Locus automates human decisions within road freight logistics

Automating truck routing is essential because it accounts for a variety of factors that dynamically change over time, making it virtually impossible for a human to optimize manually. For instance, computer-aided route automation can account for variables like the number of packages to be delivered, the number of trucks needed and their dimensions, the drivers to be sent out, and even parameters like the number of loading bays in the warehouse in question.

Locus is envisioned as a decision-making layer that sits atop all the information management systems like fleet management, driver management and vehicle management. “We take care of the decision-making that happens on top of this, effectively answering the question ‘where the truck should be’ over ‘where the truck is,’” said Rastogi.

Rastogi contended that efficiency in logistics is not about saving the bottom line, but rather about increasing the top line. “This brings in a completely different mindset to growth. And as more and more consumer products get commoditized, it’s effectively the distribution network that becomes the competitive mode for fast-moving consumer goods (FMCG) companies,” he said.

“Traditionally, if you take a brand like Kellogg’s – large chain retailers were always their biggest allies, because the brand was creating the product and the retailers were selling it. But today, because of profit margin pressures, retailers are actually pushing down their own products. So for the first time in the history of retail, retailers and brands have become competitors. That’s why brands are super interested in getting close to the customers themselves.”

Locus now counts about 40 customers, of which 10 are large enterprise companies like Big Basket, with the rest spread between small to medium enterprises and other startups.

“Our customers are from industries where the cost of logistics upon their profit margins is an important ratio. Because otherwise, if I’m fixing logistics cost for the jewelry market, they wouldn’t care as compared to the cost of their goods or profit margins, logistics costs amount to nothing,” said Rastogi. “This leads us to four interesting segments – e-commerce and retail, consumer packaged goods (CPG) and B2B distribution, third-party logistics, and field force movement where people go to the store to collect retail orders.”

Locus raised Series B funding of $22 million in May, in a round led by Falcon Edge Capital and Tiger Global, with existing investors Exfinity Venture Partners and Blume Ventures reinvesting in the round. Rastogi mentioned that the company already was profitable on a per transaction level, and that the funding would be directed at growing into international markets with a special focus on North America and Europe, and in attracting and retaining its talent pool.