Despite the company’s success, the sudden and abrupt nature of its exit makes the situation even more bleak.
Trella, a trucking startup, has quietly decided to exit the Pakistani market. Bloomberg reports that the company’s decision was prompted by the “deteriorating economic condition,” and that they began their exit “last month in March when they stopped taking orders.”
The company has not yet made the decision public, and representatives have not responded to Profit’s request for comment. This raises questions about Trella’s departure.
“These exits are not just limited to Pakistan,” says Fahad Rauf, Head of Research at Ismail Iqbal Securities.
Globally, capital allocation is being reconsidered. Pakistan’s business environment is also unfavourable at the moment, as the country’s economy is contracting. It appears that Pakistan’s growth will remain subdued in the coming years.”
Trella is a trucking startup based in Egypt that was founded in November 2018 by Ali El Atrash, Muhammad El Garem, Omar Hagrass, and Pierre Saad. In 2021, the company raised $42 million from investors, including A.P. Moller-Maersk A/venture S’s arm. The company has operations in Egypt, the United Arab Emirates, Saudi Arabia, and, until recently, Pakistan.
Trella launched in Pakistan in October 2020. Pakistan was the company’s third and “most promising” market, according to a post on its website. The company justified its decision by citing Pakistan’s logistics industry, which was valued at more than $30 billion at the time.
Trella further justified their decision in their post by stating that the majority of freight (94%) is transported via a road network that includes national highways and motorways from Gwadar Port to the Khunjerab Pass into China. The company claimed that its first seven months in the Pakistani market were a success.
Trella had onboarded over 1500 carriers and serviced over 25 shippers in the industry by June 2021, with clients ranging from logistics and trucking behemoths to major household brands.
In addition, the company positioned itself as “one of only two digital players propelling the e-commerce industry forward through timely deliveries on inter-city shipments with live shipment tracking.”
Despite the company’s success, the sudden and abrupt nature of its exit makes the situation even more bleak. Trella is not alone in feeling the effects of Pakistan’s economic crisis.
Attributing the decision to the macroeconomy raises the question of whether more dark clouds are on the horizon in this space.
“Inflation has become pervasive, and we are all affected by it.” “There is no doubt that volumes have decreased across the industry,” says Sheryar Bawany, Co-Founder and CEO of Trukkr. “Construction activity has decreased, as have imports into Pakistan.”
“All of this has a knock-on effect on the trucking industry because there is simply less cargo moving around,” Bawany adds. Bawany, on the other hand, does not believe that the current state of the economy is the defining moment for the trucking industry.
“Transport as a business will always continue. It will always exist because other businesses and industries will always need to have items moved from one place to another,” Bawany adds.
“Transport companies can always increase their fares to offset the impact of inflation to some degree. Whether industries are operating at 60%, 70%, or even 100%, they will always need transportation,” Bawany continues.
“The logistics industry is large, and there is still opportunity,” Bawany muses. Bawany’s optimism contrasts with Bloomberg’s explanation for Trella’s decision.