Recently a ship the size of several football fields called the Ever Given blocked the Suez Canal for nearly 6 days. 12% of daily global trade moves through this channel and the cost was estimated at $6.7 million dollars per minute in held up goods. I frankly was glued to this story. And you know who else was? Pretty much every single company on the planet that sells a product and relies on a global supply chain. Each asked the same question: “where is my stuff and how late is it going to be?”. They asked — likely, demanded — this of their freight forwarders.
Freight forwarders handle the logistics of shipping, well, everything: They’re responsible for literally trillions of dollars worth of goods. The first freight forwarders were innkeepers in the 1800s who helped their hotel guests hold and then re-forward their goods. There are now hundreds of thousands of companies that do this and the process, I think, is still more similar to how it was done in 1800 than to what one might expect in 2021. Forwarders now have data storage systems but accessing that data is challenging, certainly not visible in real-time. It is still largely a phone and fax machine industry. However, freight forwarders’ customers — commercial shippers that need their products moved — have seen the value of technology in other parts of their business. Now, they are demanding more visibility, supply chain control, pricing transparency and easier communication and payment from their forwarders. The market size and pull for this is enormous.
Today we’re excited to announce our investment in Logixboard, the customer experience platform that modernizes the freight forwarding process. Logixboard solves these problems for shippers and makes it easier for freight forwarders to win and keep their business. It used to be a given that the work of freight forwarding was behind the scenes. But thanks to high-profile, unprecedented recent disruptions like the Ever Given and Covid-19, this work has been thrust into headline news. An uncomfortable light has been cast on just how little visibility and supply chain control exists today, which stands in stark contrast to growing expectations on the part of brands, retailers, and other shippers.
Technology in general has just begun to reach logistics over the last ~8 years, with the founding of companies like Flexport and Convoy. These we consider first generation digital-first logistics companies. They changed the game in the eyes of the shippers and have thus paved the way for SaaS businesses like Logixboard to up-level the entire industry. While shipper expectations are increasing, they often cannot or do not want to cut over from their incumbent ERP. These are deeply embedded systems, with lots of fragmentation due to multiple customers and freight types (air, truck, rail, ocean). A single layer that ties all this together (in a space where EDIs — not APIs — is the norm) is game changing.
These challenges — and opportunities — have interested me for a while, and I’ve seen some of this dynamic firsthand. Before I joined Redpoint, I helped build during the early days at Uber Freight, the B2B marketplace matching truck drivers with freight to move that was recently valued at $3.3B. If I learned anything there it was the differences of building product for greenfield or tech company buyers compared with evolving an existing, mature industry into a tech-enabled one. That is a major reason why I’m so excited about Logixboard. This challenge requires a founding team of translators who can work within an incumbent industry and who understand technology. It takes years to understand the nuances, which requires a special team and mindset.
Moreover, Logixboard’s business model is the right one. Market fragmentation fuels platform businesses and enterprise enablement layers can grow quickly. Importantly, Logixboard requires no change from the forwarder, separating user interface and data storage, and adds value by moving to real-time data visualization and access for their customers.
The way ahead for Logixboard is bright, and, unlike that poor Ever Given, is moving quickly. Bonus for me as a fellow Seattleite, Logixboard is based in Seattle, home to the largest US-based freight forwarder and the largest global shipper, Amazon. Logixboard is hiring there as well as nationally. To learn more, check them out at https://logixboard.com/.