On September 24th, the "2021 (5th) Contract Logistics & Supply Chain Innovation and Development Summit Forum" hosted by Rogo Network with the theme of "Supply Chain Density Theory and Reconstructing Logistics Network" was held in Shenzhen. At the meeting, Feng Lei, Chairman and CEO of Luge, discussed the changes in the transportation industry and future trends in the digital era.
Lu Ge Chairman and CEO Feng Lei
(On September 24, Rogo held the "2021 (Fifth) Supply Chain & Contract Logistics Innovation and Development Summit Forum", this article is based on on-site shorthand)
Network freight is the policy system of digital freight
From 2013 to the present, the transportation industry is receiving the continuous impact of digitalization, until the supporting policies have begun to land in the past two years.
In essence, network freight is not a business model, but a policy system that promotes the digital evolution of logistics. How to understand?
It is the policy system launched by the government to promote the development of digital models and applications in the transportation industry. And not as some people think online freight is for invoicing.
At present, the reason why the digitalization of the transportation industry is ahead of other industries is that there is an umbrella ahead of other industries, which is the compliance system of the policy, and there are two practices under this umbrella that are natural and have successful cases.
The first is the digital upgrading of traditional logistics enterprises, which enhances their internal control and outreach capabilities through digitalization, and is self-adjustment to adapt to the times. The second is the business model of the transportation digital platform.
Where is the impetus for this digitalization? There are two main driving forces.
The first is the policy system, and the other is that the driver has a smartphone, which makes this huge blue-collar group go digital, plus a lot of IOT equipment, which can slice the whole process and cut it smaller and more accurately with digitalization. Analogy with the express delivery industry, the digital process of express delivery is a rapid progress in the field of logistics, this is because in the early days of express delivery, couriers have widely used digital terminal equipment, thus offline began to change the entire operation process. This process was also presented in the truck driver group from 2010 to 2013, and mobile phones accelerated their initiative in digital collaboration.
It is also at this time that transport enters the digital age.
But the digitalization of the transport industry has not gone easily.
Among them, there is a business model risk, there is a sentence in the policy system "only matching is not in the network freight", digitalization to serve the entire industry, but also to achieve supervision, with a single link is not enough, matching this link data is not enough, the dimension is not enough, with a single link to support the entire digital is not enough. Digitalization should seek its own logical integrity in the whole scene, rather than cutting out a single link or fragment. If you want to make a digital transportation platform and realize a digital business model, you need to enter the scene of the whole industry chain. Therefore, multi-dimensional digital assets, crisscrossing data sources, and regulatory data value are very important, and this asset is the embodiment of value.
The other is tax risk, in the network freight policy management system is an umbrella, the reason for the emergence of tax risks, from another point of view, is not because of digitalization to make these risks, but in the digital era, risks are easier to identify, management agencies will be easier to identify tax risks. It is equivalent to saying that the cost of supervision has been reduced, and the cost of internal management has also been greatly reduced.
How does Luge solve the problems of the digital age?
As a professional platform for transportation digitalization, how does Luge solve the above problems?
Luge solves the problem from the perspective of the blue-collar workers who are digitally armed at the bottom, and these blue-collar workers will promote the digitization of the entire process.
From the perspective of capacity, the participants can be abstractly divided into two categories: big B and small b. Big B is mainly an enterprise with large-scale operation and standardized requirements, including manufacturing transportation and logistics enterprises, subcontractors, etc.; small B is mainly an individual truck driver or a scalper fleet. A large number of these members are small b, and this part of the group is as small as industrial and commercial registration, tax statements, etc. it is an unaffordable burden.
If these two want to achieve digital integration within a set of systems, there will inevitably be conflicts and contradictions in various transition periods of new and old. There are two main kinds of contradictions, the first is to implement the previous interconnection process, the transportation supply chain link, from the individual driver to the demand side of the cargo owner, the chain is quite long. As a platform party, you need to prepare the digital capacity supply chain connection, and there will be a repeated collaboration and procurement process in the middle, not a hammer and a deal. This process generates digital business operations, transportation processes, settlement processes, etc. Because the platform has more than one million participants and more than 100,000 service providers and logistics enterprises, Luge has formulated a set of standardized processes.
At the same time, Lu Ge noted that from the bottom perspective, the re-division of labor in the digital era of the transportation supply chain, truck drivers pay more attention to their rights and interests, that is, they hope to provide higher quality services, obtain stable business, and earn more money. At this time, it will inevitably lead to the middle layer of scalpers to become difficult to make money, and promote the change of the middle layer that connects the supply and demand sides.
Over the past 10 years, we've seen a decade-long game between the two, with industry roles changing dramatically, some of which were once ubiquitous and now gone; some that were never heard of, but now appear entirely new. Ultimately, who goes and who stays? It also depends on the digital capabilities and value creation within their respective roles.
At present, China's transportation industry is subcontracted layer by layer, price increased layer by layer, and the industry is rolled up. People in every field are quite painful, and it is getting harder and harder to make money, especially at the bottom, the more the bottom is more and more inward. In the digital era, we look forward to a new world of digital freight, which has long-term trust, full-link intelligence and deep collaboration, in this chain, everyone creates value through collaboration.
Lu Ge's three-step planning path
Luge planned a three-step development strategy in 2015.
The first stage is to seize the opportunity of changes in the policy system and promote the linkage of industry and finance in the early stage of the digitalization of truck drivers. At the same time, it helps truck drivers resolve disputes caused by previous breaks between financial payments and business.
The second stage of capacity procurement digitalization, through digitalization, so that the transport task execution, capacity resources and capacity management more transparent, in this process, Luge accumulated a very large capacity resources.
The third stage, the final digitization of the capacity supply chain, realizes data credit, clarifies settlement rules, and finally presents a very transparent and healthy capacity supply chain.
One of the things we didn't know what we were doing before was that we were a community of truck drivers. What started out as an online card community has quickly grown into a self-organized community of online and offline truck drivers. In this community has completed tens of millions of truck driver mutual assistance, more than a thousand mutual aid incidents occur every day, and truck drivers across the country have organized to help truck drivers deal with various accidents encountered on the road, and there are more than a hundred accidents to be handled every day.
This is a difficult thing to make money, the reason why Luge insists on doing it is to see that the base of the digital era is the digitization of truck drivers, and Luge must serve the new needs of truck drivers, which is not only an empowerment of the company's brand, but also a huge role in the creation of the transportation supply chain.
The era of freight digitalization has arrived, and it is certain that the base of digitalization is the digitization of truck drivers. In the future, the re-division of labor in the supply chain will be an inevitable trend in the development of the Internet in the freight industry, and I hope that everyone will no longer use the old era thinking to look at new opportunities.
Author | Feng Lei
Organize | Logistics salon