Top Trends in Logistics Technology Heading into 2020
How companies are keeping up with Uber
Each year at this time I like to reflect on the previous year’s LogisticsTech goings-on and make some predictions on the key trends and companies that will shape the landscape for the upcoming year. Check out my 2019 predictions here.
2019 was another blockbuster year in LogisticsTech, with 317 early-stage companies have raised $11.7 billion in venture capital according to FreightWaves and Pitchbook. While the overall funding amount for 2019 may fall short of the $19.3 billion poured into FreightTech in 2018 (currently down 7% from the same time last year), late-stage valuations for LogisticsTech companies founded 4–5 years ago continue to rise. The biggest funding event of the year in LogisticsTech came in March when Uber IPO’d and cashed in on the frothy $80 Billion they had garnered as the darling of Silicon Valley for the past 7 years.
One fascinating byproduct of Uber’s IPO has been the opening of its financial kimono, and specifically the third quarter when Uber finally broke out the financials for its freight brokerage operations. Despite posting 105% YOY net revenue growth, UberFreight lost more than $80 in the third quarter alone while UberEats lost well over $300 million.
While Uber may be the first freight broker in history positioned to grow at all costs, other companies are innovating and managing to grow in the face of rapid change and disruption. Nearly all established supply-chain companies are wondering how they can be more like Uber in their businesses or are striving to find ways to work with Uber in the future. In years past, it’s been all about keeping up with Amazon but this year we are seeing companies paying close attention to the moves Uber is making.
Here is a look at the trends driving innovation and the companies bringing change to our industry.
Workflow Automation
Co-founded by LogisticsTech veterans Matt Motsick and Suraj Menon, RPA Labs is automating common tasks of logistics work. Leveraging technology like artificial intelligence, machine learning, and natural language processing. According to Menon’s LinkedIn profile, RPA Labs is “…changing the way Logistics companies work. The software bots at RPA Labs will automate how documents are processed and also how customers receive their inquiries through Robotic Process Automation.”
In an article published on his LinkedIn page titled “How RPA can help Logistics Companies”, Motsick explains, “Instead of having a software developer create a list of actions to partially automate a worker-driven workflow process; RPA’s artificial intelligence develops the action list through machine learning — watching users conduct the workflow. Within a short period of time, RPA software “understands” your company’s processes, and can interact with your existing transportation technology and applications.”
Motsick goes on to say, “True RPA software will work with any legacy system, meaning you don’t have to spend heavily on new technology to achieve greater automation. As other emerging technologies like the Internet of Things and 5G play bigger roles in logistics, RPA bots can bridge the gap between older systems and newer forms of automation along the supply-chain. In short, RPA technology is easy to install, and could potentially automate everything from data collection to documentation, as well as emails and messages with shippers, vendors, and receivers.”
Motisick is no stranger to building a FreightTech company. One of his previous companies, Catapult, was sold to Mercator in 2015. RPA Labs finished the year on a positive note raising a Pre-Seed round of investment led by one of the top seed-stage investors in Supply-ChainTech, Schematic Ventures. “RPA Labs was a goldilocks opportunity: the right team, time and technology. Matt and Suraj are perfect for this company. Their platform leverages a mix of Robotic Process Automation and other methodologies to deliver real workflow automation with measurable margin improvement for Freight Forwarders”, said Julian Counihan, General Partner of Schematic Ventures. With this capital, RPA should be well-poised to advance their mission in 2020 and position themselves to lead this growing category.
Based in Omaha, Nebraska, driverDOC is the brainchild of former Union Pacific and Werner Enterprises employee, Josh Kolar. Having also spent time at UPS and KPMG, Kolar’s intimate understanding of asset utilization and driver operations gave him the idea to leverage technology to harness the digitization movement in supply-chain and take it right into the cab of the truck. “With ELDs and smartphone technology expanding as rapidly as it has in the past few years, it only makes sense to use that data to keep drivers engaged and reduce the manual workload for the driver as well as shippers, brokers and carriers alike.”
