Introduction
In FY-2023, India spent more than 14% of its GDP on logistics costs. For context, this number was 10% in the case of China and 7-8% in the case of developed countries like the US and Japan. This shows how inefficient and expensive the Indian supply chain is when compared to more productive nations. Even countries like Vietnam and Thailand rank better than India when it comes to the Logistics Index, and this sometimes makes these countries an attractive option for companies to do business in, compared to India.
Government Initiatives
Now, it’s not that the government is not doing anything about it. The current government had launched a national logistics policy in 2022. One of the aims of this policy was to reduce India’s logistics cost from 14% to 8%, something that will help India compete with developed nations.
Private Sector and Startups
The government can only make policies; it’s up to the private sector and startups to make use of them and build businesses. In this video, I want to talk about one of the fastest-growing logistics companies in India. A company whose founders were inspired by Uber and how it organized a heavily unorganized sector of taxis. Porter is trying to do the same with the last-mile logistics in India. It is going after a 200 Billion dollar market, and in this video, we will talk about its origins, struggles, and big future ambitions.
Understanding the Problem: Intracity Logistics
To understand Porter, we first have to understand the problem it is solving: Intracity Logistics. It is basically the transportation of resources inside a city. So if you, as a business owner or a regular customer, need to send a package to someone inside the same city, it is called Intracity Logistics. Logistics determines how efficient an economy is. The cheaper and faster it is to move goods inside a country, the more productive it is going to be.
The Founders and the Birth of Porter
In 2024, 90% of India’s logistics sector is still unorganized, and this situation was even worse 10 years ago before two college friends from IIT Kharagpur decided to start Porter. The problem they were trying to solve was simple yet significant: making intracity logistics efficient and cost-effective. Inspired by Uber, Uttam Digga, and Pranav Goel aimed to bring a similar transformation in the logistics sector.
Early Challenges and Solutions
In the beginning, it was just Uttam and Pranav, who divided the roles between themselves. Uttam would go on the field to onboard truck drivers, and Pranav would get on the call with small business owners and anyone else who needed trucks to move their goods. They started with a phone and Google Sheets, but soon realized they needed a tech solution.
Read more at: https://yourstory.com/people/uttam-digga
Building the Technology
The duo brought in Vikas Choudhary as their third co-founder, who built their technology platform. Their initial pitch was simple: “Book from us, we are 20% cheaper”. This pitch worked, and in less than a year, Porter had more than 500 business customers, processed more than 3,000 bookings a month, and had a monthly revenue run rate of 30 lakh rupees.
Initial Growth and Setbacks
By 2015, Porter’s app was ready, and they felt unstoppable. However, they suffered from having ‘too much money’ in the bank and expanded too quickly into intercity logistics, which led to financial strain and layoffs. They learned the importance of focusing on their core competency before expanding.
Improving Customer Experience
Porter focused on ensuring timely deliveries and efficient operations. They introduced GPS tracking, constant driver check-ins, and per-minute charges for loading and unloading to incentivize efficiency. These improvements led to significant growth in their customer base.
Expansion and New Services
Porter expanded its services to include two-wheeler parcel delivery in 2020, quickly becoming a leader in this segment as well. They raised significant funds and relaunched their intercity delivery service, expanding their presence to over 20 cities.
Future Opportunities
Porter has a massive opportunity ahead. The intracity logistics industry alone is a 40 billion dollar market in India, and their current revenue is just a drop in that ocean. They are also exploring intercity logistics and adding electric vehicles to their fleet, making their operations more cost-effective and environmentally friendly.
Conclusion
The journey for Porter has just started. As the GDP of India grows, logistics companies like Porter will be direct beneficiaries. With continued focus on efficiency and customer service, Porter has the potential to become a logistical giant on par with global leaders like FedEx and UPS.
The Unheard story of Building Porter with Founder Pranav Goel
Your Thoughts
Let me know in the comments what Porter needs to do to get there. And also, what has been your experience using its services? Good or bad, write it down, and I will see you in the next one.