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Our Trash Is Creating A Coming Supply Chain Crisis

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Note: A version of this story was first published on May 22, 2019, at FreightWaves.

News reports about the 2019 Copenhagen Fashion Summit (May 15 — May 16, 2019) highlighted current efforts by the French government to encourage fashion companies to establish sustainability goals for the industry. French President, Emmanuel Macron, has appointed Francois-Henri Pinault, CEO of Kering SA to lead the charge. This is part of increasing concern around the world on the issue of waste, and waste management. Initiatives like the one in France, and others around the world, are also shifting focus from our past of linear supply chains to a future of circular supply chains.

Putting things in context

According to the World Bank Group’s “What A Waste 2.0: A Global Snapshot of Solid Waste Management to 2050”;

  • In 2016, 2.01 billion metric tonnes (4,431.3 billion pounds) of municipal solid waste was generated globally. If nothing changes, this is expected to increase to 3.4 billion metric tonnes (7,495.7 billion pounds) by 2050.
  • Food and green waste make up about 50% of waste in low-income and middle-income countries. In high-income countries, this proportion is 32%.
  • Recyclables — paper, cardboard, plastic, metal, and glass, makes up about 16% of the waste stream in low-income countries, and up to as much as 50% in high income countries.

Assuming that a full garbage truck weighs 23 metric tonnes or 50,000 pounds, this means that global waste produced in 2016 was the equivalent of about 87,391,304 garbage trucks a year, or 239,428 garbage trucks per day. If nothing changes, in 2050, global waste will be the equivalent of 147,826,087 trucks, or 405,003 garbage trucks per day.

What are the biggest culprits in post-consumer waste?

Fashion, apparel, & textiles is attracting a lot of attention. The following data and information in Figure 1 — Figure 6 below, from The Ellen MacArthur Foundation’s “A New Textiles Economy: Redesigning Fashion’s Future” report proves instructive. In summary, the problem is growing and solving it will require a new way of thinking, and concerted collaboration to create systemic solutions rather than isolated solutions.

Figure 1

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Figure 6

Plastic waste has also been attracting a lot of attention. Here too, The Ellen MacArthur Foundation’s New Plastics Economy initiative is uniting companies, governments, and multilateral organizations in an effort to curtail and reverse the adverse impact plastic pollution is having on the world. To properly understand the problem posed by plastics, consider that reports suggest that popular everyday items made from plastic can take anywhere from 10 to 5,000 years to decompose through biodegradation. Figure 7 and Figure 8 below put things in further context.

Figure 7

Figure 8

The gravity of the problem posed by plastics especially is captured by media reports that;

  • May 2019 — The National Geographic reported that “more than 180 nations agreed in Geneva to add mixed plastic scrap to the Basel Convention, the treaty that controls the international movement of hazardous waste.” This has become an issue of growing international concern ever since China stopped buying non-industrial plastic waste in 2018 — China is the biggest importer in the $200 billion global market for non-industrial plastic waste. It is becoming increasingly difficult for wealthy countries to export their trash to poor countries.
  • May 2019 — National Geographic and CNN reported that plastic debris was discovered at the bottom of the Mariana Trench, at a reported depth of 35,849 feet (6.79 miles) or 10,927 meters (10.93 kilometers).
  • March 2019 — The New York Times and The Washington Post reported that a dead whale was found on a beach in the Philippines with 88 pounds (39.92 kilograms) of plastic in its stomach.

News media reporting, and statistics, on other categories of waste paint an equally damning picture: For example, according to the United Nations’ Food and Agriculture Organization, about one third of the food produced in the world goes to waste every year.

So, what’s being done about this problem?

Companies, national governments, and multilateral organizations are teaming up to try to tackle the problems posed by increasing amounts of waste. For example: News reports about the 2019 Copenhagen Fashion Summit (May 15 — May 16, 2019) also highlighted Nike’s creation of an open source design guide aimed at nudging the fashion industry towards a future of circular and sustainable supply chains.

There are a few difficult problems in relation to the creation of circular and sustainable supply chains;

  • First: There is a dearth of voices from supply chain logistics in the discussions so far. How we move post-consumer waste to sorting and recycling centers will be a key component of creating circular supply chains.
  • Second: A clean and sustainable environment fits the definition of a public good. So efforts to build circular supply chains could very easily be susceptible to the free-rider problem unless political and economic structures are put in place to prevent that from happening.
  • Third: The success of circular and sustainable supply chains will rest on big behavioral changes for people all over the world — from a linear culture that glorifies consumption and generates a lot of waste, to a cyclical culture that minimizes unnecessary consumption, minimizes waste and maximizes sustainability and the reuse of products.

On the bright side, there are several startups creating innovations to tackle the problem of waste, in different industries. Social movements like #FridaysForFuture could potentially gain strength, and drive the tougher political action that may be required to spur private industry into taking more concrete steps to bring circular supply chains out of the lab and into the real world, at scale.

Why You Should Be Rooting for Startups Like Uber

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Note: A version of this story was first published on May 13, 2019, at FreightWaves.

