Behind the interview of the online freight platform: the unsolvable low price dilemma
"China News Weekly" reporter / Wang Yu
Published in the 1054th issue of "China News Weekly" on August 1, 2022
Use a 9.6-meter-long van to transport a single electronic product with a weight of 17 tons to 18 tons.
The goods are packed in cardboard boxes, with a volume of 45m³ to 55m³, starting from Huadu District, Guangzhou City, unloading to Shinan District, Qingdao City, and the distance is nearly 1900 kilometers by high-speed.
After the truck driver Xiaoyu entered the freight information, the truck helped the owner's app to give a guide price of 7,450 yuan per trip.
What about cost?
Freight has two large rigid expenditures: road and bridge tolls and fuel costs.
The high-speed toll is about 4,000 yuan, the 9.6-meter full-load cargo, and the burning of 40 liters of diesel per 100 kilometers. Calculated at the price of 8.48 yuan per liter of diesel in Guangdong Province, the fuel cost exceeds 6,000 yuan.
That is to say, the rigid cost of transporting the goods is more than 10,000 yuan.
"This is the reason why freight prices have plummeted recently." An angry Xiaoyu posted the entire process of issuing orders as a cargo owner on a short video platform. In the comment area, many messages called for "national shutdown" and "down with the full gang."
This is not the first time that Manbang, the largest Internet long-distance freight platform in China, has been besieged by drivers.
In November 2017, Manbang, which was established after the merger of Yunmanman and Huochebang, became the largest long-distance freight matching and trading platform in China.
Three months later, Manbang, which became the leader, began to try to collect service fees from both the cargo owner and the driver. As soon as the news came out, the driver was immediately dissatisfied.
Since then, drivers' anger at Manbang has been brewing as freight rates continue to drop.
After the outbreak of the epidemic, the situation of truck drivers has become more and more difficult, and the contradiction with Internet freight platforms such as Manbang has become increasingly acute.
During this period, the Ministry of Transport has held two interviews in May 2021 and January 2022 for cross-city transportation on issues such as the high percentage of platform commissions, the non-open and transparent distribution mechanism, the arbitrary adjustment of pricing rules, and the malicious reduction of freight rates. Mainly Manbang, as well as Lala, Didi Freight, and Kuaigou Taxi, which mainly rely on intra-city transportation.
At that time, the four platforms all said that they would actively rectify the existing problems in accordance with the requirements of the interview.
However, driver dissatisfaction with the platform broke out again in June this year, with drivers in many places calling for suspension of operations to boycott the platform and low-priced waybills.
On July 8, the Ministry of Transport interviewed Huolala, Manbang, Kuaigou Taxi, and Didi Freight for the third time in two years, and notified the platforms of low-price competition, multiple charges, and illegal operations that harm the legitimate rights and interests of truck drivers.
The interview requires the platform to improve its position, face up to the problem, immediately rectify the behavior of low price competition, focus on regulating the charging behavior of the platform, and resolutely eliminate safety hazards such as overloading and overloading, illegal passenger transportation, and transportation of contraband, and disclose to the public a percentage or members fee cap.
The controversial "platform reference price"
On July 22, Xiaoyu posted another video showing 5 tons to 6 tons of cargo, using 4.2 meters of cargo, the owner bid 400 yuan per trip, and the platform charged 15 yuan for technical services.
Some drivers in the comment area guessed that this was a quotation for a 140-kilometer trip.
Xiaoyu replied: "260 kilometers, do you believe it?"
The order sent by Wuhan driver Zhang Tao to "China News Weekly" shows that a shipment from Dongxihu, Wuhan to Beilun, Ningbo has an estimated mileage of 970 kilometers and a 4.2-meter refrigerated truck, loaded with 3 tons to 4 tons of frozen goods, and the freight It is 2200 yuan/trip, and the technical service fee is 47 yuan.
"The platform's one-price supply and tele-negotiated supply are actually priced by the owner, and the platform has not enforced pricing." On July 21, Manbang responded to China News Weekly.
The platform page shows that after the owner fills in the order, there is a "I want to increase the price" mark on the upper right corner of the platform's reference price. Whether or not to increase the price and how much to increase the price is in the hands of the owner.
