“When you buy anything from the market, you pay a 14 per cent freight rate on that good’s value. If you look at the same thing in a developed market, like the US or even China, those numbers are to the tune of 6-8 per cent. It is to control these logistics costs as a percentage of the GDP that the government has undertaken initiatives like the National Logistics Policy. These are done to simplify and streamline the whole logistics for the country with an aim to bring down the logistics costs to single digits,” says Vikas Singh, COO of Pune-based FreightFox, which was founded by Nitish Rai, Sandeep Mukhopadhyay, Manjari Sharma and him.
FreightFox is a tech startup in the Indian industrial logistics space.
FreightFox was one of the organisations that had been sharing their experiences and expertise with the government in the formulation of the National Logistics Policy that was unveiled last month. In May, when Niti Ayog organised the first ULIP (Unified Logistics Interface Platform) LogiXtics Hackathon, FreightFox emerged as the winner.
“What we had done was demonstrate credible solutions that could impact the national logistic efficiency in terms of cost. We also demonstrated how this data that the government was providing could be used to lower the transportation carbon-dioxide emissions across the country. These two user cases made us win the logistics hackathon, and we started working closely with authorities on evolving these solutions. This culminated in the National Logistic Policy launch event where we were among the final four private companies whom the prime minister interacted with,” says Rai.
In India, a manufacturing company that needs to “ship” goods to consumption locations does so predominantly by road. A faster movement would mean lower costs. “The logistic cost has two major components- the transportation cost and the entry cost, with both impacting each other. When transportation happens at a higher speed, the inventory cost, which needs to be kept at various locations, goes down. Planning becomes streamlined. For goods to move seamlessly with a high speed, we need the right infrastructure as well as digital intervention,” says Rai.
FreightFox develops digital products and solutions for manufacturers and industries. Their platform handles the entire management of freight till the time the goods are delivered and the company pays the transporter.
“Equally importantly, we have been able to gain a significant amount of market intelligence on the platform, which is valued significantly by manufacturers. We can use algorithms to predict, with very high accuracy, the supply-demand gaps of the freight market across the country,” says Singh. FreightFox has worked on freight procurements of around Rs 1,800 crore since it started in December 2020.
Apart from developing more solutions, FreightFox, which is present in FMCG and energy, among others, is expanding to more verticals in manufacturing. “We are also providing a Logistics Emission Abatement platform, which is a top-of-the-layer value-added service. The company is also planning to move to Southeast Asia as its solutions are replicable and globally scalable. Following that, they will move to more emerging economies.