This Week in Logistics News (September 17-21, 2018)

Another Friday, another flight home from a conference. This time I’ll be returning from enVista’s FUEL 2018 conference where I am giving a keynote presentation this morning on Defining Your Own Logistics Competitive Weapon. Stay tuned for my takeaways from the conference in a future post.

In the meantime, here’s the supply chain and logistics news that caught my attention this week:

Volvo Vera: I’ll Have a Driverless Truck, Without the Cab

If driverless trucks will one day truly operate without drivers, then why design them like traditional trucks? In other words, why not transport the trailer with something other than a cab with an empty seat?

That seems to be the question that inspired Volvo to design Vera, “an autonomous, electric vehicle that is controlled and monitored via a control centre, and has the potential to make transportation safer, cleaner and more efficient.” The solution is intended to be used “for regular and repetitive tasks characterised by relatively short distances, large volumes of goods and high delivery precision,” such as ports, factory areas, and logistics parks.

Here are some details from the website and a short video showing the vehicle and system in action:

The operation is handled by autonomous electric vehicles linked to a cloud service and a transport control centre. The vehicles are equipped with sophisticated systems for autonomous driving. They are designed to locate their current position to within centimetres, monitor in detail and analyse what is happening with other road users, and then respond with high accuracy.

The transport control centre continuously monitors the progress of the transport and keeps an accurate watch of each vehicle’s position, the batteries’ charge, load content, service requirements and a number of other parameters. As with an industrial production process, speed and progress are tailored to avoid unnecessary waiting and to increase delivery precision. In this way it will be possible to minimise waste in the form of buffer stocks, and increase availability. Vehicles that operate on the same route cooperate to create optimal flow.

The solution is analogous to how autonomous robots are being deployed in the warehouse — except the “warehouse” in this case is a bounded and secure outdoor area, like a port, where the Vera vehicles are controlled via a central operating system and they are able to sense and respond to what’s happening around them and communicate with each other.

In fact, Vera sort of looks like a much larger version of a Kiva (now Amazon Robotics) robot.

We’ll see this type of driverless vehicle application get adopted faster and more broadly than driverless trucks on interstates, much like we’ll see drones being used to track inventory inside warehouses and yards much faster than we’ll see them delivering Amazon packages to our doorsteps.

Convoy, Freightos, and Postmates: We’re in the Money!

There is a lot of venture and private equity money out there and a good portion of it is flowing to logistics companies. This week Postmates announced that “it raised $300 million led by Tiger Global Management LLC (“Tiger”), on the heels of a record-shattering year of growth, market expansion, and adoption of the industry’s first subscription service.”

Here are some details from the press release:

Postmates gives customers, across 400 U.S. cities and Mexico City, access to over 250,000 merchants with real time deliveries.

Gross profit growth averaged over 250% in the past four years while gross margins have improved dramatically to nearly 50%; Postmates completes millions of deliveries a month, generating over a billion dollars in gross merchandise volume (GMV) annually and driving profitability in 90% of its markets.

With this funding, Postmates will expand its selection advantage; broaden coverage to over 70% of U.S. households by the end of the year; unleash new point-of-sale integration technologies; deploy state of the art API tools (offering white-glove delivery services to non-brick and mortar retail partners at scale); scale social impact investments & new workforce development policies; and invest in cutting edge R&D to devise new last-mile mobility solutions.   

That’s a long “To Do” list, which shows how nascent this market still is. Ultimately, there will only be a few winners in this on-demand, same-day delivery space, but it seems like investors are betting that Postmates (which is now reportedly valued at $1.2 billion) will be one of them.

In other investment news, Freightos announced “the completion of a US$44.4 million dollar Series C funding round, led by Singapore Exchange (SGX), to further scale the world’s largest online international freight marketplace.” Here are some details from the press release:

Today, Freightos powers over one million instant freight quote requests every month, relying on over one billion rate data points and patent-pending routing and pricing engines. The Freightos global rate database also drives the Freightos Baltic Index (FBX), the world’s most comprehensive and up-to-date container freight index in collaboration with the Baltic Exchange which is part of the SGX group.

The round is joined by new and existing Freightos investors, including General Electric Ventures, ICV, Aleph, and others…To date, Freightos has raised US$94.4 million.

Meanwhile, as reported by the Wall Street Journal, “Digital freight-booking startup Convoy raised $185 million in a funding round led by an investment arm of Google parent company Alphabet Inc…The funding round brings Convoy’s total raised to $265 million, and Chief Executive Dan Lewis said it gives the business a total value of over $1 billion.”

To paraphrase the Pet Shop Boys, “there are lot of opportunities [in logistics], if you know when to take them, you know, there’s a lot of opportunities, if there aren’t you can make them, make or break them.”

And with that, have a happy weekend!

Song of the Week: “Unknown (To You)” by Jacob Banks