Will Digital Freight Brokers be able to disrupt the trucking industry in India? – Ken Research

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Digital freight brokerage sector is currently a multi-billion dollar industry and has witnessed significant funding by marquee investors and PE firms since 2016. Since, 2016, the market has witnessed presence of both digital freight brokers and digital freight marketplace. To distinguish these two, Digital freight brokers operate traditional businesses with a relatively small number of outside partners, while digital freight marketplace seek to build software platforms with a relatively large number of partners and participants.

What adds Complexity to Freight Transport Market?

Transporting freight is always a complex business as there are numerous regulations with which carriers and shippers must adhere, presence of coordination problem since freight shipments must be transported via different modes of transport and evolving expectations for shippers.

Traditional freight brokers, owing to their extensive experience with a large pool of people are well able to assess shipper’s need and work as intermediaries between shippers and carriers. Individual freight brokers perform a function that can not yet be replicated entirely with software.

How the Disruption can happen in Freight Brokerage Market?

Traditional brokers invest more on human resource instead of software technology, which is the focus area for every digital freight brokerage company. The market is moving towards technology enabled software, which can easily connect shippers with carriers through the use of technology.

If the digital freight brokers will be able to create a financial distress for traditional brokers and can affect the market positioning of these players significantly, disruption can be made successful in this sector. The financial distress can be made possible only on the basis of price, along with some of the crucial factors highlighted below:

  • Effectively matching of shippers with carriers, wherein carriers will not reject the request received by the shippers.
  • Large Audience of shippers and carriers is required to be offered with services across multiple road corridors and catering to every end user industries, serving as one-stop solution.
  • Strengthening both forward and return route load volumes by expanding strategically
  • Coordinating with partners and provide complementary tools and services including insurance, finance, fuel cards, toll cards and others to reduce the friction between the entities.
  • Maintaining and enforcing rule for participants of platform to protect interest of the entities.

Hurdles faced by Digital Freight Brokers

The digital freight brokers are growing in the market & reshaping the entire trucking industry. But these players have their own set of challenges to meet. Few hurdles being faced by them in their roadmap to success are:

  • Slow technology adoption among truck drivers, major stakeholder of the industry.
  • Local peculiarities like intermediaries who have deeply entrenched relationships with shippers and transporters make it tough to scale up in this heavily fragmented market.
  • Indemnity related issues and collusive malpractices within organizations and at octroi/toll nakas.

The existing players can focus on these challenges in order to scale well in their businesses.

Is digitalization the future of trucking sector in India?

The online freight penetration is expected to rise in the future due to the rise in internet penetration, better services being provided to both shippers & carriers, enhanced efficiency & better utilization of trucks and the ecosystem approach being followed by digital freight brokers. With home grown startups, global companies like Lalamove, Gogovan and Ezyhaul have started to expand their operations into the market. They will continue to provide competition to domestic startups. It is expected that long haul movements will continue to dominate the market due to the rise in the distribution needs across the country by major industries. Finally, the ability of both traditional trucking and trucking-tech companies to scale and to operate profitably will be determined in part by the quality of road infrastructure and legislations surrounding it.

The report titled “India Digital Freight Brokerage Market Outlook to 2025 – Marquee Investors Funding in the Space and Revenue Alternative on Return Trips to Support Market Growth by Ken Research suggests that this space has seen a phenomenal growth due to the rise in the road freight market size, growth in the funding, rising internet penetration, enhanced operational efficiency & better utilization of trucks, support from government, technological advancements. The India digital freight brokerage market is projected to grow at a CAGR of 40.6% during the period FY’2019-FY’2025.

india-digital-freight-brokerage-market

Key Segments Covered:-

By Confinement

Intercity

Intracity

By Carrier Options

FTL

PTL

LTL

By Type of Operating Model

Spot Based Model

Load Board Model

Contract Based Model

By Type of Revenue Model

Commission Based Model

Subscription Based Model

By Type of End Users

B2B

B2C

Intercity By Type of End Users (on the basis of number of bookings)

FMCG

Petrochemicals & Paints

Metals

Others

Intracity By Type of End Users (on the basis of number of bookings)

Logistics

FMCG

Furniture

Others

Intracity By Type of Trucks

Below or equal to 5ft

Between 6-8ft

Above 8ft

Intercity By Type of Trucks

3-12 MT

13-28 MT

Above 28 MT

Key Target Audience:-

Truck Aggregator Companies

Logistics Companies

PE and Venture Capitalist Firms

Transport Contractors

Logistics Association

Time Period Captured in the Report:-

Historical Period: FY’2016-FY’2020P

Forecast Period: FY’2020P-FY’2025F

Companies Covered in Report:-

Blackbuck

Porter

Let’s Transport

Truckola

Rivigo

Blowhorn

Trukky

Lalamove

Lynk

Portflip

EzyHaul

Trukky

Lobb

Key Topics Covered in the Report:-

Evolution of Truck Aggregators

Demand Analysis of Digital Freight Brokerage Companies

Demand & Supply Ecosystem

India Digital Freight Brokerage Market Size

Funding wave in India Digital Freight Brokerage Market

India Digital Freight Brokerage Market Segmentation

Competitive Landscape of India Digital Freight Brokerage Market

SWOT Analysis of India Digital Freight Brokerage Market

Trends & Developments in India Digital Freight Brokerage Market

Challenges Faced by India Digital Freight Brokerage Market

Interview of Founders of Porter, Trucksuvidha & Let’s Transport; Pranav, Ishu Bansal & Sudarshan Ravi respectively on roadmap of India Truck Aggregator Industry

India Digital Freight Brokerage Industry Future Outlook to FY’ 2025

Recommendations for New Player Entry and Strategy for Existing Players

For More Information on the research report, refer to below link:-

India Digital Freight Brokerage Market

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Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249

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