INTERVIEW: The Uber of the trucking world has big plans in Saudi Arabia

Illustration by Luis Grañena
Short Url
Updated 02 August 2020

INTERVIEW: The Uber of the trucking world has big plans in Saudi Arabia

  • TruKKer CEO and founder explains how his fast-growing company can benefit from the pandemic disruption in the Kingdom and the Middle East

DUBAI: Midway through our Zoom call, Gaurav Biswas threw a big statistic into the mix: “One interesting fact I’ve learned is that Saudi Arabia has the highest per capita number of trucks in the world,” he revealed with a flourish.

Biswas is the founder and CEO of TruKKer, the Uber of the trucking business and one of the fastest-growing logistics companies in the Middle East. Trucking statistics are his forte, and Saudi Arabia is the main growth focus for his four-year-old company.

“Saudi Arabia continues to amaze me with how innovation is accelerating at such a rapid pace. Young Saudis are so ambitious, believe in technology, and are keen to deliver,” he said.

He told how the idea for TruKKer — which recently completed one of the biggest early rounds of capital raising in the region with a $23 million funding from some of its biggest investors — first came to him.

“I was having dinner with a friend who works in fertilizer manufacture. He was very agitated because he was let down by a haulage firm for a delivery the following day. It ruined dinner, but we saw an opportunity,” he related.

Like Uber or Careem, TruKKer users can order their vehicle via an app under the slogan “any truck, any time, anywhere.” 

Since it launched in 2016 as the region’s first technology-enabled truck aggregator, it has gained 12,000 drivers and trucks to keep the Middle East’s commercial lifelines moving, even in the trying circumstances of pandemic lockdowns and transport restrictions.

Biswas said he was “inspired” by similar tech-based haulage businesses in China and the US, but regards the Gulf region as especially suited to the concept. “Trucking is so fragmented here it makes even more sense than cabs. There’s a lot of smart investment going into an extremely fragmented business,” he said.


BIO

BORN: 1982, Gujarat, India

EDUCATION:

  • Bachelor of engineering, CEPT University, Ahmadabad
  • Master of engineering, University of Dundee
  • MBA Finance, SP Jain School of Global Management

CAREER:

  • Senior project manager, Arup
  • Director, AECOM

“The majority of cross-border truckers between, say, the UAE and Saudi Arabia, are individual owner operators, or very small transport companies. In the Saudi market, 70 percent are the small to medium sized fleet, up to 50 trucks. The top 10 or 15 percent is built of large fleet owners — more than 500 and up to 2,000 trucks. The fragmentation is huge and this is where the opportunity lies for us,” Biswas added.

When the pandemic hit earlier this year, it was a challenge to TruKKer’s business model. “I told our staff in a letter ‘guys, I don’t think anybody knows how to deal with this.’ There is no book about how to deal with a pandemic. So for the first couple of months we were learning, waiting and watching. But then we realized how the industry was reacting,” he said.

The impact came in various stages. First there was the hit on imports and exports to China, with its big container-based trade in the region.

Next there was the “massive impact” from regional lockdowns as Saudi Arabia, the UAE, Oman and other importing hubs imposed lockdowns and transport restrictions to combat the virus. “For a lot of clients the top risk was the disruption to their manufacturing and their supply lines with employees falling sick,” Biswas said.

Then came the broader economic impact as industrial and consumer demand was devastated. He saw demand fall off in consumer-focused industries like retail, but also, strangely, in water delivery, a big business for TruKKer.

“We do a lot of distribution of soft commodities — for example, we are one of the largest suppliers of packaged drinking water. You might think that consumption would not go down, people still have to drink water whether they’re at home or at work. But it does have an impact on packaged water, because a lot of it is consumed in restaurants,” he said.

Even against this gloomy backdrop, Biswas saw an opportunity. “Smaller brokers, smaller transporters were either going into hibernation, or they were facing financial difficulties. So we took the approach that this is our time to acquire markets share.




Gaurav Biswas

“This was not just an opportunistic thing. This is our business model. We want to consolidate smaller suppliers into one big broker. We want to become the ‘mother broker’ in the supply space, and this is our time to make it happen at a much faster rate than would have happened anyway,” he added.

