This Week in Logistics News (February 3-7, 2014)

If you’re still wondering if there’s a talent shortage in the logistics industry, watch these videos compiled by MHL News. Then read on for this week’s news…

It’s not every day that a new supply chain software startup is featured in the Wall Street Journal, Forbes, and other high-profile publications, but that was the case this week with Elementum. The company, which calls itself the “world’s first mobile platform for end-to-end supply chain management,” emerged from stealth mode on Tuesday announcing that it has raised $44 million in Series B funding from Lightspeed Venture Partners and Flextronics, an early customer along with Dyson Ltd. and Enphase Energy Inc. Here’s an excerpt from the press release:

With shorter product lifecycles and instant customer feedback becoming the norm, companies need to respond to changes faster than ever. How? With real-time visibility into their supply chain using beautiful, bite-sized apps for managing risk, managing KPIs, and tracking shipments — all in the cloud at one simple price [$1,000 per node per year, according to the Forbes article]…All customers have to do is download an app, log in, and go.

“Supply Chain Made Simple” is the company’s tagline, and it has produced a series of short marketing videos about its apps to illustrate the point — although the apps aren’t featured in them very much.

I haven’t been briefed by Elementum yet, but here’s my initial impression:

  • The company’s vision and model are right on target. As I’ve written about in previous posts, we are now in the social/mobile/cloud era, and what users of enterprise applications want are applications that are easy to learn and use, easy to configure and customize, and easy to upgrade (see Will Supply Chain Software Vendors Start Competing on Design? and 5 Reasons Why Excel is Champ of Supply Chain Apps). The concept of “bite-sized” apps is something I envisioned five years ago, and other software vendors are striving to make their applications “beautiful,” most notably Infor, and startups like Cloud Logistics are also built for the cloud and mobile devices.

  • You can make supply chain apps simple to use, simple to deploy, and simple to procure — but the rest of supply chain management is anything but simple; it’s complex and messy. I’ve said it before, and I’ll say it again, software is not enough in supply chain management. You also need connectivity to trading partners and data quality management processes and systems. Otherwise, it’s still garbage in, garbage out. I encourage you to watch Why Supply Chain Visibility Remains an Elusive Goal where I discuss five key challenges companies face in their efforts to obtain timely, accurate, and complete visibility to their supply chain events and transactions, and I offer three recommendations for companies to achieve this goal.

The last point about data quality management relates to another startup announced this week, ThoughtSpot, which “aims to bring Google-like search capabilities to business data.” Here’s an excerpt from the WSJ article:

Unlike social data and Web data, which are indexed by consumer search engines like Google and Bing, business data tends to be scattered and siloed inside companies, making it hard to use because it’s so hard to find [emphasis mine — and I would add, in the case of supply chains, data is scattered across different companies, applications, and geographies].


The appliance can be pointed to data that’s in the cloud or inside the company, residing in databases, applications like Salesforce and Workday, data warehouses and Excel spreadsheets on individual machines.

Interestingly, Lightspeed Venture Partners is also an investor in ThoughtSpot. I would encourage the teams from Elementum and ThoughtSpot to meet for coffee soon.

Moving on to financial news, Ryder reported record comparable earnings per diluted share from continuing operations in Q4 2013, up 7 percent from Q4 2012. Both business segments — Fleet Management Solutions (FMS) and Supply Chain Solutions (SCS) — posted strong results. Here are some details about the SCS segment:

In the SCS business segment, fourth quarter 2013 total revenue was $598.7 million, up 4%, as higher operating revenue offset lower subcontracted transportation. Operating revenue (revenue excluding subcontracted transportation) was $525.9 million, an increase of 8% compared with the same quarter a year ago. SCS operating revenue grew as a result of new sales and higher volumes. The Company saw strong growth in the industrial, consumer packaged goods/retail, and high tech vertical industry groups.

In recent years, Ryder has been focused on diversifying its business across multiple vertical industries, and based on these results, it seems like those efforts are paying off.

Con-way reported mixed results for Q4 and the year. The company’s Menlo Worldwide Logistics division reported lower revenue and operating income in Q4 2013 compared to the previous year. According to the press release, “The lower operating income primarily reflected losses from two new warehouse accounts and a bad-debt write-off from a customer bankruptcy. With respect to the new warehousing accounts, Menlo incurred higher-than-anticipated operating expense, mostly due to business volumes that fell well below customer projections, particularly in December.”

Shifting gears to transportation, earlier this week I wrote about the latest news surrounding Hours-of Service. The other ongoing hot topic in the industry is the Compliance, Safety, Accountability (CSA) program, and this week the Government Accountability Office issued a report about it, calling for changes in the Safety Measurement System (SMS). Here’s an excerpt from the summary:

FMCSA faces at least two challenges in reliably assessing safety risk for the majority of carriers. First, for SMS to be effective in identifying carriers more likely to crash, the violations that FMCSA uses to calculate SMS scores should have a strong predictive relationship with crashes. However, based on GAO’s analysis of available information, most regulations used to calculate SMS scores are not violated often enough to strongly associate them with crash risk for individual carriers. Second, most carriers lack sufficient safety performance data to ensure that FMCSA can reliably compare them with other carriers.

A couple of days later, FMSCA issued its own research report stating that its “Safety Measurement System is an improvement for identifying at-risk companies.” Not surprising, the American Trucking Association issued a response: “Just because CSA is an improvement over previous programs does not make it a ‘good’ program for assessing the safety performance of individual carriers as the Government Accountability Office demonstrated earlier this week,” said ATA President and CEO Bill Graves.

The soap opera continues.

Finally, work on the Panama Canal expansion has come to a halt over disagreements on who has to pay the $1.6 billion in cost overruns. Wait, a transportation infrastructure project that’s costing more than originally projected? “That’s never happened before,” said nobody, ever.

And with that, have a happy weekend!

Song of the Week: “Come to Me” by Goo Goo Dolls

Note: Ryder is a Talking Logistics sponsor.