Serving more than 100 clients across segments like E-commerce, white goods, FMCG, auto components and pharma, Rivigo has been instrumental in reducing the turnaround time by 50-70 per cent on long haul routes. Sambit Sathapathy, Head, Rivigo in an interaction with Usha Sharma, elaborates on Rivigo’s growth prospects
Rivigo is a technology-enabled logistics company. Tell us more about the company. How many people have partnered to form the company? What made you feel to venture into the pharma space?
Rivigo was co-founded one and half years back by Deepak Garg and Gazal Kalra, ex McKinsey professionals. The company’s mission is to solve some of the most fundamental problems of the logistics industry with the aid of technology. Surface logistics though accounts for over 70 per cent of the total freight movement in India, the sector is mired with tremendous inefficiencies. In the traditional logistics set up, most truck drivers spend around 25 days in a month away from home whereas under the aegis of Rivigo’s unique ‘Driver Relay model,’ the drivers get back home on the same day (or within 24 hours). Besides this, the model has been instrumental in reducing the turnaround time by 50-70 per cent on long haul routes.
These advantages of the Rivigo model has helped the company to get great traction both from clients and driver community. In the last one and half years, Rivigo has scaled to around 1000 truck operations.
We currently serve more than 100 clients across segments like E-commerce, white goods, FMCG, auto components and pharma. Transition to pharma was a natural choice as we saw a great fit of our responsive supply chain model with the requirements of the pharma sector.
The company is focusing on expanding its base in the technology team to add IoT, automation and data sciences. Throw some light on the same.
Technology has been infused in the entire ecosystem of Rivigo and it is the backbone on the basis of which Rivigo has been able to develop many proprietary solutions that are industry first.
Rivigo’s vehicles are GPS enabled and the intelligence overlay on top of location tracking enables Rivigo’s control tower to track all the vehicles on a real-time basis.
Every day thousands of hand-offs take place between drivers. For the ‘Driver-relay model’ to work smoothly, all those hand-offs should happen seamlessly. Technology makes that possible for Rivigo. The company has also invested in getting various data like fuel, RPM, engine oil temperature, brake oil pressure etc from the vehicles on a real-time basis. These data gets processed to aid us in decision making for predictive maintenance and mileage improvement.
What percentage of medicines are transported through airways, roads and ship. Which is the most effective way and route to opt for and why?
Domestically, a significant proportion of medicines move on road. Reliance on airways is there to transport temperature-controlled products and other niche products. For exports, companies rely on a combination of air and ship.
There are several logistical challenges being faced by the pharma industry. Acute segment product demand has lot of seasonality. Government regulations create additional uncertainty owing to implementation of price control, neurological product distribution and FDC bans. Coupled with that, the skewness in product demand and large number of product SKUs create severe strain on the supply chain.
Companies end on spending in expensive air-shipment as traditional surface transport has not been able to match the transit time expectations.
The government is encouraging pharma companies to set up facilities in less accessed zones like north eastern states. How well versed and ready are you to grab the upcoming business opportunity?
Due to the tax benefits, many pharma facilities are set-up in less accessed areas like north-east and Himachal Pradesh whereas the consumption locations are more in southern and western parts of the country. Rivigo’s low transit time model is very suitable for this industry. E.g. Rivigo’s fleet covers Guwahati to Delhi in 2.5 days which normally takes eight to 10 days. Rivigo through its operational efficiencies is able to cover Zirakpur to Chennai in four days which normally takes eight to 10 days. This enables companies to reliably serve the distant markets.
Tell us about the company’s ‘Driver relay model’ and how it is unique?
Rivigo’s ‘Driver Relay model’ has fundamentally changed the lifestyle of truck drivers. Traditionally truck driving involved being away from home for 15-20 days at a stretch to deliver a cargo and return. Language and harassment by various agencies becomes a big barrier. In this model, the driver can effectively come back home the same day. It is ensured that after every 200-250 km, the driver changes over and he hands over the vehicle to the next driver. Effectively a driver drives for five to six hours, then takes rest and comes back to the starting point driving a return truck. Rivigo has 40 hubs across the country which serves as the driver change-over points. Drivers love this model which has resulted in almost zero voluntary attrition. On the client side, the model has reduced transit time by 50-70 per cent. Typically a driver drives for eight to 10 hours a day and thereby covers 300-350 km/ day. In our model as the drivers keep changing, the vehicles run for almost 22-23 hours a day thereby covering almost 1000 km/ day. No other company has been able to do at this scale because of the complexity involved in managing the hand-offs while ensuring accountability.
The pharma industry requires temperature-controlled logistics solution providers. Which technologies have been implemented and what cost control measures have been adopted?
Rivigo from the beginning has focused in handling temperature-controlled products through refrigerated trucks. The thrust has been to ensure a best-in-class temperature integrity system. The company has tied-up with India’s best refrigerated container manufacturers and refrigeration unit manufacturers. Rivigo’s pharma specific reefer vehicles are validated by reputed agencies. With 40 service-hubs spread across the country, Rivigo has the widest service network. The reduced transit time model helps companies to reduce reliance on air and courier shipment.
How do you monitor the real time temperature?
All vehicles are equipped with GSM compliant remote temperature monitoring sensors. We’ve a 100-member control tower time that monitors vehicles 24×7. Going forward, the company is also piloting with technologies that would allow us to remotely manage/ change temperature thereby eliminating the risk of abuse by drivers.
Vaccines need to be stored at a certain required temperature. Are there any challenges being faced by you?
Vaccines need to be maintained within two to eight degree temperature range. Vaccines lose their potency if any part of the cold chain gets broken. Oral polio vaccine may lose four to 13 per cent of its potency per day at 25 degree centigrade and 26-37 per cent of potency at 37 degree centigrade. Rivigo reefer trucks are well equipped to maintain the temperature integrity of temperature sensitive pharma goods. Also, the technology implemented in the reefer trucks restricts the drivers from fiddling with the temperature of the reefer trucks.
The company offers its service at much cheaper cost than air cargo. How do you manage to operate it?
Air cargo, having higher freight charges (both fixed and variable) has huge cost implications vis-a-vis surface transportation of goods. Despite the higher costs, pharmaceutical companies have relied on air cargo for shipping high value temperature sensitive pharma goods as the traditional logistics network doesn’t ensure an efficient, reliable and fast surface transport network. Rivigo on the other hand through its unique business model, technology implementation and overall operational efficiencies has been able to move shipments matching the speed of air cargo at one third the costs.