The signs so far are encouraging. March was TruKKer’s best-ever month of operations, but Biswas “put the brakes on” in April and May. July’s numbers were better than March, he said. “We used the last few months to acquire key clients. So the overall demand for trucking might reduce because of reduced consumption but we have taken the opportunity to grow,” he said.

How far does he think TruKKer can go in the tech-enabled haulage business? “It would be quite naive of me to say I’m going to control this market within this year or next. It’s a very large market and no one player can dominate the Saudi transportation industry. I think we can certainly become the biggest, and that’s not very far away. I would say by next year we will be doing more transactions that anyone in the market, so we would be the biggest,” he said.

TruKKer vehicles carry virtually any kind of product, from basic materials like petrochemicals, construction goods and equipment, steel, aluminum and copper, through to food and fast-moving consumer goods, paper and packaging products.

It has plans to get involved in the oil tanker business, but has so far steered clear of pharmaceuticals, which Biswas said was a “conscious decision” because of the special requirements of that sector.

He has also avoided the transportation of dangerous materials like explosives, although this is only a small part of the haulage market.

Egypt — the key to a broader expansion in Africa — is a focus of expansion at the moment, with eight TruKKer offices in the country and a presence in all the major Egyptian ports. He is also looking north, with operations in Jordan and other countries in the Levant that do business with the Gulf Cooperation Council.

An IPO in the Saudi markets in the next few years would be delightful for TruKKer.

Gaurav Biswas, CEO, TruKKer

And then, there is Iraq. “We’re quite serous about the opportunities involved with the rebuilding and reconstruction of Iraq, that is something which is quite close to our ambitions in the short term,” Biswas said.

This ambitious growth strategy will present its own challenges in a region infamous for the bureaucracy and security restrictions involved in cross-border trade. “Anything that crosses borders by land or sea or air comes with a lot of bureaucracy and documentation. Cargo movement comes with he amounts of documentation because of the multiple parties involved,” he said.

“The security risk is high, but I think the region ranks somewhere in the middle globally. Not quite up to the standards of Western economies, but much more secure than Asia or Southeast Asia. Law and order is a big thing in the region and people are less likely to break the law than they are in other parts of the world. But there are still things that happen,” he added.

He thinks that technology, for example in the tracking of cargoes, can be used to mitigate some of those risks, but would also like to see the region insurance industry raise its game. “I don’t think it has matured as fast as a few other economies,” he said.

In terms of TruKKer’s next steps as a corporate entity, Biswas and his team are working on a Series B fundraising that will probably take place before the end of the year. The Saudi Telecom investment arm STV was a big backer in the first fundraising round, and Biswas highlighted the synergy between his business and telecommunications technology.

“There’s going to be some very interesting times in the next few months. We’re going to add some very significant names to our shareholder list,” he said.

The endgame for a technology based start-up consists of two real options. It can go for a big-ticket sale to a trade buyer, as Careem did in its $3 billion deal with Uber; or it can look for a stock market listing via an initial public offering (IPO).

Biswas said that his priorities at the moment were the next round of financing, and with expanding operations. “We don’t spend a lot of time thinking about an exit. We’re more focused on what is happening tomorrow, or next month, or next quarter,” he said.

But with a bit of coaxing he admitted that a listing on a regional stock market does have its attractions.

“I think trucking is a very localized business across the world — you don’t want a foreign company to come and own your trucking industry. So from various perspectives — security, job creation and all that — the regional economies are really proud of what they’ve achieved in the past few decades.

“I think an IPO in the Saudi markets in the next few years would be a delightful outcome for a business like TruKKer,” he added.


Algeria to review gas prices with all its clients

Updated 03 July 2022

Algeria to review gas prices with all its clients

  • Algeria’s oil and gas earnings are up 70 percent and have reached $21.5 billion in the five first months of 2022

ALGIERS: Algeria is negotiating with all its clients to review gas prices, state oil and gas producer Sonatrach’s CEO, Tewfik Hakkar, told reporters on Sunday.

Hakkar added that the review of the prices is not targeting a single company or country.