Disclaimer: The author is not an investor in Uber, or any of its competitors. Steve Case’s Rise of the Rest is an investor in FreightWaves.

On May 9 — just one day before Uber’s I.P.O., The New York Times published; Why You Should Root for the Uber I.P.O. to Fail, an OpEd by Mihir A. Desai — a professor at Harvard Business School and Harvard Law School. He is also the author of “How Finance Works.”

I couldn’t disagree more. We should all be rooting for startups like Uber to succeed. Our future depends on it.

This article is not an exhaustive examination of Uber’s business model, corporate governance, or how it treats its employees and drivers. That is beyond the scope of this article given that Mr. Desai does not critique Uber on those issues specifically.

What is the case for rooting against Uber?

In his article, Mr. Desai argues that Uber’s pre-I.P.O. investors have thrown an unprecedented amount of capital at Uber — $24.7 billion over 23 funding rounds, to be exact, according to Crunchbase. That capital helped Uber sustain more than $10 billion in operating losses in the 3 years preceding its I.P.O. Mr. Desai urges us to pray for a comeuppance for those investors. Here’s a summary of his reasons;

  • First; The era of bloated venture capital funds, like Softbank, distorts the allocation of capital, talent, and entrepreneurial energy toward unviable business models.
  • Second; The success of a company like Uber can lead young people and investors astray. Young people can view their jobs as lottery tickets. Investors of all kinds can be seduced into imitating these giant venture funds.
  • Finally; The venture capital world will become even more clubby. Startups will compete on funding rather than on the merits of their products.

He makes a seductively compelling case, and I understand his complaints. That being said, his argument fails because it takes a rather narrow view of the issue. Let me explain.

We are entering a new era

In his book, “The Third Wave: An Entrepreneur’s Vision of The Future”, Steve Case — former CEO and chairman of AOL makes the argument that we are entering a Third Wave of the internet. Briefly;

  • The First Wave extended from 1985 to about 1999. This was the era during which technologists and entrepreneurs laid the foundation for the online world. It was driven by people, products, platforms, partnerships, policy, and perseverance.
  • The Second Wave extended from 2000 to about 2015. This was the era of the mobile revolution and the app economy, characterized by search, social networking, and ecommerce. This era was driven by people, products, and platforms.
  • The Third Wave extends from 2016. This is the era of ubiquitous connectivity and pervasive computing, enabling entrepreneurs to use digital technologies to transform real-world sectors of the global economy. This is the era during which software — made up of bits, and physical products — made up of atoms, intersect and collide. This era is driven by people, products, platforms, partnerships, policy, and perseverance.

Though Uber was founded in 2009, and Lyft’s predecessor company, Zimride, was founded in 2007, it is not difficult to see that they fit squarely in The Third Wave. Together with other startups that were also founded before 2016 you may not know yet, they represent the canaries in the coal mine of Third Wave Startups.

So, what’s the problem?

The problem is that, with only a few exceptions, in general, Third Wave startups have not been very popular with venture capitalists. Indeed, this is the impetus behind Steve Case’s Rise of the Rest® initiative. Third Wave startups are unlikely to be founded by entrepreneurs who grew up or live in San Francisco, New York, or Boston. Third Wave startups are likely to be building innovations to reinvent supply chains in industries like manufacturing, agriculture, energy, transportation, healthcare, fashion and apparel, consumer packaged goods, real estate — huge, global industries in which the opportunity to exploit the latest advances in software technology to increase efficiencies in the conventional economy has not yet been fully realized, if at all.

Some of the reasons Third Wave startups have been unpopular with VCs are;

  • First, generally speaking, they require significantly more capital than the Second Wave, or even First Wave startups.
  • Second, initially, it can appear that they are operating unviable business models and that they may require more time to mature and experience a liquidity event than VCs can stomach — in fact it can often seem as if they will never become profitable businesses.
  • Third, at the outset it can seem as if such startups will never be able to overcome entrenched norms in legacy industries, overcome existing anti competitive barriers, or work in partnership with regulators and industry incumbents to achieve mutually beneficial outcomes.

The long-term success of Uber, Lyft, and other startups like them can help start to change that narrative.

Every Third Wave innovation is about refashioning supply chains

A supply chain is a network of interdependent organizations that cooperate and collaborate with one another to manage the movement of goods, services, and information between producers and consumers. The world as we know it would not exist without supply chains. Every Third Wave startup reflects an effort to rethink and reinvent the way the world’s supply chains function and operate. These innovations are critical if we are to have any hope of reversing climate change and creating a more sustainable future for our planet.

I am not suggesting that Uber is without blame or blemish. I am not suggesting that it is the very best example of a Third Wave startup. It is not yet clear that Uber or Lyft, or any of their competitors is good for the environment — I rarely use Uber or Lyft, preferring mass transit whenever I have the choice. I do not seek to dissuade, Mr. Desai, and others like him who would critique venture capitalists in general, and Uber’s investors in particular. However, while we critique Uber and its investors, let’s also demand that regulators and government fix the problems that are best fixed through policy as Third Wave Startups grow, mature, and implement new business models. Merely praying for Uber’s comeuppance doesn’t fix the very real shortcomings of regulatory authorities.