At its core, driverDOC is a collaborative platform that connects the incumbent technology of shippers, brokers, and carriers to automate once manual operational tasks. For its entry point, DriverDoc is deploying its mobile app to small fleets and mid-sized brokers to bridge the gaps in document retrieval, load tracking, and TMS status updates. According to the company’s website, “driverDOC was imagined to challenge the inefficiencies of the logistics supply-chain through the creation of a better driver experience and integrated data flow. We believe drivers are the greatest, yet most underutilized asset in simplifying the back-office tasks of supply-chain operations.”
With several successful betas underway, driverDOC is looking to grow upstream in 2020 and has partnership discussions in place with several top tier carriers and brokers.
With a deep background in supply-chain and technology, Ash Prasad left a comfortable job as Vice President at XPO to found KoiReader with Vivek Prasad. Focusing on converting unstructured data to actionable insights, KoiReader has bundled a full suite of Artificial Intelligence tools into APIs that integrate with a broad swath of TMS applications. With a goal of enabling Logistics Service Providers (LSPs) and factoring companies, KoiReader can read Bill of Ladings, Air Waybills, and a host of other logistics documents, turning the information into structured data that LSPs can use by inserting the information directly into TMSs and ERPs. This allows LSPs to spend less time and money reading and keying in shipment details and focus on client relationships and decision making. KoiReader can even “read” video data and inform its clients on what’s happening across their operation.
To date, KoiReader has raised $60K and has been showcased as one of the top emerging technology providers in supply-chain and logistics, demonstrating their application at Transparency19 in Atlanta and FreightWaves Live in Chicago. With multiple successful pilots under their belt, 2020 looks to be a breakout year for the KoiReader team.
Payments
Hailing from Lincoln, Nebraska, BasicBlock was born in the Cornbelt and aims to solve the trucking industry’s number one problem, cash flow. “Where I’m from, we have two things, corn, and trucks. As a technologist and entrepreneur I’ve imagined some interesting solutions for blockchain in the agriscience supply-chain space but none as big as the cashflow problems the trucking industry is facing,” said Taylor Monks, CEO, and Co-Founder of BasicBlock. With carriers going out of business left and right, Taylor and team are working tirelessly to help truckers receive payment faster and cheaper. By bundling document retrieval and tagging with automated payments and factoring through a single API, BasicBlock is delivering a one of a kind solution for carriers and brokers, enabling a faster, more transparent payment solution.
Taylor says: “Traditional factoring is hard to stomach for smaller carriers and brokers. In an industry where companies work off of single-digit margins at times, it doesn’t make sense for companies to leverage factoring at the current rates found in the marketplace today. By leveraging modern technology stacks alongside realtime location data, we are paying carriers faster and safer than any of our competitors. That’s the bottom line.”
Likening traditional factoring solutions to “Payday Loans”, BasicBlock views its self as the Stripe for logistics. “In a perfect world, there would be no Trucking Bloodbath like what we’ve seen in 2019. We want to give every trucking company the financial opportunity to thrive in today’s economy and into the future,” Monks exclaimed passionately. BasicBlock successfully raised a Pre-Seed round of nearly $700K this year led by the legendary angel investor, Jason Calacanis who has backed companies like Uber, Wealthfront, Robin Hood, and Calm. With the focus on capital efficiency brought about by the carrier closures this year, BasicBlock is sure to see explosive growth in 2020 and beyond.
Built inside of a brokerage and based in the US freight hub, Chicago, IL, HubTran is speeding up the pace by which 3PLs, factors, and brokers receive and process invoices. Leveraging OCR technology and artificial intelligence, HubTran is helping its customers address their most visible administrative cost, labor. Their solution is simple: have your carriers email invoices and shipping documents to a single email address. From there, HubTran will read the documents, sort them into the appropriate category (bill of lading, lumper receipt, invoice), and then tag all documents by type and order information received from the TMS.
