Above the Fold: Supply Chain Logistics News (April 22, 2022)

What happens when engineers and Oreo cookies meet?

You get the Oreometer — “a simple device that firmly grasps an Oreo cookie and uses pennies and rubber bands to control the twisting force that progressively twists the cookie open.”

Ever wonder why when you twist an Oreo cookie apart the cream tends to stick to just one of the wafers? Not me, but apparently it’s an important research question.

“In all, the [MIT] team went through about 20 boxes of Oreos, including regular, Double Stuf, and Mega Stuf levels of filling, and regular, dark chocolate, and ‘golden’ wafer flavors,” according to the article. “Surprisingly, they found that no matter the amount of cream filling or flavor, the cream almost always separated onto one wafer.”

The article goes on to say that “the understanding gained from the properties of Oreo cream could potentially be applied to the design of other complex fluid materials” such as inks used for 3D printing.

I try not to think too much when I eat Oreo cookies (I may not want to eat them otherwise). I also don’t twist them apart any more. As I’ve gotten older, I’ve become a “dunk in milk” eater versus a twist-and-lick one. I wonder what that says about me? Which type of Oreo cookie eater are you?

Okay, enough about Oreos. Here’s the supply chain and logistics news that caught my attention this week:

Money, Money, Money in Supply Chain and Logistics

Take a quick look at the headlines above and you’ll notice a common thread across many of the news items: there continues to be a lot of investments (M&A , funding rounds, etc.) in the supply chain and logistics industry. 

Here are some highlights from this week:

Amazon: The company is “creating a $1 billion venture investment program called the Amazon Industrial Innovation Fund (AIIF) to spur and support innovation in customer fulfillment, logistics, and the supply chain…The Amazon Industrial Innovation Fund will invest in companies that imagine solutions that incrementally increase delivery speed and further improve the experience of employees working in warehousing and logistics fields.”

Convoy: The company “raised $260 million in new funding, comprised of a $160 million Series E preferred equity round led by Baillie Gifford and funds and accounts advised by T. Rowe Price Associates, Inc., as well as a $100 million venture-debt investment from Hercules Capital, Inc. …With the most recent equity investment, Convoy is valued at $3.8 billion.”

Construct: The investment firm “raised $300 million in new capital, across our second early stage fund ($225M) and a new vehicle for select later stage opportunities ($75M), to continue to support our founders as they transform the real world around us: the foundational industries that provide us with the food we eat, the products we need, and the critical services – like transportation and delivery – that shape our lives now and for the future. We remain convinced that the next set of defining companies will come from founders who share our vision that the most critical tasks of these industries are ready to be transformed through software and automation.”

Plug and Play: It launched the “Plug and Play Supply Chain Fund I, L.P., a $25.5 million venture capital fund focusing on investments across the end-to-end supply chain. The Plug and Play Supply Chain Fund will focus on investing in Series A-C startups that are disrupting and receiving great traction in the supply chain industry.”

Descartes: The company has acquired Foxtrot, “a leading provider of machine learning-based mobile route execution solutions” for $4 million. “Foxtrot’s advanced machine learning algorithms leverage millions of data points collected from vehicles in the field, helping customers reduce last-mile costs, improve customer service and learn service factors that improve route efficiency and on-time performance. The company’s technology complements existing route planning and execution solutions.”

MHS Global, “a leading global provider of material handling automation technology and systems integration, and Fortna, a leading software and solutions provider for warehouse and distribution, will combine to form a multi-billion-dollar, multinational company providing parcel, warehouse and distribution, and lifecycle services. MHS and Fortna belong to the investment portfolio of Thomas H. Lee Partners, L.P. , a premier private equity firm investing in middle market growth companies. THL will remain the majority owner of the combined company and a wholly owned subsidiary of the Abu Dhabi Investment Authority will acquire a significant minority stake to support the combination.”

When it comes to supply chain and logistics investments, we are certainly in the “boom” part of the cycle. How long will it last until the “bust” part inevitably hits?

Not all investments and segments of the market are the same, but the party will eventually slow down or come to an end when investors start caring more about profitability (or a viable near-term path to it) than just growth and market share grab.

So, enjoy those cookies while they last.

And with that, have a happy weekend!

Song of the Week: “Cheer Up Baby” by Inhaler