The highly competitive price, thus forcing big fleet

The discussion in last paragraphs gives a glimpse of opportunitieswaiting to be captured. Truck Aggregation is an ultimate up gradation. It couldbe done through a platform connecting all truck owners to the industrialdemands ensuring best possible rates for the transport. There will be nobrokers, no information asymmetry, and a centralized system. The platform willact as a Market and within few minutes of the truck request, best possiblerates will be guaranteed. The aggregation as discussed is the ideal situationwhich is a distant dream throughout the world.However, the concept “Uber for trucks” gained popularityafter Ola’s success.

Startups like Blackbuck, EzyTruck, Truck Suvidha etcsprang up giving tough fights to fleet owners for long-term contracts. Theirmodel is aligned with the truck aggregation concept. These companies provideonline platforms for truck owners to register. Thereafter, they securecontracts from industries at a highly competitive price, thus forcing big fleetowners either to run out of business or join their platform. With contracts inhand, requirements are placed on their platform which gets accepted by theowner willing to go on the lane. The astonishing USP of these new startups is the low rateoffering to the industries. It may be overambitious but it is possible.

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Thesecompanies try to establish synergy. Truck aggregation on a national level givesopportunities to convert return load unavailability to a competitive advantage.This is achieved by securing contracts which could facilitate movements fromboth sides of a lane. These tactics may lead to losses in few zones but willgenerate huge profits in other zones which overall lead to healthy profits.Also, national level operation puts the company name on a highlight, thusgiving visibility and confidence among investors and truck owners across thecountry.Despite the synergy and tactics, Truck aggregation isdifficult than presumed.

Truck owner’s data is collected through existingbrokers and even today, trucks are placed by these brokers who are more activeon the online platforms than the truck owners. This has developed into asituation of sophisticated cross brokerage. North India is plagued with unionswhich restricts truck aggregation from the major production houses in thenorth. Even though industries are benefitting from low-cost transport, theaggregators are burning a hole in their pocket. The investor’s funds aredriving the changes just with the hope of reaping benefits in future.

However,with losses reaching new heights due to several new entrants, the condition isgetting worse. Lorry Revolution is not a day’s project. This vision is inearly stage and will require huge investments, considering the long history ofthe disorganized functioning of this sector.

Truck aggregation has a promisingfuture and these startups have shown a way to do it. Improvisations andgovernment support will go a long way in securing returns for these startups anda bright future of the truck aggregation and Logistics. “Ideas are like rabbits. You get a couple and learn how to handle them,and pretty soon you have a dozen.”  – John Steinbeck