Taking Xiaoyu's order of 7,450 yuan as an example, after Xiaoyu filled out the order, he communicated with the platform's customer service and revised the freight rate to 10,800 yuan.
"The owner can choose to accept or not to accept the price... The owner can also increase the price on the basis of this price according to their own situation, and the platform does not restrict the owner to increase the price." On June 22, Manbang published "About Manbang Optimizing" Low Price Incident" (hereinafter referred to as the "Explanation").
"The platform has already given such a low price. If you are a consignor, will you take the initiative to increase the price after seeing this price? This is not in line with common sense." Zhang Tao did not accept the platform's explanation that "pricing power rests with the consignor". It seems that the platform reference price is called "reference", which is the real market price.
How is the platform reference price determined?
Taking Xiaoyu's order as an example, the "Explanation" states: "Data from the platform shows that in the past month, the average transaction price of regular orders for the same vehicle from Huadu, Guangzhou to Shinan District, Qingdao, was about 7,300 yuan, which is similar to the price provided by the platform. Reference price 'similar'."
"The reference price is calculated based on the transaction data of vehicles on similar lines in the past few months." Manbang staff told "China News Weekly": "But objectively speaking, the freight scene is very complicated, there are many non-standard factors, and the market Supply and demand, delivery time, weight and volume, whether it is fragile, whether it is dangerous, dry goods or wet goods, whether to load and unload, whether to escort, and how long it takes to unload and escort will affect the final price.”
As the world's largest digital freight platform and a company listed on the New York Stock Exchange, Manbang has worked for more than 10 years in the field of vehicle and cargo matching in the Chinese freight market with a scale of more than 6 trillion.
According to the prospectus of Manbang, in 2020, more than 2.8 million truck drivers completed 71.7 million transportation orders in Manbang, with a total transaction value of RMB 173.8 billion, and the number of drivers accounted for about 20% of China's 13.7 million heavy and medium-duty trucks.
In December 2020, Manbang had more than 1.3 million monthly active (MAU) shippers.
The Manbang Group's quarterly report shows that in the first quarter of 2022, Manbang completed 25.2 million orders, an increase of 13.6% from 22.1 million in the same period in 2021.
"Whether it is a car owner or a cargo owner, they have already relied on the vehicle and cargo matching platform to a large extent." Zhou Xiao, a lecturer at the China Institute of Labor Relations, published in 2021 "Digital Platform, Industry Restructuring and Group Livelihood - Taking the Road Freight Market" An example of the changes in the matching mode of vehicles and goods” is expressed in the article.
According to Zhou Xiao's survey in 2019, the main way for 66.9% of truck drivers to find goods is the vehicle and goods matching platform.
"Looking at the proportion of the business that truck drivers get through the platform to their total business volume, the highest proportion is 71% to 100%, at 38.2%... Among the 100 logistics companies, there are only 9 companies that do not use the platform to order cars. , 44 companies 'frequently use' the platform to order cars," Zhou Xiao wrote.
Research shows that China's vehicle and cargo matching platforms emerged rapidly from 2013 to 2014, and the number was close to 300 at one time.
Before that, there were many vehicle and cargo matching websites in the road freight market around 2010. Before these websites changed the situation of scattered information in the freight market through the Internet, drivers mainly obtained orders through logistics intermediaries in parking lots and logistics parks.
Zhou Xiao defines this kind of transaction matching relying on the interpersonal network as "embedded matching", in contrast, the matching process of the vehicle and cargo matching platform is called "bridging matching".
“In embedded matching, there is an interaction model of bargaining among truck drivers, intermediaries and cargo owners, and bidding rarely occurs. Even if there is bidding, it is limited to a small range, so the range of price changes is small. Bridging Type matching is not the case, although it seems that there are bargaining between cargo owners and car owners on the surface, but in fact it belongs to a bottom bidding mode." Zhou Xiao analyzed.
For the platform, the weights of cargo owners and drivers are not the same, and having more cargo sources is the key to obtaining a higher market share.
