Loop Freight works with a pool of truck drivers and keeps track of its fleet’s location in order to provide shippers with trucks whenever and wherever they need
Upon returning from Canada and taking part in the family textile business, in 2016, Rajib Das started working with a buyer from Vietnam. The production process would always be on time but Rajib was never satisfied with the transport of goods, pricing, and untimely delivery.
"Our clients would often complain about our services. No matter how much we tried or paid, goods would never reach the destination on time. This one part of the entire operations had a huge impact on our business and it is an issue my grandfather, father, and every other industrialist in the country has been facing over the years," Rajib told The Business Standard.
In the meantime, on an Uber ride one day, the concept of availing transport services without having to wait for a car and pay upfront, made Rajib realise that the process of a hassle-free goods transport system can be developed in Bangladesh as well.
"The idea was generated from that day's experience. We started off with humble beginnings, I convinced my friends (co-founders) to leave behind their lives in Canada and start something new here."
This idea was given the name – Loop Freight – a platform that does not just provide efficient means of transportation for goods but also ensures ease of accessibility and digitisation.
With the motive of reshaping a decades-long business model, Loop began its journey at the beginning of 2018. With time, this start-up managed to expand its operations all across the country. Besides, amid the pandemic, Loop Freight managed to secure an initial investment of $600,000 from venture capital firm - Anchorless Bangladesh in May.
So, what does Loop Freight do?
Loop arranges transport for goods according to shippers' preferred time and date. It provides real-time shipment tracking service for shippers to know of their goods' whereabouts. This start-up also offers the most competitive market rate based on the shipper's desired time.
Regarding its services, the Co-Founder and Managing Director of Loop Freight, Rajib Das said, "Since the idea of Loop was generated as a solution to a problem that I, myself, was facing first-hand, in addition to providing customers with trucks on time or within a short lead time, we try to digitise the process so that their operations can be managed efficiently."
How do they do it?
Loop works with a pool of truck drivers and keeps track of its fleet's location in order to provide shippers with trucks whenever and wherever they need. There is an app on Loop's website that can come up with transport cost estimation according to customers' preferences.
According to Rajib, the truck market in Bangladesh is very unstable; rates fluctuate according to parts of the day – prices are the lowest during the morning and keep increasing every hour.
Loop sets its prices with customers in two ways; contractual – same price rates throughout the year, and market-rate – price rate as per the market demand.
This start-up is currently collecting data with the vision of providing accurate rates based on the past flow of market rates to customers in the future. On this note, Rajib said, "We are trying to digitalise the process for the benefit of our customers and for the ease of our operations as well. With this app, shippers can plan their shipment better; shipping on Monday instead of Tuesday might have better rates."
On the demand side, their target customers can easily adapt to the services. In fact, Loop's retention rate has been 100 percent so far. "Shippers were facing the same experience as I did; delayed response from the brokers, random fluctuation in rates, and they are way more than happy to have come across such a solution," expressed Rajib.
On the supply side, trying to onboard truck owners and drivers can be very challenging. They do not want to commit for the long run. However, Loop has managed to lure in transporters with the strategy of clearing their payments within 48 hours.
"Since they have been working with brokers for years; they have a better understanding and trying to convince them to work with us can be challenging. Thus, we offer flexible payment terms. This makes them feel more comfortable doing business with us."
One of the biggest liquid expenses Loop has to bear is the vehicle charges that they clear away instantly after the goods have been delivered to its destination.
Impact of Covid-19 on Loop Freight
Though the coronavirus pandemic took a toll on all sectors and businesses, it had little to no impact on Loop. In fact, this start-up's business grew by 125 percent in July alone. Since Loop operates in the logistics industry, it was fully operational throughout the pandemic while the entire country was shut down.
Logistics is recession-proof, earthquake-proof, and natural calamity proof. We cannot shut down the logistics business, it is the wheels of an economy and has a big role to play in our lives.
Reflecting on this fact, Rajib said, "Logistics is recession-proof, earthquake-proof, and natural calamity proof. We cannot shut down the logistics business, it is the wheels of an economy and has a big role to play in our lives. Even shippers are more inclined to adopting better methods now that can reduce the hassle of dealing with truck brokers."
Where does Loop Freight see itself five years from now?
Rajib believes that the logistics market of Bangladesh has huge potential and it can be further expanded by bringing in services for shippers at the international level. Loop is looking forward to becoming a one-stop-solution for customers who want to ship their goods from Bangladesh to other countries.
Reflecting on this vision, Rajib said, "If you are planning to send your products from Bangladesh to Walmart, we could collect the goods from your desired location and deliver it at your desired destination while taking care of all the formalities in the process. It will take around a year or two for this service to be implemented in Bangladesh's market."