How Ritase Is Disrupting the Logistics and Freight Market in Indonesia: Startup Stories

Indonesia's logistics and transportation sector has caught the eye this year, with a large number of startups raising significant funds, indicating that the industry is tipped to be a big thing in the country's digital economy going forward.

One of the startups that received significant investment in 2019 was Ritase, a platform that provides a B2B digital transportation system that brings together shippers and carriers, which aims to simplify logistics supply chains and create a more efficient ground shipping process.

Founded in 2018 by entrepreneur Iman Kusnadi and software architect David Samuel, the company raised US$3 million in an initial funding round in September 2018 from Insignia Ventures Partners. In less than a year, the company bagged another $1,6 million in its next round in February 2019, and $8,5 million in its Series A round led by Golden Gate Ventures in May.

"In terms of traction, it is good and the business is growing fast, so investors believe in the company's potential," said one of the founders and CEO, Kusnadi, to KrASIA in an interview.

Kusnadi has over 15 years of experience working in the logistics industry, including in management positions for global logistics giants such as DHL and APL Logistics. Ritase is a rebranded version of the company he previously founded called Trucktobee, he explained.

In addition to connecting companies with truck vendors, Ritase also runs software-as-a-service (SaaS) systems for real-time transportation management, digital order processing, route optimization, and load planning, which are used by both vendors and customers.

"Our primary mission is to overcome the biggest bottleneck of transportation and logistics: inaccurate data. Trucks often operate without clear reference to data, such as the type of payload carried in the truck, or whether or not a driver's license is appropriate. Therefore, we tried to develop digital infrastructure to address this issue, so that all stakeholders in the logistics ecosystem can benefit from our technology solutions," said Kusnadi.

He believes that a disruption in the logistics sector will have a major impact on the Indonesian economy. “For example, because our solution can lower logistics costs for shippers, it can lead to lower prices for goods in the long run. Meanwhile, lower prices will ultimately increase people's purchasing power," he added.

According to Kusnadi, the business in logistics technology is very promising. Ritase has been operating for approximately one year, and so far has shown positive developments.

Today, the company facilitates more than 40.000 deliveries per month, and has worked with internationally renowned brands such as Nestlé, Unilever, Japfa, Lotte and others.

“We only had two shipping clients in the first quarter of 2018, but now we have partnered with 74 major companies, including global FMCG and retail brands. We have also registered 600 small and medium-sized transportation companies, with more than 11.000 individual trucks,” he said.

“The advantages of this B2B [business] model are very easy. We can get good and fair margins because we deal directly with truck owners without intermediaries,” said Kusnadi, adding that Ritase was already profitable.

The company has also signed an agreement with the Indonesian Ministry of Transportation to digitize weighing scales across the country to ease overloading of trucks and excess dimensions. They also launched a “smart shelter” service in Surabaya earlier this year, which serves as a resting place for truck drivers. At the stopover, drivers are also given a brief digital training, especially on how to take advantage of the Ritase platform.

The company operates an online marketplace platform called Ritase Shop (or Ritshop), which was launched in May 2019. They offer Ritase trucking partners access to affordable auto parts and trucks. Kusnadi stated that Ritshop has demonstrated the company's commitment to support the carriers, most of whom are small and medium enterprises (SMEs).

“Because we partner with many trucking companies, we know that it is difficult for them to buy new fleets at competitive prices. Therefore, we work with multi-financial companies that allow carriers to pay in installments. In addition, after purchasing a truck, they will automatically integrate with the Ritase transportation management system, which translates into added value for them," said Kusnadi.

In October, Ritshop launched the largest used truck dealer in Greater Jakarta which allows potential buyers to check the condition of their trucks in person before making a decision.

Although the sector is said to be promising, companies developing new logistics technologies also face many challenges, especially in terms of licensing and regulations, according to Kusnadi.

“At first, many thought that we were a logistics company, therefore we had to comply with the normal regulations for the transportation of goods, one of which was that we had to have our own fleet. So I need to continue to explain that we are a technology company that offers solutions for truck logistics,” he said.

Kusnadi hopes that the government will push for new regulations in this regard to accelerate the growth of the logistics technology sector.

Looking at the future of logistics in Indonesia, Kusnadi believes that there will be more digital players disrupting this space which will make the competition more interesting. "The more, the merrier. This shows that the market is growing, and I believe that competition will increase innovation, which is good for the entire ecosystem," said Kusnadi.

"I hope that Indonesia will implement the entire smart logistics process in the near future, and we can solve the cross-regional logistics challenges to facilitate trade between countries more conveniently," he continued.

Going forward, Ritase wants to strengthen its technological capabilities and add more services to its customers, to become a market leader in the Indonesian truck industry. The company is also expanding its offerings to include hazardous waste management. In the next year, Ritase also plans to offer inter-island container logistics services, as well as financing services to its partners.

Moreover, Ritase is currently in the process of raising new capital. It will be finished "soon," Kusnadi said.

- This article was first released by KRASIA. Re-released as part of a collaboration with DailySocial.