Zhou Xiao's analysis may explain the platform's logic, "As the number of trucks gradually increases, the market increasingly presents a situation of more vehicles and less goods, and obtaining sufficient supply information has become the key to the success of the (logistics intermediary) information department. It means that the establishment and maintenance of the relationship with the shipper is very important." Today, the logistics intermediary information department has been replaced by the online freight platform, and the logic is still true: in the buyer's market where the supply exceeds the demand, the platform will inevitably favor the shipper.
Since the platform brings together a huge number of truck drivers, every time a cargo owner sends out an order, it will soon be seen by hundreds or thousands of drivers. driver.
Many drivers reported that some cargo owners will lower the freight rate again after communicating with the driver.
In the era of no vehicle-cargo matching platform, drivers have more room for bargaining due to the limited capacity that cargo owners can obtain.
The logistics intermediary fiercely resisted Manbang’s software revision in 2018. In that revision, the driver tried to make a quotation without knowing the details of the goods. On the basis of the quotation, the driver and the logistics provider contacted the logistics provider through a virtual number call, which means that The close relationship between logistics providers and drivers was forcibly cut off by the platform, and logistics providers who were deprived of pricing power and living space rose up to resist.
However, "the greater the mass, the greater the gravitational force", just like the law of gravitation in the physical world, due to the strong adsorption force of the platform on the cargo owners and drivers, the logistics intermediaries in the past have to turn to the front line and become a part of the chain dominated by the platform.
The low price dilemma of "multiple causes and one effect"
China's road logistics freight index shows that after reaching a historical high of around 120 points in the second half of 2016, the road logistics freight rate has been declining.
In February 2022, China's road logistics freight index jointly surveyed by China Federation of Logistics and Purchasing and Lin'an Logistics Group was 98.3 points, a decrease of 2.19% from the previous month and a decrease of 0.9% from the same period last year.
Today's freight rate index is down nearly 20% from its highs.
On March 17, 2021, Bilibili UP host "Tomorrow's End of the World Road 1" showed his income and expense records from January 1, 2018 to December 30, 2020 in the form of video.
In the past three years, he worked 708 days, the operating rate was 64.6%, and he pulled 998 orders, an average of 1.4 orders per day.
The total mileage is 192,053 kilometers, with an average of 271 kilometers per day.
The total freight is 387,563 yuan, and the average annual income is 129,187 yuan.
Taking the freight from Dongguan to Zhongshan as an example, in 2018, the highest freight is 850 yuan, the lowest is 350 yuan, and the average is 480.4 yuan/car. In 2020, the highest freight is 660 yuan, and the lowest is 300 yuan, and the average is 381.6 yuan/car, a month-on-month decrease of 20.5%. Down 6.83%.
"I just wanted to ask those drivers who are still rushing to pull low-priced goods, if they are still planning carefully, running more country roads, provincial roads, national roads, and adding some cheap petrol, there is still a little left, compared to Staying idle and strong. Living in the car, eating in the car, and saving money with such a sports car is not to make more money, but to adapt to lower freight costs. You say, is this the sadness of our trucking industry? "Meng Hongfa, a truck driver The video asked, "Remember, low-priced goods are sent on the platform. If you don't pull it, I won't pull it, it will never go away, and the shipping fee will definitely go up."
However, the vicious competition that has occurred has already made cargo owners form solid low-price expectations. Even if truck drivers can establish a consensus to resist low-priced orders, change will not be achieved overnight.
In reality, due to various reasons, it is extremely difficult to establish a consensus to resist low-priced waybills.
"I originally had 12 cars, but because I still can't get the loan, I have sold 10 cars at half price, and the remaining two cars are still running." Zhang Tao said.
"The threshold for buying a car is too low." Zhang Tao told China News Weekly that when he bought a car, the 4S shop directly helped him apply for a loan. After a set of purchase procedures, he only needed about 20,000 yuan in cash to buy a car. .
"Various 0 down payment and interest-free scoring financial solutions have gradually lowered the entry threshold for the freight industry. The requirements for driver's licenses have also been further relaxed, which has allowed a lot of fresh blood to enter the freight market." Truck Home analyzed.
