Supply Chain Tech Monthly Roundup — January 2022
Welcome to the January monthly roundup of the supply chain tech industry where I’ll be providing quick tidbits and links about recent logistech news around companies, supply chain, trends, and innovation.
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In this month’s roundup:
- Warehouse Automation
- Fundraising, M&A, and Stocks
- Company News
- State of the Industry
- Companies Hiring
Warehouse Automation
Two big logistics companies, ArcBest and NFI Industries, are investing in Phantom Auto, a teleoperation startup for logistic vehicles. ArcBest and NFI Industries are planning to deploy thousands of forklifts that can be operated remotely using Phantom Auto’s software. Phantom and ArcBest have been working together to develop autonomous forklifts that can either move goods themselves or be operated by a remote pilot. With the technology, one pilot can operate multiple forklifts in different locations. Phantom and ArcBest will be working together to sell these autonomous forklifts to other companies in various industries such as automotive and retail. NFI plans to deploy the robots in their own operations where they will be operated remotely at all times. ArcBest and NFI also led Phantom’s recent $42 million funding round. ArcBest’s Chief Innovation Officer will be joining Phantom’s board. Press release here.
DHL is buying a fleet of Boston Dynamic’s mobile warehouse robots. DHL Supply Chain announced it would be spending $15 million to buy Boston Dymanic’s robots that have been named Stretch. The companies entered into a three-year agreement with plans for the robots to arrive this spring. The Stretch robot will be used to unload truck trailers initially. This investment is part of DHL’s ongoing goal to invest $2 billion in supply chain digitization by 2030.
Robotic arms are being adopted by labor-strapped warehouses. Businesses are investing in software-powered robotic arms that can sort e-commerce packages, sort clothing, and pick electronics and consumer packages from large bins to be prepared for delivery. Puma uses robotic arms to sort clothing and shoe orders at their distribution center in California. Best Buy and Victoria’s Secret uses technology from Nimble Robotics that picks items from bins that another automated system delivers to packing stations. Robot picking technology is just one niche of the warehouse automation space and is expected to reach $1.34 billion by 2025 according to Interact Analysis.
Exotec, a warehouse robotics system startup, raises $335 million. With this Series D round the company reaches a valuation of $2 billion. The round was led by Goldman Sachs’ Growth Equity business with 83North and Dell Technologies Capital participating in the round. Exotec is a goods-to-person picking solution. Their autonomous robots that they call Skypods roam the warehouse floor and go to the rack that has the bin that contains the product(s) they need. The robot grabs the bin and carries it to the picking station where a picker picks out the products for the order. Once done, the robot puts the bin back into the rack. The company has also created a product they call Skypickers. These robots would do the picking from the bin instead of the pickers and place them into totes that are ready to be shipped. The company plans to use the money to hire 500 engineers by 2025 and continue to expand into North America. The company has recently signed eight large customers some of which include GAP and Geodis.
Vecna Robotics, an autonomous forklift startup, raises $65M in Series C round. The funding round was led by Tiger Global Management and includes investors Blackhorn Ventures, Drive Capital, and Lineage Logistics. The money will be used for R&D, fulfilling orders, and operations expansion.
If you’re not familiar with warehouse automation check out this DC Velocity article that explains goods-to-person systems. GTP systems are just one niche within the warehouse automation space. However, the demand for these systems is expected to quadruple through 2023.
Fundraising, M&A, and Stocks
ShipMonk nearly doubles its warehouse footprint by acquiring Ruby Has. This acquisition takes ShipMonk’s, an e-commerce fulfillment startup, warehouse space from 1.3 million square feet to 2.4 million square feet. Both companies pick, pack, and ship orders for small eCommerce businesses with Ruby Has servicing slightly larger customers. ShipMonk CEO, Jan Bednar, says the acquisition expands their geography, fills in some talent gaps, and Ruby Has’ expertise with bigger customers will help them retain their small customers as they grow. Venture capitalists have been pouring money into the order fulfillment space (ShipMonk has raised $330 million) with some of the money being used by these companies to buy up warehouse space to fuel their growth.
project44, a Chicago-based startup that offers supply chain visibility solutions, raises $420 million. The investment was led by Thoma Bravo, Goldman Sachs, and TPG. The round values the startup at $2.2 billion. The company tracks over 1 billion packages annually across 166 countries and has some big-name customers such as Amazon, Lenovo, and Home Depot. The company will use the money to expand its supply chain monitoring to more locations and create new tools for customers to intervene when a supply chain disruption occurs. The company plans to add 400 new employees in 2022 with a lot of the new capital going to product and engineering.
