Innovation Footprints

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Trucking

The Democratization of Data for Supply Chain Logistics

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Note: A version of this story was first published on May 29, 2019, at FreightWaves.

Almost every day, there are reports warning of severe weather events, across the United States and in other parts of the world. About two weeks ago, while listening to one of those reports I thought to myself “I wonder how easy it is for someone responsible for supply chain operations at any company to proactively get a sense of where there may be severe weather events worth worrying about?” I couldn’t think of any.

Since that day, whenever I have some slack in my day, I go to Google to see if I could find something that provides a simple to use, and holistic source of data and information to enable all types of businesses make preemptive decisions related to their supply chain operations.

The closest I have found is FreightWaves’ Sonar — specifically, for the particular issue I am thinking about, the Critical Events view.

According to Zurich Insurance Group, an extreme weather event is an unexpected weather incident that is at the extremes of historical ranges for a specific location. The record amounts of precipitation that led to flooding in the midwestern United States in March, and the flooding earlier this month, again in the midwestern United States, are both extreme weather events. As bad as the problem is now, it has been getting worse, and will continue to get worse.

In “Economic Losses, Poverty & Disasters: 1998–2017”, the United Nations Office For Disaster and Risk Reduction (UNDRR) and the Centre for Research on the Epidemiology of Disasters (CRED) state:

“The report finds that between 1998 and 2017, climate-related and geophysical disasters killed 1.3 million people and left a further 4.4 billion injured, homeless, displaced or in need of emergency assistance. While the majority of fatalities were due to geophysical events, mostly earthquakes and tsunamis, 91% of all disasters were caused by floods, storms, droughts, heatwaves and other extreme weather events.

In 1998–2017, disaster-hit countries experienced direct economic losses valued at US$ 2,908 billion, of which climate-related disasters caused US$ 2,245 billion or 77% of the total. This is up from 68% (US$ 895 billion) of losses (US$ 1,313 billion) reported between 1978 and 1997. Overall, reported losses from extreme weather events rose by 151% between these two 20-year periods.”

The ability to know where critical weather events may be developing so that a business can adapt it’s plans for moving goods around is quite important. Severe weather events simultaneously increase costs and decrease revenues.

As I write this article, Sonar is showing me;

  • 591 Severe Weather Watches and Warnings around the world,
  • 5 Severe Thunderstorm Outlooks
  • 2 Tropical Cyclones
  • 40 Earthquakes, and
  • 2 Wildfires.

Sonar also allows me to drill down further, to get local data wherever there’s an asset providing data to the system. I drilled down to see more detail from data assets and sources in Kaduna, Port Harcourt, and Warri — cities in Nigeria. It’s the beginning of the rainy season in West Africa so I may come back periodically to see what the data says.


In addition, I can zoom in on parts of the United States, and identify the specific cities that are most likely to be hit by the storms that are mentioned daily in the news. For example, I as I write this article, can see that there are 160 different assets collectively warning of wind gusts, severe weather, hail, flooding, and tornados across the midwestern United States. If I were expecting a shipment of goods from that region, I could make contingency plans to account for these developments.

FreightWaves isn’t the only company building a platform of this sort. In January 2016, IBM announced that it had acquired The Weather Company. Presumably with the data that it has gained from that acquisition its Watson Supply Chain platform is better placed to help IBM’s enterprise clients take proactive measures to prevent disruptions to their business operations.

The power of systems like the ones I have described will be realized when they are as ubiquitous for businesses as Google Maps and Waze are for consumers. The technology keeps getting better, and the need keeps becoming more acute. The days when such information is only available to big companies that can afford to pay significant sums each year for such data and information are now behind us.

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.

#UnderConstruction | Why Is A Global Grassroots Supply Chain Community Starting in NYC, and Bangalore?

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Disclaimer: This blog post reflects my personal opinions only. It does not represent the opinions of REFASHIOND Ventures, or REFASHIOND CO:LAB. It does not represent the opinions of The New York Supply Chain Meetup, or The Worldwide Supply Chain Federation. It does not reflect the opinions of any other person who is associated with any of those entities. This blog post does not represent the opinion of any other individual or organization that is mentioned by the author.

Acknowledgement: I am grateful to Anisha Surana, of Locus, for helping me with research about Bangalore, and India. She’s also been the point-person as we’ve worked across time zones to get things going in Bangalore. She’s been phenomenally helpful, even when our team in NYC has been stretched for time and other resources, and therefore less responsive than we should be.

Introduction

After thinking about value chains and supply chains since August 2014, I decided in August 2017 that I should focus the remainder of my career as a venture capitalist on becoming a supply chain specialist. So on August 23, 2017 I decided to start The New York Supply Chain Meetup. You can read about how I got there here: #UnderConstruction | Why A Supply Chain Meetup in New York? In summary: New York City does an enormous amount of business with the rest of the world. Therefore, it is a wonderful laboratory for stress-testing technological innovations for supply chain. Moreover, it is also a great gateway for supply chain tech startups that seek to grow in the North American market.

