There have never been so many parcels sent in France: this is the observation made by La Poste (the French postal service) and private delivery companies in recent weeks. Because of the recent lockdown, this trend is going to increase as Christmas approaches. La Poste expects to process 4 million parcels per day in mid-December, a record. And this is just one country in Europe.
Technology-driven efforts to increase the efficiency and sustainability of logistics have attracted increased attention and investment throughout COVID-19, and even more so as seasonal shopping peaks approach in what is expected to be a digital “mega peak” of online shopping.
Startups like Madrid-based Ontruck are among the many companies contributing to this digitisation in what is becoming a booming market for transport and logistics technologies. We recently caught up with Rika Christanto, co-founder and COO of Ontruck, to hear about Ontruck’s personal stories and the use of AI and logistics technologies to drive sustainable change in transportation.
Hello Rika, thank you for sharing some insights into the Ontruck success story. Could you please give us a brief summary of what has been your journey in entrepreneurship with Ontruck?
In 2016, I moved to Madrid where I met Iñigo, Ontruck’s CEO. The project to transform the massive transportation sector with technology, and the team was truly impressive, so I came on board as a co-founder. At Ontruck I’ve worn many different hats adapting to wherever I am needed. I’m officially COO but I’ve led Finance, Operations, People and now Marketing.
Prior to my startup life, I worked as an investment banking analyst in the technology group of Morgan Stanley and had four years of consultancy experience in McKinsey. My main experience in logistics came when I worked for an NGO in Uganda leading the operations to create a nationwide dairy supply chain.
Ontruck is based in Madrid, Spain. What is your opinion on the environment for creating a tech company there?
Madrid has been under the radar as a tech hot spot. But there are a few things that make it a great place to start a tech business: it’s a magnet for international talent with great quality of life, year-round nice weather and relatively low cost of living; access to seed capital is growing with established investors and accelerators, and you’re just a stone throw’s away from tier 1 VCs across Europe; the Spanish government provides generous grant-like funding like ENISA for innovation projects; and perhaps most importantly, the startup community is incredibly supportive, giving advice and encouragement as you navigate the ups and downs of startup life.
Back in June this year, Ontruck secured a €17 million funding round from OGCI Climate Investments. Would you like to tell us more about the objectives and how does that relate to your sustainability pledge?
We’re on a mission to help build a world without waste, starting with efficient and sustainable transportation. Transportation is the world’s largest source of climate-changing greenhouse gas emissions. In Europe, trucks contribute to 5% of total emissions, and with almost 40% of trucks running empty, this means that 78 million tons of CO2 are needlessly entering the world’s atmosphere every year.
To address climate change, we build technology that drives out waste from the logistics process, automating order management, pricing, routing and matching, saving money and time for shippers, maximizing earnings for carriers and removing carbon emissions generated from empty trucks. Through this optimisation of movement with consolidation and routing, we can reduce empty kilometers from 40% to 22%, and mitigate millions of C02 emissions, ultimately offering the most efficient and low-carbon solution for moving goods.
This news came in the midst of the COVID-19 pandemic which has put a strain on the world’s economies. What has been Ontruck’s move to face this unprecedented challenge?
2020 brought uncertainty, anxiety, and grief to people across the world. We have seen firsthand the challenges of grappling with COVID-19 for our employees, our customers, our carriers and our communities. During the strictest lockdown periods in Europe, the Ontruck team did their very best to keep our trucks moving to ensure all business customers could continue to offer essential services. We have many stories of resilience – like how our carriers restocked supermarkets when they had no more trucks available, or when our team collectively delivered pizzas to carriers hungry on the road when all restaurants closed. In the face of these setbacks, we believe this moment is a transformative opportunity to help serve existing and new customers. We believe we have seen the worst of the pandemic and are emerging more resilient than ever.
Your team has grown to 160+ employees since 2016. What is it that matters to you when you think about building a strong team?
