Why you don’t want the APPLE to fall far from the platform
By Linh Phạm on March 19th 2020
How we’re leveraging on our own platform for growth
Since I founded LOGIVAN roughly two and a half years ago, our team has been constantly exploring how we could further accelerate and better curate matching on our platform. At the same time, we still want to remain asset-light and cost-efficient in our operations, but still provide immense value to our users.
In this regard, we’ve kept to our roots of working closely with the truckers and shippers. When LOGIVAN was still just a website MVP, we initially went out and spoke to truckers, from the ones we knew to the ones at parking stations, to get insights and feedback. Matching efficiencies needed to be improved, so more of the time could be spent driving and earning. It was from this perspective that we developed LOGIVAN further into a tech platform that could drastically reduce the time spent finding and securing trucking jobs.
Over time, with the accumulation of transactions, the platform gathered data on matching behavior, trucking routes, and pricing. With these data points, we’ve also been able to upgrade the way we learn from truckers and shippers, and strategically target pain points that persist among our users.
Platform-driven AI models
Last year we launched APPLE (Auto Pricing Project for LOGIVAN code E), an instant pricing model based on market demand and supply catering to all possible routes, truck and cargo types. For the shipper the model offers a faster and more reliable alternative to the time consuming and labor intensive booking process, which often poses a challenge when they have to book trucks last minute for deliveries the next day.
When SME shippers need a truck the next day, they usually call multiple brokers and truckers today to ask for quotes. After waiting an hour or more to get quotes back, the SME shipper has to negotiate for different brokers, which takes a couple more hours. The booking process is very time consuming and very labor intensive. If you don’t finish the negotiation process before 5 pm, then the price increases sharply, because the brokers and truckers know that you are desperately in need of a truck.
Getting instant pricing changes this process entirely for the SME shipper. They can decide on the spot whether their cargo can make it the following day or not. For corporate shippers, while the spot market only occupies 20% of their needs, LOGIVAN also lends a lean and efficient alternative for managing internal operations. Centralizing information and documents can reduce the difficulty of reconciling different truck suppliers that serve them on different routes.
While APPLE gives out an instant price to shippers, it also delivers personalized price offers to truckers as well. If the “instant” aspect of pricing is highly valuable for shippers, the “personalized” aspect of the price offers is just as important to the truckers. Factors such as the type and model of truck, fuel efficiency, the reliability of the truck driver, and the bidding behavior are collected as data points that generate price offers personalized for each trucker. This has also allowed us to see whether a trucker is going to accept a lower price, and thus increasing the margin and spread on our platform.
While the pricing model improves the speed and reliability of matching, we’ve also found that our marketplace doesn’t necessarily translate the aggregation of offers into wins for truckers. Typically we would send out offers to truckers by the thousands, which actually keeps the chances of winning any particular job low. With that in mind we built a REcommendation Engine for Logistics (REEL) that predicts when and where the truck is going to be empty and available to take the job at the pick up location rather than their absolute location at the moment. For the truckers, there’s less notifications and job offers but more quality offers, and more importantly, higher chances of winning more of the offers they receive.
The APPLE doesn’t fall far from the platform
Technology platforms thrive on their ability to radically change the way supply and demand find each other. Looking back at my time working with the ten trucks at my family business, the impact of technology is clear. At the core of the progress we’ve made thus far has been the ability to work closely with our truckers and shippers.
In the beginning we talked to them and were able to better define their pain points. Then as we brought them onto our platform, we listened to the data that came from their behavior to create these models and recommendation engines that target specifically the areas where they could have a hassle-free user experience. This allows LOGIVAN to be radically differentiated with our products and service offerings when it comes to speed and reliability. In that sense, we didn’t want the APPLE to fall far from our platform.
As companies are diversifying their operations across the world to respond to the trade war and the volatility of the global economy, we’re seeing significant positive impact on the logistics sector of Vietnam over the next few years. It’s more important than ever to continue listening on the platform to our users and create more avenues for them to generate feedback we can work with. That way we can grow with Vietnam’s logistics industry, which is going to be our core focus in the years to come.