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Journey of Truck Lagbe: Digitizing Bangladesh’s Trucking Industry

Every day thousands of commercial trucks, pickups, and covered vans are transporting goods throughout the country, which keeps the wheels of the economy running. In developed countries, the ‘Freight Board’ or ‘Load Board’ was used for freight transport bookings, which was basically a central marketplace for all trucks entering a specific city or area. Previously, companies would rent vehicles or lorries over the phone or through numerous trucking agencies. Following the growth of the internet, these ‘load boards’ eventually transformed into an online marketplace, where freight brokers and shippers can find several carriers for their loads. Whereas in Bangladesh, if any individual or company needed to find a truck or freight vehicle in less time and at a reasonable price, they had to first travel to a truck stand or seek the assistance of a transportation agency. This process was both costly and time-consuming. To bring a halt to such problems, the app Truck Lagbe has been developed in Bangladesh so people can avoid such unpleasant situations. Truck Lagbe is a Bangladeshi startup company that reshaped the traditional hauling or trucking industry of Bangladesh. It provides online freight vehicle bookings as well as related logistical services. In brief, Truck Lagbe is an online freight booking and logistics platform that connects truck owners/drivers with service seekers to avail their desired on-demand service efficiently. The platform offers affordable and competitive pricing of transportation for thousands of businesses and individual users. On the other hand, truck drivers or owners are getting more trips than before and can enjoy the best utilization of their vehicle.

The Journey

Mr. Anayet Rashid, the founder, and CEO, and Mir Hossain Ekram, the co-founder and COO of Truck Lagbe were childhood and work friends. They used to discuss various business ideas from time to time. They had a plan to open an online grocery shop in around 2005 when the internet was not even popular for eCommerce in Bangladesh. Later, the two friends stepped on an idea of automobile components and parts selling business but abandoned the idea due to a couple of issues.

The idea of “Truck Lagbe” started in 2016. Mr. Rashid was involved in an FMCG company that needed to transport tons of wholesale products to different locations. He noticed that the transportation cost varies significantly from time to time. Even if the product weight and destination are the same. Once they hired a truck to transport products to Jessore. The cost for that transport was BDT 8,000. After a week, they hired another truck to transport another batch of the same product to Jessore. But, at that time, it cost only BDT 35,000.

The idea of Truck Lagbe came when Mr. Anayet Rashid realized that there was a cost difference in transportation of goods.

The incident captured his attention which encouraged him to find the reason behind the price difference. After evaluating the reasons, he got to know why there was a huge price difference. In the first case, the truck was hired from a third party and not originally from Jessore. The driver thought that he would not get a deal on the return trip. So, he charged more to cover that expense. In the second case, the truck was originally from Jessore and it was on its way back to Jessore from Dhaka. So, he could afford BDT 8000 as the rent as it was an unexpected deal. Mr. Rashid realized that there was a mismatch between the supply and demand for the trucks and the whole logistics is a multi-dimensional process where every factor is interdependent. Proper coordination of all the elements can reduce the ‘unused capacity’ or loss of ‘empty cargo’ and ultimately lower the cost. Then he discussed it with his friend and came up with the idea of the Truck Lagbe platform. They visited places like Comilla and Tejgaon to understand the market trend and talked with intermediaries, transport agencies, truck owners, and drivers and got a warm response after pitching the idea. Then they started sharing the idea with different stakeholders. In December 2016, they finally decided to go for the idea. They recruited specialists since it was a tech product. They approached their friends with the idea. Their friends welcomed the idea and joined the team. In February 2017, they initially started the journey with four people in the management team. Although, they hadn’t started their operation at that time. In May 2017, the ICT department of the government arranged ‘Startup Challenge 2017’. 72 contestants participated in that event. Truck Lagbe team also participated in that competition, pitched the idea, and became the champion among 20 other winners. After winning the competition, they got a lot of traction from national dailies and TV channels. A lot of emails and phone calls started coming in every day from both drivers/owners and shippers about the service. They had received a small funding from the ICT ministry. They had received a free co-working space as well. 

In July 2017, the country’s first digital truck rental platform Truck Lagbe was officially launched with a beta version of the app. They had started with only 25 trucks, and they were able to make 30 shipments in the first month. Soon, they started growing rapidly. A lot of shippers and truck owners started joining on the platform. On 1 August 2018, they received $250,000 from ‘RC Ventures’ as pre-seed funding. In the same month, their number of total trucks increased to 8000. On 20 April 2019, Truck Lagbe again received $1 Million from Mount Parker Ventures and The Aria Group as seed funding.

According to the Dhaka Tribune, they had 50 thousand registered drivers and over 150,000 registered customers in September 2020. They have achieved the milestone of completing 1 million trips through the app in November 2020. On 1 Feb 2021, Truck Lagbe received $5 Million as series A funding from IDLC Finance and International Finance Corporation.