We are building a better way to move goods to enable a positive change in the world that is impacting a €600 billion industry in Europe, the road freight sector. It’s a staggering challenge, so when we set out to attract talent and build the best teams possible, we are seeking people who share and believe in our purpose as a company, and are ready to take on big challenges. Innovating is hard and changing the world is hard, so once you have the right talent and dedication on board, the next step is to ensure you can sustain it by establishing the core values and supporting systems to reinforce it.
At Ontruck, we have 7 core values. Each one was inspired by a person who embodied that value. For example, we have a value of humility and we always tell the story of one of our most senior leaders who would “wash the dishes” in the kitchen every day to set the right example. We value flatness, and that great ideas and innovations come from anywhere.
As the Christmas season is getting closer, how are AI and logistics tech ensuring operations run smoothly?
Many shippers and retailers faced with surges in online demand this season will have implemented AI and logistics tech solutions to support their shipping and supply chain processes. This is an exceptional time of the year where consistency, flexibility and organisational planning take precedence and young startups in the logistics space are rising to the challenges that these digital peaks are presenting to keep things running smoothly behind the scenes. At Ontruck, for example, we’ve deployed a new predictive analysis tool capable of forecasting market behaviour for these critical periods. We can know the exact number and types of vehicles that are needed in each city, how many orders we expect to receive, and the potential revenues this can generate for the business. Having access to data such as this is game-changing for planning our resources and provides us with a full overview of how to extend our capacity to deliver the best results possible for our clients to support their evolving needs.
What do you think of the current status of logistics, and where do you see it in five years?
While the pandemic highlighted the vulnerability of logistics processes, it also showcased how fast the industry is capable of changing and adapting. Spikes in demand in some sectors, halts to activity in others and the fast-changing conditions created from border closures to trade required stakeholders to rethink the concept of “business as usual” and it has been impressive to see the extent of innovation unfolding across the ecosystem. Based on insights shared from our shippers, carriers, and the wider marketplace, we expect the below trends to accelerate in the next five years:
Diverse & flexible supply chains – There is increased awareness now around the risk of having a singular concentrated supply base. At Ontruck, our asset-light model allowed us to be able to respond quickly to urgent and sporadic needs by our shippers, such as supermarkets in need of urgent restocking.
Transparent supply chains – Knowing where your goods are during the crisis proved to be paramount. With consumers driving up e-commerce sales and demanding to have full visibility on packages, businesses faced increased pressure to provide visibility across their end-to-end supply chain. Real-time GPS tracking and incident management are no longer a nice-to-have add-on, but a fundamental feature.
Increased environmental consciousness – Greenhouse gas emissions from trucks alone account for 5-10% of the EU’s total C02 output, so companies will be looking at this more closely to reach their corporate sustainability goals. At Ontruck we are working with several clients on reducing GHG emissions in their supply chain.
What are the main lessons you learned as an entrepreneur in tech and logistics?
The process of scaling, especially in logistics where you have a magnitude of operations at play, is a great learning curve. While it’s rewarding to see something you’ve created evolve, it’s dramatic to see how fast teams grow and responsibilities expand. I have to ask myself on an ongoing basis, am I empowering the people closest to the actions to make decisions, effectively and efficiently? This takes dedication and delegation but is intrinsic to growth and success. As startups move forward you have to put in the time to strike the shifting balance between meeting the demands of the business, while also spending quality time to coach and “just be” with your team. This year also reinforced for me the importance of resilience, both as a business and as a team, and how innovation can be leveraged to adapt and remain resilient even in the face of unprecedented disruption.
What advice would you give to young (female) entrepreneurs looking to kick off their own company?
I recently moderated a panel at the Global Women in Tech Festival and posed this same question to a group of female entrepreneurs, from a diverse range of startups, one of whom highlighted the importance of keeping your spirits high, realising your own resilience, and more importantly, embracing the ambiguity that comes with being a founder. As an entrepreneur setting sail on your first venture, you won’t have the whole course mapped out in front of you, and you need to be prepared to accept that you won’t always know where it leads but to trust in the process and in yourself.
Perhaps the most important aspect of being a founder is learning how to enjoy it. So build a support network around you who will offer a balance of realism and encouragement when you need it the most. 4 years after starting Ontruck, I am working over 60 hours a week and I still look forward to Mondays.