DO you remember that fascination as a kid when driving to Native Jetty bridge and seeing all those cranes? Or how the government/municipality deploys containers? Ever wondered where they get all the machinery for that? At least I didn’t until last week, before stumbling upon Fleet.com.pk.
Fleet is an Airbnb-style marketplace for heavy machinery equipment. At the moment, they have a range of cranes, forklifts, and aerial work platforms available which can be rented out to anyone on short- and long-term basis. Go to the website, browse through the type of equipment and their specifications, check the starting prices, and fill in the form with contact and other details to express your interest.
“The portal is still very basic tech-wise but we’re trying to automate most of that, such as integrating a location-based price tool and online booking,” says Fleet’s CEO Saqib Qayyum. Meanwhile, payments are done through cheques, as is the norm in B2B, given the bulky sums at play and the startup’s operations are limited to Karachi and its peripheries at the moment.
However, Fleet wants to take tech beyond the booking and discovery platform. “We have introduced telematics, which means (most of) our machinery is equipped with devices that would not only let the owner track its location but also its usage,” Qayyum tells Dawn. “It’s a major problem in the industry as machinery is often overused beyond its recommended daily duration of 8-10 hours a day, often by tipping the operator a little. Telematics would bring some transparency beyond the basic location tracking,” he further explains.
Fleet started off as an online portal for booking intercity freight containers that showed prices for the given cargo size and distance in real time. However, some months into it, they pivoted into the current line of work. “After trying that out for a while, I realised it wasn’t too scalable because of the heavy security deposits involved in the industry. During that time, I used to get some queries for heavy machinery due to the nature of my family business and so ventured into this business,” Saqib recalls.
As for the money, Fleet earns revenues by charging a certain margin on each order and according to the CEO, they are already approaching profitability. “The margins are quite healthy and the amounts involved significant; all we have to do expand operations and increase clientele,” says Qayyum. The startup is still bootstrapped with Saqib is in no mood to change that any time soon.
How does the heavy machinery’s traditional structure look right now? There are different classes of players operating in the scene. First are the distributors of branded and latest model equipment, such as the Jaffer Brothers who work on long-term projects and have organised structures, then are the rental houses who often cater and have relatively older models and lower prices. Finally comes the small vendors on stands in industrial areas such as Sohrab Goth or Shershah who, despite cumulatively having a significant market share, are pretty much undocumented and like the latter, deal in mostly shorter periods.
“We are trying to bypass all these suppliers and instead bring on board contractors —such as construction or engineering companies —who own the machinery to carry out their own projects and don’t utilise it off-season or between works,” Qayyum says. Why would these dedicated companies want to rent their toys out to a third party though? “This heavy equipment has a high maintenance cost which the owners have to bear regardless, plus most of the time they have to make the lease payments as well. A marketplace thus offers them the opportunity to minimise costs when the machinery is otherwise not in use,” he adds.
Banking on such unutilised equipment lets Qayyum source from and thus offer lower rates compared to individual vendors on the stand or rental houses, which is at the heart of his Airbnb-style business model where homeowners rent out their free rooms for cheaper than guesthouses and make a quick buck. “Bringing in this fleet ensures lower prices for the clients and better margins for us so it’s a win-win,” he says.
However, getting these contractors on board hasn’t been easy so in the meanwhile, Qayyum is trying to get inventory from wherever he can — rental houses, family-owned or small vendors. “Most are actually reluctant to rent their due to the perceived risks and it’s not easy convincing them,” he says.
As far as the tech adoption in the industry is concerned, it mostly goes to the extent of traditional players having some online presence with details such as services and machinery offered. But there again, not much is available about the prices. The idea takes inspiration from Big Rentz, a US-based equipment rental network while the model has also been adopted in the UAE by Tenderd.com, which recently raised $5.8 million as well.
Does the Pakistani heavy equipment rental market have the appetite for adopting technology when a majority of players haven’t even shown much willingness to enter the formal economy? Stay tuned.