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Transportify sees robust PH logistics sector

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By Bernie Cahiles-Magkilat

Transportify, an app-based cargo delivery firm focusing on the logistics needs in certain southeast Asian countries including the Philippines, is expanding its operations in the Philippines as it continued to scale up volume of deliveries and drivers into their platform saying the country’s logistics requirement is so huge that they’re only tapping just a small fraction of the industry’s needs.

Paolo Bengson, co-country director head of operations and service told Business Bulletin, this expansion mode is in response to its robust growth in just a year since it opened its business middle of 2016 here. For this month alone, Transportify is posting 400 percent sales growth this month, December, 2017, as against December, 2016.

Transportify, founded by Inspire Ventures and Ardent Capital, is set to open three satellite offices in Luzon and is just waiting for the right time to switch on its Cebu business.  This tech start-up is run by ASEAN nationals, mostly Vietnamese and Filipinos. Bengson was employee number one in the Philippines, which now employs a total of 75 people and still hiring.

Noel Abelardo, Transportify co-country director for sales and marketing, also reported of having a robust database with a fleet of over  7,000, serving over 24,000 customers, as Filipino firms have realized the value of this app-based logistics provider.

Transportify drivers can earn P70,000 net of commission a month while customers can save as much as 30 percent compared to booking with the traditional logistics provider.

“The guy driving the L300 van can make net of commission P70,000 a month,” Abelardo said.  In most instances, drivers own their own vehicle so there is space for him also to hire a driver and still have enough income to operate the vehicle.

There fleet include economy cars, L300, closed vans, 6 wheelers. Economy starts at P250 for the first three kilometers and R20 per kilometer after. L300 starts are P600 for the first three kilometers and then P30 per km after. Their are plans to also incorporate motorcycles to augment their fleet, especially for last mile deliveries.

Typically, immediate bookings get a truck within 45 minutes. The scheduled delivery can book 3 hours in advance or two weeks in advance. A full day option service is also available. Booking is also easy with a friendly dashboard that shows all the features and services made available by the logistics company.

To ensure proper services, Abelardo said all their drivers have to pass stringent accreditation processes. Many could not pass the exams on the first attempt and others still fail on the third.

“We accredit and train them, we require ORCR registration of vehicles and full day training,” said Abelardo noting that each driver must be well-versed with the app and makes sure they follow courtesy procedures before he is put on board.

Their main customers are small and medium enterprises, big companies and even third party logistics. Payment of service can be done cash on delivery.  Goods are also covered by insurance.

“Most companies have no technologies to track and trace but on our app you can see where the drivers are,” he said.

Since the business is to deliver goods, Transportify is more forgiving about the age of vehicle as long as they well maintained.

“Every vehicle is eyeball inspected by the trainers and see if they are well taken care of,” said Bengson.

“We do anything older than year 2000 because the vehicle is not a determinant of quality but the delivery experience so we look at the skills of the driver, we inspect the vehicle to ensure there will be no vehicle breakdown,” he said.

“We manage the drivers and vehicles, our data is very robust. We know if there is a complaint and able to react to this because we have the best feedback process.”

By booking with them instead of managing their own fleet of trucks, drivers and helpers to deliver their goods, companies can save on cost.  Savings come from having no overhead cost, efficient use of trucks and maximized labor.

Unlike the traditional logistics companies normally operate based on fixed contract, but Transportify is on need basis, making trucks fully utilized and drivers fully maximized. This efficient operation enables their customers to save 30 percent on the average.

“If you deal with traditional logistics providers there are other cost factors like overhead cost and employing drivers all those things are taken away with Transportify. So we bring value to business and our clients can focus on what matters which is to grow the business. In this case, we are helping them out,” he said.

There is no industry data of the logistics industry, but Paulo said it is huge. Transportify has only tapped the tip of the iceberg.

Demand is driven by the robust growth of the domestic economy. Other factors include the digital way of doing business and the consumer driven economy. The worsening traffic has also forced companies to adopt new technologies to make their business more efficient. In fact, Transportify is not adding more vehicles on the road, rather it is easing the flow of traffic.

“It is big enough but we are only a small fraction,” said Bengson. Sales have been very strong at 400 percent increase in December this year compared to December 2016.The Christmas season is where they have the most volume but the business is growing briskly.

Besides, Bengson said they really don’t have direct competitor. Transportify caters mostly to mid-mile or business to business although they do have some last mile deliveries. There are already last mile delivery firms, but they own their fleet or they are not app-based. They have different rules and requirements also.

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