Strength in maritime transport gave birth to some of the most powerful empires in the past and it remains an important part of global trade and economies, as shipping remains one of the most cost-effective methods to move large amounts of goods globally. It is an ecosystem of ports, shipping, and maritime services, which have grown tremendously in size and relevance, and will continue to do so, given the advent of technology, massive projected growth of the Southeast Asia region (specifically retail and eCommerce, and inter-connectedness with the world), as well as the advent of Industry 4.0 (the Internet-of-Things “IOT”) and collection and democratization of data. It, more so than many industries, is ripe for disruption as it has been notoriously slow to adapt to technology, given that many parts of the value chain are still very much either dominated by a few key players, or extremely fragmented.
Freight transport remains a key cog in the well-oiled machine that is maritime logistics and it is an area that remains, as many might claim, the same as it was decades ago. There are many players in a logistics and supply chain, and any inefficiency stacks up quickly. On top of that, hard-to-predict shipment volume results in difficulty in planning and scheduling of drivers, more greatly impacting smaller hauliers in a highly fragmented industry. Moreover, there is still a lot of inefficiencies and wasted trips in haulage, due to the lack of optimization of scheduling resulting from archaic systems – the reliance on pen-and-paper scheduling, phone calls/walkie-talkies, and cash transactions.
Haulio aims to make use of technology to bring greater efficiency to container trucking, building a marketplace for shippers and transporters/hauliers, becoming the Grab/Uber for it.
Who are they?
Founded in 2017 by Alvin Ea and Sebastian Shen, Haluio is a B2B platform for the container haulage industry. It is a digital haulage service provider aiming to match hauliers to shippers/freight forwarders. It claims to be Singapore’s largest and fastest-growing digital container haulage network, with over 90% of the truckers on their platform.
They have two products – 1) Haulio Community Portal (HCP), a job management page to match shippers to hauliers, and 2) Haulio Connectivity System (HCS), a driver management system for hauliers to better manage their fleet.
Forwarders will post jobs on the Haulio Community Portal and hauliers will bid for the jobs. The system will then automatically match suitable jobs to hauliers, with a typical response time of 5 minutes to 2 hours, as stated on the FAQ.
Some of the features of the Haulio Community Portal are:
- Free open market – shippers are free to post any price they want for their jobs and hauliers will decide whether that is do-able
- Value-added service for regular accounts – Haulio has a separate module where we offer a fixed quotation for regular accounts with a volume
- Automated reminders, live chat, file attachments, and job milestone updates
Because supply of hauliers is not as dynamic and assignments take a longer time, shippers are advised that jobs with 3-5 days of lead time get better responses from the hauliers, although there is no time restriction to posting jobs on the portal. Haulio boasts that it has had 98% matching success rate.
What is the team and who are the investors?
Haulio was co-founded and is led by Alvin Ea, with co-founder Sebastian Shen as CPO. Alvin has deeper industry knowledge, while Sebastian’s experience skews towards technology.
- Alvin Ea (CEO, co-Founder) – started his logistics profession through his family business HUB Distributors Services, a Singaporean SME 3PL firm, subsequently co-founded HUB Logistics, a business extension for container trucking
- Sebastian Shen (CPO, co-Founder) – previously a Business and Tech consultant at 2359 Media, a mobile marketing company, where he was involved in projects on chatbots with Singapore Airlines, contactless technologies with the Singapore Tourism Board and delivery management solutions with ST Logistics
Haulio’s pre-seed investors was $56K from PSA unboXed, the corporate venture capital arm of PSA International, a statutory board regulating, developing, operating and promoting the Port of Singapore, and NUS enterprise. Their $747K seed round in May 2018 was led by PSA unboXed, with participation from 500 Startups, NUS Enterprise, and several angel investors from the logistics industry.
What is their value proposition?
Similar to platforms like what Grab or Go-Jek aspire to be, scale matters. If it is as it claims, to have over 90% of the truckers on their platform, then it would make the platform a very compelling option for shippers to find transport partners.
