Yale researchers collaborate with FreightFox, a logistics firm serving manufacturers in India, on innovative contracts research

March 10, 2022

When manufacturers cannot ship their goods reliably and at a low price, the whole economy suffers. Nicholas Ryan, Assistant Professor of Economics at Yale and an affiliate of the Economic Growth Cetner, has announced a collaboration with FreightFox, a logistics technology start-up in India, to design new, more dynamic contracts for shipping, and test whether these can increase stability for manufacturers while making agreements more remunerative for shipping companies and the truckers themselves.

FreightFox was founded in October 2020 by Nitish Rai, Sandeep Mukhopadhyay, Manjari Sharma and Vikas Singh, with a mission to use technology, data, and efficient ground operations services to enable efficient, cost-effective, and future-ready logistics to Indian manufacturers. A memorandum of understanding guiding the research was signed in January 2022.

“Failures in shipping and trade are a major concern for firms in India,” Nicholas Ryan said, “and offering improved contracts could make shipping more reliable, lower-cost, and raise people’s incomes. The intention of the project is to innovate in new contracts and see if that reduces the costs of trade.”

The project, which will take place over six months, aims to address the high cost of logistics in India. Industry research suggests that for the country to become a competitive manufacturing destination internationally, logistic costs need to be brought down from the current 14% of GDP to around 9% of the GDP. Specifically, the research will address contracts that are unstable in terms of pricing and accountability, often failing to place goods with shippers and ensure transportation. According to FreightFox records, manufacturers in India face a high percentage (~35%) of placement failures.

Nitish Rai, CEO, FreightFox, said, “At FreightFox, we are delighted to collaborate with researchers at Yale to develop responsive freight contracts and are committed to deliver superior logistic contracting methods by leveraging technology, data and the know-how available at Yale.”

The project will involve data-driven analysis and evaluation of freight contract failures to develop an indexation-based framework pegged to market movement, thus making the system more sensitive to market conditions. This will ensure reliable truck placements and minimal supply chain disruptions. As a consequence, manufacturers may be able to improve contract price adherence and pay the right price in exchange for transportation services.