Manbang’s management platform “abnormally low price”, can freight rates return to rationality?

Source | TransLink Think Tank (ID: tucmedia)

Author | Jia Yichao

Editor | Shuxin

When the cost of living, the cost of using a car, and the cost of fuel rise, the lack of an increase in freight costs is already equivalent to a price cut in disguise. If the freight is squeezed again, the contradiction may be intensified at any time.

Unfortunately, there are many driver masters who mistakenly believe that the freight platform is depressing the freight rate, and the platform has become the “bearer” of the freight rate drop.

In fact, after completing the online transaction between cargo owners and drivers, although the platform has greatly improved the efficiency of vehicle and cargo matching, it has always played the role of “old mother’s uncle”, reconciling the two to find a balance. point.

The dispute over this balance point undoubtedly comes from the freight rate. The core difficulty lies in how to make the freight rate truly reflect the market supply and demand, and always be in a reasonable position.

Based on this, in recent years, the domestic online freight platform Manbang has been guiding freight rates back to rationality by suppressing malicious low prices and improving the credit system.

Recently, Manbang has set up a price barrier on the delivery side, adding a feedback channel for drivers to increase prices and a channel to reach shippers, and made necessary intervention and guidance for the phenomenon of low freight rates.

1. Find low-cost sources

The freight platform has neither pricing power nor motivation to lower freight rates.

In fact, there are many factors that affect freight rates, such as supply and demand imbalances, repeated epidemics, oil price fluctuations, other costs and so on. In the process of Internetization of the logistics industry, the changes in freight rates experienced by logistics practitioners come from the dynamic changes of these factors on the one hand, and from the transparency of market information on the other hand.

This will also lead to some changes in the capacity market. If the freight platform wants to effectively guide the market, it first needs to find the source of low prices, such as price reduction by shippers, imbalance of supply and demand, and involution of drivers.

1) Shippers “try their luck”

The original intention of the vehicle-cargo matching platform is to reduce the empty driving rate of trucks and improve the efficiency of vehicle-to-cargo matching, but this has caused a small group of cargo owners to start taking advantage of the “return car” and give unusually low-priced sources of goods to “try their luck” . The transaction of such orders has magnified the psychology of some cargo owners to maliciously lower prices, thereby disrupting the normal price level and aggravating the “involution” of drivers.

2) Imbalance between supply and demand

In the previous “small blackboard” era, the barriers to entry in the industry were relatively high, there were too many goods and few vehicles on the market, coupled with low offline transaction efficiency, truck drivers had relatively strong bargaining power, and drivers could take advantage of poor information to make money. However, with the development of various online social media and the emergence of vehicle and cargo matching platforms, not only the transaction efficiency has been greatly improved, but also transaction information has become more transparent. This means that the era of making the difference by relying on information gaps is gone, so everyone began to compete for operational efficiency.

Master Shan of the Manbang Freight Platform revealed, “There were a lot of cars coming in in the past few years, and the oil price was okay at that time. Although the freight was not high, the business was relatively stable and there was always work to do.”

Factors such as flexible employment and financial leasing have lowered the entry threshold for individual drivers.

According to public data, in 2020, the national heavy-duty truck sales reached 1.62 million, a new high. However, behind the high sales also means a large influx of groups. This explosive growth has directly led to oversupply.

3) Inside the driver

The lowering of the industry’s entry threshold and the popularization of financial methods such as financial leasing have forced a large number of truck drivers to move forward in debt and forced to infiltrate.

“Some people have to grit their teeth because they can’t receive orders for a long time, or because of the pressure of taking out a loan to buy a car. Our small cars are better, and some large cars cost thousands of dollars a month to repay the loan. No matter how low their freight rates are, they have to accept it.” Master Shan said, “After you have a certain understanding of the market, more people will start to withdraw from the market.”

It can be seen that the fluctuation of freight rates is not caused by unilateral factors. Vicious competition on the supply side and malicious price reduction on the demand side have jointly caused the market downturn.

2. Give the pricing power to the market

To a certain extent, the current situation of oversupply of shipping capacity on the market will encourage the price-cutting behavior of cargo owners. Especially since the beginning of this year, the volume of goods that has been repeatedly caused by the epidemic has shrunk, making the imbalance between supply and demand more and more serious.

