This Week in Logistics News (May 8-12, 2017)

By Adrian Gonzalez

It was a very busy week in the world of supply chain and logistics, so let’s go straight to the news that caught my attention:

I remember meeting Karl Siebrecht, co-founder and CEO of FLEXE, a few years ago at the CSCMP Annual Conference not long after the company had launched. I was intrigued by the on-demand warehousing concept (or “Airbnb for warehousing” as some are calling it) and the business model and technology behind it. It made a lot of sense, but would it work? That was my main question after our initial meeting. Could FLEXE build a network of warehouse providers that would buy into the model? Could it develop the necessary technology to manage inventory and shipments across many disparate partners and get the warehouses to use it?

Fast forward to today and FLEXE has raised almost $21 million, has 200 partners and a network of 550 warehouses (with 25 million square feet of storage space, with an additional 10 million square feet to be added this year), and sales grew 400 percent last year. One of its partners is Iron Mountain, which provides document storage for financial, legal, healthcare and government clients. According to a Bloomberg article:

Iron Mountain signed on with Flexe two years ago to sell extra space in its 1,000 facilities in 90 markets. Solar panels, space heaters, sheets, pillows and mattresses from various merchants have now passed through its facilities without disrupting the main business, and e-commerce opportunities are growing, says Dale Lawing, an Iron Mountain senior vice president.

FLEXE took the next logical step in its evolution this week: it announced FLEXE Next-Day Delivery, “a new fulfillment solution that enables e-commerce brands to reach 98 percent of the US population via next-day ground shipping.” According to the press release:

For the first time, businesses can now deliver their goods faster than Amazon Prime, without making an Amazon-sized investment.

FLEXE Next-Day Delivery gives companies control of the end-to-end fulfillment process, from identifying ideal fulfillment center locations, to delivering product via integrations with all major carriers. FLEXE integrates with all major shopping carts, provides inventory control, and enables dynamic order management to ensure the most efficient path from order to delivery.

One of my predictions for 2017 was that we would continue to see the convergence of commerce and logistics, as well as the ongoing convergence of technology and logistics service providers. FLEXE is yet another example, along with Symphony Commerce and the MonarchFX Alliance (comprised of Tompkins International, Kenco Logistics, NFI Interactive Logistics, and JDA Software), of solution providers that are coming to market to help retailers and others compete against Amazon and its vast fulfillment network and services.

Will these ventures work? Time will tell, but what’s clear to me is that with the possible exceptions of Walmart, Target, and a few others, most retailers don’t have the scale, money, technology, or time to build the logistics network necessary to compete effectively with Amazon on their own. They’ll need to be more creative and collaborative — and so will existing third-party logistics providers (3PLs) and technology companies — to even the playing field, or even better, to create a competitive advantage of their own.

Moving on, one of my other predictions for this year was that we would see the migration from traditional user interfaces to chatbots and virtual assistants, such as Alexa, the virtual assistant that comes with Amazon Echo. Well, DHL this week announced that “effective immediately, DHL customers can query Amazon’s digital smart speaker ‘Alexa’ for information on their parcel’s current whereabouts.” Here’s more from the press release:

By activating Alexa’s DHL Parcel “skill” via the Alexa app, users can ask their Amazon Echo or Echo Dot smart speaker to provide information on their shipment status, for example: “Alexa, ask DHL where my parcel is”. The voice-controlled interaction with Alexa is part of DHL Parcel’s service strategy to continually improve the customer experience. The goal here is to make it quick and easy for every customer to receive an answer to his or her question at any time.

I originally made this prediction back in 2013 when I wrote the following under the banner of “Siri Comes to Enterprise Apps”:

Instead of manually executing tasks with a mouse or touch screen, why not speak them? We already see this in the consumer realm with smartphones, and in the warehouse too with voice picking technologies. It’s only a question of time before speech recognition gets embedded into other enterprise and supply chain applications. A TMS user, for example, can say to the system, “Show me all uncovered loads,” or an inventory manager can ask, “Which stores have less than three days inventory of product X?” and up come the results on the screen.

So maybe I was a few years premature on that prediction, but I’m feeling more confident about it now.

Finally, lots of news this week in the supply chain software realm, led by Manhattan Associates, which held its Momentum 2017 Conference this week. I spoke at the conference and will share my takeaways about it in a future post, but the big news was the unveiling of Manhattan Active Solutions, “the next generation of software and services that gives customers faster access to Manhattan’s latest innovations through an integrated suite of platform-based products that span the commercial continuum.” Here are some details from the press release:

While new software releases that improve both the effectiveness and efficiency of store, warehouse, transportation and inventory management are frequently introduced, adoption of the latest technologies is often slowed by the need for significant capital investment or change management requirements.

The new Manhattan Active Solutions suites address these challenges, with products and services that are always current and automatically include the customer’s latest extensions and modifications, reducing or eliminating both downtime needed for upgrades and additional fees.

Again, more on that news and the rest of the conference in a future post.

And with that, have a happy weekend!

Song of the Week: “Life in a Northern Town” by Dream Academy