We Started In NYC! We optimize for enthusiasm.

Friday, November 16, 2018 will mark one year since our first public event, which you can read about here: Progress Report | #TNYSCM Minimum Viable Launch – Building A Supply Chain Community. We are celebrating that milestone with an event on Thursday, November 15 which you can read about here: #TNYSCM09 / Keynote, Showcase & 1 Year Anniversary Celebration.

Over the course of our first year:

  • Our kickoff on November 16, 2017 attracted about 150 people.
  • We have grown to 1,370+ members in NYC.
  • We typically have 100+ people attend each meetup . . . and they do not show up for the food or alcohol, as one of our members who has travelled from Philadelphia to attend our meetups on more than three occasions told a friend who was visiting from Europe. Our gatherings are very engaging affairs, and people have always tended to stay well after the end of each event to talk to one another.
  • We have helped some of our members connect with potential customers, and some of our speakers have gone on to raise significant amounts of capital from VCs or are on the verge of raising capital from early stage investors.
  • With far less in terms of resources, we have become the biggest  and most active community on Meetup.com that focuses on supply chain, technology, and innovation. We’re more than 10x as big as the Supply Chain Meetup of NYC – It turns out copying our name  and our mantra was insufficient to foster growth, and they have not had an event since April 2018. We’re more than 3x as big as the Future of Supply Chain & Logistics which is in Sunnyvale, California and is organized by Plug and Play Supply Chain & Logistics – They have not organized an event since October 2017; This is pretty amazing given that Plug and Play’s many corporate partners are reported to each pay $300K per year for the privilege of being part of that community. To be fair to Plug and Play, perhaps they have invested in a proprietary platform and so meetup.com is no longer a fair reflection of their size and scale.
  • We published The Worldwide Supply Chain Federation – Our Manifesto as a rallying cry to gather people who share our obsessive enthusiasm for supply chain, technology, innovation, and startups.

We started The New York Supply Chain Meetup with a deceptively simple but ambitious mission:

To nurture and grow the world’s foremost open, global, multidisciplinary community of people devoted to building the supply chain networks of the future — starting in NYC.

Soon after that we built on that mission statement by developing this vision:

To create a global movement; the largest community on the planet of people obsessed with supply chain technology, who are trying to develop new products and build new companies – while learning from each other, and supporting one another.

Now, We Are Launching A Community In Bangalore!

During this year of bootstrapping our community, we have built on our early progress in NYC, and are now on the verge of launching chapters outside New York City. On November 24, 2018, The Bangalore Supply Chain Meetup will have its public launch, establishing itself as the first international chapter of The Worldwide Supply Chain Federation.

We are excited that Bangalore is the next chapter to launch after NYC. In all the time that I have been studying about the economic impact more efficient supply chains can have on the world, it has become clear to me that the developing world stands to benefit the most from technological innovation in supply chain. As a boy growing up in Northern Ghana and Northern Nigeria, I was always amazed by the durability of buses made by Tata Motors. I find it personally meaningful, that a supply chain community I am helping to start is building its first international presence in the home of Tata Motors. Here are some highlights about India, and Bangalore specifically:

  • According to the IMF’s Country Focus (August 2018): “India’s economy is picking up and growth prospects look bright—partly thanks to the implementation of recent policies, such as the nationwide goods and services tax. As one of the world’s fastest-growing economies—accounting for about 15 percent of global growth—India’s economy has helped to lift millions out of poverty.”
  • Information technology firms in Bangalore employ about 35% of India’s aggregate pool of about 2.5 million information technology professionals. Bangalore’s IT firms account for the highest IT-related exports from India. Bangalore’s growth as India’s IT capital has been helped by heavy investments by India’s Central Government as well as support from the Karnataka State Government. Bangalore accounts for 87% of Karnataka’s economy and 98% of the state’s software exports.
  • According to a 2016 report from the Associated Chambers of Commerce & Industry of India; The country could save $50 billion if logistics costs as a percentage of India’s GDP were to decrease from 13 percent to 9 percent. In other words, every percentage point gain in supply chain logistics efficiency could lead to $12.5 billion of savings for India’s economy. That is $12.5 billion that could be invested in more productive areas to spur more economic growth in India.

What is even more exciting than that? Our chapter in Bangalore is being launched through the dedicated effort of the team at Locus. I met Nishith Rastogi, Co-Founder & CEO of Locus, in June 2018, in NYC, while he was visiting the United States. We originally planned to chat for about 30 minutes. Instead we wound up spending nearly two hours chatting about the problems Locus is solving for its customers. This is a problem I have been interested in since 2016 – In fact, I discussed it at considerable length when I published: Industry Study: Freight Trucking (#Startups) and Updates – Industry Study: Freight Trucking (#Startups).