This process saves hours per week for administrative employees while improving accuracy by a significant amount. When brokers can pay truckers faster, they can invoice shippers faster and ultimately make more money faster by reducing overhead and increasing the speed of invoicing. The HubTran website claims its brokers, 3PLs and carriers reduce their back-office staff needs by up to 80%.
The company was founded in 2015 and already has landed massive brokers as customers such as Nolan Transportation Group, FedEx supply-chain, CRST, NFI, and RR Donnelley. With the industry-wide focus on automation and margin expansion, HubTran should see massive growth in 2020 and beyond.
Originally called MyLumper, RoadSync has grown up to become “Square for the transportation industry”. With the goal of making the process of truckers paying lumper, washout or towing fees as easy as buying a hotdog or popsicle as a consumer, RoadSync is focusing on digitizing these traditionally cash-based fees. On the RoadSync platform, dockworkers and tow truck drivers can receive payment digitally via credit card or ACH, speeding up turn around and keeping trucks moving.
RoadSync has built an impressive team led by Robin Gregg, CEO and former Fleetcor executive. In addition to helping drivers and carriers, RoadSync has digitized solutions for brokers and factors alike. “We have facilities that used to take money orders, so the truck driver had to go get one. And we just make it easy for everyone,” said Gregg in an interview for FreightWaves TV. “We make it easier for warehouses to take credit cards and offer more options, and they want to do that. They want to be easy to work with,” Gregg went on to say. RoadSync has raised just under $3 million dollars to date and assuming their execution remains high, another venture round in 2020 is very likely and a bright future will be in store for the RoadSync team.
A product of an operating subsidiary of Triumph Bancorp, Inc. (“TBK Bank”), TriumphPay has transcended its freight factoring roots and has evolved into a defacto payment platform automating the way shippers and brokers pay carriers. “TriumphPay’s on-site portal really gives the power back to the Broker’s carriers. It allows them to review any load(s) completed for one of our partnered Brokers and make the decision on how they want to be paid. It puts the control back in their hands and helps with their own internal money management because everything they need is on one portal. They don’t have to go to multiple broker sites to find their information,” said Kate Juliao, Vice President of Operations for TriumphPay in a recent conversation I had with her.
The flexibility that carriers get to exercise is something that sets TriumphPay apart from its competitors. “My favorite feature on the TriumphPay portal is that the carrier(s) gets to pick and choose what term they want to be elected on a per invoice basis or they can set a term for all pending invoices. This technology really has helped bridge the communication between Brokers and their carriers enhancing the overall relationship with hopes to drive carrier loyalty. Onboarding new carriers on a daily basis is a very tasking job, so its great when they can develop a strong relationship between Broker and Carrier,” Juliao said.
The carriers are not the only stakeholder who gets to exercise flexibility in the payment process. “Through multiple system integrations, it has helped Brokers streamline their back offices and focus that human capital into other areas of their business. The TriumphPay operations team is really just an extension of our Partnered brokers back office to help support them with load verifications, factor management, payment status updates, and support inquiries for their carriers and factoring companies,” Juliao told me excitedly. TriumphPay was recognized in 2019 as a FreightTech25 as one of the most innovative companies in FreightTech for the second year in a row and is sure to continue its innovation and growth in 2020.
Smart Capacity Platforms
Originally a digital broker focusing on drayage (Dray Now), the founding team at Parade decided two things very quickly; 1) freight brokerage is really hard, and 2) the team was way better at building tools for brokers than it was as a broker itself. Smartly, Anthony Sutardja, CEO of Parade, pivoted the company to focus on the development of its carrier engagement platform rather than being just another freight broker. Parade quickly and efficiently released one of the industry’s first Smart Capacity Platforms.
Leveraging AI and OCR, Parade’s software can read emails from carriers and shippers, parsing relevant data and suggesting potential matches on loads for brokers to offer their carriers and shippers alike. Brokers make money when they have a truck and can suggest a matching load to the carrier or when they have a load from a shipper and can find a matching truck willing to haul the load at or below the targeted price. With Parade, algorithms make these suggestions continuously by reading available load details from disparate sources such as TMS data, Email and historical transaction information, programmatically offering carriers available loads with a “book now” feature that will eventually 100% automate the transaction for a broker.
