Logistics is one of the elements that plays a vital role in the supply-chain management of any business. It is basically the whole process of controlling how goods or materials are collected, stored, and transported from the point of production to the end user. A proper logistics system may assist a business by boosting efficiency, lowering costs, and increasing production rates. Furthermore, efficiency in logistics can establish a favorable business environment for both new and current enterprises, generate jobs, attract foreign direct investment and contribute to national GDP. In Bangladesh, the logistics system is not as robust as expected. A large share of the market is still dominated by traditional, age-old logistic channels. However, a couple of large logistics solution provider companies and a few online based logistics companies have emerged in Bangladesh. ‘Bongo Express’ is one such company that works as a logistics aggregator to provide complete logistics related solutions by integrating automation and digitalization in the industry.
Overview
The logistics sector has long been a driving force behind the success of local companies and the overall economy of any country. With the increase in per capita income, the demand of people of Bangladesh is increasing. As a result, the market size of almost every sector is increasing and the volume of imports is also increasing. On the other hand, Bangladesh’s export earnings are increasing every year. However, supply chain management is one of the prominent issues that local and foreign trade dependent organizations of Bangladesh are constantly facing, and the biggest issue of supply chain management is logistics. For any business, logistics refers to the whole process of reaching a product or material consumer, starting from the production point. Currently, there are different types of logistics services available in Bangladesh, including, freight transport service, cargo handling service, storage and warehousing service, courier service or last mile delivery service and 4th party logistics service.
The most prominent subsector of the logistics industry is freight forward or transportation service. According to Bangladesh Freight Forwarders Association (BAFFA), there are 1058 companies listed with them as of October 2021. MGH group, MAERSK, Navana logistics, and A.H.Khan & Co. are some of the largest freight forwarder and logistics solution provider companies. Apart from that, a few online based trucking and logistics companies have appeared in Bangladesh. REDX, Truck Lagbe, GIM Digital Truck and Loop Freight are some of the prominent online based trucking and logistics solution provider companies. Although large companies have their own dedicated transportation system, medium and small businesses do not have that facility and had to rely on these freight forwarders and transportation companies. Besides that, many businesses and individuals are taking assistance from traditional transportation services as well. In many cases, small traders have to go directly to the truck stand and hire trucks. The BRTA data shows that the industry employs roughly 364,000 vehicles as of September 2021, which include Cargo Vans, Covered Vans, Delivery Vans, Pickups, and Trucks.
After that, the need for warehousing and fulfillment centers arises which is also an essential part of the logistics system. Some Logistics and transportation companies have warehousing facilities. Besides that, loading and unloading, sorting, packaging are also some crucial activities that some logistics solution provider companies offer based on the contract. Courier service or last mile delivery is another notable sub-sector of the logistics industry. The need for delivery services has grown substantially in recent years, owing mostly to the growing popularity of e-commerce. Because of that, a few courier and last mile delivery companies have emerged in recent years. Pathao, e-courier and paperfly are some of the largest online based last mile delivery companies in Bangladesh. According to textile today, the market size of the logistics industry of Bangladesh is around $1.5 to $2 Billion.
Challenges
A country’s sustainable economic development requires good infrastructure and efficient logistics systems. However, Bangladesh’s logistics system is not particularly strong, since a number of challenges impede the overall logistics system’s seamless functioning. According to the Agility Emerging Markets Logistics Index 2021, Bangladesh ranked 38 out of 50 countries. China, India and Indonesia were ranked 1st, 2nd and 3rd on the list respectively. Behind this poor ranking position, some major issues can be seen in Bangladesh’s logistics industry.
Lack of Digitization
To hire a vehicle for transportation in Bangladesh, any business or individual must call a transportation service or broker, or go straight to a truck stand. Dishonest brokers exchanged a trip numerous times in this traditional method. This not only wastes time but also raises transportation costs due to the influence of brokers and intermediaries. The most significant issue that businesses encounter while renting transportation vehicles in Bangladesh is the high cost of hire. There is no widely accepted fair policy for transporting goods, and tariffs are determined by the demand and availability of transportation vehicles in a given neighborhood or city. This expense is enhanced further by the aggression of brokers and intermediaries. Furthermore, most truck drivers are suspicious about return trips and demand higher fares.
Uncertain Delivery Time
The uncertainty of timely delivery is one of the biggest concerns in Bangladesh’s overall logistics industry. There is no assurance of on-time delivery for large shipments or last-mile deliveries. The transportation system of Bangladesh is one of the primary causes for this issue. The condition of Bangladesh’s road communication infrastructure varies from district to district. Many parts of the country still lack direct train and road connectivity. Launches or ferries are often used for transportation in many regions. None of the courier or fast mile to last-mile delivery services can complete the delivery on time due to such weak infrastructure and communication system. On the other hand, due to the lack of real-time vehicle tracking, the professionalism of transportation workers cannot be monitored. As a result, delivery times become uncertain, and ‘loss of product’ occurs sometimes.