According to CrunchBase: Locus is an intelligent logistics automation platform with a built-in route planning and vehicle allocation engine which improves consistency and efficiency of operations, higher customer satisfaction with high adherence to service-level agreements (SLAs) & last-mile live tracking. The platform helps companies and enterprises in e-commerce, food delivery, fast moving consumer goods (FMCG) and other verticals to automate and optimize their logistics. The product suite comprises of a route deviation engine, order dispatch automation, a field user app, route optimizations, scheduling, tracking for end-customer, predictive analytics and other services and products. Locus offers the entire technology stack, in the form of a platform as a service.

According to CBInsights; Locus has raised $6.75 million from angel investors and institutional venture capitalists in India, Singapore, Japan, and California. Locus is also a graduate of Microsoft ScaleUp. When I met Nishith, he told me that the company was growing its business very rapidly in India, Indonesia, and other markets in Asia. Locus is now looking to grow it’s business in the United States, and has opted to begin that process by establishing a presence in New York City.

Finally, Nishith and I talked about the idea that propelled the formation of The New York Supply Chain Meetup. He grasped it immediately, and expressed a desire to build a community in Bangalore, one that would be connected with our community in New York City, and that would also subsequently be connected with every other chapter that launches in other parts of the world.

I explained that one of the goals of the community we were forming in NYC was for startups like Locus, and entrepreneurs like Nishith and his co-founders, to have a ready-made community of like-minded and helpful people they could connect with in NYC once they were ready to establish a presence here. That benefit should also work in reverse  . . . Obviously, that becomes more effective if the community in NYC collaborates actively with a similar community in Bangalore. That is how the idea for The Bangalore Supply Chain Meetup (#TBLRSCM) was born. It is a microcosm of how we hope The Worldwide Supply Chain Federation will function in helping early-stage startups building new technologies and new innovations to make global supply chains more efficient connect with New York City for customers, for talent and expertise, and for financial capital . . . . . No matter where they were founded, if they are expanding into the United States, we want them to call NYC home first, and we will become the community that welcomes them here.

Since our conversation in June, Nishith and his team at Locus have been hard at work putting things in place for the public launch. We would not have made it this far without the dedicated hard work of the team at Locus. They have taken on this initiative on top of their already very demanding responsibilities.

Our team in NYC could not be more excited about seeing The Bangalore Supply Chain Meetup get off the ground. You can help by telling anyone you know in Bangalore who may want to be part of the community that is forming there to look for the group on meetup.com. You may also signup for the launch of The Bangalore Supply Chain Meetup on the event page here.

What Problems Will Our Community Help To Solve?

Some of the complaints I’ve heard from startup founders who are building new technology for the supply chain market, or new technology-enabled products with supply chain functionality are:

  • How do we find enterprise partners for our first pilot? How do we find the individuals who will be our internal champions as we try to win our very first enterprise customers? 
  • How do we find supply chain professionals who can help us understand how our product would be used by professionals in the industry?
  • How do we identify talented people who understand technology but also understand supply chain so that we can recruit them to join our team?
  • How do we find professional service providers who understand the nuances of what we’re trying to do and can help us with tailored advice?
  • How do we find other investors like you?

From large companies we’ve heard comments like; We’ve been grappling with this problem for decades, and we can no longer afford to do things the way we have done them in the past. However, we do not know the people doing the kind of research that could lead to a better solution. Do you know anyone we may not have heard about who’s thinking about this?

So, as part of The New York Supply Chain Meetup, and ultimately as part of The Worldwide Supply Chain Federation, we will create a partnership network which will help us tackle those sorts of concerns very directly.

The Worldwide Supply Chain Federation is the collaborative, and mutually supportive coalition of grassroots communities focused on technology and innovation in the global supply chain industry. The New York Supply Chain Meetup is its founding chapter.

We wouldn’t have made it this far without the generous support of the following people and organizations;

  • Jessica Lin and Allie Felix from Work-Bench: Who reached out to me even before I had clearly organized my thinking. Allie now runs programming and partnerships at the Embarc Collective. Work-Bench sponsored us by donating space for our events during our first year.
  • Michelle Shen from UPS: UPS supported us by contributing towards food and beverage for our launch last November. Michelle has also been a sounding board for us when we’ve had questions about how large organizations like UPS might think about working with nascent communities like ours.
  • Akshata Philar from SAP.iO. SAP.iO hosted us on alternate months at their office in NYC, providing space as well as food and drink for our members. Her colleague, Kange Kaneene of SAP Ariba has road-tested some of our ideas as we’ve worked on growing during the course of 2018.
  • Matt Turk of FirstMark, and founder of Data Driven NYC, and Jon Zanoff of Techstars, and Founder of Empire Startups, both graciously shared their individual experiences of getting startup communities off the ground in NYC.
  • My former teammates at KEC Ventures/Particle Ventures, indulged me when I told them I had started a supply chain meetup – this is after I had decided to become a supply chain specialist. KEC Ventures/Particle Ventures supported the meetup financially by covering the cost of food and drink for some of #TNYSCM’s events. My teammates gave me ideas about how to get things off the ground, and Susan Belding came to my rescue by helping me figure out some of the event-day logistics as we got going.

