This Week in Logistics News (February 4-8, 2019)

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… because my mind is blank this morning. Here’s the supply chain and logistics news that caught my attention this week.

Stating the Obvious: Amazon Competes in Transportation and Logistics Services

Amazon added four words to its 10K filing last week that has generated a lot of buzz. As reported by CNBC, Amazon added “transportation and logistics services” to its group of competitors in the “Risk Factors” section of the filing, which now reads (emphasis ours):

“Our businesses are rapidly evolving and intensely competitive, and we have many competitors in different industries, including physical, e-commerce, and omnichannel retail, e-commerce services, digital content and electronic devices, web and infrastructure computing services, and transportation and logistics services, and across geographies, including cross-border competition.”

This is just stating the obvious. As I wrote back in August 2016 in Amazon: Disruptor or Distraction?, Amazon has been a third-party logistics provider (3PL) for many years, and via its “Fulfillment by Amazon” service (and more recently, its “Shipping with Amazon” offering), the company is perhaps the leading 3PL serving small and midsized businesses (SMBs), a segment of the market that other logistics service providers have historically ignored or failed to penetrate.

Co-opetition in parcel delivery has been going on for years, especially between the United States Postal Service (USPS), FedEx, and UPS. Here’s an excerpt from a report issued in November 2015 by the USPS Office of Inspector General titled “Co-opetition in Parcel Delivery: An Exploratory Analysis”:

E-commerce and changing consumer demand have led to an explosion in parcel shipping, which in turn is driving dynamic change in the parcel market. Not only has increased demand for parcels benefitted the providers of parcel services through increased volume, it has also changed the relationship between players in the market. In order to remain competitive, firms are beginning to collaborate with their once rivals — providing processing, transportation, or delivery for each other — something we refer to as co-opetition. For example, both UPS and FedEx use the Postal Service to provide last-mile delivery for a significant portion of their ground parcels.

While Amazon’s continued investments in delivery and logistics capabilities and services make it more competitive than cooperative, the reality is that all players are still dependent on each other for success. The lines between Amazon, USPS, FedEx, and UPS have been blurred for some time, and they will remain so moving forward.

Open Checkbook for Visibility: FourKites Secures $50 Million in Series C Funding

The real-time freight visibility space was particularly hot this year, with two major acquisitions completed in recent months (Descartes acquired MacroPoint and Trimble acquired 10-4 Systems). Why the increased demand for these solutions? Because shippers want this visibility, and more importantly, they want to do something with it — that is, they want to identify and implement better ways to plan and execute their transportation and logistics operations, which is what ultimately delivers value.

I wrote that back in December 2017 as part of my supply chain and logistics predictions for 2018. Since then, the market has remained hot. Just a few weeks ago, for example, project44 acquired GateHouse Logistics, which expanded the company’s presence in Europe. Last month, Descartes announced that “Steelcase Inc., an industry-leading supplier of architecture, furniture and technology products and services, has deployed Descartes MacroPoint™ to enhance real-time shipment visibility across its U.S. distribution network.” Here’s a quote from the press release:

“Delivering a superior customer experience is what sets us apart in our industry. Extending real-time shipment visibility across the organization from our manufacturing facilities and distribution centers to our dedicated fleet and carrier partners is key to our exemplary service performance,” said Joe Verbraska, Director, N.A. Transportation at Steelcase. “With Descartes MacroPoint, we’ve been able to reduce load tracking time by 50 percent, provide faster response times to any shipment issues that may arise, and optimize our labor and capacity planning.”

And this week FourKites announced $50 million in new funding, led by existing investors August Capital, Bain Capital Ventures, CEAS Investments and Hyde Park Angels. The funding brings FourKites’ total capital raised to $100.5 million. Here are some excerpts from the press release:

FourKites’ network now includes more than 200 of the world’s top shippers, including AB InBev, Conagra Brands, Kraft Heinz, Nestlé, Perdue Foods, Smithfield Foods, Unilever, Walmart Canada and many others.

“FourKites gives us comprehensive data visibility in a simplified platform that allows us to quickly and effectively manage our shipments in transit,” said Jason Wicklund, supply chain leader at Land O’Lakes. “As our partnership with FourKites grows, we look forward to leveraging the predictive analytics tools available to unlock additional capacity in a challenging marketplace. This will allow us to be more collaborative with our customers and vendors in a fragmented and complex supply chain.”

FourKites will use the funding to expand its supply chain platform with new applications and capabilities; grow its global network of top shippers and carriers; and extend its “zero deadhead” initiative to help shippers share unused truck capacity.

I’ll keep saying it: This is a fast-changing market and the endgame is still not clear to me, but I expect to see more partnerships and acquisitions in the months ahead, with perhaps other network-based supply chain solution providers taking out their checkbooks and bringing these freight visibility solutions directly onto their platforms.

For related commentary, see On-Time In-Full (OTIF) and the Growing Demand for Real-Time Freight Visibility

And with that, have a happy weekend!

Song of the Week: “Weak” by AJR