"Little white drivers" who need to borrow to buy a car are themselves under a lot of pressure to survive. After buying a car, they are also under heavy loan repayment pressure. In order to pay off the loan as soon as possible, they can only use high-intensity labor in exchange for more Cash, and therefore more tolerant of low-priced waybills than other drivers.
In addition, the economic and geographical reality that China's industrial areas are mainly distributed in the southeast coast determines the high rate of empty return journeys of trucks.
In an interview with the Economic Observer in January 2017, Miao Tianye, the former president of Yunman, said that according to Yunman’s statistics, the empty driving rate of China’s trunk logistics is about 40%.
"The 40% empty driving rate means that, for example, there are 10,000 tickets from Shanghai to Chengdu, but only 6,000 tickets from Chengdu to Shanghai. This is the result of uneven development between China's economic regions and an objective fact." Miao Tianye said.
A study by Zhongtai Securities comparing the similarities and differences of the express transportation industry between China and the United States pointed out that the main industrial areas in the United States are distributed in the northeast, southeast and west coasts. From the perspective of major freight highways in the United States, cargo transportation is concentrated in the east coast area and across the east and west coasts. of long-distance transportation.
In long-distance transportation, the route passes through major states in the United States, the supply of goods is sufficient, and the return stowage is easy.
Taking American express companies such as ODFL and FedEx as an example, the loading rate of their own vehicles is over 90%.
However, China's cargo transportation is mainly concentrated in the southeastern coastal areas, and the supply of goods in the central and western regions is scarce, and it is difficult to load on the return journey.
In October 2018, Miao Tianye said in an interview with IRU, a global road transport organization, that the efficient matching of full shipments reduced the empty rate of trucks from 37% to 32%.
In the eyes of many people, this is a great efficiency-enhancing achievement that the freight platform has brought to the logistics industry, but in the eyes of the driver, increasing the load rate of the return trip has become a platform to attract shippers with low-cost orders without increasing income. the "pretence".
"What is the concept of returning a car? Suppose I have to send coal from Shanxi to Beijing every day. After unloading the coal, I have to go back to Shanxi anyway, and then send coal to Beijing the next day. Whether there is any goods or not The return car is called a return car. But in the current freight market, our card friends on the trunk line run all over the country, which one is a return journey?" said Xue Feng, the person in charge of the logistics company.
The rise in various costs is also forcing truck drivers to reduce the empty load rate as much as possible.
Before January 1, 2020, in order to curb overloading, Chinese expressways generally implemented weight-based tolls for trucks. However, due to the need to stop and weigh at exit toll stations for weight-based toll collection, it affected the efficiency of trucks to a certain extent.
From January 1, 2020, the charging method for trucks will be adjusted from the weight-based charging to the charging by vehicle (axle) type.
At that time, a truck driver objected to the Ministry of Transport: "Now large trucks are charged according to the axle (charge), and the charges for pulling the goods are the same as those for not pulling the goods. How to survive?" The Ministry of Transport replied: "According to the vehicle (axle) It is a common practice internationally, because under the condition of legal loading, the same axle-type truck, no matter how much cargo is loaded, will occupy and consume the same road resources.”
In addition, the "Technical Conditions for the Safety of Operating Trucks" implemented on September 1, 2020 has new requirements for the equipment of vehicles, and the direct impact of various types of equipment installed is that the purchase price of vehicles increases, and the freight borne by drivers Costs are rising again.
In order to dilute the cost as much as possible, drivers have to find ways to reduce the empty load. Even if it is a low-priced order, as long as it is loaded, it can reduce the loss, which makes the low-priced order have more market space.
Overloading is also one of the factors exacerbating the downturn in freight rates.
"Many card friends always say, 'You can't make money without overloading', but the logic of this sentence is reversed. It is precisely because there are many overloaded cars that two cars can pull the goods, and one car can handle it. A long-term vicious cycle will lead to a low overall freight rate if a truck does not work.” Analysis of the Truck Home Forum.