Last but not least: Lisa agreed to become my co-founder when I called her in a “panic” on August 24, 2017. We have been learning about supply chain, technology, and innovation together since we first met in June 2016. We are now in the early days of building a specialist supply chain early-stage technology venture capital firm. She shares my obsessive enthusiasm for all things supply chain + technology + innovation. I couldn’t have done this without her help.

We have been lucky to have a large team of volunteer co-organizers: Brian Lindquist, Paula Cadman-Mendoza, Christian McKenzie, Nathan Sjoholm, Tina Kang, Santosh Sankar, Joy Fan, Elizabeth Salcedo, Leslie Cohen, Natan Reddy, and Daniel James. I have a firm belief that nothing of significance can be accomplished without the concerted and significant effort of a team. As I look back on the past year, I am grateful for the contributions from every member of our team. It’s through their efforts that we have been able to accomplish so much with so little.

Looking Forward: Our Plans For 2019

We figured that 2018 would be our experimental year: We have small groups of people who expressed interest in forming communities in Vancouver, Singapore, and Athens over the course of 2018. However, we have deliberately moved slowly in order to allow the chapter that demonstrates the most enthusiasm to get organized first, while we learn the lessons we can from that experience. We expect 2019 to be a year in which The Worldwide Supply Chain Federation grows by launching at least one additional chapter per quarter . . . In other words, I expect that we will have at least 6 active chapters around the world a year from now. Ultimately, our goal is to bring our community together for an annual conference in NYC, starting sometime in 2020.

If you would like to help us make this happen: Consider joining one of the communities we’ve already started, or consider starting one where you live. We can always use more volunteers. We do not yet have a committed sponsor. If you’re a company that wants to discuss becoming a sponsor, let us know. Our contact information is available via our manifesto, and we’re easy to find online.

Forward!

My Supply Chain Credo

About Locus: Locus is a decision-making platform in the supply chain that automates human decisions required to transport a package or a person, between any two points on earth, delivering gains along efficiency, consistency, and transparency in operations. The company’s premier logistics optimisation solutions include route optimisation, real-time tracking of orders, insights and analytics, optimised permanent journey plans and automated shipment sorting.

Update #1: November 8, 2018 at 12:45 to update disclaimer, add link to event page at Locus’ website, and add “About Locus” section.

Update #2: November 9, 2018 at 22:53 to update event links for #TBLRSCM in order to avoid confusing people.

#CountDown: 3 Days to #TNYSCM04 – Supply Chain & Artificial Intelligence

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A cross-section of the audience at #TNYSCM #02, January 2018.

We’re now less than a week from The New York Supply Chain Meetup’s fourth gathering. The purpose of this post is to outline our plans for that event, and preview what we expect to do between now and June 2018 . . . We’re still in the early days of building this community, so much of this is subject to change, especially as we go through the process of recruiting sponsors.

Our Mission

To nurture and grow the world’s foremost open, global, multidisciplinary community of people devoted to building the supply chain networks of the future – starting in NYC.

Become a coporate sponsor. Email me at: brian@tnyscm.com for more details about our vision, and the team that’s working behind the scenes to build this community.

The New York Supply Chain Meetup is powered by Particle Ventures, a seed-stage fund based in NYC that invests in Supply Chain & Industrial Intelligence. Particle is built by the same team that launched KEC Ventures.

Logistical Details: #TNYSCM #04

  • Date: Thursday, March 15, 2018.
  • Time: 17:30–20:30
  • Location: SAP America, 10 Hudson Yards - 48th Floor, New York, NY. An organizer will be downstairs, at the security counter.

#TNYSCM #04 combines a Lightning Talk, a "Fire-Side" Chat, and a Showcase. It is sponsored by SAP.iO and co-hosted by The New York Supply Chain Meetup and the New York City Bots and Artificial Intelligence Meetup.

SAP.iO helps innovators inside and outside of SAP build products, find customers, and change industries.

REGISTER HERE!

Agenda

5:30 PM - 5:55 PM: Pre-event Networking
5:55 PM - 6:00 PM: Welcome Remarks (#TNYSCM, NYCBAI, SAP.iO)
6:00 PM - 6:30 PM: Lightning Talk (15 Minutes), Q&A (15 Minutes)
6:30 PM - 6:50 PM: "Fire-Side" Chat (15 Minutes), Q&A (15 Minutes)
7:00 PM - 8:00 PM: Showcase (10 Minutes, with 5 Minutes of Q&A, each)
8:00 PM - 8:30 PM: Closing Remarks, Post-event Networking

Lightning Talk: Evolution & Use Cases of Artificial Intelligence in Supply Chain, From An Industry And SAP Point of View

David Judge (@DHJudge) is Vice President of Predictive Analytics and Machine Learning products at SAP. He guides product strategy and drives increased market awareness for SAP Leonardo.

Geoff Maxwell (@geofflm) is Global Head of Business Strategy and Execution Analytics and SAP Leonardo. He is responsible for go to market strategy for SAP’s portfolio of Leonardo solutions.

Fireside Chat: The Future of AI-Driven Transformation in Retail Supply Chains, and in Government Agencies.