There is much to critique about Uber. Others have done so ably elsewhere. However, many of the issues that Uber, Lyft and some of their early Third Wave counterparts are facing may be emblematic of the same sorts of issues and obstacles that successive generations of Third Wave startups will face. Reinventing the way the world produces, transports, and consumes the goods and services that characterize life as we know it is a difficult and complex task that will take time and require many trade-offs and compromises.

Third Wave startups are the startups that excite me most. I believe that supply chain innovation is the foundation for all other sustainable innovation, and that supply chain innovation functions as a powerful economic multiplier. We should celebrate the era in which venture capitalists become more willing to fund startups taking on problems in unsexy but important industries — industries in which entrenched interests profit off inefficiencies that harm consumers and damage our environment. We should encourage, celebrate, and champion entrepreneurs of the Third Wave, even while we hold them accountable for their personal shortcomings. We should all be rooting for startups like Uber to succeed.

Is disruption finally underway in the freight brokerage industry?

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Note: A version of this story was first published on May 10, 2019, at FreightWaves.

On April 25, Amazon announced that it was making an investment of $800 million to reduce delivery times, from two days to one, for members of Amazon Prime. The next day FreightWaves was first to report that, without any fanfare, Amazon had also launched a digital freight brokerage website at freight.amazon.com. Before that, on February 5, Convoy, a startup in Seattle that operates a digital freight marketplace, announced that it can now automatically match 100% of loads to carriers, without human intervention.

These announcements have pushed us farther along a curve tracing the evolution of the freight brokerage market, one that has historically operated on the basis of personal relationships, trust, and phone calls.

What is a market disruption?

A market disruption occurs when new entrants into a market supplant incumbent companies within that market in terms of market share and market power, leading to financial distress for some incumbents.

In his book, The Disruption Dilemma, author Joshua Gans distils what we know about disruption into two major categories;

  • The Demand-Side Theory of Disruption (Demand-Side Disruption) is the more popular and widely known version of disruption because it is the process described and explained in Clayton Christensen’s book The Innovator’s Dilemma. A Demand-Side Disruption is driven by changing customer demands and expectations.
  • The Supply-Side Theory of Disruption (Supply-Side Disruption) is much less well known, and results from research by Rebecca Henderson and Kim Clark. A Supply-Side Disruption is driven by a change in the architectural knowledge that forms the basis by which suppliers satisfy market demand for a service or product.

The freight brokerage market is being attacked on two fronts

Amazon’s entry into the freight brokerage business threatens to shift the basis on which the services of a freight broker are delivered to the market from one reliant on personal relationships, trust, and telephone calls to one that relies on a combination of software, cloud computing, connected devices, stochastic optimization, and automation. These platforms will automatically match carriers to only the most profitable loads, and they will minimize operating costs by automatically optimizing delivery routes. A relatively small number of people trained and licensed as freight brokers would be required to handle complex, unusual, and exceptional situations on an ongoing basis. Such a platform would be tightly integrated through application programming interfaces with all the other supply chain management software that customers rely on, as well as other external sources of relevant data. These platforms will eventually surpass the performance thresholds achievable by the best human freight brokers, and they are already being tested by some of the world’s largest companies. If they pass the preliminary tests and become widely adopted by shippers and carriers, they will represent a supply-side disruption.

Simultaneously, there is already a sizeable population of startups building on-demand digital freight marketplaces with the goal of cutting freight brokers out of the picture. For now, these marketplaces mainly fulfill the function of automatically matching loads to carriers, and they typically target the 10% of the carrier market that is made up of owner-operators. Given the razor-thin profit margins that characterize the trucking market, and the reality that brokers can command fees as high as 40% or more of each transaction, it is not difficult to understand why such marketplaces could potentially win market share from some incumbent freight brokerage businesses as time progresses. These marketplaces also compete directly with load boards. If these digital freight marketplaces succeed, they will represent a demand-side disruption.

There are two wildcards

There are two conditions that have to be met before freight brokerage confronts disruption;

  • First, new entrants have to solve the trust problem. Shippers interests are aligned with those of their freight brokers, and freight brokers act as arbiters of trust between shippers and carriers. Conventional wisdom among industry professionals is that this trust relationship cannot be replicated with software.
  • Second, new entrants have to overcome the cognitive and psychological switching costs that keep carriers and shippers firmly locked into the old way of doing things.

Even just a few years ago it might have been difficult to see how these problems could be solved systematically and satisfactorily with a software-centric approach. Conventional wisdom among industry professionals is that the trust relationship between shippers, carriers, and brokers cannot be replicated through software. I am not so certain. Carriers and shippers have the fundamental need to increase throughput, increase efficiency, and improve profit margins. The new entrants can gain market share by proving that they can satisfy those fundamental needs better than their incumbent counterparts on an ongoing basis.

