While e-Enterprise has become the norm, the practice of hand-written order is still adopted in the logistics industry in Hong Kong and Asia. Seeing this gap in the industry, start-up enterprise Acquaintance Enterprises has launched LOGFLOWS, a one-stop cloud management platform for trucking logistics. From order input, scheduling, tracking, payment to even the search for outsourcing partners, the tasks can be completed on the platform which is instantly accessible online to users. With the use of innovative technology, the platform captialises on business opportunities in goods transportation that arise from the popularity of online retail.

Riding on the start-up waves in 2015, Felix Wong, who is from a family of logistics entrepreneurs, teamed up with two friends to open the IT company Acquaintance Enterprises. The company developed Software as a Service (SaaS), followed by the second app development LOGFLOWS.

Felix’s father is the owner of a cross-border transport company, while he also worked for a Swiss logistics company prior to founding his own business. Therefore, he has thorough understanding of the thorny aspects of the industry that stem from its “outdatedness”. He points out that logistics is a deeply traditional industry, where some small and medium-sized enterprises still follow the practice of hand-written order and accounting. Even at large-scale logistics companies, the business models in use remain extremely outdated.

“Most of the renowned large-scale enterprises in the industry are over 30 years old, and they are still using order systems from decades ago. Some of them don’t even have Windows but are using DOS, that is, the system that starts on commands on a blue screen.” He notes that for large companies, upgrading to and operating new systems is an enormous task. That is the main reason the installation of new systems has been put off in the logistics industry.

“As there wasn’t anyone willing to do the work (installation of new systems), we developed an extendable system.” One of the company’s partners worked for Microsoft in the past, where his main duty was to develop Enterprise Resource Planning (ERP) systems. Targeting the sore spot of the logistics industry, the company uses the ERP system as the blueprint to develop the trucking logistics management system LOGFLOWS.

Ease of use is a selling point of the cloud management platform, which encompasses different templates for order input, truck allocation, goods monitoring and payment. Logistics companies can use the platform to manage their daily operation. As Felix explains, enterprises can use the platform to directly input orders. The company also connects the clients’ existing order systems with the platform, whereby data is automatically transferred to the platform.

“It only takes a few second to input an order. The platform features real-time display of the location of each driver. It can also assign orders directly to the driver, as the order and information are delivered through a mobile app to the driver.” The platform also automatically generates separate analytics reports of different data such as turnover and order volume, which allows entrepreneurs to have a firm grasp of their companies’ business development.

Apart from its one-stop format, “partner matching” is another main selling point of the platform. Felix points out that there are distinct high and low seasons in the logistics industry. For effective resources allocation, many large-scale logistics companies have ceased to keep large truck fleets and opted for outsourcing additional goods transportation orders to other small-sized transport companies. “It involves multi-level outsourcing where one outsourcing partner re-outsources the orders to another. For example, when my father’s transport company receives a large order from a fashion chain, and it requires daily goods transportation to its outlets by ten trucks. But we’re only keeping five trucks and outsourcing the rest of the order to other transport companies we have close ties with, in order to lower the cost risk of keeping a truck fleet.”

He mentions that outsourcing is mainly done for urgent orders. As information flow is relatively constricted in the industry, it is not easy for companies to find new business partners. In view of this, the platform takes its cue from LinkedIn and Wechat, and assigns designated ID and company’s profile to each client. Users may search for suitable partners through the platform and add them as “friends”, which allows them to send orders to each other or even join hands in making bids.

“The first outsourcing partner can use the platform to monitor the location of the goods.” He states that after a ten-month trial run, the platform was officially launched in February 2017 and its target markets are Hong Kong and Southeast Asia. It currently has more than 40 clients from Hong Kong, including small-sized goods transportation companies and large-scale international logistics companies. “We mainly target big companies. After they have tried out our platform in one region, the usage may be extended to other regions. This drives organic business growth.” He reveals that as trucking logistics is well-developed in Malaysia, the company embarked on the market in June 2017. There are now more than ten companies in the market using the platform, with its coverage stretching to Vietnam and Singapore.

The company charges a service fee of HKD2 for each transaction. Felix states that Hong Kong is a major transit point in logistics and the city’s freight transport industry is thriving. In addition, the emergence of online retail drives up demand for trucking logistics in Hong Kong, which is conducive to the platform’s business development. At present, the platform processes over 100,000 orders per month, and the figure is expected to increase to 1 million per month in April 2109. The company also expects the platform to break even by the first quarter of 2019.

To stand out in the market, start-ups need to make continuous investment in research development to refine their services. Therefore, Felix meets with the large clients of the company every month to survey the industry’s needs, in order to continually strengthen the platform. He mentions that the team is planning to develop new functions for the platform including “route planning”, which utilises AI technology to plan the best route for drivers in a bid to enhance goods transportation efficiency.

Participation in expos is one way for start-ups to boost their exposure. The company has taken part in the “SmartBiz Expo” and “International ICT Expo” organised by the Hong Kong Trade Development Council (HKTDC) to reach new clients. Last year, it stepped up on its efforts and took part in the “Asian Logistics and Maritime Conference” (ALMC) for the first time.

“I was at the expo the whole time. Every second, there were clients stopping by to make inquiry. Besides visitors, other expo participants were also our targets.” Felix describes that the expo has been expanding in scale and it spans different areas in logistics. The venue was divided into designated zones for different business categories with clear signage. The company’s booth was in the IT application zone, and it received many visits from industry peers.

He adds that conference is attended by a considerable number of industry professionals, since it features eminent industry figures as speakers at the event. The visitors include representatives from small and medium-sized transport companies as well as international logistics players. The company earned more than ten new clients at this expo, including three large-scale logistics companies. With the excellent results achieved last year, the company is planning to take part in the expo again this year.

Felix Wong, founder of Acquaintance Enterprise, points to the fact that the transportation industry is rather a low-end one and outdated in terms of their e-platform.

Acquaintance Enterprises is expanding its R&D team to cope with the upgrading of LOGFLOWS cloud management.

Information as of 2017