Above the Fold: Supply Chain Logistics News (February 17, 2023)

Is there something you miss from your younger days?

I miss getting handwritten letters from friends in the mail. Nothing brightened my day more in college than getting back to my dorm, opening my mailbox, and finding a letter inside. If the envelope had red, white, and blue borders, and a foreign stamp on it, even better.

I still have many of those letters, written decades ago, stored in shoeboxes in the attic.

Ink or pencil on lined paper. Words and sentences written not in Arial, Helvetica, or Times New Roman, but in fonts with no name but their own.

Texts? Emails? Social media posts?

They’re just not the same. 

When the mailman comes by today, I won’t be in a rush to see what he brought. I know there won’t be a letter from a friend today. Maybe next week, or the week after, I’ll get one

If I write them a letter first.

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

The Circle of Life

Like in every market, there are buyers and sellers in the supply chain and logistics software industry.

Two of the most acquisitive software companies in the industry — WiseTech Global and Descartes Systems Group (a Talking Logistics sponsor) — announced acquisitions this week.

Yesterday, WiseTech Global announced that it is acquiring Blume Global (a Talking Logistics sponsor) for $414 million. Here are some details from the press release:

North America is the world’s largest domestic logistics region, and Blume manages intermodal containers and chassis on behalf of 6 of the 7 Class 1 US railroads, ocean carriers and other intermodal equipment providers including global freight forwarders and Beneficial Cargo Owners (BCOs). Blume is a high-growth recurring revenue business and is expected to generate FY24 revenues in the range of US$65 million to US$70 million representing annual growth of 45% to 55%. Before operational synergies, on a standalone basis, Blume expects to achieve FY24 EBITDA margins of approximately 10% and be cash-flow breakeven by the end of FY24.

Richard White, Founder and CEO of WiseTech Global, said: “This is another strategically significant acquisition that follows our acquisition of Envase Technologies last month. It further extends our capability in one of our six key CargoWise development priority areas, integrating rail into our landside logistics offering in North America, the most complex and largest logistics region in the world. Blume also brings significant new talent, a portfolio of other valuable product capabilities, and further enhances our product development skill set. 

Meanwhile, Descartes announced that it is acquiring GroundCloud, “a cloud-based provider of final-mile carrier solutions and road safety compliance tools,” for $138 million plus potential performance-based consideration. Here are some excerpts from the press release:

GroundCloud is a leader in final-mile logistics automation, combining operations, safety and compliance in an integrated platform. Final-mile carriers leverage the platform to receive customer delivery orders, plan and execute routes against those orders, train and monitor drivers on safety and performance, manage assets and resources, and analyze the operating efficiency of their business. GroundCloud’s platform also incorporates video telematics to provide driving event detection and verification, combined with reactive coaching solutions designed to improve safety.

“To deliver safely and efficiently on customer expectations in today’s dynamic market conditions, final-mile carriers need a holistic approach to operations, safety and compliance,” said Andrew Roszko, Chief Commercial Officer at Descartes. “This challenge is even more complex for the thousands of subcontracted delivery service providers working as agents for larger carriers. GroundCloud helps ensure seamless operations, end-to-end visibility, and standards of safety and compliance are met, including helping final-mile carriers comply with the various safety mandates of large transportation brands.”

It isn’t easy being a startup or smaller software vendor these days. If you’re successful, you ultimately reach the point where you have to raise a lot more capital to grow (and make acquisitions of your own to expand your value proposition) or you attract the attention of a bigger fish that offers you an attractive exit to help them fill a void in their solution portfolio.

If you’re a big fish in the pond, there’s always a bigger fish coming after you too.

It’s the circle of life in the supply chain and logistics software industry.

The good news is that for every software company that gets acquired, a new one starts up because there is always a new problem to solve or new opportunity to go after. The innovation never stops.

And with that, have a happy weekend!

Song of the Week: “Ghosts Again” by Depeche Mode