Illustration from Cnava can be drawn
Although Today's China's freight industry has a considerable scale, and the parcels from Taobao Jingdong are endless, logistics is still a "non-negligible" pain in the development process of various enterprises - too expensive. From the data point of view, China's logistics costs accounted for about 14.7% of GDP in 2020, almost double the value of the United States (7.6%). Moreover, nearly 1/3 of the expenditure on domestic logistics is caused by information asymmetry, and according to the overall value of China's GDP, this waste can save tens of billions of dollars per year for every percentage point reduction.
It is precisely the participants in the freight industry themselves who cause information asymmetry, or cause "noise" in the matching process of information. But this cannot simply be attributed to them: objectively speaking, there were about 8.1 million carriers in China at the end of 2020, with an average of 4 trucks per company, compared with 600,000 and 26 in the United States. Because the carriers are too dispersed, resulting in too many practitioners, the freight industry actually reflects deformities and pathological developments.
In this context, a digital freight platform emerged as the "ultimate solution". However, as a new thing, on the one hand, the scope of the freight platform can participate in it is limited, the logistics ecology in different fields is completely different, and it may be a bad thing to rush into the market; on the other hand, the freight platform is still in a relatively early stage in terms of the degree of development, and the potential has not yet been fully exerted.
Solving the freight problem is imminent
According to McKinsey data, road transport in a broad sense can be roughly divided into six sections: express delivery, express transportation, regional LTL, large ticket LTL, vehicle and urban distribution. Among them, vehicle transportation accounts for more than 50% of the market size, about 3 trillion yuan; followed by LTL and same-city transportation, a total of about 2 trillion yuan; the remaining market includes the land transportation part of express delivery, about 600 billion yuan.
Compared with the European and American markets, China's road freight market is characterized by scattered supply and immediate demand: on the one hand, 90% of the carriers are composed of long-tail individual truck drivers; on the other hand, the proportion of the contract market is limited, and the transportation demand of small and medium-sized enterprises is scattered and mixed, and the volatility is large, so the immediate demand occupies the main body of the market.
For shippers, it is common to not know where the truck has arrived and not be able to contact the driver during transportation; for the carrier, in addition to the unclear source of goods, it is also unknown whether it can be reloaded on the road in time after arriving at the destination. Both the carrier and the consignor cannot match the order in time and allocate the capacity, which causes the idle rate of the truck to be carried is extremely high, and the remaining capacity cannot be released, making the overall efficiency of the industry low.
It is conceivable that if the traditional problems of these industries can be solved, it will not only benefit shippers and carriers, but also avoid many unnecessary wastes, so the digitalization of the freight industry is imminent. So in order to solve the problem, the freight platform came into being. As far as the track participants are concerned, there are currently players in the vehicle transportation market such as Manbang, Fuyou Truck, Lion Bridge, Zeyi and China Foreign Transport. Among them, Manbang and Fuyou Truck have each stepped out of different platform development models.
Full of gang matchmaking, looking for money from small customers
As the "first share of digital freight", the main business of Manbang, which was merged from yunman and truck gang, is the vehicle and cargo information matching platform of intercity trunk line logistics. The two are complementary to each other, of which the full load is responsible for the matching of vehicles and goods, and the truck help focuses on stabilizing the transportation capacity. Its business model is characterized by only providing source information, but not participating in the transaction process, from this point of view, Manbang belongs to the matchmaking platform.
As a matchmaking platform: on the one hand, the basis of revenue is the idle carrier that accounts for the largest proportion of total transportation capacity, and the small and medium-sized enterprises with scattered and mixed needs, in short, to find money from small customers; on the other hand, how to build long-term trilateral trust in such a complex relationship network, improve the retention rate of both parties on the platform, and maintain a relatively healthy and sustainable commercialization on this basis is the most critical issue.
The commercialization of Manbang can be regarded as "C-end B-end", through the horizontal expansion of business lines, to finally achieve platform traffic monetization. In response to the diversified needs of both parties, Manbang provides a series of value-added services including transportation management systems, ETC, energy, truck sales, credit and insurance solutions, in an attempt to create an economic ecology covering all scenarios of road transport. At present, its main sources of revenue are freight matching and value-added services, of which freight brokerage and transaction commissions are the pillars of revenue, and in the whole year of 2021, the service revenue was 3.95 billion yuan, an increase of 102.7% year-on-year.
Thanks to the extremely large number of long-tail markets, Manbang is now a leading enterprise in the field of trunk logistics, and its share of the national digital freight platform GTV (platform total transactions) in 2020 will account for 64%. According to the latest data released by Manbang, in 2021, Manbang GTV reached 262.3 billion yuan, an increase of 50.9% year-on-year; the total revenue of the whole year was 4.66 billion yuan, an increase of 80.4% year-on-year.
As a self-built digital freight platform, Manbang has obvious advantages in the flexibility and efficiency of capacity allocation, and the online presentation of information and intelligent matching enables cargo owners to place orders flexibly, and drivers can also reasonably plan orders and itineraries. As of December 2020, "the average matching time of the full gang is 13 minutes, an increase of 43% year-on-year". As a result, efficiency and revenue increase as matching times are shortened and carriers increase their freight volumes.
