Saturday, 24 June 2017

GST - Positive Development in Transportation sector

Friday, 9 June 2017

Typical Indian Driver Time Usage on Roads

LOBB-ERP Product

LOBB offers powerful cloud based LMS-ERP product for small and medium size transportation companies to automate entire process from booking to money collections. The product modules are below

Thursday, 8 June 2017

GST- Impact on Transportation

A shift to the organised logistics sector, consolidation of warehouses, lower logistics cost and boost to express cargo operators – rating agency ICRA expects all these changes once the Goods and Services Tax (GST) regime kicks in.
To understand the impact of GST on the logistics sector, BloombergQuint, in its special GST Countdown series, spoke with Subrata Ray, senior group vice-president at ICRA.
A report, authored by you, makes the case that GST will trigger a shift to the organised logistics sector. Why do you say that?
Today, the logistics segment is highly fragmented. The primary use of logistics is from the manufacturing sector. First, the goods are sent to warehouses, from warehouses goods go to smaller distributors, and then eventually to the end retailer. The logic of setting warehouses today depends on both the demand aspect as well as the taxation aspect. Because if you are setting up warehouses in a single city, as you transfer the goods to another state, you have to pay additional central sales tax (CST) of 2 percent.
Currently there is a 2 percent CST applicable for inter-state supply but if a company sets up a warehouse in each state, CST isn’t applicable as transfers between inter-state warehouses are treated as stock transfers,,
Yes, exactly. So today the major incentive for setting up multiple warehouses across locations, across demand centres is to ensure that you don’t end up paying higher taxes. But post GST as this transfer tax gets subsumed in the overall GST, the economic logic will come into play. We don’t expect consolidation to happen immediately, but over a period of time we expect the number of warehouses to come down. We will have bigger warehouses in a more centralised location. The location of the warehouse will be decided purely by economic considerations and the number of warehouses will come down.
Can you illustrate how the logistics of transporting goods will change once GST kicks in?
In the pre-GST regime, if a manufacturer is located in one state, he sets up warehouses in multiple locations in each state; at least definitely in various geographies - central, western, north and south, and also in maybe multiple other states. Now the goods are transported by the manufacturers to warehouses and then from warehouses to distributors and retailers further down. Typically, the transportation would happen through a full truckload system from the manufacturer to warehouses, and then from warehouses to distributors and retailers in less than truckload format by the subsequent transportation house.
Post the implementation of GST, we expect the number of warehouses to get consolidated eventually to one or two large warehouses. So the number of warehouses will come down. At the same time, the quantum of goods that is getting transported will increase significantly. So, a single warehouse will handle a larger quantum of input. So effectively, you’ll have much bigger trucks and possibly carrying over a longer distance between manufacturer to warehouses. So, we will see higher tonnage trucks being used and we will also see operating efficiencies coming in from scale economics.
From warehouses to distributors and retailers, the chain will become wider because now from a single warehouse, the goods will get distributed to many distributors. So this segment can be handled depending on the type of goods or the nature of goods by less than truckload or full truckload; distributor to retailer would be obviously less than truckload format.
How is this choice of full truckload and less than truckload made by manufacturers and how will it change post GST?
Ideally, trucks would like to operate in a full truckload mode. Basically, use the full truck capacity between one location to another because that helps you achieve efficiency.
So transport more goods in a single trip?
Yes, but when you are transferring fewer goods, it is not possible to get full truckload. So you’ll be typically using a smaller truck. But even then, it’ll be a less than truckload situation. So, you’ll be transferring truckload, smaller lots, less than truckload between shorter distances. Post GST, the manufacturer to warehouse transportation will get consolidated and the tonnage segment will go up significantly.
How is it different from what happens today?
Today, there are multiple warehouses. So, there was distribution of load. In various product categories, one was not able to use very large capacity trucks. And secondly even the distances were smaller. Larger trucks typically give the best operating efficiency when you operate over a longer distance and carry the maximum quantity of goods.
 What factors will determine warehousing strategy of companies?
The warehouse locations now would be entirely decided by nature of goods, distance from manufacturing plant and economics. We believe there will be a lot more investment in technology. So, you will have larger trucks operating. You will also see that the warehouses will get consolidated. Warehouses will use greater amount of technology in terms of labelling, tracking and other activities. Also, there will be investment in cold chains. So, we expect investment in the logistics segment to move up the value chain and a greater degree of investment in technology.
How will GST impact express cargo operators, given that tax treatment wise, they will be at par with Goods Transport Agencies or GTAs?
Currently, there is some difference in terms of taxation. Express cargo operators end up incurring a higher tax rate (15 percent) because of lack of abatement (compared to GTAs at 4.5 percent) . But now, with the input tax credit coming in, the difference will go. So effectively, under GST, the GTA operators and express cargo operators will have the same tax incidence of 5 percent.
The other aspect of GST that is likely to make transportation of goods efficient is e-way bills. Do you see any challenges in this process?
One of the biggest operating inefficiencies that creep into logistics is because of check posts. At every check post, if a good is transported between from say Delhi to Chennai, it has to go across multiple check posts and at each check post, there is time spent in clearing goods. The estimate is that the time wasted could be in the range of 20-30 percent. The expectation is that post GST, since number of the state level taxes will come down, the requirement to do border checks will come down too. Additionally, if the e-bill is used properly, in terms of proper digitisation, the time spent at check posts can come down significantly.
However, there are question marks on operational aspects because the requirement of having check posts or having physical checks hasn’t totally gone away even under GST. So, we have to actually see how it pans out in the implementation phase and if during implementation the actual amount of time spent at check posts continues to be the same, the advantages of introducing GST will be reduced significantly.
What could be some of the implementation challenges?
In each e-way bill there will be multiple points which would need to be checked. One is, that at every check post, the person who is checking may not be fully qualified or fully experienced in doing those checks. So if you’re doing a manual check, it may take a lot of time. Two, sometimes there may be trivial variations in the manual entry; so those trivial variations may lead to a hold up or may lead to, as in the past, people paying bribes to get through the check posts. I think the government needs to address such issues. You will have to train the people on the ground on how to use the new system in terms of checking because in the initial months, probably, people may continue to use existing systems.
Source from:

