Trucksters co-founder Gabor Balogh talks about the future of the relay system
Spanish transportation company Trucksters, which provides a long-distance FTL trucking service via an AI-based relay system, has been making waves of late following the announcement of its Series A funding round bringing in €6.3 million. The investment will facilitate the company’s growth as it seeks to develop its European transport corridors.
What makes the relay system work for Trucksters? And how could the system adapt as autonomous vehicles and electric vehicles come on stream?
To find out the answers to these questions, and learn about Truckster’s future, we caught up with co-founder Gabor Balogh.
Hi Gabor, thanks for speaking to us at Trans.INFO.
You founded Trucksters with Luis and Ramon just over 3 years ago. How content are you about how the company has grown during this time?
Actually, we are quite happy I’d say. As you know, we recently closed the big investment round; our series A round with €6.3 million.
When we were planning the round, we were hoping to get €4 million. So in the end, we had over-demand from investors. Actually, we had to say no to a couple.
That means that the market trusts our business model; the investors do and the clients do too. Of course, we couldn’t be happier about this.
Back in 2019, after opening your Valencia office, you were accepted by the Mercadona startup accelerator Lanzadera. How much did that help in getting you to where you are today?
With the accelerator, what I think we’ve benefited the most from is the interesting training sessions about how to manage people. It was based on the best practices of Mercadona itself.
In the end, businesses are people, whether it’s investors, stakeholders, internal employees or external clients, you need to know how to manage them. So it’s key to have some frameworks to know what’s right to do in what situation.
Lanzadera has a very interesting model based on three pillars; giving, asking, and demanding.
It’s a very simple framework, which says, okay, before you ask, you need to give. If it’s employees, that means training, good salaries and working conditions, as well as good company culture.
Once you give, you can ask. You can ask employees to follow your processes, your values and so on. If they don’t, you can then start to demand.
Although this is a very simple framework, it’s very powerful. The same applies to clients and investors. Before you can ask for better prices or so on, you need to give them a good service – a better service than the market can offer.
So to sum up, it’s a very simple framework that I think has helped us a lot.
Trucksters’ FTL offer very much pivots on what you describe as your innovative relay system. How does this system work for you?
Well, the model actually dates back to when the Persians switched horses to tell the Emperor about the news from around the world. What is new, however, is the way in which relays can be combined with technology.
That’s why the market has not been able to consistently do relays. It’s very hard to productively plan and replan 1,000 times because in transportation you never know what can happen.
It’s technology that helps to replan and control resources in every stage of the process. This is very important to make it scalable. And that is what makes us different.
What are the major advantages you believe that this system offers you versus the conventional approach?
I’d say there are two, possibly three. One of them is the better service on offer to the clients. Why?
Because with relay transport your main benefit is speed; you can transport from A to B in a very fast way. That speed also has its own derivatives; if your trailer is moving non-stop, that means that there is less risk of cargo theft. It also means that your final customer has its goods faster and that you have less mobile stock.
If we take security for instance, the electronics industry has a lot of thefts. Looking at some European statistics, there are more than 12 billion euros worth of goods stolen per year.
For e-commerce and perishable goods suppliers, speed is also very important and clients are demanding. As regards the latter, one day spent in transit means one day less on the shelf.
The other advantage of the system relates to the shortage of drivers in Europe; there is a shortage of more than 100,000 drivers according to European statistics. This means that there is more and more difficulty as the years go on, because now almost nobody wants to be a truck driver anymore. At the same time, older drivers are retiring, so the industry is currently facing a shortage of drivers that will get bigger.
Naturally, this means that it’s becoming harder and harder to get extra capacity. Therefore, if you are able to give the drivers a better quality of life through relays, it makes things easier.
They can spend more time at home compared to the traditional way of transportation. At the same time, you can actually get more capacity, which is a scarce thing at the moment.
The 3rd benefit is that relays lend themselves to new technologies such as electric trucks and autonomous trucks.
If you think about electric trucks, probably their range in the short term is not going to be much higher than 300 kilometers. So if you have a truck relay every 300 kilometres, then it can recharge until the relay arrives. And of course, recharging points are not abundant throughout Europe as of now.
So relay systems can benefit from regional infrastructure that allows the implementation of this technology, and the same is true of autonomous trucks. Not all the roads will be suitable for autonomous vehicles, and probably regulations on these vehicles will vary in different regions.
It is typically said that whenever there is a big city nearby, you will not be allowed because of safety and so on. So again, relaying drivers with machines will also be the way to utilise these trucks for long-distance transport across Europea.