An autonomous, electric rail vehicle startup comes out of stealth mode after raising $49.55 million. Parallel Systems was created by three former SpaceX engineers. The company was announced while revealing the close of their Series A funding round led by Anthos Capital. The money will be used to build their second-generation vehicle, launch an advanced testing program, and hire about 60 engineers. Two railcars position themselves far enough apart so that a container, lowered by a crane, can be placed on them. Once the container is on it the railcars use short and long-range cameras to navigate the rails. The vehicles can join up to form “platoons” making it a long train or go their separate ways. Read more about how it works here.
BasicBlock, a Lincoln-Nebraska-based firm that offers freight factoring, raises $78 million. The round included investments from Autotech Ventures, Clear Haven Capital Management, and Emergent Ventures. BasicBlock was launched in 2018 originally as a trucking document tool that allowed truckers to send load documents at low rates. Now the company has become a payments platform that offers freight factoring. Freight factoring allows carriers and owner-operators to get paid immediately for their loads in exchange for a service fee instead of having to wait a month or more. The factoring firm, in this case BasicBlock, then claims the invoice amount on the bill of lading from the original broker. BasicBlock plans to use the funds to expand its services, client support, and hiring. Part of this money will go to branching out their operations to Chicago.
o9 Solutions, a supply chain software provider, doubles in value after receiving a $295M equity investment. o9 Solutions is now valued at $2.7 billion. The investment comes from growth equity firm General Atlantic. Their planning and management software can help estimate demand, analyze financial operations, and communicate with suppliers. o9 will use the money to grow their business planning platform, invest in R&D, and develop their partner ecosystem. Press release here.
Company News
Waymo’s first self-driving freight customer will be (drumroll please) J.B. Hunt. Waymo Via is the trucking and cargo transportation business unit of Waymo, Google’s autonomous vehicle company. This will be a long-term strategic alliance between the two companies where J.B. Hunt will be Waymo’s first launch customer of their autonomous, driverless freight routes. They also plan to conduct joint operational and market studies as well as explore integrating J.B. Hunt 360, J.B. Hunt’s digital freight marketplace. This partnership comes after a successful pilot program where the two partnered and completed several test runs with no crashes, speeding issues, broken freight, and a 100% on-time pickup and delivery rate. This partnership will also help Waymo hammer out its driver-as-a-service business model.
FedEx and Microsoft announce a ‘logistics-as-a-service’ platform for retailers, merchants, and brands. It is a cross-platform solution using FedEx shipping data, Microsoft’s Dynamic 365 Intelligent Order Management, and can integrate with existing companies’ e-commerce platforms. Brands will be able to better fulfill, ship, and service customer orders. It will also give the ability to provide real-time delivery status updates and offer convenient, frictionless return options at 60,000 dropoff locations using digital QR codes. This new offering is a continuation of FedEx and Microsoft’s multi-year partnership where they have agreed to make logistics solutions to increase delivery efficiencies. The U.S. domestic parcel market is expected to ship 110 million packages per day (40+ billion total) in 2022 with 86% of the growth expected to come from e-commerce. Press release here.
ShipBob, ShipHero, and Flexport partner to help small sellers get their goods into the U.S. Port congestions and shipping delays have been impacting sellers’ big and small. The big players, such as Amazon, have found a way around this by chartering their own flights and ocean liners. ShipBob is offering a similar solution to smaller sellers by batching together small sellers’ goods to fill a whole container. This gives them the same advantage the major retailers like Amazon, Walmart, and Home Depot are able to demand from freight forwarders. This partnership with Flexport, a freight forwarder, has cut down goods deliveries to fulfillment centers to 15 to 20 days for ShipBob customers and 20 to 23 days for ShipHero customers. Previously, it could take more than 60 days to get their goods into the U.S. Currently, the service seems to be limited to routes between China and the west/east coast of the U.S. However, ShipBob’s CEO Dhruv Saxena says they plan to expand the concept to more routes going to other U.S. ports and countries.