José P. Chan is VP Business Development for Celect, a predictive analytics firm founded out of MIT, which helps retailers optimize their inventory portfolios in stores and across the supply chain. Previously, he worked internationally in retail for over two decades with LVMH, Richemont and Roberto Cavalli. José has held senior management positions and has extensive experience in buying, marketing, merchandising, planning, and has run retail store networks. He holds an SM from Massachusetts Institute of Technology, an MBA from University of Rochester, a BS from Cornell University and an AAS from the Fashion Institute of Technology.

Sameer Anand is a Partner with A.T. Kearney’s operations practice with over 16 years of experience in management consulting. He advises clients on large scale transformations to drive step changes in productivity with an underpinning of analytics and digital across CPG, retail, industrial products, and high tech industries. His areas of expertise include consumer products, manufacturing, supply chain planning, sourcing, bracket pricing, logistics, and advanced analytics. Prior to joining A.T. Kearney, Sameer worked at Deloitte and American Airlines.

REGISTER HERE!

Showcase Presentations

At #TNYSCM #04 we'll have 3 startups talk about the artificial intelligence-driven products they are building for the supply chain logistics industry. They will appear in the following order;

ClearMetal (@ClearMetalInc): Founded in 2014, and based in San Francisco, CA, ClearMetal provides predictive data and analytics for the supply chain logistics industry, enabling its customers to unlock increased efficiencies in global trade as ClearMetal enables them to solve complex problems using a data-driven approach. According to CrunchBase and CBInsights ClearMetal has raised $12M over two rounds of financing, most recently raising $9.0M in its Series A financing which was led by Innovation Endeavors. SAP.iO is an investor in ClearMetal.

Wise Systems (@goWiseSystems): Founded in 2014, and based in Cambridge, MA,  Wise Systems develops route-optimization software that schedules last-mile delivery truck drivers while considering multiple constraints like customer time windows, traffic, and service time. Wise automatically dispatches schedules to drivers and the software recalculates and updates schedules in real-time as things change in real-time. According to CrunchBase and CBInsights, Wise Systems has raised $1.1M in seed capital. Dynamo Accelerator is an investor in Wise Systems. Santosh Sankar, a co-organizer of The New York Supply Chain Meetup, is also a co-founder & director of Dynamo.

Optimal Dynamics: Based in Princeton, NJ, Optimal Dynamics brings AI to the trucking industry based on over 30 years of academic research and development centered on the use of Computational Stochastic Optimization and Learning in solving problems related to dynamic assignment problems in transportation and logistics. Optimal Dynamics recently raised an undisclosed amount in pre-seed funding.

REGISTER HERE!

Preview — #TNYSCM  in April, May, June

Here is what our team of organizers is working on, between now and June.

  • April 26: A panel discussion and keynote presentation, focused on the issues that have kept blockchain and other distributed ledger technologies in the lab and out of the real world. The keynote presentation is by Silvio Micali, he will talk about his work creating Algorand. THIS IS GOING TO BE BIG!
  • May 24: A showcase of startups in Fashion, Apparel, and Retail supply chain. THIS IS GOING TO BE BIG!
  • June 21: A Sourcing 101 workshop for startups building physical products.

Other "Upcoming" Supply Chain Events

  • TPM2018: Is now behind us. It was awesome. Read my blog post about it here: #TPM2018: The Woodstock Of International Container Shipping & Logistics
  • Maritime Global Technologies: Reverse Pitch on March 15, 2018 from 09:30–12:30. MGTIC is an initiative of SUNY Maritime College to build a global maritime technology innovation hub by bringing together all that the New York City metro-region has to offer entrepreneurs building software for the global shipping and maritime logistics market. I’m a member of the advisory board and have previously blogged about it here and here. I will be there. Say hello, if we've never met before
  • Transparency18: This is the flagship event series started by the founders of the Blockchain in Transport Alliance. It follows BiTA’s Spring Symposium, a members only event that occurs on May 21, 2018. I will attend both days of Transparency 18 May 22 and May 23.

#TPM2018: The Woodstock Of International Container Shipping & Logistics

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I’m posing with the TPM2018 Signage in the Speaker Ready Room at the Long Beach Convention Center in Long Beach, CA.

Notes:

  1. This blog post represents my opinions only. It does not represent the opinions of my teammates at Particle Ventures (formerly known as KEC Ventures), nor does it represent the opinions of any one at Journal of Commerce, JOC.com, JOC Events, IHS Markit or any related entities therein. It also does not represent the opinions of any of the people I mention specifically.
  2. Particle Ventures is not an investor in any of the startups highlighted in this post.

I have not been shy about telling people how much I hate travelling, and how much I hate big conferences. So, it takes a lot to persuade me to travel in order to attend a big conference. This year, I am happy I broke my own rules in order to attend TPM 2018.