The "Statistical Bulletin on the Development of the Transportation Industry in 2021" shows that in 2021, the country will have 11.7326 million trucks and 170.995 million tons, an increase of 5.7% and 8.3% respectively compared with 2020. Compared with 2016, the cargo tonnage has increased. about 58%.
In 2021, the national highway completed 52.160 billion tons of commercial freight, an increase of about 56% compared with 33.413 billion tons in 2016.
Overall, the increase in freight volume is smaller than the increase in cargo tonnage, and the result can only be intensified competition in the freight market.
Compared with 2021, the epidemic will bring a very serious blow to the road freight industry in 2020.
According to the Statistical Bulletin, in 2020, there will be 11.1028 million trucks and 157.8417 million tons of trucks across the country, and the national highways will complete 34.264 billion tons of commercial freight. The average freight volume per ton of trucks in one year is only 217 tons.
Well below the 2021 cargo level of 305 tonnes per tonne truck.
In 2022, the outbreak of the epidemic in many places in China will put many cities in a state of long-term closure and control, and the blow to the road freight industry should not be underestimated.
When talking about low freight rates, people often overlook a very important background, that is, China's logistics efficiency is still not high enough compared to developed countries.
According to the "China Road Freight Market Research Report" jointly released by management consulting firm Bain & Company and smart IoT company G7 in 2017, China's logistics costs account for 16% of GDP, compared with 10% in developed countries. The gap is still huge.
The specific performance is that the highway lines are busy, but the average speed is generally low.
The study selected the 10 busiest lines in China, with an average running speed of 50-65 km/h, which is still far from the average level of 75-80 km/h in developed countries.
In addition, congestion is widespread and increasingly serious. Taking the busy line in and out of Shanghai as an example, vehicles are in congestion and congestion for more than 30% of the time.
This means that there is still a very high potential for improvement in transportation efficiency, and it is bound to further squeeze out less competitive vehicles and drivers.
The "Development Trend of China's Road Freight Market" released by the Boston Consulting Group predicts that by 2025, 5% of micro-freight operators (with less than 10 vehicles under management) and 5% of scattered individuals will be squeezed out of the market.
The current expressions of individual drivers on social platforms and short video platforms also seem to confirm the Boston Consulting Group's prediction of the trend. Many drivers say they are selling or have sold their cars and are determined to quit the freight industry.
According to data from the China Automobile Dealers Association, in 2021, the national second-hand truck transaction volume will be 1.4538 million, a year-on-year increase of 6.93%.
The workforce is on a downward trend.
In 2018, Xinhua News Agency reported that there were more than 21 million employees in the road freight industry that year. On November 3, 2021, the head of the Ministry of Transport stated at a press conference that there will be 17.28 million truck drivers in the industry in 2020.
Where will the online freight platform go?
"In order to limit unreasonable and vicious low-price competition, the platform has set minimum prices and reminder prices according to different car captains, and has continuously adjusted and optimized according to the logic of cargo category, car-to-goods supply and demand ratio, transaction rate, etc. When the owner publishes a price lower than the lowest price The price platform will block the delivery. If the price is higher than the minimum price and lower than the reminder price, the owner will be reminded that it is difficult to find a car if the price is too low. If the delivery price of the owner is lower than the estimated market price, the platform will prompt and guide the owner to increase the price reasonably. Freight rates so that drivers can take orders as soon as possible." Facing the driver's fierce questioning, Manbang replied to "China News Weekly".
Manbang also said that in the driver-end app, for the supply information that is significantly lower than the market price, the platform will block the supply price and not show it to the driver.
This function was officially launched on December 12, 2021. From November 2021 to March 2022, the platform blocked and intercepted 2.19 million times of low-priced supply through technical means; the platform issued low-priced supply reminders to shippers 19.02 million times , the markup rate after the reminder reached 32.2%.
But obviously, the truck driver group doesn't buy into the platform's improvement.
As the world's largest digital freight platform, Manbang was listed on the New York Stock Exchange on June 22, 2021, becoming the "first share" of China's digital freight platform, with an issue price of $19.
As of press time, Manbang’s share price was $9, more than half of the issue price.