To be clear, none of the innovations I am describing is a perfect replacement for the best freight brokers. Not yet. That said, venture capitalists have already invested $1.6 billion in FreightTech during the first quarter of 2019. This exceeds the $1.3 billion that was deployed in 2017 and is already 55% of the $2.9 billion invested over the course of 2018. Moreover, REFASHIOND Ventures’ analysis showed that Amazon had $31 billion of cash and marketable securities on its balance sheet as of August 26, 2018. That is more than enough capital to fund a sustained push to redefine the basis of competition in freight brokerage — the $800 million investment it announced is just a beginning.

No industry can escape turmoil if a supply-side disruption occurs within the same period as a demand-side disruption. Fasten your seat belts. We’re embarking on a long and bumpy ride.

A Big Change Is Coming To Maritime Shipping And It Could Affect Everything

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Note: A version of this story was first published on April 30, 2019, at FreightWaves.

The maritime freight shipping industry is central to the functioning of the modern world. Yet it is foreign to most people because it is largely hidden from view. A big change in the way the industry uses oil will come into effect on January 1, 2020. This change is an indication of even more changes to come. These changes will affect everyone, and everything. However, the coming change also presents a great opportunity.

Here are some facts about the maritime freight shipping industry:

  • According to the World Shipping Council (WSC) the global maritime freight shipping industry is responsible for transporting about 90% of the world’s trade.
  • According to the World Trade Organization (WTO), global merchandise trade amounted to $17.43 trillion in 2017.
  • WTO members accounted for 98% of global trade in merchandise in 2017, up from 88% in 1995.
  • So the maritime shipping industry is responsible for moving roughly $16 trillion of merchandise, of which manufactured goods account for 70% or $11 trillion.
  • According to the WSC, the system of world trade the world has become accustomed to depends on a maritime fleet of about 50,000 merchant ships which are registered in 150 different nations, employing over one million seafaring men and women, and generating over $500 billion annually in revenues.

Why should you care? The shipping industry has played a central role in globalization. It provides an incredibly efficient mode of transporting merchandise manufactured in relatively low-wage countries to customers in relatively high-wage countries. It also facilitates a highly cost-effective trade in non-manufactured goods. For example, Wiskerke Onions reportedly exports about 185,000 metric tons (more than 400 million pounds) of onions, shallots and garlic and exports about 90% of its products to 125 countries around the world. This is made possible by containerized shipping.

Shipping is a capital intensive industry. Despite its size and significance, shipping as a business is characterized by low profit margins and frequent boom and bust cycles.

The International Maritime Organization (IMO) “is the United Nations specialized agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships.” It has 174 Member States and 3 Associate Members. On January 1, 2020 the IMO will begin implementing a 0.5% cap on the sulphur content of marine fuel, replacing the existing cap of 3.5%. This change is in addition to a 0.1% cap on sulphur content that is imposed on ships in emission control areas (ECAs).

Why is the IMO introducing the new sulphur cap? This measure is the culmination of concerns among the IMO’s members about the impact that the international shipping industry has on atmospheric pollution, global warming, and climate change. The industry’s emissions lead to about 400,000 premature deaths from lung cancer and cardiovascular disease, and about 14 million childhood asthma cases annually (Jalkanan, Corbett et al., 2018).

This measure does not address nitrogen oxides, carbon dioxide, and particulate matter — each of which is present in emissions resulting from shipping, and so the sulphur cap is the first of a number of regulations that will need to be implemented if the IMO’s member states remain committed to minimizing the industry’s negative impact on climate change.

The data below from NASA’s Global Climate Change portal puts things in context.

The first graph shows NASA’s Global Land-Ocean Temperature Index, which measures the change in global surface temperature relative to 1951–1980 average temperatures. The index has been on an increasing trend since 1910 when it attained its lowest value, meaning that the warmest years on record have been the most recent.

The second graph shows atmospheric carbon dioxide (CO2) levels measured at Mauna Loa Observatory, Hawaii, in recent years, with average seasonal cycle removed. Measuring atmospheric CO2 is important because it traps heat generated by human activity and natural processes in the earth’s atmosphere.


The third graph shows changes in sea level since 1993. Sea level changes due to melting ice sheets and expanding seawater as the world’s oceans and seas become warmer.

The new rules, and others that professional observers of the shipping industry expect the IMO will introduce in the future, will have the effect of making the business of transporting the world’s merchandise more expensive. According to a 2017 Wood Mackenzie Study, global marine fuel costs could increase by up to $60 billion annually in a full compliance scenario. Shipping companies will also be confronted by new capital expenditures for equipment to retrofit existing fleets and an increase in ongoing operating costs. The most certain outcome of these developments is that ocean freight rates will increase, and eventually these increases will be passed-through to the individual consumer. In other words, we should expect price increases for 90% of the things we consume.

There’s intense discussion within the industry about the future. For example, Maersk, the world’s largest container shipping line, has stated that it is taking steps to become carbon neutral by 2050. This discussion takes on increased urgency as the stark realities of global warming and climate change become more pronounced. The traditional solutions to the challenge of greatly reducing emissions from the shipping industry are interesting and we should keep pursuing them. However, I am most excited about the opportunity this presents to consider radically new approaches to solving the problem; New materials for ship construction, new methods of powering ships, 3D printing and localized manufacturing, automation and optimization, and better use of data for predictive analytics, among others.

