The technological revolution of the past decades have changed the game for everyone – from how people live, how business is conducted, and how goods travel. But while there are industries more receptive to changes, there are some, through various reasons, that have been a bit behind on the uptake.
For years, the logistics and supply chain industry has been lagging on innovation and it was only recently that noise about technology-driven changes in the industry has been surfacing. But with the speed at which the rest of the world is innovating, would logistics and supply chain be able to catch up?
For HAULIO Co-Founders Alvin Ea and Sebastian Shen, the way forward would have to be optimisation of resources through industry-wide collaboration.
Trends point to a clear need
When talking about a wide and fragmented industry such as logistics and supply chain, it is helpful to look at it on the big picture level first before getting into the details. In this case, we look to the globalisation of manufacturing companies and the economies of scale.
“There are a lot of innovation on sea freight,” Sebastion said. “Container haulage is increasing in use and increasing in importance. More goods have been relying on it, even e-commerce.”
It can be owed to the fact that transporting via containers means transporting more, especially in recent years when economies of scale have resulted in shipping lines not only merging but building bigger vessels. Since the year 2000, container vessels have been doubling in size, enabling them to transport a lot more than the previous year. Bigger vessels means optimised trips, which makes for lower prices.
These trends – increasing number of goods for transport and increasing vessel size – have powerful implications on the logistics and supply chain industry. Specifically, to the aspect of the industry that deals with container haulage.
More good transported through sea freight means that there is an increasing number of containers to be transported overland, which has huge implications for ports, as the containers don’t simply need to pass through them but also move within ports.
“You need to rethink the entire model to handle this new circumstance,” Sebastian said. “The port needs to be able to handle this kind of volume.”
From traditional to global
In an ideal world, processes would evolve swiftly to support changes in the market and environment. But as with most industries, especially within logistics and supply chain, container haulage is struggling with archaic processes and habits.
“One of the biggest challenges we face today is getting these traditional guys to rethink the way they run their business,” Alvin said. “Customers want more reliable, transparent service. With technology, we can give them that.”
For the Alvin and Sebastian, the changes in the industry are slow coming. Because while there is a lot more knowledge and openness about what technologies are available to it, most of the industry’s processes have been developed and set when the technology available is less than what it is today. There is also the fact that it requires the cooperation of an entire industry for actual innovation to take hold.
“Transporting goods go through many, many different hands. And you need every single one of them to adopt your new process,” Sebastian said.
“The old rules of doing business will not be relevant in the long run,” Alvin added. “The operators need time to get used to changing the way they do things.”
This all stems, according to Sebastian, from supporting Manufacturing 4.0 and the reality that while there is a lot of discussion on how to make factories run like clockwork, there is little about how external factors such as transport of raw materials and finished goods can be optimised to help companies run the factories and transport their goods better and more efficiently.
It is a difficult task, as just like in any industry, whenever there is a change to how things are running, there are those who will be resistant to it. Mostly because there is a sense of comfort in familiarity to the way things have always been done, but also because there is the fear of being negatively impacted by these changes.
But it is beginning, Sebastian said. “The impetus and desire to change is beginning in the industry right now.”
A big-picture view
Alvin and Sebastian built HAULIO with the goal of creating an ecosystem that promotes sharing of resources between suppliers that would allow all three stakeholders – trucker, port, and customer – to benefit.
For Sebastian, having the opportunity to reimagine how an age-old industry works and being able to create improvements using today’s technology is what drew him in.
Alvin, on the other hand, has been in this industry as a second generation logistics guy who understands its inefficiencies. “Over the past 4 years, I’ve faced a lot of problems from painstakingly growing my business from 1 truck to 15 trucks today. It was a very painful journey and I figured out this space has a lot of potential for change. In Singapore, we have one of the largest ports in the world – second in volume in terms of TEUs that passes through; we have a world class port, however the ecosystem that is adjacent to it is still living in the 90s. It is ripe for disruption as the entire industry awaits a huge transformation.”
Alvin added that his immersion in the supply side of the industry has given him insight on what’s needed. “I realised the inefficiencies, as well as the difficulties truckers will face especially asset utilisation. I see the need for the industry to collaborate and work together. Only through collaborative measures can the industry truly improve. You need to ensure that your assets are very much utilised.”
Building HAULIO is their answer for this, and while there has admittedly been some difficulty in changing mindsets and improving processes, there is also progress. The past 6 months that the startup has been in operation had given them more insight into the industry and the challenges that both port and truckers are experiencing. As it is, HAULIO has about 50 hauliers on board, with the startup working with PSA to provide jobs that were not around before.
“We have to make sure that the industry works together and, instead of cannibalizing, we help to make Singapore a more competitive place for containers to be shipped as a more viable option comparatively to land or air freight,” Alvin said.
And this is what their first step toward that industry-wide collaboration looks like, Alvin added. “We are looking for more sources, creating new jobs, and pushing hauliers to start sharing.”
HAULIO aims to treat every container like a passenger as they move the industry towards a more efficient and collaborative one in order to bring added value to the eco-system.
They are an online B2B platform that connects ports, truckers, and customers to meet the demand for container hauling services, operating in Singapore. They are the 3rd startup to be incubated in the PSA unboXed programme and has received funding from NUS Enterprise and SPRING Singapore ACE Grant. Over the past 6 months, they have successfully connected 15 haulier companies to move over 6,500 containers in PSA ITT jobs, and close to 50 hauliers registered to date in their network. Moving forward, HAULIO aims to utilise IoT technology to allow hauliers to share not only jobs but assets as well.
HAULIO’s vision is to provide reliable and efficient container haulage service in the SEA region within the next 3 years through their focus of connecting Shipper Jobs to Truckers.
Disclosure: This article is produced by the e27 content marketing team, sponsored by HAULIO