One of the biggest challenges that Sebastian Stefan faced after setting up his logistics company, LoadMe, was resistance to the adoption of technology by potential users.
Mr Stefan first came up with the concept of a marketplace connecting freight carriers to companies looking to have their goods transported in 2014 and the business was fully operational by 2016.
However, LoadMe's success depended also on the willingness of lorry and pickup drivers to use the platform – a feat he initially found difficult to achieve.
"Adoption is a problem in our industry," the LoadMe chief executive told The National.
At the time the company began, many lorry and pickup drivers still used old Nokia phones with no internet or GPS. His first task was to attract them to the platform, which promised to connect them to companies that wanted freight transported across borders.
Soon he and his team moved to integrate them to the platform. It helped that smartphone penetration picked up significantly around this time.
“Things evolved [as] users, drivers and logistic professionals started to have data plans. Soon, we attracted the largest companies in the region as customers,” says Mr Stefan.
Today, LoadMe’s online marketplace has about 18,000 lorries and 6,000 companies actively using the platform, resulting in thousands of transactions each month.
Digitising freight transport is a lucrative business and the platform is not the only start-up tapping into this industry in the Middle East.
Trukker, another UAE start-up, records thousands of daily transactions and has raised millions of dollars from top investors such as Silicon Valley-based Partners for Growth and the International Finance Corporation, part of the World Bank Group.
Companies looking to book a lorry or pickup can enter the type of vehicle required on LoadMe’s platform and the collection and drop-off points – a process similar to how an Uber or a Careem ride is booked. Once the goods are collected, load owners can track the vehicle and receive electronic proof of delivery once their merchandise is delivered.
Digitisation has benefitted the logistics industry, with such platforms helping to reduce the number of empty trips across borders, in turn increasing efficiency, experts say.
Gopal R, global leader of Frost & Sullivan's supply chain and logistics practice, says a 10 per cent improvement in fleet use, aided by digitisation, can have a significant effect on revenue.
“This is why the concept picked up for lorries. Even reducing empty return mileage by as low as 5 per cent to 10 per cent delivers profitable results for the operators.”
The idea for LoadMe came to Mr Stefan, a Romanian who previously worked for General Motors in Europe, when he first moved to Dubai to take up a role in a logistics company. He was surprised to see there was no freight marketplace in the UAE despite the presence of a thriving logistics sector.
He teamed up with two of his friends – Sebastian Morar and Claudia Pacurar – to test the waters with a freight exchange marketplace. The company was initially incubated by DP World’s Turn8 accelerator.
Although the service caught on, Mr Stefan realised that they would need to offer more options to attract major companies that had the greatest load transport requirements in the region.
“The marketplace ... is more like an open space. We do not interfere much and let the transporter get in touch with the load owner. However, larger customers cannot manage the marketplace and the procurement through it. They need an advanced system in place and that is where we step in,” he said.
“We positioned ourselves as a digital broker for land transport.”
The move worked and soon LoadMe was able to convince clients such as Procter & Gamble, Unilever and Kuehne+Nagel to use its services and the platform.
LoadMe’s business model received a further boost last year as the coronavirus pandemic disrupted supply chains across the world. Companies needed to move their goods amid stringent movement restrictions and LoadMe’s access to a large lorry fleet and drivers on an electronic platform came in handy.
“The current Covid-19 crisis has led to an accelerated digital transformation due to the need for people to function business as usual, despite staying isolated,” says Mr Gopal.
“This has led to greater adoption of digital processes in a shorter time frame. Start-ups help to bring up innovative solutions, which can help organisations maximise the fullest potential of digitisation.”
The pandemic also finally solved the problem of slow adoption of technology on the part of drivers.
Until the onset of the pandemic, digitisation was a “fancy word” for many, says Mr Stefan.
“Drivers who before refused to be paid online or to provide electronic proof of delivery or go through training ... adopted all of these and they will never go back. The adoption is difficult ... but [once they begin] they will never go back.”
However, the start-up also had its challenges during the movement restrictions introduced by the UAE last year. For example, LoadMe’s team had to continuously stay abreast of potential border closures and other limitations when assigning loads to lorries and pickups.
Things used to “change weekly ... by the time you managed to adapt to one change, there was another coming. So, it was not easy,” he says.
LoadMe, which currently operates in the UAE and Saudi Arabia, plans to expand to four new countries to tap into booming demand for digital logistics services. It will soon set up shop in the Philippines and Egypt, as well as two other markets that Mr Stefan declined to name.
The start-up, which has raised $2.5m in funding so far, intends to raise more money.
“This year, we have target of $5m in Series A,” Mr Stefan says.
LoadMe is also looking to branch out from land transport and change the way goods are moved by sea and air. It is already conducting trials in the two segments.
“I believe we can fix the biggest pains,” says Mr Stefan. “We can own the sector and it will be one platform for all logistics.”
He also wants LoadMe to become a "super app" for logistics, integrating all services through one platform.
“Imagine Uber develops a super app, through which you can [book air tickets] ... and you can buy one ticket, which will take you from your home to the airport" and ensure you are picked up your destination, he says. “That is the vision.”
Q&A with Sebastian Stefan, chief executive of LoadMe
Is there any other start-up you wished you started?
Logistics is not very attractive [at the outset]. I would like to have had a more consumer-oriented business but they are more risky. It is easier to start a niche business. Logistics is a huge market and it never stops even if we are living in a pandemic. Logistics can slow down but never stop.
Do you have any plans to list your company?
The legal structure [of the company] is built for international expansion … we want to keep the options open to list the company. We are also interested in being acquired or for consolidation. The way we are positioned and have built the structure, there will be no blocks in case we need to list or be acquired. It could be a management buyout, initial public offering or an acquisition by another player. But this is a long-term plan and will not be immediate.
What skills have you learnt from your business so far?
I think for me [the business] changed the mindset. One of the skills I learnt was to manage disaster and flip it in such a way that it is going to be beneficial.
What are some of the things that you would have done differently if you had a chance to start over?
I think I would be more open to advice from people. I would also be hiring top talent faster than I did during the early stage. I have [made] a lot of mistakes in the first one or two years. I was really all over the place trying to serve any customer we could get hands on, instead of being more focused on the customers that really needed us. It took me a while until I realised that.