Truckin
We’ve embraced technology when it comes to urban transport leveraging ride hailing applications for personal transport as well as the delivery of packages of all sorts right to our doorstep. And yet, our national road transport system is surprisingly analog.
This article was first published in The Mint. You can read the original at this link.
We are today just a click away from anything we want. Entire ecosystems have been built to get us the things we want in the shortest possible time and at the lowest cost. As a result, we have seen a rapid proliferation of warehouses, optimally located to ensure that fast-moving products reach their intended recipients as quickly as possible. As well as massive global sourcing enterprises that are constantly on the look-out for sellers who stock products as diverse as desk ornaments and the desks on which they sit.
Behind all this is a largely unseen transportation and logistics industry that works silently in the background to move these packages from place to place. This, given the demand, takes place at a frequency unprecedented in human history and using a number of different modes.
Among these, by far the most common is overland transport—where trucks of all shapes and sizes are used to move packages cross-country or from warehouses to the nearest distribution point. But it is within this leg of the supply chain that there exist inefficiencies that need to be urgently addressed.
Empty Miles
The scourge of overland transport is, what is referred to within the industry as “empty miles"—the distance a freight truck has to travel carrying no cargo. In 2020, this accounted for nearly 20% of the total road freight transport in Europe alone—a number which by all accounts is not much better in other countries. Industry leaders wryly point out that the most-shipped good on the planet is air. Apart from not earning the company any revenue every time they return home empty, it is estimated that trucks that run empty emit as much as 76 million metric tons of CO2 every year.
Carriers are trying to take steps to improve the situation. Wherever possible, they are looking to improve network planning to consolidate shipments into larger and larger containers in an effort to reduce the number of empty containers being used.
But this can only go so far. Some shipments, particularly the more specialised ones, are one-way only, leaving the truck no option but to return to its origin with no cargo. This is further complicated by the fact that much of the industry remains, to this day, painfully analog—relying on paper manifests and third party brokers for various legs of the journey. When recorded in this format and intermediated by third party brokers, it is highly unlikely that any empty miles that exist will be capable of being monetised. As a result, the demand for empty trucks remains unfulfilled even as trucks continue to drive back empty.
This, if you think about it, is a problem we already know how to solve.
Uberisation of Transport
No more than a decade ago, you could have been waiting to hail a taxi on a road when just one road down there could have been a long queue of empty taxi cabs that were similarly waiting for a fare to find them. We no longer worry about that because mobile applications like Uber and Ola leveraged the GPS capabilities of modern smartphones to find a way to bring the demand (us) to meet the supply (taxis). If we could find taxis for humans, should we not be able to find cargo for empty trucks?
In an article that appeared in this column over six years ago, I had argued for the “Uberisation" of national transport:
“It’s hard to comprehend, why technologies which have proven so successful in managing movement within the city, are not being deployed for the journeys between them. Why, for instance, do truck drivers still have to transport the same cargo trailer from the origin of the journey to its end. Would it not be more efficient if trailers were designed to be transported using a hub-and-spoke model where trucks move trailers from one hub to the next instead of all the way across the country."
While the particular solution I was arguing in favour of remains unfulfilled, we have today a brand new digital public infrastructure (DPI) in the logistics space that could prove to be promising.
DPI for Logistics
The Unified Logistics Interface Platform is an Application Programming Interface (API)-based data exchange system that has been designed to enable innovative solutions in the logistics sector in India. While its APIs currently offer only basic information—vehicle and driver data as well as eWay bill numbers—that can be used to track consignments across multi-modal transport services till they reach their final destination, it is possible to see how this digital infrastructure could be adapted to solve the empty mile problem.
We could, for instance, identify all the transport vehicles at a given location that are scheduled to return unladen to their home location so that any consignor looking for a truck to transport their goods in that general destination has a set of transporters they can choose from. If this information is made available through an open API accessible by any logistics provider, it would be possible to find a way to bring demand to meet supply.
Elsewhere in the world, this is a problem private companies are looking to solve. They are entering into arrangements with logistics companies and consignors to bridge the gap between supply and demand.
This, in a country as vast as India with its disorganised and distributed transportation industry, is unlikely to succeed. What will work, however, is a population-scale DPI that makes this data accessible through open protocols, which private entrepreneurs can use to build solutions that work at scale.