The statement comes almost a week after Spain began re-exporting gas to Morocco in reverse flow via the Gazoduc Maghreb-Europe pipeline, marking the first direct flow of piped gas from Europe to Africa.

Spain and Morocco agreed earlier this year to consider using the GME pipeline for reverse flow to the North African country with the gas to be sourced from the global LNG market.

On Nov. 1, Algeria, which has cut off diplomatic ties with Morocco, stopped supplying natural gas to its neighboring country through the GME pipeline.

Algeria is now supplying Spain using the Medgaz undersea pipeline with an annual capacity of 8 billion cubic meters, which does not go through Morocco.

Earnings up

Algeria’s oil and gas earnings are up 70 percent and have reached $21.5 billion in the five first months of 2022, compared to $12.6 billion in the same period last year, an executive at state oil and gas producer Sonatrach told reporters on Sunday.

Along with gas, Algeria is a large oil producer with 12.2 billion barrels of proven oil reserves. The country exports 540,000 barrels per day of its total production of about 1.1 million bpd. All proven oil reserves are held onshore, though offshore exploration is in the early stages.

Related


Argentina government crises build as Economy Minister Guzman resigns

Updated 03 July 2022

Argentina government crises build as Economy Minister Guzman resigns

  • Inflation is running above 60 percent and the peso currency is under growing pressure

BUENOS AIRES: Argentina’s economy minister Martin Guzman resigned on Saturday, a blow to a government beset by mounting economic crises.
Guzman, who led Argentina’s debt restructuring deal with the International Monetary Fund and creditors, posted a letter to his Twitter account announcing his decision.
“I write to you to present my resignation as economy minister,” Guzman said in a letter addressed to President Alberto Fernandez. He had been minister since late 2019.
The government is facing its lowest approval rating since taking office in 2019. Inflation is running above 60 percent and the peso currency is under growing pressure. Sovereign bonds have plummeted.
The resignation leaves the ministry leaderless just as Guzman was expected to travel to Europe to negotiate a $2 billion debt deal with the Paris Club of sovereign lenders.
Investors are skeptical about the economy and infighting in the governing coalition between moderates like Guzman and a more militant wing including Vice President Cristina Fernandez de Kirchner.
Mariel Fornoni, director of the Management and Fit consultancy, said the resignation of a key ally was a reflection of President Fernandez’s loss of power since a painful midterm election defeat last year.
“It is the chronicle of a death foretold. Ever since the loss in last year’s legislative election,” she said, adding that a militant wing around the powerful vice president had been pushing to oust Guzman.
“(The president) has lost another piece of his board, perhaps the most important, and is increasingly alone,” Fornoni said.
Guzman tellingly posted his resignation letter while Fernandez de Kirchner was giving a speech commemorating iconic former Argentine President Juan Domingo Peron.
Guzman said “there should be a political agreement within the governing coalition” to choose his successor.
The president’s office said that it did not yet know when a replacement for Guzman would be announced.
A government source who asked to remain anonymous told Reuters that Guzman’s exit was due to what he felt was a lack of political support for his agenda.
Miguel Kiguel, former secretary of finance in Argentina, told Reuters that whoever takes over will have a tough time, noting that inflation could hit 80 percent this year and there is a gap of nearly 100 percent between official and parallel currency exchange rates.
“We don’t know who’s coming, but this will be a very hot potato,” Kiguel said. “Whoever comes is going to have a very complicated time.”


Dubai firms board the metaverse to improve customer engagement

Updated 03 July 2022

Dubai firms board the metaverse to improve customer engagement

  • Realty major Damac has invested up to AED367 million to develop and monetize a metaverse

DUBAI: Top Dubai-based companies are racing against time to build metaverse or immersive virtual worlds to bolster their sales prospects and disrupt customer experiences in their respective industries.

Realty major Damac has invested up to AED367 million ($100 million) to develop and monetize a metaverse that could allow potential customers to check into their luxury properties virtually, choose an apartment, explore furniture options and toy with the paraphernalia on offer.

Called D-Labs, the metaverse platform will create digital replicas of their top projects, including Damac Hills, Damac Lagoons, Safa by De Grisogono, and Cavalli Tower in Dubai. It will also host other notable projects such as Damac Tower Nine Elms in London and the upcoming Cavalli Residences in Miami.