Monday, 10 April 2017

How LOBB is creating information symmetry for lorry drivers and transporters

Founded by a team of ex-logistics and tech experts the company believes it can organise the trucking industry, which is fragmented, and make inroads into the $200-billion logistics industry.  
Ramana Gowda makes a living by ferrying vegetables from the mandis of Kolar in south-eastern Karnataka to Hyderabad in neighbouring Telangana in his 15-tonne truck twice a week. He gets his business from a local transport agent, who, in turn, is contacted by the transport company entrusted by the retailer with the delivery of vegetables to Hyderabad.
In this entire chain of picking up produce from the mandi and and their delivery to the retailer, only the agent makes money, netting about 15 percent of the delivery cost, while the driver makes only 10 percent and the rest is made by the transport company. The cost of one-way 550km trip is Rs 20,000, and this weighs heavily on those involved in the trade partly because the truck returns empty. The chain is only responsible for one-way trip. On his way back, Ramana contacts an agent in Hyderabad for a payload for Kolar, but this seldom happens.
The cost per km works out to Rs 30 as the vehicle returns empty or is halting for long periods during the trip. Now, here is the twist–the retailer either has to mark up the price of the product to take into account the high price of logistics, in an endeavour to make a profit, or he has to bear the loss by marking it down, because it is a category that brings footfalls to the shop. Now, some of you may be wondering how these costs can be brought down.
Enter SaaS startup Lorry Business to Business, or LOBB, which provides truck availability information, by region and markets, to transporters, agents and truckers. Using the information provided by LOBB, drivers like Ramana could charge as little as Rs 27 per km for the trip for forward and return journeys.
The founders, 49-year-old Jayaram Raju and 40-year-old Venu Kondur have built a system that captures data of consumption and markets, making it easier for lorry owners, transporters and agents to book loads across regions.
Founders of LOBB Jayaram Raju and Venu Kondur
As we speak, the two founders are in Nammakal and Madurai in Tamil Nadu, speaking to truckers and associations in the region about the merits of using technology to increase their revenues. "Each day, trucks leave for Bengaluru and Chennai with full truckloads from these regions, and come back empty," says Jayaram, Co-founder of LOBB. He adds that this is the reason users ended up paying for a two-way trip instead of just for one leg of the journey. This is a problem across India, as 90 percent of the country's logistics is fragmented.
This became a problem statement for them, and the duo went about solving it with great enthusiasm and drive. They were in a good position to address the issue, with both coming from technical backgrounds and having worked in logistics, thus having an understanding of the problems faced by the industry.
India's logistics costs are the highest, at 13 percent of the product’s value, compared to only 6 percent in countries like the US. The US, however, is a different business altogether, with its supply chain largely tied to hyper markets or large 50,000 sq ft stores supported by manufacturers. In India, meanwhile, the story is very unique, thanks to its signature mix of small stores, small businesses, distributors, medium-sized manufacturing firms, and small land holdings.
The inefficiency in the chain exists because of the fragmented nature of information exchange between the stakeholders. This whole segment is not in to financial inclusion and runs primarily on cash. Team LOBB is trying to get this 13 percent logistics cost, which is cash driven, in to the digital digital banking channels and thus increasing the tax net in the country. Ankit Sethia, Founder of Hip Ship, says,
"When you distribute in India, what is missing is information and adoption of technology. Now, if one solves this, then there is a business for all parties concerned."
"Distribution in India is local for local, and is very unique. You cannot remove incumbents, but what you can do is convince them that the use of technology increases their margin," says Anish Basu Roy, Founder of Shotang.
Now, this is where LOBB is unique. It works with lorry associations that have 8.5 million truckers on their roles.

