This article is the first in a series on Truck Alliance, one of China’s most innovative shipping companies. Parts two and three can be found here.

I first met Dai Jianwen in a hot pot restaurant in Barkam, a mostly Tibetan city in his native province of Sichuan, in southwestern China. His low-key appearance — he was dressed in plain jeans and a light gray T-shirt — made him seem nothing like a business magnate. In reality, Dai’s logistics app is used by hundreds of thousands of China’s truck drivers. Some commentators have even called him overland shipping’s answer to Jack Ma, the founder of e-commerce giant Alibaba.

Back in my hotel room that evening in late June, I searched Dai’s name on the internet to find that just two weeks before, the Financial Times and the International Finance Corporation announced Dai’s company, an app called “Truck Alliance,” as the winner of two awards at their 2017 jointly held Transformational Business Awards and Conference. That evening, Truck Alliance was the only winner from China.

It helps to think of Truck Alliance as an Uber for the overland freight industry, though this comparison fails to encompass the magnitude of Truck Alliance’s ambitions. Dai dreams of controlling three key elements of China’s logistics business: transactions, cargo containers, and finance. Together, these three sectors may be worth more than 10 trillion yuan ($1.53 trillion).

At dinner, Dai invited me to drop by his office in Sichuan’s capital, Chengdu. So the following day, we sat together for a second time, at a giant table in his basketball court-sized office. “China has only a few markets worth 10 trillion yuan or more, and real estate magnates are a dime a dozen,” Dai explained. “Tencent and Alibaba dominate the social media and e-commerce industries. The barriers to entry in the financial sector are too high. Logistics is the only market of this size where you can still find opportunities.”

By the end of July, Truck Alliance had registered 4.5 million vehicles and 880,000 cargo owners. It facilitates over 140,000 shipping orders and processes 170 million yuan in shipping fees every day. On average, Truck Alliance holds around 90 million yuan in deposits from drivers, who use the app to pay road tolls that pop up periodically along China’s vast road network. The company has also lent a further 1.5 billion yuan, via the app, to drivers caught short of money at the toll booth.

Prior to 2015, internet companies had penetrated less than 10 percent of China’s logistics market. But that year, a wave of tech entrepreneurs backed by large amounts of capital flooded into the industry. Within a year or two, China’s online-to-offline freight market came to be dominated by two apps: Truck Alliance and Ymm56. Today, the online logistics industry is replete with companies vying with each other for dominance, but Truck Alliance and ymm56 show the most growth potential

Dai’s move into the overland freight industry has not only made him a successful businessman, but also allowed drivers of China’s cargo trucks to work with more dignity. Previously, drivers would load up their vehicles in one location, drive a few hundred kilometers to their destination, unload their goods, and then travel to the nearest cargo market in search of another job.

Businessmen looking to ship cargo would sit at freight markets and wait for a driver to arrive, at which point they would haggle over rates. After agreeing on a price, the driver would then head to the cargo’s location and load their truck. Often, the journeys to and from the cargo market would cost a driver hundreds of yuan in gas, making this system highly inefficient.

Cargoless trips are a major waste of resources. According to He Liming, chairman of the China Federation of Logistics and Purchasing, a State Council-approved industry association, the country’s total logistics costs have fallen as a proportion of gross domestic product since the advent of big data, but this figure still stood at a staggering 15 percent in 2016. In Japan and the United States, the numbers are 8 percent and 11 percent, respectively. China’s situation is compounded by the fact that 85 percent of its large cargo trucks are operated by individuals or small-scale enterprises.

Logistics in China is heavily reliant on a diffuse network of over 27 million trucks. Every year, the movement of empty trucks contributes to the country’s waste and environmental pollution problems. Fortunately, over the past year, the growth of both mobile internet coverage and big data has helped to pair empty trucks with ready-to-ship cargo, reducing the total number of cargoless trips. Truck Alliance’s services have helped save more than 60 billion yuan in wasted fuel in 2016, earning the company praise from Chinese Premier Li Keqiang.

In April 2007, Dai returned from an inspection tour of Europe convinced that the future of the logistics industry lay in integrating China’s transportation systems. He concluded that China’s notoriously high transportation costs were due to the lack of a communal transportation pool.

His original plan was to monitor truck drivers and match them with convenient cargo shipments. To this end, he gave China’s truckers 20,000 satellite navigation units, hoping to obtain information about their routes. “That method simply didn’t work,” he says. “The drivers and shippers didn’t appreciate what I was trying to do, and more than 30 million yuan in investment was flushed down the drain.”

While industry insiders north of the Yangtze River had embraced a certain degree of informatization — using a rudimentary system of pagers and text messages — to the south, such progress was almost nonexistent. Dai used QQ, a popular messaging app, to set up 13 chat groups, each containing around 500 cargo owners and truck drivers and covering the 13 provinces south of the Yangtze. Later, he transitioned about 60 percent of the chat groups’ cargo owners onto a software platform he had developed.

The status quo persisted until 2013, when Dai released Truck Alliance. The app lets drivers use their phones to alert other users when they have cargo space. It also helps them find new cargo and calculate transport costs and prices. Finally, it calculates the price of insurance.

Drivers and cargo owners once communicated via blackboards hung in logistics centers or through informal local networks. This latter group was populated by middlemen — essentially scalpers who connected cargo owners with trucks in return for a fixed fee.

As the rough-and-ready logistics business has bumped up against the mindset and business practices of the tech industry, companies like Truck Alliance have often faced resistance for cutting out the middlemen. Dai’s company has had its cars damaged and its internet connections cut off. He has been threatened by gangs of thugs claiming to protect the middlemen’s livelihoods. Once, they even came to blows.

Dai remembers an incident from 2009, when he and his team went to install software in Xiangyang, a small city in the central Chinese province of Hubei. That day, 20 scalpers surrounded Dai’s company Honda and proceeded to smash it to smithereens. Dai himself emerged relatively unscathed, but the events of that day have had a lingering impact.

“If I was unsure whether I wanted to stay in the industry before, but that decided it for me,” he tells me back in Chengdu. “I will see it through to the end and have no intention of giving up. As long you’re going in the right direction, who cares how long the road is?” Dai has since upgraded his car to a bulletproof model.

Translator: Kilian O’Donnell; editor: Matthew Walsh.

(Header image: A line of trucks in a traffic jam on the Beijing-Tibet Expressway in Hebei province, Aug. 16, 2010. Wang Jianing/VCG)