So, how does this work? First, a potential customer in any part of the world can meet up with the sales agent of Damac Properties inside the metaverse instead of connecting over a Zoom call. Then, inside the metaverse, the prospect can tour the apartment and pay for the unit during the checkout.

“We sell around AED100 million monthly over Zoom calls without any immersive technology. With the metaverse, we can sell AED700-800 million a month to any customers in California, New York or Miami,” Ali Sajwani, general manager of operations at Damac and CEO of D-Labs, told Arab News.

The company, which has been annually clocking a business of $5 billion in real estate, expects to rake in $6.5 billion a year using the metaverse, added Sajwani.

We sell around AED100 million monthly over Zoom calls without any immersive technology. With the metaverse, we can sell AED700-800 million a month to any customers in California, New York or Miami.

Ali Sajwani, general manager of operations at Damac

Potential to disrupt

Metaverse owes much of its success to its disruptive nature that displaces traditional ways of looking at a category and creates a new business model. Gone are the days when real estate buyers would close deals based on brochures and project plans.

Instead, they are not only engaging in real-time with the property, but they now have the option to shop for things during their virtual tours. In the case of D-Labs, customers could also pick a host of non-fungible tokens or scarce digital objects on offer and sell them for a better price on a future date. The company, for instance, will soon be offering a variety of NFTs, including digital wearables and jewelry.

“The idea is you own your real estate and virtual assets. As part of our De Grisogono relaunch, we will also be offering digital jewelry. However, the goal is to convert that customer into an owner of real assets, not just digital ones,” Sajwani said.

According to management consulting firm McKinsey & Co., more than $120 billion have been globally invested in building metaverse technology and infrastructure in the first five months of 2022. That’s more than double the $57 billion invested in 2021.

The company recently surveyed more than 3,400 consumers worldwide and found two-thirds are excited about transitioning everyday activities to the metaverse, especially when it comes to connecting with people, exploring virtual worlds, and collaborating with remote colleagues.

“Our bottom-up view of consumer and enterprise use cases suggests it (metaverse) could generate up to $5 trillion in impact by 2030,” said Eric Hazan, senior partner of McKinsey in the study.

Strategy in motion

To make this groundbreaking concept a reality, Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum recently announced the Dubai Metaverse Strategy, which aims to increase the contribution of the metaverse sector to the emirate’s economy to $4 billion by 2030.

Given the government’s proactive role, companies are now looking at ways to develop metaverse platforms that could launch pilot activities, study consumer behavior, learn from the real-time interactions and nurture the business model.

Emirates Airline, another early adopter of the metaverse, also announced that it would soon offer a slice of immersive technology, where the customer could virtually relish the travel experience aboard the premium airline.

“These projects will allow customers to transform their entire processes, whether it’s a business operation, training, or sales force, into an interactive experience in the metaverse,” said Emirates Chief Operating Officer Adel Ahmed Al-Redha during a press roundtable.

These projects will allow customers to transform their entire processes, whether it’s a business operation, training, or sales force, into an interactive experience in the metaverse.

Adel Ahmed Al-Redha, Emirates chief operating officer

As part of its metaverse offerings, the customer can tour the aircraft and experience economy, business, and first class, besides selecting their seats and the food and beverage of their choice.

“The customers can also tour the airport, do their duty-free shopping and buy their items while sitting at home, which can be delivered to them at home or in the aircraft,” he added.

It wasn’t a new idea for Emirates to digitize. Still, they did not have the technology to do so and are currently cooperating with different technology companies “to ensure we get the right thing,” Al-Redha said.

Al-Redha is among the league of forward-looking business executives reaping the fruits of the first-mover advantage. It will be interesting to see how they use this fresh produce technology to disrupt their business models and create newer avatars of consumer engagement.

Related


Exxon signals operating profits could double over Q1

Updated 02 July 2022

Exxon signals operating profits could double over Q1

  • Energy prices have shot up this year with oil selling for more than $105 per barrel

HOUSTON: Exxon Mobil Corp. has signaled that skyrocketing margins from fuel and crude sales could generate a record quarterly profit, according to a securities filing.

