Vaahika accounted for a relatively young team, it was difficult to gel into the scene at the start. Jain mentioned that when a big client approached them for sending a load across a specific route, the startup could only muster a savings of 2% on the client’s freight bill, as they did not have a strong presence in that route.
Nonetheless, the client was impressed and did try Vaahika for another load across a different route – a corridor that the startup had a good footprint in, leading to a 8% reduction in freight bills. “We were not just reducing his freight bills, but aggregating the freight as well. He could not believe the bill reduction for almost a month,” said Jain.
The company is looking out to create a solution that would act as a single window for all the needs of a user – being it them checking their accounts, settlements, invoices, freight aggregation, or connecting with people. And unlike a lot of startups in the space that have been burning cash and aiming for break-even after a few years, Vaahika has remained a profitable venture from the initial stages. “This makes us stand out among competition,” said Jain. “This not only justifies the kind of company we are, but it actually defines how our future would be.”