Shopify terminated contracts with several e-commerce fulfillment centers this month. In 2019, Shopify launched Shopify Fulfillment Network (SFN). The SFN was marketed as a way to help merchants on their platform compete with faster delivery speeds and a lower cost. It also provided a way to help merchants compete with Amazon which has a powerful fulfillment network. With these contract terminations, it is expected that Shopify reduced its capacity by half. Industry insiders and analysts speculate that Shopify may be getting ready to acquire a third-party logistics firm or start operating their own warehouses. Nevertheless, this move hurts small e-commerce fulfillment center owners some of whom gave deep discounts to Shopify in anticipation of further growth with them. Shopify says they will explain during their earnings call in February.
Serve Robotics rolls out their next generation of autonomous sidewalk robots that no longer require human assistance. In certain geofenced areas, Serve’s robots will not require remote operators. This will set them apart from competitors such as Coco and Kiwibot who currently rely on remote operators to monitor the autonomous deliveries and take over if needed. Serve started using their next-gen robots in December and have completed their first Level 4 autonomy delivery. The company raised a seed round in December 2021 and is using the funds to enter into new customer segments and expand to more geographic areas. The company currently operates autonomous deliveries in some neighborhoods in Los Angeles.
Cathy Roberson on Twitter: “From this morning’s @WSJLogistics email…. https://t.co/dP4MyDST6A… “ — twitter.com
“From this morning’s @WSJLogistics email…. https://t.co/dP4MyDST6A”
Economists believe that supply chain disruptions will largely recede in the latter half of this year.
WSJ writes about investors piling money into supply chain technology. Supply chain tech startups raised $24.3 billion in funding the first three quarters of 2021, up 58% more than all of 2020. The median pre-money valuation for late-stage logistics tech companies in Q3 2021 was $120 million up 41% from the same period in 2020.
The Corporate Electric Vehicle Alliance which includes big players such as Amazon, DHL, and Best Buy says they will shop somewhere else if their EV fleet demands aren’t met. Some of the demands include all-electric battery vehicles instead of hybrid and open-access charging networks. You can download the survey analysis report here.
Cargo trains are getting hit by thieves. Union Pacific says that cargo thefts have jumped 160% since December 2020 with an average of 90 containers hit per day.
The U.S. is letting 18 to 20-year-olds drive big rigs from state to state in a new test program in an effort to ease the supply chain backlog. Currently, truckers must be 21 years old or older to drive big rigs across state lines.
The U.S. closed its borders to unvaccinated and partially vaccinated Canadian and Mexican truck drivers.
Truckers, dubbed the Freedom Convoy, protested Canada’s vaccine mandate this past Saturday in Ottawa, Canada.
Some Stats:
- 73% of consumers expect fast delivery and nearly 60% of shoppers are willing to pay for faster delivery according to a LaserShip study.
- Bringg’s recently released survey results reveal that 99% of retailers plan to offer same-day delivery by 2025.
- The autonomous mobile robots market is expected to grow from $1.97B in 2021 to $8.70B by 2028.
- Gartner predicts that 75% of large enterprises will adopt some form of intralogistics smart robots in their warehouse operations by 2026.
Nik Sharma put together a Supply Chain 101 book that you can download for free here. He also runs a newsletter about DTC that you can sign up for here.
Some audio recordings/podcast episodes to check out: Supply Chain Tech: 2021 Year in Review, The Final Mile Vodcast Episode 3, and 20VC: The Unit Economics Behind JOKR.
Companies Hiring
- Sales Engineer — Atlanta
- Software Systems Engineer — Atlanta
- Project Engineer — Atlanta
- Project Engineer — Culver City, CA
- Simulation Software Engineer — Palo Alto, CA
- Software Engineer, Perception — Culver City, CA
- Commercial Account Executive — Remote
- Software Engineer — Chicago
- Customer Success Manager — Chicago