The business of moving the world’s freight across the oceans and seas is an awesome and critical responsibility. Difficult problems are gathering on the horizon. Difficult problems always offer an opportunity to think different, to think boldly, to refashion existing systems, and to champion the innovators among us who we may have ignored in the past.

Image Credit: Linda Rigano


Logistics Network Optimization — Why This Time Is Different

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Note: A version of this article was first published on April 23, 2019 at FreightWaves.

Amazon has changed the retail business. It has changed the cloud computing business. It has also changed the supply chain business, but perhaps not in the way that you think.

On April 9, 2015, Amazon published a blog post on the AWS Blog; Introducing Amazon Machine Learning. In the time since then sophisticated artificial intelligence capabilities and tools that make it easy for non-experts to deploy powerful models to solve business problems that have been intractable until now have become part of Microsoft Azure, Google Cloud, and other public cloud computing services. According to a 2018 report by Stratistics MRC, the market for Machine Learning as a Service (MLaaS) is expected to grow at a compound annual growth rate of 41.2%, growing from $679.32 million to $7,620.18 million between 2016 and 2023.

Why does this matter?

For the first time, technology startups building innovations that rely on supply chain data can utilise and deploy sophisticated Deep Learning, Natural Language Processing, Speech Recognition, Computational Learning, and Real-time Simulation at a fraction of the cost it used to require just to get started.

Concurrently, advances in microprocessor technology have led to a scenario in which data can be collected, analysed, and used to make critical decisions at the point of use — even in situations where poor internet connectivity makes communication between edge devices and public cloud services impossible, at relatively minimal cost. The graph below shows the growth in the number of connected devices globally, from 15 billion in 2015 to 75 billion in 2025.

Before 2015 logistics network optimization was only possible for the largest, most sophisticated companies. Since 2015, that has changed. Supply chain logistics networks can now be optimised in real-time, based on proprietary and non-proprietary data, and used to render a decision in a fraction of the time, and at a fraction of the cost it would previously have taken.

This development has led to the beginning of a new era in supply chain management. We are moving out of the age of transactional supply chain management and into the age of cognitive supply chain management. Transactional supply chains are characterized by; A narrow focus on discrete tasks that optimizes processes rather than end-to-end outcomes, static and siloed data that is refreshed at relatively long intervals, local optimization that does not account for global conditions throughout the supply chain network, reactive decision-making that is also relatively slow. In contrast, cognitive supply chains are characterized by; A focus on optimizing end-to-end outcomes within the supply chain network, data that is dynamic, refreshed in real-time and collaborative, global optimization, adaptive decision-making that accounts for the cadence at which business operations occur.

Why is this significant?

Manufacturing added $2.38 trillion to the U.S. economy in the fourth quarter of 2018. Durable goods manufacturing contributed $1.33 trillion while non-durable goods contributed $1.05 trillion. Transportation and warehousing added $664.4 billion to the U.S. economy in the fourth quarter of 2018. U.S. GDP was $20.87 trillion in the fourth quarter of 2018. Manufacturing, transportation and warehousing represent approximately 15% of U.S. economic output. (Source: Bureau of Economic Analysis)

Of the 251,774 manufacturing firms in the U.S. as of 2015, all but 3,813, 98.5% have fewer than 500 employees and are considered small. (Source: National Association of Manufacturers. Author’s calculations.) This is the opportunity; The portion of that population that is big enough to purchase supply chain network optimization software, but too small to build its own.

According to a BCG Report: How Online Marketplaces Can Power Employment in Africa; “The cost of getting a product from the factory to an end user within Europe adds around 90% to that product’s manufacturing cost. In Africa, logistics add an average of 320% to a manufactured good’s cost.” Consider the implications of supply chain network optimization — in all regions of the world.

The opportunity is even more exciting when one realizes that manufacturing is only one of the sectors in which this transformation is taking place. Every aspect of economic production and consumption will be affected by this shift from transactional to cognitive supply chains.

This is why startups building new supply chain logistics software have captured the imagination of venture capitalists recently, leading to the 25x growth in the amount of capital venture capitalists are deploying in freight tech startups. Some of them are building proprietary products that they use to run their own captive businesses. Others are building platforms that enable their customers businesses. That distinction is less exciting than the possibilities this ongoing transition offers investors and entrepreneurs.


Supply Chain, Innovation, & Technology (#SCIT2019) – Event Summary

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More than 800 Supply Chain Professionals from 15 Countries Attend Supply Chain, Innovation & Technology Conference 

The Worldwide Supply Chain Federation (#TWSCF) held its inaugural global summit on June 19 and June 20, 2019 in New York City. The 2-day conference was hosted by Microsoft Reactor NYC and Microsoft For Startups in NYC. 

The Supply Chain, Innovation and Technology Summit (#SCIT2019) is produced by The Worldwide Supply Chain Federation. Attendees of this FREE global gathering are the most obsessively enthusiastic technologists, supply chain executives, professionals, academics, entrepreneurs, and investors from around the world.  

BUYERS & BUILDERSTM of innovations for future-ready global supply chains came together over two days to talk about how technology is transforming their respective industries. 