Business card data shows that before the IPO, Manbang has experienced more than 10 rounds of financing. Among the luxurious investment lineup composed of dozens of institutions, in addition to Sequoia China, the largest external shareholder, there are also Alibaba-based Yunfeng Fund and Tencent Investment. , Hillhouse Capital and Masayoshi Son’s SoftBank Vision Fund, etc.
According to data disclosed by Sequoia China, in November 2017, when Huochebang and Yunmanman merged, both companies were valued at nearly $1 billion.
According to Guo Shanshan, a partner of Sequoia China, Yunman Man did not seize the market through subsidies and advances, but showed valuable "long-termism".
"The project team stayed in the logistics park for a long time, observing and recording the process of app installation and coaching by drivers in various localities. At that time, except for a few young drivers, most of the drivers were over 40 years old, which was very difficult to accept, and they had not used any applications. And the website. Different teams have very different execution capabilities. Some teams leave the app after installing the app, and then another team comes and uninstalls it. At night, we stayed in a small hotel and communicated with the drivers who lived in the bunk and bunk to get to know them. life." Guo Shanshan said.
In Guo Shanshan’s account, Yunman Man’s early development in the truck-cargo matching market was plated with a layer of rose-colored heroism: “After a period of work, Yunman Man in Nanjing and the truck gang mainly in Chengdu at that time Standing out from the middle, with the advantages of willpower, organizational power, and technical means, they persevered in information networks and logistics parks in various places. Their software has been blocked, vehicles and materials have been destroyed, and ground pushers have been injured. Hospital and back on scene the next morning."
Today, drivers are more willing to believe that this is a story of "slaying a dragon and becoming a dragon", although Manbang has already presented the core drivers of industry changes and the transmission logic of hidden dangers in the risk statement of the prospectus: Freight volumes and trucking capacity are very sensitive to changes in overall economic conditions. China's road transport market is already experiencing cyclical fluctuations due to economic slowdowns, downturns in shippers' business cycles, energy price volatility, pandemics and other economic factors beyond our control .The deteriorating economic environment exposes our business to various risks...A reduction in total freight volume reduces our revenue and growth opportunities; in addition, a decline in freight volume due to a downturn in the shipper's business cycle or other factors typically results in order prices Decline as truck drivers compete for transportation orders to keep trucks productive, which will impact our monetization opportunities; some truck drivers may drop out of the market, and when the market recovers, we may not have enough drivers to satisfy shippers ."
According to the financial report of Manbang, in the first quarter of 2022, the total transaction volume of the platform reached 53.6 billion yuan, an increase of 4.2% from the 51.5 billion yuan in the same period in 2021.
The total net income of the platform was 1.3326 billion yuan, an increase of 53.7% from 867.2 million yuan in the same period in 2021.
While the total transaction volume remained stable, despite the scolding of truck drivers, the revenue of the platform whose main source of income is transaction matching commissions, membership fees and tax rebates has increased significantly, making many industry observers sweat.
The price corresponding to the beautiful performance is expected by the full gang.
"If our existing solutions and services fail to achieve and maintain sufficient market acceptance or provide expected benefits for ecosystem participants, our financial condition, results of operations and competitive position will be materially and adversely affected." Book Display.
Perhaps the market ceiling of cross-city long-distance freight has been predicted for a long time. Manbang entered the intra-city freight field dominated by Huo Lala, Didi Freight, and Kuaigou Taxi as early as November 2020 before the listing.
However, Kuaigou Dache’s prospectus submitted to the Hong Kong Stock Exchange on June 14, 2022 shows that, as the third largest intra-city freight platform with a market share of 3.2% in mainland China, Kuaigou Dache has been losing money for 4 consecutive years, with a cumulative loss of about 2.786 billion It is expected to continue to lose money in the next three years.
At the same time, from 2018 to 2020, the commission rate of Kuaigou Taxi’s platform services in mainland China continued to rise to 8.3%, and in 2021, the commission rate had to drop back to 2.6%, “mainly due to our Rewards offered to users of platform service transactions increased significantly, reflecting a more aggressive growth strategy and intense competition in the online intra-city logistics market in mainland China."
"China News Weekly" Issue 28, 2022
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