Encouraging a digital rethink for logistics

 

Trucks, containers, and warehouses were common sights for Alvin Ea as he grew up in a family running a Singapore logistics business.After university in Australia, he went home in 2012 to help his father’s firm.

After years experiencing logistics operations – including eventually founding his own trucking company to move containers – Mr Ea learned about “the pains” faced by the industry over the years. “The truckers are always ‘not on time’, they are always ‘on the way’,” and the customers “have no idea whether they are coming,” he observed in an interview with Innovation Hong Kong.

That kind of inefficiency prompted the Singaporean entrepreneur to set up Haulio with another partner in 2017. It is a centralised business-to-business (B2B) platform for the local haulage industry. The venture is in its formative phase, but its digital platform foundations have already won top prize at RISE Hong Kong 2019, one of Asia’s largest technology events. On the strength of such recognition, Haulio aims to improve its market appeal in Singapore and beyond, said Mr Ea.

Haulage usually refers to the commercial movement of goods by road. Haulio’s proposition is that traditionally the assets involved have not been used optimally, meaning they spend too much time doing nothing and not earning money for those involved.

“Think of us as an OS [operating system for a digital device],” explained Mr Ea, a co-founder of Haulio. Whether a device is “an Android phone or an iPhone, it has an OS to power the phone, and we want to be the OS that powers trucks and trucking companies,” he explained.

Improving efficiency

The Haulio start-up has been incubated by PSA unboXed, the corporate venture capital arm of PSA International Pte Ltd, one of the world’s largest port operators based in Singapore. Haulio helps to match customers with containers to be moved to trucking companies; and in turn pairs trucking companies with drivers, in a process designed to be streamlined by the digital platform.  “We digitalise the entire ecosystem [of the industry] with our technology,” he said.

 

 Haulio platform

The platform maximises haulage resources through sharing of information within the industry. This is said to improve productivity and efficiency. According to Mr Ea, the efficiency of a container truck in Singapore is about 55 percent, which means every 100 kilometres it runs it only makes money for about 55 kilometres.

“It is similar to the taxi model — taxis will only make money if they have a passenger inside; if there are no passengers, they are driving around with low efficiency,” the Haulio co-founder explained.

Haulio seeks to improve haulage business efficiency by matching a truck to an assignment closest to that particular vehicle, thus reducing the distance and time the trucks are driven around without containers. “The efficiency [of trucks on Haulio] has been increased from 55 percent to 62 percent at this early stage,” Mr Ea said. “Customers can also have a seamless experience to get their containers on time.”

The platform’s promoters also argue it could save trucking companies time and money through the automation of the traditional office-based systems for co-ordinating the use of containers, haulage trucks, drivers and end customers.

“[The platform] is moving about 6,000 containers a month and we only have four staff managing them,” he said. “For big companies here, which also handle about 5,000 containers [a month], their headcount is easily ten times that of mine,” he stated, referring to rival Singapore businesses

Mr Ea said that – after two years in operation – about 180 trucking firms, or 80 percent of all trucking firms in Singapore, have registered with Haulio. The 5,000 to 6,000 containers coordinated monthly via the platform represent about 3 percent of the available Singapore market, he stated. “We want to stabilise it at around 16-17 percent in the future,” said the co-founder.

Niche market

Incubation via the venture capital division of PSA has helped Haulio to gain recognition from trucking companies and get them to trust at an early stage the value of adopting this digital approach to doing business.

“If you can solve a real ‘pain’ for them, naturally the resistance will be removed and they will be willing to come on board,” he said. “I come from the industry: we [at Haulio] have the right mind-set, the right connections, and the right tools to solve the problems for all of our users.”

One of the biggest challenges for Mr Ea in this start-up journey has been fund-raising, as the general public and investors have little knowledge about the container-trucking business and what benefits Haulio’s new business model could bring to the sector.

“We are in a very niche place [and] we struggle to find people to understand what problems we are trying to solve: only trucking, logistics and shipping companies which are in this business can really relate to the problems,” he said.

Validation

The fact Haulio was named the winner – among 60 start-ups – of PITCH 2019 at RISE Hong Kong 2019, has helped the platform to gain greater recognition, said the Haulio co-founder.

PITCH brings together some of the world’s leading early-stage start-ups for a presentation in front of a panel made up of Asia’s top investors.

“It’s a form of validation – the problem we are solving is a real problem, and getting the endorsement from investors that are part of the panel shows that they realise it is a big enough problem for us to get going” with the business, he remarked.

He also refers to the success story of NEXT Trucking on the other side of world, as a proof that his new business model for the trucking and logistics sector could be sustainable in the long run. NEXT Trucking, a tech start-up inaugurated in 2015 in the United States, also helps to streamline the process of moving goods from ports to warehouses and vice versa. Earlier this year it raised US$97 million in ‘Series C’ funding.

“I fundamentally believe that the market will change and transform with or without Haulio,” said Mr Ea. “If it’s not me, another Haulio will come up some day.”

Haulio aims to strengthen its market presence in Singapore. It is also looking to expand beyond the city-state, with help from PSA’s network, which encompasses numerous port projects across Asia, Europe and the Americas.

“We’re doing a very aggressive expansion into the Southeast Asian region. We’re looking to launch in Thailand and Indonesia in the next five months or so,” he said. “We believe this is a business for the long haul.”

“I’m passionate about this industry, and there is so much technology could do to change some of the real pains that I have had a chance to witness since I grew up as a kid,” Mr Ea stated. “Being able to do something about it matters a lot.”

 

         a hub driver checking the Haulio platform

 

 

 

 

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