A small business owner once bought a couple of trucks as an investment strategy and leased them out to other businesses whenever they needed to use the vehicle to transport goods. Of course, at first, it sounded like a great option to earn extra income, but soon he realised the difficulty of keeping track of the trucks, had to spend a lot on their timely maintenance and struggled to obtain regular business within the local circle. While he had to keep paying off the loans for the trucks, the business suffered as the assets were not being utilised in an efficient manner. Eventually, the man lost his trucks, had to give up on the transport business and went nearly bankrupt. It sounds like a warning for small business owners in India, but it’s the story that inspired Prasad Sreeram to launch COGOS and target truckers in India.
When Sreeram’s friend, who went through the troubled times described above, wanted help, there wasn’t much he could get to organise the business. This made Sreeram realise just how important it could be for other truckers or transport business owners. He believed his friend’s situation could have been avoided had there been proper tech intervention. As soon as Sreeram finished engineering in college, he began working on vehicle-tracking systems and maps APIs to came up with a logistics management platform.
Joined by Dr. Rama Mohan Katta, he founded COGOS to solve the worries of small transport owners, many of whom are not very tech-savvy. As a former carry forwarding (C&F) and stevedoring agent, Katta had the experience of working in the logistics and freight industry, and he knew just how difficult it is to find a reliable way to deliver materials locally, something he observed regularly with cargo at ports. Getting a clear picture of the fleet, the pricing, and the truck capacity were some of the major challenges and Katta knew COGOS could operate in niches that other companies haven’t yet tapped.
Founded in 2016, COGOS is an AI-led logistics platform that claims to offer tools that solve the challenges for most intra-city supply chain businesses that are run on trucks or smaller tempos. The startup has received funding from like Padmaja Ruperal, Saurabh Srivatsava, Anukur Jain, Charles Owen, Niraj Saran, Raman Roy, Suresh Kumar, Farhat Ali among others.
With integrated advanced sensors, IoT technology, and third-party applications, COGOS helps truckers plan, execute and control the movement and storage of goods, with a clear view of the fleet in real-time. The platform also provides related information in an actionable manner between the point of origin and the point of consumption in order to meet customer requirements such as delivery tracking features within some ecommerce or other delivery apps.
The COGOS delivery management system (DMS) claims to help businesses book trucks, track their whereabouts and manage the movement of cargo while allowing live tracking of vehicle location. It also provides electronic proof of delivery to prevent theft and protect against other incidents in transit.
The company’s enterprise resource planning (ERP) tool assists in planning, scheduling, and dispatch of goods. It uses a just-in-time (JIT) management to clear the queue in real-time. Besides this, COGOS offers trucking businesses automatic billing and invoicing upon delivery features, which helps them stay ahead of market demands, and solves liquidity issues. Businesses can also keep track of their trucking expenditures through a dedicated dashboard.
Finding The Niche In A Large Market
“In the current gig economy where the ability to respond quickly to the market dynamics is the key, COGOS is fast becoming the de-facto player for marquee customers such as Flipkart, Amazon, Udaan, Delhivery, and Bigbasket for city logistics and fast-expanding the presence which will aid network effects,” Sreeram told Inc42.
COGOS claims to operate in more than 150 cities across India with a strong presence in northeast India, due to the lower degree of competition in this particular market.
Like various other logistics entrepreneurs, cofounder Sreeram also believes that the logistics sector is highly fragmented with 85% of the trucks owned by individuals or small-time entrepreneurs, where discovery and reliability are two major challenges. Along with working capital crunches and delayed payments as long-standing issues in the market.
“While technology will weed out the earlier challenges, we believe that fintech and early payment discipline will help the sector in the longer run,” Sreeram added.
What Sets COGOS Apart?
The highly fragmented supply of trucks, inconsistent earnings from truckers, delayed payments by customers, poor vehicle utilisation and lack of adequate management tools are some of the other challenges, according to Sreeram, which are the hurdles in front of other startups in the logistics sector in India too.
COGOS falls into the same category of players such as Rivigo and Blackbuck that are heavily funded and operate in more cities across the globe. The competitors focus on solving problems like fuel analytics, route planning, human behaviour analysis or pure-drudgery elimination tasks like auto-alert systems and intelligent decision systems.
Reiterating the focus on finding the right geographies to achieve growth, Sreeram said that while there is a lot of work being done in the market for truck discovery by many startups, they are largely concentrated around metros and tier-1 cities. “However, there are no consolidated pan-India players for city logistics covering Tier-1, 2 and 3, along with metros. COGOS is looking to bridge this gap,” Sreeram said to explain how COGOS is trying to outpace the competition.
For now, COGOS charges customers based on the kilometres driven by the truck, time utilised and the deliveries made.
Ecommerce did not bring the logistics industry into existence, it only validated its existence by bringing a paradigm shift in how things operated. Earlier, deliveries from warehouses happened in bulk, now single products started moving out of the warehouses.
India spends around 14.4% of its GDP on logistics compared to less than 8% spent by other developing countries. The logistics market in India is expected to be worth $307 Bn by 2020 and the unorganised nature of the sector opens up huge scope for disruption. Startups that capitalise on the right technology to solve the pain point of the industry are here to be in the long run.
The interplay of infrastructure, technology and new types of service providers will define whether the logistics industry is able to solve the real problems and help businesses reduce their transportation costs and inefficiency in a meaningful manner.