What is TPM? TPM stands for Trans-Pacific Maritime . . . and TPM2018 is the 18th successive annual instalment of the conference. I have not read an official history of TPM, but from what I have gathered it began as the brainchild of Peter Tirschwell, Senior Director of Editorial Content at IHS Markit and a few of his teammates and colleagues at IHS Markit and Journal of Commerce. Early last year, after one of my conversations with Fauad Shariff from CoLoadX he said to me “You need to attend TPM. You’d get a lot out of it.” I had just published a needlessly long blog post; Industry Study: Ocean Freight Shipping (#Startups).

Early this year, Peter emailed me to ask if I’d consider moderating an Innovation Jam at TPM. We had previously met in September 2017, while I was at IHS Markit in Manhattan, NY visiting Daniel James who also works at IHS Markit. Given my experience at CMA2017, and how much more I’d learned about supply chain in general, and shipping in particular since February 2016, I knew I wanted to see what TPM is all about. So, after talking it over with my teammates at Particle Ventures, I said “yes”.

I have always believed that seed-stage VCs should spend as much time learning about industries in which they intend to invest. Some of that learning comes from reading books, media articles, and research articles. Some of that also involves speaking with individuals who actually work within the industry. Another avenue to learning about an industry is attending industry conferences, because conferences allow you to get a sense of the community or communities that come together to makeup the industry. Done well, conferences enable you to learn about trends and issues of concern within the industry, and simultaneously meet individuals for on-on-one conversations.

Context – Who Am I? What did I Expect?

I am a partner at Particle Ventures, a seed-stage venture fund based in New York City that invests in technology startups with a focus on Supply Chain & Industrial Intelligence. Our team at Particle believes the greatest technological shift of our time is happening at the intersection of data and heavy industry. Particle is built by the same team that built KEC Ventures.

Together with a team of co-organizers, I also founded The New York Supply Chain Meetup in August 2017 – to my mind, a logical next step in my evolution as a VC developing a specialty in supply chain and industrial intelligence; I wanted to hangout with people who think obsessively about software, global supply chains, and innovation. We’re building multidisciplinary community to bring techies and supply chain professionals together to pursue ways to enable innovations that will lead to the supply chain networks of the future. We expect to launch a website soon. Stay tuned!

As a result of my background, it is very likely my interpretation of things will seem strange. It will also often be wrong. When I am wrong, I hope you’ll let me know, and tell me how to correct my knowledge. If you are in the shipping industry and want to connect, or if you are a startup creating a new product for the supply chain industry . . . I am easy to find online. Don’t hesitate to connect.

To say TPM2018 met my expectations would be an understatement . . . It blew expectations completely out of the water. Here’s my recap.

Sunday, March 4

I thought it would be helpful to attend the Editorial Luncheon, because I find what journalists do to be similar to what early stage VCs do in some respects. So I wanted some insight into how journalists who cover container shipping and international logistics are thinking about the industry. The luncheon was phenomenal . . . I told someone after it was over that if I’d been told that was it, we all had to go back home because TPM2018 had been cancelled, I still would have felt the trip was absolutely worth it.

I know, I know . . . You’d like to know more details. Sorry. That conversation was off the record.

Next, I had coffee with Chayenne Wiskerske. Chayenne is a managing director responsible for sales and management at Wiskerske Onions, a family run business that has existed since 1933. She’s the 4th generation of her family to go into the business. Wiskerske Onions is a Dutch company that exports onions to 110 markets, and has a network of growers in 23 countries. We talked about many things, including

  1. The use of distributed ledger technologies and digital tokens as a way to keep track of produce in the supply chain with transparency and visibility, but just as important,
  2. As an alternative to existing banking infrastructure in situations where multinational corporations like Wiskerske Onions encounter foreign currency risk due to regulations that severely limit how much foreign currency they can transfer out of countries in which they do business around the world.

Monday, March 5

I was up way too early on Monday, March 5, 2018 . . . I decided to head to the Long Beach Convention Center before sunrise on Monday, March 5, 2018.

I started my morning by meeting with Christy Coffey, a cybersecurity collaboration advocate, computer scientist, and inventor. She currently serves as the VP of Member Services for the Maritime & Port Security Information Sharing and Analysis Organization (MPS-ISAO). We talked about trends in cybersecurity especially as it relates to maritime shipping and port operations. I am interested in how early stage cybersecurity startups can collaborate with the maritime shipping industry, so meeting Christy was one step towards helping me begin to get some ideas about how channels of communication may be enabled between cybersecurity startup founders and people responsible for increasing the maritime industry’s cybersecurity preparedness. This also one area of focus for the Maritime Global Technologies Innovation Center at SUNY Maritime College, which I have been helping get off the ground.

With Christy Coffey of MPS-ISAO, after we’d been talking about cybersecurity and maritime operations – port and vessel operations, at the Long Beach Convention Center on Monday, March 5, 2018.

The morning’s program began with welcome remarks, followed by the keynote address. This year, Jochen Thewes, CEO and Chairman of The Board of Management at DB Schenker delivered the keynote. A few things struck me about the welcome remarks, as well as the keynote . . .

