Product Overview

This is an e-Logistics based company, where they handle trucks logistics from electronic means (vis s
vis Data driven, Internet and Automation)

We feel that the company is ambidextrous in terms of Incremental innovation and Breakthrough
innovation. But mostly Incremental in its innovation, as the it is no new industry and it is an
incremental in their business process in which they are efficient and data driven.

They may be breakthrough innovation for other competitors, as no other logistics company is doing
any innovations at the higher levels.

The company has its core competency as Data science, that is with the comprehensive data gathered
by them over time, which would make them future ready to match the demand and supply. They are
also investing in Machine learning to better understand the change in consumer behavior over time.

Their objective is to provide infinite value and deliver measurable results for shippers and fleet
operators through :

 Instant Availability
 Fair and Transparent Pricing
 Seamless Experience

They are providing a unique platform for shippers, through a interactive interface on mobile and web
based applications, which gives them access to locate their trucks across the country without making
multiple phone calls. Their ML (Machine Learning) Algorithm helps them in connecting them with the
most suitable fleet depending on source, source destination, materials to be shipped and other details.

It also is attracting its vendors by providing cost affective solutions to run their daily business, like:

 Optimal truck utilization

 Efficient route; which in turn helps them in optimal route planning, optimize time and reduce
fuel expense.

Freight platform for enabling convenient shipping and higher utilization of truck with organized freight
matching. With the service platform they are making trucking simple and efficient with host of trucking
services and infrastructure.

Market overview
Amongst all the modes, rail and road transport are the most significant. The modal share between
these two has changed over the years, from the 80% rail share in 1950-51, to the road share becoming
65% in 2011-12. Road overtook rail in the early 90’s. This shift was a consequence of the inability of
the Indian Railways to provide the required capacity or respond with expected customer service, while
road transport could provide door to door service. Further, during the last two decades, road
infrastructure expanded rapidly on account of focused policies and investments.

The truck market is growing, but the pace is slow. From 2004 to 2014, sales in the global truck market
for MCV & HCV grew at an average annual rate of 2.7%, but growth was extremely volatile, ranging
from 18% to 37%. HCVs continue to be the dominant segment in the market, with a share of 63%.
Between 2014 and 2024 the global truck market is expected to continue growing at a low rate of 3.1%
per year. The Indian market will be the main driver.

The following is the current revenue generated by top five logistics company:

Source: https://www.owler.com/company/blackbuck

The above picture clearly shows how BB is able to generate more revenue, and is having a strong
backup from its VC throughout its various stages of funding, and this could be due to their
differentiating factor of ML, AI and Automation coming into picture.

Growth rates vary widely around the globe. Growth is slowing down in large truck markets such as
China and most of the Triad countries. On the contrary, India, the ASEAN countries, and Eastern
Europe will account for most of the future growth. Central America is showing dynamic growth as well.
More than 70% of incremental sales in 2024 will be generated outside the Triad markets. But the
solidity of the Triad markets will stabilize the total global truck market in the decade to come.

Growth is not global but regional on a global scale, with India contributing the largest share, India is
expected to supersede the US as the worlds largest market.

Tata is a major OEM for trucks in the Indian market and is expected to profit from the same in the
future.
With respect to the finance aspect banks provide financial aid to the small road operators under
priority sector lending. This is in accordance with the RBI initiative where it has identified certain
sectors to be the priority sectors for the purpose of granting low interest loans. The objective of this
is to make financial assistance available to low income groups and weaker sections of society, also to
provide self-employment opportunities to the educated unemployed. Since loans are available at
cheaper rates, the truck owners have the incentive to stay small.

India has a highly fragmented truck ownership. 75% of the fleet is with those who own up to five
trucks. 15% of the fleet is with those who own between six to 20 trucks. Only about 10% of the fleet
is with those who own more than 20 trucks.

The 5 S framework for roadway transportation in India would be as follows:

Speed: The primary need of the trucking sector is speed. While vehicle technologies are moving in this
direction, infrastructural and regulatory bottlenecks remain. There was a push on infrastructure last
decade which has slowed down. Attempts are being made to re-energize this. On the regulatory side,
a lot needs to happen to enable streamlined movement of trucks across the country. Apart from
removing inter-state check posts, electronic tolling needs immediate attention.

Sustainability: Rail and Coastal transport are threats to the trucking sector due to their better
environmental impact. This can be combated by better technologies, maintenance and driving
practices. There are efforts to limit the age of the vehicles and use improved fuel.

Safety: Indian roads kill the maximum number of people globally, on a country wise comparison. Road
engineering, signages, driver training and licensing, driving practices and vehicle maintenance need
significant attention. Post-accident support is also critical to minimize loss of life and limb. Truck based
video cameras and a ‘black box’ should be considered for better analysis of the causes of accidents.
While there is sensitivity on these issues, implementation could be better. As per many international
studies, trees are the biggest killers during accidents. This is specially significant when we are trying to
increase the average speed on the roads.
Security: There are many situations where truck and cargo thefts happen. Vulnerable areas need to
be identified for better security support. ICT, including truck-based video cameras, can be used more
effectively to bring in visibility.

Stress: Studies have estimated that the economic loss due to damages on the road, vehicle and cargo
would amount to 2% of GDP. In addition, the driver is often stressed out, which also could be a cause
of accidents. High quality road infrastructure, improved truck cab design for driver comfort and
scientific cargo loading practices need emphasis.
References:

https://www.owler.com/company/blackbuck