Lack of Warehousing Facility
After the shipment of goods, a need for a proper warehousing facility arises. Although large corporations in Bangladesh have their own warehousing facilities, most companies hire warehouse space on-demand basis. However, due to a shortage of skilled workers and warehouse facilities, the companies confront a variety of problems.
Transforming the Logistics Industry
Understanding the logistics and distribution industry’s issues, a tech-enabled company ‘Bongo Xpress’, owned by Bongo Technology Ltd, has developed an innovative platform to provide an app-based whole logistics solution in Bangladesh. The company was founded in 2018, and within three years, they have built AI-integrated, cloud-based end-to-end logistical solutions. From a single platform, the company offers online truck rental, supply chain, and distribution management solutions, fleet management solutions, food and grocery delivery, home and office moving solutions, and P2P parcel delivery.
Trucking Solution
Bongo Xpress is trying to offer an on-demand smart trucking solution for businesses and individual shippers through an app. Besides that, the platform also has multiple delivery point options and a return trip facility to offer the most efficient trucking system by minimizing cargo loss. Bongo Xpress has an app called ‘Bongo Xpress Pilot’ for drivers, with which they can get new tasks, and complete their delivery with an expert navigation system. They also can track info on their earnings and incentives through the app. Apart from that, drivers can also enjoy a monthly free health check-up as an added advantage. The truck owners, on the other hand, can live to track the vehicle, make audio and video calls with the drivers, and make changes to the fare structures with the app. From the shipper’s or customers’ perspective, they can also avail numerous advantages including a fixed fare without bidding, live tracking, audio/video call with the drivers, providing ratings to drivers, and digital signature & barcode verification for secure delivery of products.
Transportation companies, on the other hand, will be able to use the ‘Bongo Xpress’ platform for ‘Fleet Management,’ as well as finding trips and monitoring drivers. ‘Bongo Xpress’ will provide a ‘Fleet Management Solution’ service even to companies who have their own ‘Vehicle Fleet.’ As a result, besides using their vehicle efficiently, it will open up potential for extra earning by providing idle vehicles to other businesses. That’s how Bongo Xpress is integrating existing transport businesses, vehicle owners, drivers, brokers, existing e/f-commerce and parcel delivery businesses into their ecosystem.
P2P PARCEL DELIVERY
Bongo Xpress has solutions for e-commerce and f-commerce businesses. They basically offer logistics solutions including last mile product delivery services to the customer’s doorstep. Through the app and web dashboard, ‘e-commerce’ and ‘f-commerce’ can easily place parcel delivery requests. Bongo Xpress is currently developing its own delivery fleet as well. In order to conduct P2P parcel delivery, Bongo Xpress has introduced an innovative feature called ‘proof of delivery (POD)’. This feature will include a digital signature and an auto-generated barcode system to show evidence of delivery. The parcel can be tracked by both the sender and the recipient using Bongo Xpress’s P2P delivery app. Bongo Xpress also provides packing and shipping services, as well as efficient packers and movers for home and office relocation.
Grocery and Food Delivery
In Bangladesh, no platform can provide effective grocery and food delivery services.
Bongo Xpress is trying to build their own food and grocery delivery solutions on their platform. It allows any individual, as well as online grocery stores and supermarkets, to start a food delivery service. Restaurants will also be able to provide their own food delivery services by utilizing Bongo Xpress’ platform and delivery men, rather than depending on any online food delivery aggregator. Restaurants who already have a meal delivery system will be able to improve their efficiency by utilizing Bongo Xpress’s platform.
Bongo Bonik Franchise
Entrepreneurs have the opportunity to take the Bongo Xpress franchise. Through the ‘Bongo Bonik’ franchising concept, Bongo Xpress hopes to establish a robust logistical network in Bangladesh. A person with valid user agreement, an office and warehouse space, computer and printer, weighing machine as well as a team of pilots on board to deliver parcels anywhere in the region can become a bongo bonik franchisee and earn money. They will get technical and business operational support from the ‘Bongo Xpress’ and represent the company in that particular region.
Application Programming Interface (API)
Bongo Xpress provides its own API for ‘online order management interface’ and ‘fleet management’ of existing business websites and mobile apps. The company claims that such integration in the website or app will enable for automation of the ‘order’ and ‘delivery process.’
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