Energy prices have shot up this year with oil selling for more than $105 per barrel and gasoline at about $5 per gallon in the United States. The enormous earnings are likely to ignite new calls for windfall profit taxes.

The largest US oil producer projected a sequential increase of about $7.4 billion in operating profits compared with the first quarter. In the first quarter, Exxon posted an $8.8 billion profit, excluding a Russia writedown.

The filing indicates a potential profit of more than $16 billion for the second quarter. The company’s peak quarterly profit was $15.9 billion in 2012.

The filing showed Exxon expects higher oil and gas prices will add about $2.9 billion to results. Margins from selling gasoline and diesel will add another $4.5 billion to operating profits.

“High energy prices are largely a result of underinvestment by many in the energy industry over the last several years and especially during the pandemic,” Exxon said in a statement on the profit gains.

Analysts tracked by IBES Refinitiv forecast a per share profit of $2.99, up from $1.10 in the same quarter a year ago. Official results for the period will be released on July 29, according to a summary of factors influencing the period disclosed late Friday.

Exxon’s profits led US President Joe Biden last month to say the company and other oil majors were capitalizing on a global oil supply shortage to fatten profits.

The company said it is investing more than any other producer in the US to expand oil and natural gas production, including in the Permian, the country’s largest unconventional basin.

US Representative Ro Khanna said Exxon’s record-breaking profits reinforce his call for Congress to pass a windfall tax on Big Oil.

“Big Oil companies should be providing relief to their customers, not pouring billions into stock buybacks to enrich their investors,” he said in a statement.

Exxon’s shares closed up 2.2 percent at $87.55 on Friday.

Exxon, which lost more than $22 billion in 2020, has been using the extra cash from higher energy prices sales to pay debt and raise distributions to shareholders. It plans to buy back up to $30 billion of its shares through 2023.

Despite losses during the pandemic, Exxon continued to invest in additional production and expects to increase output in the Permian by 25 percent in 2022, the company’s spokesperson said.

The second-quarter results will be the first quarterly earnings report since Exxon decided to report results by four business units, giving a more detailed breakout of its petrochemical operations. The snapshot showed that margins in its chemical and specialty products units were flat in the second quarter compared with the first.

The company estimated the impact of exiting Russia would cut oil and gas profits by about $150 million compared with the first quarter. Exxon wrote down $3.4 billion in Russia assets earlier this year.

Exxon also signaled a contribution of about $300 million from asset sales in the quarter.

Related


Stuck bags add to tangles at Paris airports amid travel boom

Updated 02 July 2022

Stuck bags add to tangles at Paris airports amid travel boom

  • Union activists said many more passengers flew without their bags
  • The scene at Charles de Gaulle on Saturday was busy but typical for the first weekend in July

PARIS: Airlines worked Saturday to deliver luggage to passengers around the world after a technical breakdown left at least 1,500 bags stuck at Paris’ Charles de Gaulle airport, the latest of several tangles hitting travelers this summer.
The airport’s baggage sorting system had a technical malfunction Friday that caused 15 flights to depart without luggage, leaving about 1,500 bags on the ground, according to the airport operating company. The airport handled about 1,300 flights overall Friday, the operator said.
Union activists said many more passengers flew without their bags, apparently because of knock-on effects from the original breakdown.
It came as airport workers are on strike at French airports to demand more hiring and more pay to keep up with high global inflation. Because of the strike, aviation authorities canceled 17 percent of flights out of the Paris airports Friday morning, and another 14 percent were canceled Saturday.
Passengers on canceled flights were alerted days ahead of their flights. The scene at Charles de Gaulle on Saturday was busy but typical for the first weekend in July, when France’s summer travel season kicks off.
Unions plan to continue striking Sunday but no flights have been canceled so far. They have threatened to renew the strike next weekend if negotiations with company management don’t succeed in finding a compromise.
Until now, French airports had been largely spared the chaos seen recently at airports in London, Amsterdam and some other European and US cities. Airlines and airports that slashed jobs during the depths of the COVID-19 crisis are struggling to keep up with soaring demand as travel resurges after two years of virus restrictions.

Related