  1. Software technology is top of mind . . . The theme for the Innovation Jam frames things nicely and captures the mood around technology in maritime shipping;Beyond the hype and the promises “What Can Technology Really Solve?”
  2. Artificial Intelligence is already making a small difference for some of the big players in the industry . . . The goal now should be to apply AI even more broadly to augment existing efforts. Some of the sentiments about AI in maritime shipping are echoed here: Cargo Drones and Data Swarms: Experts Weigh In on Digital Transformation in Shipping & Maritime
  3. Like everyone else, people in the shipping industry are really excited about bitcoin and blockchain. The jury is still out how or if the shipping industry will adopt it as quickly as some hope.
  4. Jochen Thewes is a really good public speaker.

During the keynote, Jochen Thewes made a remark about how a team of mathematicians DB Schenker has hired relatively recently has made a big difference in how they run their business. I chuckled and muttered under my breath . . . “Uhm. That’s what mathematicians do. They solve problems.” The gentle man sitting next to me looked at me and said, “You find that impressive? The forecasting timeline?” I replied, “Yes. Given the business they are in, yes, that’s impressive.” Then I looked at him and asked, “What do you do?”

He said, “I am the Chief Economist at Maersk.”

My mind was immediately blown.

Graham Slack is Chief Economist and Head of Strategy at Maersk! Can you imagine what insights he must have into the state of the world’s economy? I discovered I was sitting next to him during the kickoff keynote on Monday, March 5.

Graham Slack, Chief Economist at Maersk takes the stage to discuss the 2018 outlook for container shipping.

Another highlight on Monday, was the concurrent session Technology II: Blockchain – An Example of How it Could Apply to Shipping. It was moderated by Daniel James, Director of Commodities Financial Markets at IHS Markit. The panelists were;

  1. George Goldman, President, Zim USA
  2. Gadi Ruschin, CEO, Wave Ltd
  3. Bjorn Vang Jensen, VP of Global Logistics, Electrolux, and
  4. Jason Manganaro, VP of Sales, SPARX Logistics.

The room was packed with people interested in hearing about a specific implementation of Wave’s distributed ledger document management network. From Wave’s website; “Wave has created a peer-to-peer and completely decentralized network that connects all carriers, banks, forwarders, traders and other parties of the international trading supply chain. Using decentralized technologies, all communication between these parties will be direct and will not pass through a specific central entity. Due to its decentralized nature, the Wave network will not have any single point of failure and will not rely on any single entity.”

Tuesday, March 6

As you can imagine I woke up feeling nervous on Tuesday morning, which is the day that the two hour-long Innovation Jam Sessions were held. It’s one thing to be in front of a big audience and to have no idea who’s judging you . . . It’s a completely different issue to be in front of the best and brightest of the industry . . . . Especially, for someone like me; I used to have a very severe stammer as a child. In fact, the first time I spoke in public in secondary school, the audience booed at me. Nevermind, I endured all 9 minutes of it. The story has a happy ending, so ask me about it when we meet in real life.

To calm my nerves I went and took a walk around the Grand Ballroom at the Long Beach Convention Center while it was empty.

The Grand Ballroom at The Long Beach Convention Center, in Long Beach, CA.

Personally, I think the highlight of Tuesday’s agenda was listening to Lior Ron, cofounder of Otto and now head of Uber Freight discuss Uber Freight’s vision for digital freight marketplaces during TPM Accelerator: The Future of Trucking and What it Means for Shippers.

Here are two videos that explain the vision.

The Innovation Jam

Photo Credit: Caught in the Moment Photography.

Quoting from TPM2018’s website; “Technology is all well and good, but what problems can it actually solve? That remains the disconnect between the hype and the reality of the digital revolution as it relates to transportation and logistics. Despite hundreds of millions of dollars invested in startups — not to mention massive technology investments by legacy players — basic problems that shippers experience every day remain unsolved. The question, then, is whether technology can solve them. The JOC editorial team set out to answer that by reaching out to beneficial cargo owners about their most severe supply chain challenges, and inviting technology providers and others to propose how they would solve them. The result was nearly 80 proposed solutions to 17 of the most severe BCO pain points, proposals that an ad hoc committee of BCOs then reviewed and ultimately decided which ideas it wanted to see presented at TPM. The result: Eight technology providers will present their proposed solutions to pain points that range from poor supply chain visibility, exception/contingency management, gate efficiency, rolling of cargo, and variability in ocean carrier schedules. Attendees will have the opportunity to vote on the solution that most convincingly addresses the pain point it addresses, with the winner announced at the end of the jam.”

What Problems Can Technology Really Solve? First of a Two-Part Track – Exports Session

As sponsor for this session, John Golob, CEO of Lanetix kicked things of with an introduction. For the first hour we had 4 presentations from 4 technology providers, each addressing a specific BCO pain-point.

From Left to Right; Adam Compain CEO, ClearMetal. Zvi Schreiber, CEO, Freightos. John Motley, CEO, Log-Net. Robin Jaacks Vice President, Sales Operations, Ocean Insights. Photo Credit: Caught in the Moment Photography.

