I received a few questions yesterday about Indago, our new market research community for supply chain practitioners that benefits charities. The most common question was “What does Indago mean?”
Indago is a Latin word that means “to investigate, search out, try to find/procure by seeking.”
We investigated two questions with our members this week:
- “How often is risk considered in your supply chain decision-making discussions?”
- “Which risks do you believe supply chain professionals need to plan for more effectively moving forward?”
Our community members will receive the results by the end of today. I’ll give you a hint: tariff wars ranked near the bottom of the list.
Moving on, here’s the supply chain and logistics news that caught my attention this week:
- Amazon’s Freight Push Rattles Logistics Sector (WSJ – sub. req’d)
- SAP and Uber Freight Join Forces to Deliver On-Demand Logistics Through the Power of Networks
- Kuebix Extends Load Matching Service with Emerge Marketplace
- FedEx CIO Looks to Industry Collaboration to Scale Blockchain (WSJ – sub. req’d)
- WiseTech Global acquires messaging solutions provider, Xware
- BlackBuck raises $150 million to digitize freight and logistics across India (TechCrunch)
- FreightHub, the European digital freight forwarder, collects $30M Series B (TechCrunch)
- CH Robinson Reports 2019 First Quarter Results
- JDA Delivers Record Q1 2019 Results
- Ryder Reports Record First Quarter 2019 Revenue of $2.2 Billion, Up 15%
- AI Yields Benefits for Rail Operators (WSJ – sub. req’d)
- Amazon dismisses idea automation will eliminate all its warehouse jobs soon (Reuters)
Amazon the Freight Broker
Last week Amazon grabbed the headlines when its CFO said the company was investing $800 million to make 1-day delivery standard for Amazon Prime members (see my Above the Fold commentary). This week, Amazon grabbed the headlines again with the news that it’s offering freight brokerage services. As reported by the Wall Street Journal:
The online retailer has opened an online freight brokerage platform to connect shippers with available trucks, offering service in five Eastern states […] Amazon is offering beta service for truckload shipments in Connecticut, Maryland, New Jersey, New York and Pennsylvania through its Amazon Logistics arm. It also provides instant rate quotes through an online portal, freight.amazon.com, saying users can “tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates.”
Over the past few years, freight brokerage has been a hot segment of the transportation market. Several startups (leveraging technology as a weapon) have raised hundreds of millions of dollars in an effort to disintermediate the heavyweights in the industry. Others, such as Descartes MacroPoint and Trucker Tools, are focusing on helping freight brokers, especially small and mid-sized ones, become more productive and efficient with technology solutions.
The common denominator is technology. Freight brokerage has been powered by phone calls and emails for a long time, but it’s not a sustainable model any more. The heavyweights in the industry know this too. In this week’s earnings call with Wall Street analysts, C.H. Robinson’s CEO Bob Biesterfeld emphasized that “Robinson spent about $1 billion on technology over the past 10 years and would spend another $1 billion on technology in the next four to five years,” as reported by FreightWaves.
Freight is a very big and very fragmented pie. Even if Amazon carves out a slice for itself, there’s plenty left for others to claim — but only if they modernize and keep pace with the rapid changes in the industry.
Connecting TMS with Networks and Marketplaces
Earlier this week, I wrote about the network effect in transportation management. Coincidently, both SAP and Kuebix (which sponsored the e-book my post was based on) announced partnerships this week related to the topic.
SAP and Uber Freight announced a partnership “to modernize the freight industry through intelligent process automation and better access to a network of connected and reliable drivers.” Here are some details from the press release:
The integration of Uber Freight into SAP Logistics Business Network will let customers access transportation rates from Uber’s digitally activated carrier network and gain real-time quotes and guaranteed freight capacity, greatly simplifying load management and execution.
SAP Logistics Business Network, built on SAP Cloud Platform and the SAP HANA business data platform, expands transportation management to enable shippers, freight forwarders, carriers and other logistics partners to easily onboard, collaborate, exchange logistics information and share insights. With this industry-first Uber Freight integration, shippers and carriers can work together using innovative tools that bypass traditional roadblocks, enabling shippers to select from a much broader carrier base and perform real-time pricing of shipments, while gaining improved utilization and efficiency.
Meanwhile, Kuebix and Emerge announced the addition of Emerge Marketplace to Kuebix Community Load Match. As described in the press release:
When a shipper is in need of additional truckload capacity or looking for more rate options, they can post their shipment to Community Load Match and begin receiving spot quotes. Through this new partnership, Emerge’s extensive broker and direct carrier asset connections are now accessible so that users can easily have their freight digitally matched with available assets. Customers gain access to this capacity without having to onboard each individual carrier and manage separate invoicing. All of this is handled as a one-stop-shop through Emerge and Kuebix.
As I wrote in my post this week, the traditional “inside the four walls” approach to transportation management makes it challenging to quickly and efficiently match transportation demand with available capacity. The growing need in the market for better matching of supply and demand, coupled with the rise of cloud computing, software-as-a-service (SaaS), application programming interfaces (APIs), and other emerging technologies, is driving the next evolution of transportation management systems — that is, from being “inside the four walls” applications to becoming operating systems that power transportation communities and enable network effects.
And with that, have a happy weekend!
Song of the Week: “The Heart is a Muscle” by Gang of Youths