“As we built our brokerage, we couldn’t help but think we were really good at using technology to engage our carrier base but we were Silicon Valley engineers, not freight brokers. We suspected legacy brokers probably weren’t as good at making software as we were, so we decided to become a SaaS company rather than a broker and we shed the brokerage to focus on building solutions for other brokers and carriers,” Anthony Sudjarta told me the first time I met him in late 2018.
When I asked Anthony about the outlook for 2020 his response was “2020 will definitely be interesting as we see third party marketplaces proliferating, the customer challenges have expended to automate/digitize pricing, negotiation, and bookings across private and external networks.”
Parade has raised $2 million in seed funding according to sources I know and I have also heard will be raising a proper venture round in 2020. With AI becoming a mega focus of late, there’s no doubt the 2020s will make Parade a household name within the trucking and brokerage communities.
Founded by former DAT/Getloaded engineers, Prasad Gollapalli and Murali Yellepeddy, Trucker Tools was originally built to occupy the most valuable real estate in business today, the home screen on every trucker’s smartphones. When TruckerTools launched its mobile app in 2013 it was focused on helping truck drivers find the locations and services they needed like truck stops, fuel, parking, and maintenance. Think Yelp! for truck drivers.
Leveraging the location data amassed from its more than 750,000 driver downloads, TruckerTools began building a smart capacity platform allowing brokers to access the capacity it aggregated. The beauty of the TruckerTools platform is its simplicity.
“We started with the driver because when we were building Getloaded, we knew the best way to integrate a network with technology was to put a computer in the cab of every truck so we would be able to have the precise location of each user. That would allow us to match the optimal load for each driver on our platform. Once smartphones hit critical mass, my team and I knew it was time to get working and we started building TruckerTools,” Prasad said. “Now, every driver has a computer in their pocket and we can help them get the best paying loads while allowing our broker partners to be able to not only better manage an existing network of providers but also access newfound capacity,” Gollapalli also told me.
According to Crunchbase, TruckerTools has raised nearly $9 million in 3 rounds of venture funding. Launching its “Book It Now” feature earlier this year, TruckerTools was able to land some marquee partnerships with the likes of Choptank Logistics and mega broker Schneider Logistics. With more features released in 2019 like detention alert and facility score carding, as well as Uber Freight’s continuous innovation and proliferation, TruckerTools will surely be part of every forward-thinking carrier and 3PLs plans to compete with the fast-growing digital brokers in the 20’s.
2019 was a banner year for Truckstop in nearly every way. In the second half of 2018, Truckstop added LoadPay services to its platform and integration offerings through its acquisition of D&S Factors. This came on the heels of their acquisition of SaferWatch, a compliance platform. In January of 2019 Truckstop publicly celebrated its successes of 2018 and promptly took a substantial investment from ICONIQ Capital Investment Group, the renowned private equity firm based in Silicon Valley, at a massive $1billion valuation. Just months after receiving its unicorn status, Truckstop announced its own “Book it Now” functionality and promptly inked a deal with Schneider Logistics following a successful pilot.
It really seemed like everything was going perfectly for Truckstop in 2019 and they were going to cruise into 2020 with a head of steam. That is until the malware attack that came just before Christmas. Truckstop’s entire platform was shut down for nearly a week after the attack and has yet to fully recover at the time of this writing (nearly 10 days post-attack). Despite this major setback, Truckstop’s reach and vision for becoming a “platform as a service” will catalyze another successful year for the firm in 2020 and will likely take them to another stratosphere during the coming decade.
Sharing Economy
An unintended negative consequence of ELD proliferation has been the truck parking problem. Anyone who drives along a major highway in the past two years has seen trucks parked in the strangest places. According to the American Transportation Research Institute, parking ranks second among the worst problems for drivers and ninth among carriers. SecurSpace was founded in Charlotte, North Carolina by Lance Theobald and has quickly become one of the fastest-growing marketplaces in FreightTech history. SecurSpace focuses on existing, unused parking facilities and brings them to market through a proprietary platform.
