Logistimo Fleet: a sustainable model for last-mile freight delivery

Last-mile transportation auctions for demand aggregation creating market access for rural entrepreneurs and income growth for transporters

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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Logistimo India Private Limited

Year founded

2011

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • $500k - $1m

Number of beneficiaries impacted so far

  • 50,000 - 100,000

Organization type

  • Social enterprise

Headquarters location: Country

  • India

Headquarters location: City

Bangalore

Location(s) of impact

India: Dharwad District, Belgaum district, Uttar Kannada district (>2,000 villages)

Website

www.logistimo.com

Twitter URL

https://twitter.com/Logistimo

Problem: What problem is this initiative trying to address?

Last-mile rural transport in much of the developing world is inefficient and infrequent, escalating costs and creating a formidable barrier to entry for participation in the formal economy. Higher landed costs and lead times for manufacturing inputs and outputs discourage business growth. Simultaneously, there is gross underutilization of the existing transport capacity, resulting in lost income opportunities for hinterland transporters, not to mention a higher carbon-footprint for everyone.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

By leveraging the penetration of smartphone ownership in smaller towns, we are scaling a network of commercial light truck operators who are incentivised to service last mile communities by participating in transport auctions on their devices. The aggregated demand for deliveries and pickups to villages, along with advanced route optimisation, is helping move the rural logistics industry towards sustainable unit economics. Not only have we enabled the professionalisation of an unorganised business sector, but ultimately, the connectivity should catalyse rural investment and entrepreneurship.
   Our solution is a Transportation Auctions & Fulfillment platform for assuring parcel delivery and collection to-and-from remote villages. The platform orchestrates end-to-end demand aggregation, route and task sequencing; auctioning; allocation, order tracking and management; accounting & digital payments – to automatically crowdsource logistics services at optimally low price points.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

Logistimo Fleet, locally branded as Tusker, aims to catalyze rural economies inhibited by limited resources and poor infrastructure. Our field office in Hubli city serves an area comprising more than 2,000 villages. Drivers using the platform have fulfilled nearly 25k orders, notably in the pharmaceutical sector, where Tusker has enabled the reliable replenishment of essential medicines inventory in rural pharmacies.
Environment: We see route optimization and freight consolidation as an exercise that inherently seeks to minimize the fuel resources allocated per item transported. Calculated by the standards of the CLECAT guide on GHG emissions, Tusker has reduced emissions of 135 carbon tonnes in performing 25k deliveries.
Livelihoods: 27 directly employed personnel and 90 transporters on the platform. A baseline survey of 634 respondents indicated average Tusker transporter incomes exceed the industry average by 72%. Regional economic impact assessment is ongoing.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

Although roughly more than half of our income is from sales revenue, we have been and continue to be recipients of research and social impact grants by leading foundations in our space. Logistimo Fleet has been supported by, and works closely with, the Shell foundation in a shared commitment to positively transform last-mile transport in developing economies.
   Grants can be instrumental in catalyzing innovation, particularly in product companies that take carefully considered evidence-based approaches to problems. Nonetheless, Logistimo Fleet is expected to reach operational break-even by the end of 2017, and the robust scalability of both software and business model have us anticipating accelerated growth in the coming year.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

We put the challenges of low-resource settings at the centre of our approach, which has seen us “in the field” since 2011 developing our flagship SCM platform, now operational at massive scale and managing one of the world's largest vaccination programs.
   Logistimo Fleet is similarly capable of scaling in rugged environments. The software is deployed on an extensible cloud platform that supports millions of users, and our operating procedures have been abstracted to suit diverse contexts.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

Logistimo has been researching the supply chains of public good commodities, essential medicines in particular, since 2011. The salience of the last-mile fulfillment problem for village pharmacists, and the precarious situation of individuals who relied on those frequently unavailable goods, was a recurring observation. Looking for a market-based solution became our focus for sustainability reasons, and it became obvious that the viability of small enterprises and family farms was subject to many of the same constraints as village pharmacists. We saw first hand the penalty to economic participation that being disconnected from scheduled transport routes had on rural people in the time they had to spend shuttering their businesses to travel to larger towns to procure supplies. Eventually, advancements in mobile computing opened up an array of testable solutions.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

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