This Week in Logistics News (June 27 – July 1, 2016)

By Adrian Gonzalez

With many folks taking off early for the holiday weekend, I’ll just go straight to this week’s supply chain and logistics news that caught my attention:

At the stroke of midnight, the new SOLAS regulations went into effect today, and much like the Y2K doomsday predictions, the global trade world did not end. I’m sure there will be some disruptions here and there, but as a whole, my guess is that this too shall pass and be generally forgotten about in a few months.

For more on SOLAS, read the following guest commentaries we have published in recent months:

GT Nexus: Don’t Get Caught Off-Guard: Preparing for July 2016 SOLAS Shipper Mandates
Descartes: The Impact of SOLAS on Ocean Shipping and Data Management
Transplace: July SOLAS Mandates: What You Need to Know

Acquisitions in the software space continue, especially related to Supply Chain Operating Networks. Less than four months after acquiring Terra Technology, E2open announced this week that it has acquired Orchestro, “the leading provider of demand signal repositories and preemptive analytics for retail and omni-channel fulfillment.” Here are some details from the press release:

Today, over 210 global brands from multinational manufacturers including Newell Brands, Del Monte, and General Mills, and their omni-channel retail partners rely on Orchestro’s analytics to improve on-shelf availability, promotional effectiveness, new product introductions, and forecast accuracy.

Orchestro’s data, visibility and analytics solutions strategically complement E2open’s recent acquisition of Demand Sensing solutions from Terra Technology. By leveraging Orchestro’s daily omni-channel data, Demand Sensing can provide 20-40% better forecast accuracy than traditional solutions for brand owners and their retail partners.

The Terra Technology and Orchestro acquisitions give E2open a strong foundation to grow in the CPG industry, and it further expands the scope and functionality of Supply Chain Operating Networks into the collaborative planning and execution realm. Much like JDA with its Flowcasting solution, E2open is providing manufacturers and retailers with an alternative approach to synchronizing demand with supply, an approach that can sense demand more quickly and accurately than traditional methods and can facilitate trading partner communication and collaboration more effectively too.

In the third-party logistics (3PL) realm, as reported by Erica Phillips in the Wall Street Journal, “DB Schenker…has hired uShip Inc. to connect shippers with trucking companies online, in the latest major tie-up between traditional freight brokers and technology firms.” Here are more details from the article:

[DB Schenker] said it’s paying “tens of millions of dollars” for exclusive rights in Europe to a digital freight-booking platform developed by Austin-based uShip.

Logistics companies worldwide have been racing to develop technology to make it easier for shippers to book freight transportation, much of which is still hashed out between brokers and carriers by phone or fax.

Companies like XPO Logistics Inc. are spending millions of dollars to develop in-house platforms. Others have pursued acquisitions, including United Parcel Service Inc., which last year bought Coyote Logistics, a freight technology firm, for $1.8 billion. Deutsche Post AG took a €345 million ($383 million) write-off on a failed effort to create its own global freight forwarding technology platform.

This is yet another example of the “build vs. buy” dilemma many 3PLs face, which I wrote about last November in Is Every Company a Technology Company? I’ll just repeat what I said then:

There is no universal correct answer to the build vs. buy question, and in some cases, a hybrid of the two approaches is the best path forward. Regardless of which path you take, the key is understanding upfront the critical factors for success — the pitfalls to avoid, the hurdles to overcome — and make the necessary investments in time and resources to make it work.

Finally, one of my predictions for 2016 was that we would see increased innovation to simplify and expedite trading partner (B2B) connectivity, with APIs and Web Services replacing EDI as the preferred approach moving forward. Well, project44 announced this week that it has integrated over 1,000 transportation APIs into its platformed network, with plans to expand further into other modes and data sources. According to the press release:

Since 2014, project44 has maintained critical mass in the $37B Less-Than-Truckload (LTL) sector with 99.9% of the LTL carriers connected into their platform. This level of API depth is unprecedented in the LTL market, enabling a new level of real-time connectivity and proactive transportation management while reducing the need for manual back-and-forth communications, saving all parties time and money.

The platform currently facilitates about 2.1M instant API transactions per day. With this LTL proof of concept in place, the enterprise SaaS provider plans to expand into new transportation modes, most importantly Truckload and Intermodal, address additional data “black holes” plaguing the global supply chain, and integrate more environmental ecosystem APIs, like weather and traffic.

Simply put, APIs are the technology equivalent of millennials, while EDI is an aging baby boomer, not quite ready to retire just yet, but getting close.

And with that, have a happy weekend!

Song of the Week: “Feel Right” by Esmé Patterson