“We like to work with the Mom and Pop trucking company or 3PL that has a secure yard that its not fully using. When we approach a company about a new revenue stream for their unused yard space, the first questions is usually ‘How do I sign up?’ We are literally creating new supply for the industry’s worst problem,” Lance said in late 2018 during a phone conversation.
In working with unused parking spaces, not only is SecurSpace helping companies monetize their real estate, but they are also helping create a new supply source for the overall truck parking market. This is very similar to what Uber and Airbnb have done for ride-sharing and rental properties respectively. SecurSpace closed a $1M round of Angel funding this year which brings its total amount raised to $1.6M. A very capital-efficient business, SecurSpace boasts monthly Gross Marketplace Values of more than $1M and profitable unit economics.
“We started SecurSpace to solve a big problem and create a profitable business. We’ve never been interested in the typical ‘growth at all cost’ approach that’s become commonplace in FreightTech. We spend a lot of time with our clients and continue to develop solutions for solving their problems. Our SaaS yard management product came as a result of our clients wanting to lease their parking spaces but they were using clipboards at the guard shack to sign drivers in. That seemed like a problem so we built a solution using an inexpensive camera and tablet that can read license plates and capture signatures in realtime,” Theobald said with his typical level of enthusiasm. “We are growing because we’re listening and grinding, its just that simple.”
SecurSpace is flush with cash but plans to entertain VC offers in 2020 to pour gas on an already hot burning fire. With no end in sight for the truck parking problem, SecurSpace will indeed play a major role in 2020 in this very fast-growing space.
Based in Chicago, IL and founded by Anthony Petitte and Joshua Walls, Truck Park was founded when the idea came to Petitte while helping his uncle manage a parking lot for trucks. “I founded TruckPark to eliminate the headaches that truck drivers experience out on the road, as well as to provide a safer alternative than having to stop on road shoulders and abandoned gas stations just to meet Hours of Service (HOS) requirements. When forced to make a stop, drivers may experience ticketing for illegally parking, not to mention the huge safety risks for motor carriers when driving at night,” said Pettite in an interview with Silicon Prairie News in 2019.
With the goal of replicating the successes of SpotHero and ParkWhiz, but for the trucking space, TruckPark has raised $500k in seed funding and is showing signs of growth. A problem as large as truck parking has plenty of room for many players in the space and the TruckPark team seems to be focused on being a part of the solution. Watch for more growth and possibly additional fundraising from this talented group in 2020.
In January of 2019 Ryder launched its COOP platform to connect asset owners with those in need of equipment like trucks and trailers. Bundling the equipment, insurance, and payment through a single platform, Ryder is recreating the successes of Airbnb and EquipmentShare inside the truck rental market, a brilliant move from one of the world’s largest truck leasing companies.
“With close to half a million registered commercial vehicles in Florida and a richly diverse mix of businesses that experience seasonality, the South Florida market represents great opportunities for lenders and borrowers of trucks to connect on COOP to generate revenue from idle vehicles and move business forward,” said Rich Mohr, General Manager for COOP by Ryder in a press release on ryder.com. “In Atlanta, we witnessed plenty of success in 2018 were more than 300 companies in the metro area reaped the benefits of COOP and we’re confident this innovative service will be a value to businesses in Ryder’s home state of Florida. I would encourage businesses and fleet owners to explore the marketplace to learn how they can profit from their idle vehicles.”
With Ryder’s standing as a Fortune 500 company and its well run leasing and supply-chain divisions, there’s no doubt that COOP will become a staple for many businesses with fluctuating asset needs in the 2020s.
This list by no means represents all of the innovative trends and companies that will shape the coming year and decade. It does, however, reflect a shift in culture and focus in supply-chain and logistics that is sure to accelerate as technology and consumer expectations evolve. I’ll see you next year and we can reflect again on these predictions and make some more for 2021!