A Cross Section of The Audience at #SCIT2019

Here are the highlights… 

Day One #SCIT2019 put all the emphasis on the future of supply chains – globally, and across industries.  Innovators in Fashion Technology, Logistics, Maritime and BlockChain talked about a variety of issues including:

  • What problems remain that need to be solved? 
  • What problems have now arisen that we did not anticipate even a decade ago? 
  • What is now possible with software-enabled technologies? 
  • How can intra-industry and inter-industry collaboration between BUYERS & BUILDERSTM  help make this future a reality? 
  • Why is this an important discussion we need to have now?

Day One Session Highlights – BUYERS

The first day of #SCIT2019 focused on people and organizations who want to buy new innovations for supply chain. 

Keynote with Q&A: Paul McCulloch, NYC Cyber Law Group

Title: The T.A.O of Supply Chain — Technology, Architecture, & Operations

Link to YouTube Video: #SCIT2019 Day I Welcome Remarks, Keynote, & Fashion Track

Notes: Paul’s keynote presentation starts at about 19 minutes.

Paul McCulloch is a coder and information technology architect, a government advisor, and an attorney in technology, privacy, and cybersecurity law at NYC CyberLaw Group. He is a former vice president of technology law & digital compliance at JP Morgan Chase. He now spends his time empowering companies to get compliant, innovate, and implement digital transformation.

The world is becoming more complex, more interconnected, more distributed and more decentralized. At the same time, society demands more from the BUYERS, BUILDERS, and OPERATORS of the world’s supply chain networks. In “The T.A.O of Supply Chain – Technology, Architecture, & Operations”, Paul discussed the issues that emerging startups, medium-sized businesses, and large corporations operating anywhere in the world should be concerned about.

  • Organizations that do not have a strong grasp of technology law risk being burdened by liabilities off-loaded onto them by their more knowledgeable competitors. This is especially critical for startups which can easily be hobbled with fines for non-compliance with technology related regulations.
  • The risks increase as data and information crosses borders and becomes subject to different compliance regulations each time national borders are crossed. This is the internationalization of risk as data is transmitted around the world.
  • Compliance has usually been used as a defensive mechanism. More and more it is being weaponized and used as an offensive mechanism to handicap competitors.

FASHION TRACK

Link to YouTube Video: #SCIT2019 Day I Welcome Remarks, Keynote, & Fashion Track

Notes: Fashion Track discussion starts at about 60 minutes.

How is the fashion industry adopting customization, personalization, and on-demand manufacturing? How is data being leveraged to provide predictive, personalized digital experiences? How are brands allowing their consumers to co-create? What does luxury on-demand manufacturing look like today and where will it be in 5 years?

Moderator — Emma Cosgrove, Supply Chain Reporter, Supply Chain Dive

ELSE Corp — Andrey Golub, Founder & CEO

Milaner — Elisa Rossi, Co-founder

Queen of Raw — Stephanie Benedetto, Founder & CEO

  • Technology makes it possible for fashion and apparel to operate on the basis of customization, personalization, and real-time inventory.
  • Companies who can introduce technology to address huge issues with waste and pollution will be the ultimate winners.
  • This requires major shifts in supply chain operations. It is NOT the same as the fast-fashion business model.
  • Speed to market is critical for luxury fashion which is all about exclusivity. Speed does not have to compromise the product and brand.
  • Breaking down silos can speed up the process of manufacturing luxury fashion and accessories.
  • There is a growing interest in localization, but there are still a lot of outstanding questions, and the process of transition will be gradual. 

LOGISTICS TRACK

Link to YouTube Video: #SCIT2019 Day I Logistics Track

What problems can technology solve in land-based supply chain logistics? What’s most promising in the near term? Where do we still have challenges? What’s happening in other parts of the world?

Moderator — Eric Johnson, Senior Editor, Technology at JOC.com

Maersk — Bob O’Donnell, Head of North America E-Commerce Logistics

Princeton University & Optimal Dynamics — Juliana Nascimento, Optimization Expert, Operations Research

SCMI University of San Diego — Joel Sutherland, Managing Director & Professor of Practice                                                                                                    Transfix – Ahmad El-Dardiry, Chief Revenue Officer

  • The biggest problem is harnessing technology to reduce waste in a fragmented industry.
  • Supply chain is a massive optimization problem. There’s a lot of value in implementing simple technologies in supply chain logistics.
  • Transparency and automation matter A LOT to shippers and carriers.
  • For supply chain optimization to be effective it cannot be siloed. It has to be organization-wide. Optimization requires critical mass.
  • Technology is allowing us to do things we could not do in the past but we still need people with expert knowledge to augment software systems.
  • Startups still make the mistake of building technology that is too cutting-edge for market realities, and there isn’t enough collaboration. 

MARITIME TRACK

Link to YouTube Video: #SCIT2019 Day I Maritime Track

What problems can technology solve in maritime supply chain logistics? What’s most promising in the near term? Where do we still have challenges? What’s happening in other parts of the world?