For some truck drivers, in the past, due to their own fixed offline sources of goods and the assistance of freight platform tools, they could achieve efficiency by sacrificing part of their profits; I also began to hope to run some profitable work on the supply platform.

Therefore, in order to improve the transaction efficiency and sense of gain between the company and the goods, and establish a good platform ecology, Manbang, as a vehicle and goods matching platform, based on the value of the platform, has carried out necessary intervention and guidance on the price of the source of goods. Good bottom line, positive guidance.

The person in charge of Manbang’s related product lines revealed, “In order to intervene and guide prices and improve the health of platform prices, Manbang’s cargo owner APPs have added some functions, such as setting blocking prices and reminding prices. , increased feedback channels for drivers and channels to reach cargo owners. Since the second half of last year, these functions have been launched one after another.”

In fact, in addition to this, in order to ensure the health of freight rates, Manbang has made a set of combined punches.

1) Stop malicious low prices

Since its launch in November last year, the ultra-low price blocker has suppressed malicious price reductions from the source, and has basically eliminated the ultra-low-cost supply of goods on the platform.

2) Let more market voices come in

This kind of price intervention and guidance method launched by Manbang, on the one hand, is still source management, guiding cargo owners to give market prices;

The relevant person in charge said: “In fact, Manbang will not price the waybill, but try to ensure the efficient and transparent market information, respect the market’s self-adjustment and balance ability, and supplement the process with various scientific and effective methods. Guide both the company and the cargo to reach each other’s demands as efficiently and accurately as possible.”

In the process of experiencing the “price increase” function, Master Shan also said: “What we add is the market price, and we will not increase the price arbitrarily.”

3) Let good drivers get good jobs

Although the blocking price and reminder price set by the platform have effectively restrained the price reduction behavior of the shipper, the driver also needs to have bargaining power in order to be effective for each transportation. Correspondingly, Manbang has also created a credit system for the group of cargo owners, which can rate the group of drivers.

Master Shan said: “In addition to your basic information, the shipper will also look at your praise rate, which has a certain impact on the driver’s order acceptance rate. If the score is less, some orders will not be accepted. Similarly In fact, we also have a choice to increase the price, and we will not increase it when we see that the employer has a lot of bad reviews, and some people give too much price, thinking that the car is water?”

In this way, in the process of guiding freight rates, it actually gives more flexibility to both parties to bargain.

By introducing more market voices, the function of market adjustment can be amplified, and to a certain extent, it will also more truly reflect market supply and demand. For the market, this is a positive incentive that can lead to healthy competition in the market.

3. Rational return of freight rates

The 4.2-meter model driven by Master Shan is mainly used to transport some mechanical equipment and building materials. Since the beginning of this year, the market volume has shown a downward trend, so that more than half of the business it has acquired comes from the freight platform. The freight platform’s positive guidance on freight rates has alleviated their survival dilemma to a certain extent.

The platform’s process of guiding and intervening in freight rates, that is, the process of bargaining between shippers and drivers, will bring the balance line closer to the psychological expectations of both parties.

“Maybe the owner expected 900 yuan, and his bid was 800 yuan. We added a price within 100 yuan, and the deal was basically done.” Master Shan said.

Of course, the price increase is not random. As mentioned above, the driver is also based on the market price. If there are special circumstances, they will explain it. For example, the owner may not know that some routes are limited and need to detour.

Master Shan added, “We also have our own schedule, so there is a certain probability that the price increase will be successful.”

At present, it runs more short-distance routes within 200km, and it can run more than 50 times a month. Among them, more than 20 orders will choose to increase the price, and the success rate of the price increase is more than 50%.

“After the overall experience, the income will definitely increase. Short-distance runners like us can earn thousands of dollars more every month.” Master Shan said.

The accumulated data of the Manbang platform shows that in the past six months, the number of ultra-low-priced goods blocked has exceeded 4 million orders. Since the driver’s feedback channel for price increase has been launched for several months, nearly 30% of the cargo owners who have reached it have chosen to increase the price.

On this basis, in September this year, the freight rate on the Manbang platform increased significantly compared with the same period last year; the rate of help from drivers for abnormal prices dropped significantly compared with the beginning of the year. It can be seen that the health of platform freight rates has been further improved.