However, because Manbang, as a matching platform, does not participate in the specific links of the transaction, there is still a certain degree of information asymmetry between the shipper and the carrier. Most of the ways for the two parties to reach a transaction on the matching platform is bidding, and the driver and the cargo owner directly bargain, which makes the price fluctuate greatly, which is not suitable for the business of stable supply (the driver is random and the price is uncertain), nor is it conducive to the interests of the novice driver or the new cargo owner (unfamiliar with the market situation).
At this time, it depends on the audit mechanism of the platform. For shippers, if there is no source review mechanism, when the cargo owner fabricates the source information, it is easy to have disputes with the driver; for the carrier, if the platform only reviews four certificates and one card, it cannot directly control the driver, and there may be a situation of eating kickbacks and temporary price increases, then the quality of transportation is difficult to control.
Bless the carrier and find money from big customers
Founded in 2014, its founder Shan Dandan was called "the most knowledgeable about the Internet in the logistics circle, and the most knowledgeable in the Internet circle". As a digital freight platform, Fuyou Trucks, like Manbang, relies on intelligent scheduling and intelligent services to connect shippers and carriers on the basis of the digitization of the entire road freight process. The difference is that Fuyou also distributes freight orders to the most suitable carriers on the platform through intelligent pricing, pre-pricing, and realizes real-time tracking, ultimately completing closed-loop road freight services.
In addition, as a digital freight platform, Fuyou Truck is no longer limited to the role framework of "matchmaker", but also further transforms the "carrier" and participates in the transaction process of logistics. Compared with the matching platform, the advantage of the carrier platform such as Fuyou Truck is that it largely solves the control problem of the driver, builds a bridge of trust between the shipper and the carrier, and avoids many problems caused by the intermediate links through platform intervention and pre-pricing.
Compared with Manbang, Fuyou Truck positions itself as a "fulfillment platform", that is, it not only links upstream and downstream users, but also controls the transportation process and is responsible for the transportation results. Fuyou obviously believes that in the entire transaction process, the platform can only achieve digital empowerment by participating in all aspects of the vehicle transportation in all aspects, otherwise it cannot truly solve the industry problems, nor can it guarantee the quality of service, and then it is impossible to regulate the industry order, let alone build market barriers.
As a platform-type carless carrier, Fuyou Trucks first looks for money from large customers. Because it is impossible and has no energy to directly serve a large number of small and medium-sized enterprises, the first business object it serves must be a large-scale enterprise with unified and stable demand and low intermediate transaction costs. In 2020, the three largest shippers of Fuyou Trucks, namely Debon Logistics, JD Logistics and SF Express, contributed more than half (55.8%) of the revenue, which shows the great influence of large customers.
This way of making money makes Fuyou Truck susceptible to "KA dependence". On the one hand, although KA large customers can provide relatively stable income for Fuyou Truck, the payment cycle of large orders is usually relatively long, and the platform will always make certain concessions in the account period in order to win over KA; on the other hand, Fuyou Truck, as a carless carrier, must compete with other opponents for transportation resources, so subsidies have become a necessary means.
In this case, the shipper's funds will be settled according to the agreed cycle, but the remuneration and subsidies to the carrier need to be paid on time, so that the capital chain of the blessing truck is more prone to pressure fluctuations. And then again, it is easy to concentrate on serving several large customers, but the single and centralized revenue structure is more affected by market fluctuations and has less resistance to factors such as the epidemic.
In order to get out of this structural dilemma, Fuyou Trucks is actively developing the SME business line, that is, consignment services for small and medium-sized enterprises, but this is bound to be further inserted into the sphere of influence of the Full Gang, and competition is becoming more and more inevitable.
Different means to the same end
It can be seen from the platform of Manbang and Blessing that no matter what kind of users it is mainly for, what kind of services are provided, and what kind of business strategy is adopted, the essence of logistics is still "point-to-point movement of goods". In this process, the actual work of the freight platform is to integrate and distribute information, so the development of the freight platform will inevitably require the digitization of all aspects of offline transactions, and then regulate through algorithms, artificial intelligence and other ways.
Further, the revenue of freight platforms is essentially to find money for efficiency, that is, to constantly carry out "efficiency revolution", and all other monetization means are attached to it. In the traditional freight industry, there are barriers between shippers and carriers, and many industry participants participate in the intermediate links of the transaction as "lubricants". What the platform needs to solve is to eliminate intermediate links and improve transportation efficiency.
In this process, the effect of the platform is remarkable, but it is also very different: Blessing itself has limited strength, does not have the energy to disperse to all the participants in the industry, large and small, so it can only concentrate on one corner, on the basis of the full performance model, first serve the KA large customers, and then expand to SME small customers; The full gang not only involves a wider range of participants, but also builds a general economic ecology around the entire freight industry.
The digital freight platform is still a blue ocean market in China, which can be seen from its overall penetration rate of about 4%, and it is not realistic to give these different models of platforms a winner or loser now. From this point of view, it cannot be said that the direction of the full gang and the blessing is right or wrong, it can only be said that the two have different centers of gravity, but in the end, the utility of the industry must be the same destination.