The early days 

Jayaram started off in rural Andhra, and his early days have played a key role in shaping his ambitions today. "I had to walk five kilometres to school every day, and was in a Telugu medium school," he says. He says that being a farmer's son, he understood the way the agri industry worked. Through sheer hard work, Jayaram went away to the US and became a server side engineer in Fujitsu Consulting and Horace Mann. Although he became a US citizen, he returned to India in 2010 and joined the company True Logistics in 2011, setting up their technology architecture. He also worked closely with lorry owners, and it was at this time that he realised there was a problem in the industry - information asymmetry.
He jotted down the idea, and began looking at ways to begin the business. That's when he met Venu Kondur at a family function in June 2014. The two of them, childhood friends, became deeply intrigued with the idea of building a dynamic platform for truckers, transporters, brands, and agents. "We even believed that we could create the redBus of logistics, and that's how we built the company," says Venu.
Venu was a programmer in several software services companies, and had served stints in companies like Dell as well and was in the leadership team at Fidelity Information Services.
The two registered the company in January 2015, and began to build the architecture that could support the ecosystem. They went after the lorry owner associations, and signed up over 8,000 trucks, 400 large transporters, and 200 agents.

The business

LOBB provides an app for the agent and the trucker. The agents have all the truckers on the platform, and when the orders appear for the transporter from the brand, they will select the agent and the trucker offering the lowest trip sheet. But the system does not end there, because once the trip to a destination is decided on, there will also be a load selected for the return trip. "The trucker does not come back empty, and the brand pays only for a single trip, unlike earlier," says Venu.
The company quickly raised $1 million from friends and family. In 2016, they closed at Rs 11 crore in revenues, which is the gross ride revenues. Today, they are well covered in Karnataka, Maharashtra, Andhra, Telangana, and Tamil Nadu, with plans afoot to go pan-India.
Of the 8,000 truckers on the platform, around 55 percent use the brand on a regular basis.
The company takes a small percentage of commission from the agents and the truckers. The only costs for the company lie in convincing the lorry driver associations and agents to use the brand. Modern delivery companies like Shadowfax and Rivigo can in fact use the LOBB platform for inter-city travel. "We are a technology company and work with all companies that handle physical assets," says Jayaram.
LOBB helps truckers, in Tamil Nadu and Karnataka, identify just-in-time-truck-loads, for agri produce, which resulted in 50 percent better price for them.
With 90 percent of Indian logistics being disorganised, LOBB is definitely a refreshing model that can map consumption and demand through trucking trips, and has the potential to scale up soon. Now, only time will tell if the truckers and agents take to using this technology. Only time will tell how far the Ramana Gowdas of the world adopt this technology, but the beginning seems bright.

Friday, 11 November 2016

LOBB E-wallet : Support  Honorable PM  Modi Initiative for Digital India

LOBB offers cashless Transactions to  facilitate money transfers from Transporters to Truckers. 

Image result for net banking

Also offer HPCL Diesel Card and FASTAG for Cashless Toll Payments

Image result for hpcl drive trackImage result for fastag

Lobb is an e-commerce platform for the trucking industry. It helps truckers and transporters to do business transactions in a more transparent, efficient and profitable manner ensuring a much better experience for all parties concerned OR for all stakeholders.

Let us LOBB together!! 

Thursday, 3 November 2016

GST rate structure finalised, panel fixes rates at 5%, 12%, 18% & 28%

NEW DELHI: A 4­tier GST tax structure of 5, 12, 18 and 28 per cent, with lower rates for
essential items and the highest for luxury and de­merits goods that would also attract an
additional cess, was decided by the all­ powerful GST Council today. 

With a view to keeping inflation under check, essential items including food, which presently
constitute roughly half of the consumer inflation basket, will be taxed at zero rate. 
The lowest rate of 5 per cent would be for common use items while there would be two
standard rates of 12 and 18 per cent under the Goods and Services Tax (GST) regime
targetted to be rolled out from April 1, 2017. 

Announcing the decisions arrived at the first day of the two ­day GST Council meeting,
Finance Minister Arun Jaitley said highest tax slab will be applicable to items which are
currently taxed at 30­31 per cent (excise duty plus VAT). 

Luxury cars, tobacco and aerated drinks would also be levied with an additional cess on top of the highest tax rate. 
The collection from this cess as well as that of the clean energy cess would create a revenue pool which would be used for compensating states for any loss of revenue during the first five years of implementation of GST. 
The cess, he said, would be lapsable after five years. 

Jaitley said about Rs 50,000 crore would be needed to compensate states for loss of revenue from roll out of GST, which is to subsume a
host of central and state taxes like excise duty, service tax and VAT, in the first year. 
The 4­tier tax structure agreed to has slight modification to the 6, 12, 18 and 26 per cent slab that were under discussion at the GST
Council last month. 

The structure to agreed is a compromise to accommodate demand for highest tax rate of 40 per cent by states like Kerala. 
While the Centre proposed to levy a 4 per cent GST on gold, a final decision was put off, Jaitley said.

News Source from ETimes