Truck Lagbe received $5 million funding from IDLC Finance and International Finance Corporation (IFC)

How it Works?

Truck Lagbe is basically an app based ridesharing service which works as a parcel service. It has 2 separate apps, one for drivers and one for shippers. Anyone can avail the service by downloading the app from the PlayStore. The iOS version is yet to be released. Shippers can rent a truck in two different ways: Instant Booking & Schedule Booking. With the ‘NEED NOW’ option, one can rent a truck instantly according to the specific rent shown in the app. Currently, they are providing an ‘instant pickup booking’ with a fixed rate facility within Dhaka city. People can also book a truck for later, using the ‘SCHEDULE’ option of the app. One needs to create a post mentioning the type & size of the truck, exact time, date, and types of goods that need to be transported and ask for quotations from truck owners. Then truck owners bid for the deal. At the end, he can choose the best rate in the market he finds suitable for him. Truck Lagbe charges a commission from the drivers, while the shippers do not pay any commission.

The Truck Lagbe platform provides a couple of benefits over traditional ways in the hauling industry. People often face difficulties in transporting goods for many reasons. Among them, unavailability of vehicles, not getting the desired type of trucks, not having trucks on time, fare fluctuations and unusual demand of truck drivers, falling into the clutches of brokers are some notable issues in traditional ways of transporting. Truck Lagbe platform eradicates all those issues and offers faster booking, better rates, and secured delivery facility for all the shippers.

The user-friendly design and expert navigation system integrated in the new app provides an effortless experience for the users. Besides that, according to market data, more than 12% of transport trips have more than one drop point. People can choose multiple drop points through the new version of the Truck Lagbe app now. The round trip facility has also been introduced in the new update. People can rent a truck for an up-down trip with a consistent fare rate. Hiring trucks for a whole day is also introduced for Dhaka city. According to the Truck Lagbe authority, the platform is minimising around 30% logistics costs of the shipper as well as reduced 15%-20% costs of pickup fare within Dhaka city.

The platform is also very beneficial for truck drivers. Each driver gets trips that are suitable for him. For example, a 25-ton truck owner will get trips suitable for that kind of product. Besides, they can get trips while returning from a trip. The driver app has an advanced online feature, with which they can set the time of their availability on a particular place while on a trip, before reaching the place. So, the chances are higher that they might not return from there with empty cargo. It will help them earn more money than before.

Present Operation

Currently, Truck Lagbe has over 80,000 truck owners and approximately 150,000 small pickup and large trucks registered with them and serving all 64 districts in the country by using the platform. They have several categories of vehicles including 1, 2, 3.5, 7.5, 15, 25-ton trucks, and primal mover/trailer trucks on their platform.

Apart from serving mass people, they also provide special corporate service at a competitive rate for many companies. Some of the notable companies are EasyTech Lifts & Escalators Ltd., National Polymer, National Trading Syndicate Ltd, Arla Dano, and Transcom Consumer Products Ltd. Besides that, Truck Lagbe provided 5% discounts on transporting animals during Eid Ul Azha.

In the pandemic situation, Truck Lagbe provided a lot of value to the transport industry. According to a survey of 2020, 80% domestic manufacturing companies are suffering from transportation-related complications. Besides, the transportation cost of many companies rose by 15-20%. Truck lagbe is providing 100% guarantee of getting trucks on time at a lesser fare than the market rate and help keep the wheel of the economy moving.

Transportation costs of many companies rose by 15-20% during the pandemic

Future Plan

The Truck Lagbe team developed a GPS device for their registered trucks. They will use GPS to track road conditions in the future, which will likely change the traditional vehicle hiring and transportation system of Bangladesh.

The future plan of Truck Lagbe is to create an ecosystem in the hauling industry. Currently, the platform is a two-sided marketplace: the drivers and the shippers. But there are also some other parties involved including transport agents, wholesalers, auto parts, and utility sellers, load-unload laborers, supervisors, and many other service providers. The aim of Truck Lagbe is to include them in the ecosystem and step up to further development of the company. The founder and CEO of Truck Lagbe said, “We call ourselves Truck Lagbe network because we work as an aggregator platform where the drivers/owners and shippers can connect and do business swiftly.”

However, the startup will confront a lot of barriers. Most truck drivers in Bangladesh are neither well educated nor technologically sophisticated. Apart from the drivers, most consumers are not yet familiar with utilizing truck transport services via the app. Also, since Bangladesh is a small country, drivers don’t have to travel long on each trip. Therefore most drivers or owners aren’t concerned about the return trip, and most of the time they return with an empty cargo. Recognizing the potential for technological advancement and digitization in Bangladesh’s truck sector, a number of start-ups and organizations have also emerged to pursue this market. How Truck Lagbe will perform in future is yet to be seen.

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