Moderator — Timothy Simpson, Maritz Global Events

Advent Intermodal Solutions — Allen Thomas, Chief Strategy Officer

Maersk — Erez Agmoni, Regional Head of Supply Chain Warehousing and Distribution, Americas

Gemini Shippers Group — Kenneth O’Brien, Chief Operating Officer

  • Shippers in the maritime industry are facing several complex problems, and many are looking for builders to help them solve those problems.
  • Visibility across intermodal systems was an issue 10 years ago, and it’s still a problem.
  • Shippers expect reliability, but it’s complicated. Reliability means different things to different companies.
  • Market-driven collaboration is the new norm.
  • Blockchain is still controversial in maritime and it is unlikely to have a meaningful impact on maritime logistics. 

BLOCKCHAIN TRACK I

Link to YouTube Video: #SCIT2019 Day I Blockchain Track I

Notes: Tanjila starts at 2 minutes, Patrick starts at 24:30 minutes, and Michael starts at 37:30 minutes.

What lessons have we learned about bringing blockchain + supply chain from the lab and into the real world? 

Emcee — Kelly LeValley Hunt, Blockchain Specialist, Forbes 2018 Blockchain “Pioneer”, Microsoft’s 2018 Women in Blockchain Award for Hyper-growth & Innovation

Blockchain in Transport Alliance (BiTA) — Patrick Duffy, President

BlockScience — Michael Zargham, Founder & CEO and Harry Goodnight, Lead Executive Advisor

TradeFlo — Tanjila Islam, Founder & CEO

  • Tanjila Islam is building TRADEFLO, a blockchain-powered platform to facilitate global trade and trade-financing with an initial focus on emerging markets. When she spoke at The New York Supply Chain Meetup’s event in April 2018, she had not yet started building TRADEFLO. However, after meeting an IBM executive at that event she began exploring building TRADEFLO in partnership with IBM. She’s been building TigerTrade for over a decade, and TRADEFLO is inspired by that experience. TigerTrade is the largest wholesale reseller of excess retail inventory.
  • The Blockchain in Transport Alliance (BiTA) focuses on creating open-source and royalty-free technology standards to encourage the adoption of blockchain in the transportation industry by bringing together technology companies, service providers, transportation companies, financiers, and insurers. Patrick Duffy is President of BiTA and he talks about the progress they’ve made in the two years or so that the organization has existed.
  • BlockScience’s Michael Zarghan and Harry Goodnight touched on supply chains as cyberphysical systems, what blockchains enable, and the implications on operations research, applied AI, and distributed systems. They believe that blockchains are ideally suited for describing and establishing supply chain network ontologies. They emphasize that corporate executives need to start thinking about ecosystems.

BLOCKCHAIN TRACK II

Link to YouTube Video: #SCIT2019 Day I Blockchain Track II

Given some of the lessons learned, what work is being done to bring blockchain + supply chain from the lab and into the real world? Kelly and Rob are returning speakers: They have each spoken at past meetups organized by The New York Supply Chain Meetup on the topic of blockchain in supply chain.

Emcee — Kelly LeValley Hunt, Blockchain Specialist, Forbes 2018 Blockchain “Pioneer”, Microsoft’s 2018 Women in Blockchain Award for Hyper-growth & Innovation

Inflection Point Blockchain Advisors — Joshua Klayman, Founder & CEO

MState — Rob Bailey, Co-founder & CEO

r3 — Alisa DiCaprio, Head of Trade and Supply Chain

  • We’re in the early days of figuring out how blockchains will impact supply chains and it is important to get try to get the fundamentals right.
  • Companies interested in figuring out how to deploy blockchain can tap into a wealth of resources, partnerships, and organizations focused on understanding how blockchains can be integrated into supply chains – no one has to go it alone.
  • There are many more blockchain projects that no one is publicizing than those that are in the news. There are a lot of questions that remain open.
  • Blockchain in supply chain is complicated by the fact that data traverses multiple legal jurisdictions. There are also relevant questions that surround laws specific to specific industries. This is an important part of the conversation. The role of incumbents is a source of concern.
  • Blockchain is a point of convergence of many other technologies. Container shipping is one of the industries doing early work on this issue. Here, blockchains function as a permissioned data transfer layer.
  • Supply chain might require the development of new blockchain protocols that are uniquely designed for application in supply chain.
  • There’s an outstanding question about the utility of product provenance for mass consumers. 
  • Here’s the reading list Kelly refers to during the conversation. 

Day Two Session Highlights – BUILDERS

The second day of #SCIT2019 focused on people and organizations who are building new innovations for supply chain. 

Keynote with Q&A: Rosemarie Truman, Center For Advanced Innovation

Title: SCALE – Supply Chain and Logistics Enterprises

Link to YouTube Video: #SCIT2019 Day II Welcome Remarks & Keynote

Rosemarie Truman is an entrepreneur, growth strategist, distinguished corporate executive, angel investor and prolific startup catalyst. She is the Founder and CEO of the Center for Advancing Innovation (CAI), a 501c3 non-profit which identifies breakthrough inventions and maximizes their commercial potential. 