- Scale – hauliers (like riders for Grab/Go-Jek) will want to go on a platform only if there is supply (shippers), and similarly for shippers (drivers), only when there is demand. Haulio seems to have solved one side of the chicken-egg problem with their claimed number of truckers
- Free market and price transparency – shippers are free to price their jobs and hauliers respond to them in a free market environment
- Affordability – The Haulio Connectivity System (HCS) for hauliers was made free in Sept 2019, potentially accelerating Haulio’s acquisition of hauliers and making the platform more compelling for shippers (note that PSA Port Messages, for drivers to communicate PSA within the port, will still require a monthly fee of S$19.90 per truck)
- Extensive stack of features – the HCS has features like tracking, electronic proof-of-delivery, job management, trip forms, navigation/routing, controller chat (for hauliers and truckers), and promotions, all of which are of value to the customer
HCS app registration flow. Source: Haulio App
Importantly, in making the match between shippers and transport partners more efficient, it could mean better cost optimization for both parties, and potentially time and effort savings. Trucking is notorious for being physically-demanding, resulting in a dwindling worker supply that is already stretched thin. Better technology integration could help in this aspect.
What could the company branch out into and what similar companies are there?
They could expand the services they offer to their current customers. For example, fleet managers might need help with streamlining their interaction and communications with their drivers. They could build a communications platform or forum on their app, or integrate a digital payments platform, in order for fleet managers to have a one-stop-shop to communication, pay, and make any form of interaction with their drivers. They could also help fleet managers to boost the supply of drivers by making the app attractive for drivers to use. With the introduction of a suite of core-services, data visualization as an add-on for their customers could also be explored.
Following the example of Grab, Haulio could build a reward, or benefit, system that is offered to all drivers, or package it into a subscription plan as an added service to fleet managers. Another value-added service it could provide is financial-services solutions (e.g. insurance, working capital loans) to its shippers and drivers, following its African counter-part, Kobo360. (As a note, another African player Lori Systems has broadly stuck to just its core business).
They could also transform themselves to be an end-to-end technology enabler in the logistics supply chain. A company like RichLand could be a business onto which Haulio’s technology is applied. Haulio could integrate other services onto its app, including compliace services (e.g. freight documentation, permit declaration and customs clearance), accounting services, cargo handling, or extend its services into different cargo types (dry/break bulk, ro-ro etc.). A model to which it can look to is Haulage Exchange in the U.K..
Besides that, there is the potential to diversify their customer base by monetizing their data. A large proportion of logistics and trade occurs through container shipping. The data that they could potentially collect from shippers and hauliers could be useful input for estimating consumer and economic trends, as well as demand prediction. An analyst for economic growth in, say, an academic institute, would find such information useful in their research on global trade trends and growth. An eCommerce could use such information to drive focus on certain countries, or a manufacturer could use it to determine what products to prioritize. As they build up their scale, the information that they collect would be valuable to a diverse group of audiences.
Geographical expansion beyond Singapore is another option. Whilst Singapore is arguably key for shipping in the Southeast Asia region, the demand for goods and services in other countries are also fast-growing, due to fundamental shifts in consumer behavior, with its added value of convenience and access to products once much harder to obtain. Indonesia and Vietnam, for example, grew their internet economy by 49%/38% CAGR from 2015 to 2019, and eCommerce users grew from 49M in 2015 to 150M in 2019.
Haulio aims to bring transparency in prices and jobs, chipping away at the ability of shippers/truckers to undercut each other and bringing efficiency to the industry as a whole, in some ways unifying it. A key challenge would be to developing partnerships with these fleet owners/drivers and shippers, who have been comfortable with years of operation without technology disruption. Convincing them that greater transparency brings better efficiency and returns to all in the industry is crucial.
Beyond that, compared to start-ups in the broader logistics industry (e.g. Ninja Van for last-mile), it is very much asset-lite and hopefully, a lot easier to scale in the region, where much opportunity awaits. With an enthusiastic founding-duo leading the team, I am excited to see how the company develops and grows.