What Problems Can Technology Really Solve? Second of a Two-Part Track – Technology Session

As sponsor for this session, Todd Ericksrud, President and CEO of MatchBack Systems kicked things of with an introduction. For the second hour we again had 4 presentations from 4 technology providers, each addressing a specific BCO pain-point.

From Left to Right; Gordon Downes, CEO, New York Shipping Exchange. Sumitha Sampath, Vice President of Operations, XVELA. Karim Jumma, Interim Chief Product Officer, INTTRA. Vladimir Pshonyak, Founder and CEO, Pier Trucker. Photo Credit: Caught in the Moment Photography.

Based on votes from the audience, Gordon Downes and the New York Shipping Exchange walked away with the prize for most persuasively addressing the pain-point that NYSHEX had been invited to discuss with the audience of BCO representatives. That being said, I thought each of the presenters did a good job . . . I’m already thinking about ways to make the Innovation Jam at TPM2019 better for the folks chosen to present; more guidelines about where to place their emphasis, and more direction about how to prepare for a presentation like this – It’s a hybrid between a normal sales pitch, a product demo, and some elements of an Oxford-style debate – with possibly big implications for each business that’s presenting. At the least I think people who agree to moderate should do more to help each presenter put their best foot forward by helping guide presentation prep and practice ahead of the conference. This may also mean getting the process of selecting presenters for the innovation jam done about a month earlier than happened this year. That said . . . 2018 is the first year in TPM’s history that there’s been an Innovation Jam, so I think we’re off to a great start. Now the focus has to be on making the communication between startups and the maritime industry more robust and free-flowing.

(L) Brian Laung Aoaeh, CFA, Partner, Particle Ventures and (R) Gordon Downes, CEO, New York Shipping Exchange. Gordon won the TPM2018 Innovation Jam via Audience Poll. Photo Credit: Caught in the Moment Photography

I felt beat after the Innovation Jam . . . So I went back to my hotel and walked 14.4 miles as part of my effort to get back in shape after suffering a case of plantar fasciitis last summer.

Wednesday, March 7

I was supposed to head back to NYC from Long Beach on Wednesday, in the afternoon . . . But snow storms on the East Coast caused me to change my plans. So Instead of heading out early, I now could stay for the full day of programing on TPM2018’s final day. I am happy I did.

I will highlight two things;

Technology Forum: Preparing The Port of Los Angeles-GE Transportation Information Portal for Prime Time was a series of presentations followed by a panel discussion that focused on how GE Transportation, the Port of Los Angeles, and the Port of Long Beach are working together, and with other stakeholders to remove bottlenecks to the free flow of intermodal cargo once it arrives at the ports. I hope this is only the first example in a a model that spreads to other major ports around the world. Essentially,GE Transportation, the Port of Los Angeles, and the Port of Long Beach have created a collaboration model that brings together technologies from large and small companies, and some early stage tech startups too to create a system that will ease congestion at the ports. Project44 and Voyage Control were part of the presentations, and they participated on the panel discussion too.

Lunch with Speaker – “Bold and Clear Predictions” was a presentation by Lars Jensen, CEO and Partner, SeaIntelligence Consulting. I am happy I had to stay for this because of my change in travel plans . . . He discussed some questions I have been thinking about over the duration that I have been teaching myself about supply chain and the opportunities for innovation driven by tech startups – the kind I hope to discover and invest in. For example;

  1. He talked about some of the business models that he believes will work, and he also talked about some of the business models that he feels have less promising prospects. He confirmed some of my assumptions, and some of my concerns on this topic.
  2. He highlighted some of the startups he feels have strong prospects of gaining adoption by the industry. I became happier as I heard him confirm some of my guesses when I was studying the opportunities for startups in the maritime shipping industry in February 2016.
  3. He also discussed industry dynamics I did not know . . . I now will go and spend some time following up on some of the threads he pointed us towards.
  4. He discussed the Amazon Effect in some detail, but he has a different perspective than other speakers. Most others spoke about Amazon as a threat. Lars sees it as more of an opportunity . . . The shipping business is so tough that he believes that I Amazon decided to become a carrier onto itself, that would be one of the earliest signs of a coming decline in Amazon’s fortunes. I agree with him. For the same reason I did not think Apple would start building cars.

He’s an author, and so I have bought two of his books and added them to my reading pile on supply chain and shipping.

My Takeaways

  1. Supply chain presents an enormous opportunity for startups to create value through technological innovation.
  2. However, global supply chains will not be “disrupted” . . . Startup founders who approach supply chain innovation with a “we are going to disrupt yada yada” mindset will find the going very hard. This is mission-critical stuff, chaos and general pandemonium is anathema to how the industry runs. Early stage investors will do well to keep this in mind.
  3. Trust is key. Relationships matter. Old systems and new technological innovations have to play well together.
  4. Supply chain industry professionals and tech startup folks should spend more time around one another in order to enable the cross-pollination of ideas and knowledge.

There’s more from my time at #TPM2018 on Twitter.