SCALE – Supply Chain and Logistics Enterprises is a global contest to disrupt retail supply chain, logistics, and transportation. SCALE is orchestrated by the Center for Advancing Innovation (CAI) in partnership with the Walton Family Foundation. CAI’s past challenges were the catalyst for 200+ startups and 2000+ knowledge-based jobs in the past 4 years. 

The rest of the day featured presentations from start-ups around the globe as well as a guest presenter from the Singapore Economic Development Board.

STARTUP SHOWCASES

BLOCK I – Emcee: Sapna Shah, Principal, Red Giraffe Advisors

MILANER

Elisa Rossi is co-founder MILANER. MILANER empowers the world’s top luxury manufacturers to sell direct to consumers for the first time. MILANER has operations in Europe and San Francisco, CA.

Link to YouTube Video: MILANER

FAST Applications

Adam Yaron is ceo of FAST Applications. FAST Applications designs, develops, and manages professional networking software solutions for the freight industry.

Link to YouTube Video: FAST Applications

limbiq, by Setlog

Guido Brackelsberg is a founding partner and managing director of Setlog. Setlog develops supply chain management software that optimizes transparency, digitalization and real-time data exchange. In this presentation, Guido premieres limbiq, a new platform for digital procurement that has been developed by Setlog.

Link to YouTube Video: limbiq by Setlog

FreightWaves Sonar

Description: Patrick Duffy is President of Blockchain in Transport Alliance, a sister organization of FreightWaves. FreightWaves is a provider of data for the freight markets. Patrick showcases Sonar, a platform that brings together millions of disparate freight market data points with a robust analytics toolset and the market intelligence of the FreightWaves team. FreightWaves operates from Chattanooga, TN.

Link to YouTube Video: FreightWaves Sonar

Queen of Raw

Description: Stephanie Benedetto is founder & CEO of Queen of Raw. Queen of Raw turns pollution into profits across the textile supply chain by building a marketplace for brands to sell excess and scrap textiles rather than warehousing or shipping and incinerating them at a loss. Their analytics tools provide real-time actionable insights, helping to create transparency and efficiency. Queen of Raw operates from New York, NY.

Link to YouTube Video: Queen of Raw

Voyage Control

Description: Jameson Peterson is Head of Construction Solutions at Voyage Control,  a cutting-edge ‘Air Traffic Control’ for inbound logistics management. 

A powerful and easy-to-use software platform, Voyage Control enables ground transport hubs to proactively manage, optimise, track, and communicate with their traffic. Voyage Control has operations in the UK and the US.

Link to YouTube Video: Voyage Control

BLOCK II – Emcee: – Michael Rentz, Founder, The Charleston Supply Chain Meetup

Optimal Dynamics

Daniel Powell is co-founder and CEO of Optimal Dynamics, a NY-based company bringing advanced AI to the supply chain and logistics industry. Based on over 30 years of innovation, Optimal Dynamics is changing how companies operate. 

Link to YouTube Video: Optimal Dynamics

Singapore Economic Development Board 

Samuel Chan is the regional vice president for the Americas at the Singapore Economic Development Board (SEDB). SEDB is a statutory board of the Government of Singapore that plans and executes strategies to sustain Singapore as a leading global hub for business and investment. *This is not a startup showcase, but rather an update on what’s happening in Singapore as the government facilitates and enables supply chain innovation to boost economic growth.

Link to YouTube Video: Singapore Economic Development Board (EDB)

PeerLedger

Dawn Jutla is founder and president of PeerLedger. PeerLedger uses cutting-edge blockchain technology to help companies collaborate to protect human rights, improve environmental performance and significantly reduce key risks, such as counterfeiting and safety, in their supply chains. PeerLedger is based in Halifax, Canada.

Link to YouTube Video: PeerLedger

ELSE Corp

Andrey Golub is founder and CEO of ELSE Corp, an Italian B2B and B2B/2C startup. Headquartered in Italy, ELSE Corp, designs new technological solutions for virtual retail and cloud manufacturing. 

Link to YouTube Video: ELSE Corp

Kontainers

Graham Parker is co-founder and CEO of Kontainers, an ocean freight platform serving some of the biggest brands in shipping. Kontainers allows users to get instant container shipping rates and transact entire shipments online in under one minute. Containers has operations in the UK, and in New York, NY.

Link to YouTube Video: Kontainers

Locus

Shaun Siler is vice president of sales for North America at Locus. Locus is a global decision-making platform in the supply chain that uses deep learning and proprietary algorithms to automate all human decisions required to transport a package or a person, between any two points on earth. Locus is headquartered in Bangalore, India and is establishing operations in the United States.

Link to YouTube Video: Locus

The Worldwide Supply Chain Federation

The Worldwide Supply Chain Federation is the collaborative, and mutually supportive coalition of open and multidisciplinary grassroots communities focused on technology and innovation in the global supply chain industry. Founded in August 2017, The New York Supply Chain Meetup is the founding chapter of #TWSCF with a sister chapter launched in Charleston, SC, and other chapters in the process of forming in Vancouver, Athens, Singapore, Bangalore, Chicago, San Francisco and other cities around the world. There are more than 1900 members in New York, and 2700+ members globally.