Start@SG

Mr Prashant Dadlani
Mr Prashant DadlaniST PHOTO: DON CHI

Logistics company blu has installed an automated inventory system in an industrial building off Boon Lay Way near Jurong East that offers a glimpse into the industry's future.

As founder Prashant Dadlani showed The Straits Times the system, a small army of robots was hard at work inside the massive grid-based storage, rapidly zoning in on items to be delivered to homes across Singapore.

NEWCOMERS

"There are currently two logistics companies in Singapore that use robotics on this scale. One of them is a multinational. The other one is us," says Mr Dadlani as he spoke over the robots' droning noise.

The start-up, which officially began operations in November, is counting on this facility - dubbed bluStore - to be one of its key growth drivers as a merchant-focused logistics provider.

"(The storage hub) is integrated with our cloud-based inventory management interface, or bluPortal, that serves our retailer clients. The entire system has the capacity to process 150 to 250 orders per hour, and is growing.

"And then we have a network of 35 self-collection points, or bluPorts, which are placed nationwide at prime locations like shopping malls and Cheers convenience stores," Mr Dadlani says, referring to locker stations similar to SingPost's POPStations.

His excitement is part of a growing buzz in Singapore's logistics industry, where new players - many with a strong focus on technology - are emerging to jolt the scene.

As the Government looks to restructure local industries to become more productive and tech-driven, these companies believe they can tap the need for efficiency within the changing ecosystem.

While blu positions itself as an end-to-end provider for e-merchants and retailers looking to thrive in the online shopping era, others offer more specialised expertise.

KEY GROWTH DRIVER

(The storage hub) is integrated with our cloud-based inventory management interface, or bluPortal, that serves our retailer clients. The entire system has the capacity to process 150 to 250 orders per hour, and is growing.

MR PRASHANT DADLANI, founder of logistics company blu, on its bluStore, a grid-based storage facility which has an automated inventory system.

At Yojee, the focus is bringing artificial intelligence (AI) to bear in logistics, such as helping deliverymen beat the traffic and get parcels to their destinations in the most efficient way.

The Sydney-listed firm does this by using in-house AI to analyse traffic data mined from Google Maps, with users getting instructions through a mobile device application, says managing director Ed Clarke.

"We're talking about (Singapore becoming a) smart nation, that should mean delivery processes can avoid and reduce congestion," notes Mr Clarke.

"For instance, do you want a vehicle going into Raffles Place only to waste time finding a parking space? Maybe the most efficient way for that last 400m is to stop at a hub and use pedestrians.

"Through machine learning, we can offer these insights, and the result is more jobs are done faster in a day with fewer vehicles."

Yojee serves both Australia and the South-east Asian markets. Around 35,000 vehicles were registered with its platform last year. In Singapore, where the company officially rolled out its platform in the fourth quarter last year, over 3,000 Yojee-registered vehicles are plying the roads.

True to its nature as a tech company, Yojee also embraces the sharing economy, inviting individuals to sign on as trained and paid delivery partners using their own vehicles. Like at Uber, these drivers will get jobs assigned through Yojee's app.

COLLABORATION

The new players joining the fray are transforming the logistics industry into a more vibrant - and more crowded - landscape.

In 2015, the transportation and storage sector, including logistics, contributed 7.4 per cent to Singapore's economy and employed over 8 per cent of the total workforce.

It is a sector already filled with incumbents. How the old and the new can coexist and thrive together remains to be seen, but Mr Clarke does not see the emergent, tech-based companies like Yojee as disruptors.

"It's a crowded market, indeed, with a lot of vehicles on the road, a lot of excess capacity. Our approach to success will be in using technology to help existing players optimise their business. It's never about replacing them," he says.

This is also the way forward for Anchanto. The technology company helps traditional logistics companies build the solutions needed for e-commerce - from online inventory and warehouse management systems to billing tools - so that they can then become service providers for e-merchants.

Anchanto chief executive Vaibhav Dabhade believes the market is still highly fragmented, with many pockets of opportunities.

"Logistics is a massive domain with a lot of sub-verticals such as project, shipping, freight, warehousing and distribution," he says. "Conventional warehousing and distribution is a very competitive space, but purpose-built e-commerce logistics catering to the business- to-customer segment - that is still blue ocean because most of the tech built by Amazon or Alibaba is for in-house consumption."

Mr Dadlani agrees that the market is too fragmented to be considered saturated, and partnerships should take centre stage as the logistics industry continues its transformation.

"The Government should be the conduit in facilitating partnerships across the industry, matching established enterprises with innovative start-ups," he adds.

"The local industry needs to have this collaborative foundation to encourage innovation from all, to avoid a situation where incumbents are merely defending the fort."

Wong Wei Han

A version of this article appeared in the print edition of The Straits Times on January 03, 2017, with the headline 'Start@SG'. Print Edition | Subscribe