Seeing as you’ve mentioned autonomous vehicles, when do you envisage relays between conventional and autonomous trucks to be taking place?
As for when it will happen, there are lots of different opinions. I think five years ago, they said it would happen in 10 years. Now they’re saying another 10 years. It looks like the deeper the industry delves into the problem, the more variables that come up.
It’s a very hard thing for an algorithm to mimic human sight, especially on the roads where visibility may differ depending on the conditions. It’s really a tough problem to solve.
However, there’s no option other than to solve it, as otherwise we’ll run out of drivers. I also think that the shortage will mean there are more resources being put into autonomous technology.
We do believe that autonomous vehicles should come on stream in around 15 years. The sooner the better, right?
There are not only technological barriers to consider, but also political. There needs to be a lot of new legislation and regulation regarding these vehicles in Europe.
That said, it is arguably a good thing that autonomous vehicles are not standard today, as if they were, I believe very few players in transportation would be ready to incorporate them.
They’re actually just one more piece in the puzzle. Before autonomous trucks arrive, things like resource allocation need to be allocated. For example, which truck will pick up which cargo. Things like reporting to the client or monetization need to be automated too.
The last step is autonomous driving. So I believe it’s good that we still have this lag as the industry can catch up with the technology, and then they will be ready to welcome these new vehicles.
Amid talk of driver shortages and problems with driver welfare, do you expect the relay system to become more widespread?
Absolutely. We believe that relays will be the standard in the industry in a couple of years and not the exception as it is right now.
If clients see that this way of doing transport is more beneficial to them, then we believe that they shall seek more of these services.
We really hope to make a paradigm shift. Once a company starts becoming accustomed to the system, we believe there will be no going back. If you don’t have drivers, your truck will be idle in a parking lot.
We believe we’re currently in between the traditional way of doing transport and autonomous driving. During this intermediate period, relay is certainly the way.
One of the services you offer concerns the visibility of your trucks. How have your clients needs and expectations changed regarding this?
Well, we have a platform which tracks where the truck is, the ETA of the truck and the milestones it’s completing among other things. It sends some notifications, and we also have a system that measures client activity on the web portal.
Interestingly, what we saw in the beginning was that the ratio of the clients entering the platform for visibility was not that high. It has grown over time substantially though. I believe the last time we checked it was more than 90%.
Visibility might seem like something obvious, but there are still a lot of people who just call the driver when they want to know where the truck is.
If you think about it, you can make a comparison with airplanes. Most would think that someone wanting to know when a flight is going to arrive would not need to call the pilot.
Nowadays we have everything; we can easily check online when flights are going to arrive, and find out if there is a delay. We can even know it hours in advance. So why can’t trucks be the same?
Last year you went international with corridors between Spain, Benelux, Germany and Poland. How has this progressed, and what corridors are you eyeing up for the future?
They are still going wonderfully. We started going international in 2020; before that we were mostly inside Spain.
I believe we should have taken this step before, because of course the longer the distance, the more relay transportation brings. 2020 demonstrated this.
In the first month we went international, our revenues increased tenfold. 2020 was also the year that covid hit; I think we proved that this was the model for the market. I believe this is what investors saw as well. In fact, that’s why we were able to attract more investment than we had expected to.
So going international was probably key to the growth of the company. As for new lanes, we are still deciding where to open them. Italy will probably be in our sights, and we also have some other plans less certain than Italy.
The UK is a possibility, though question marks remain because it’s complex in terms of administration and so on. Nonetheless, if we were able to figure that out, it would be a very interesting market.
When it comes to future ambitions, what kind of market position are you hoping to achieve?
Well, we see that there’s a lot of new startups in the freight forwarding space. We believe that there is another way, which is through a dedicated fleet.
The strategy we are using means that all the drivers of the trucks work solely with us. This way we can ensure quality service for the client, and of course, quality of life for the driver.
When it comes to the market, we do believe that there shall be a consolidation.
The current situation is not very sustainable. For instance, looking at the Spanish numbers, there are 200,000 trucks and 100,000 companies. That’s an average of two trucks per company.
Of course, they will not invest in technologies and visibility and automation, because the guy who owns the company often also drives a truck. That’s one of the reasons why the industry has not evolved in technological terms. So for sure, there will be a consolidation of some sorts.
We also have big dreams. We want to keep opening up corridors until we can form a network of relays that is very complex from a technological basis. If relays are complex in bilateral routes, the star pattern and more complicated patterns will be much more difficult.
However, our vision is to solve the optimization problem in more complex patterns than just bilateral routes.
I wouldn’t necessarily say we want to be the biggest, but for sure we’d like to be the fastest.