Supply Chain Tech Monthly Roundup — November 2022 — Big Tech Bets on Supply Chain

Welcome to the November 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.

In this month’s roundup:

• Big Tech bets on supply chain
• Fundraising, M&A, and Stocks
• Company News
• State of the Industry
• Companies Hiring

Before we get started, check out this recently published supply chain tech market map by Sapphire Ventures:

Sapphire Ventures Supply Chain Tech Market Map

Big Tech Bets on Supply Chain

One thing that the COVID-19 pandemic made clear was the fragility of the supply chain. It exposed companies to the need for visibility, risk management, and efficiency in their supply chain operations. More and more companies have turned towards sophisticated supply chain software to help.

With this increase in interest in supply chain technology, Big Tech has taken notice. This month Amazon and Microsoft announced their supply chain management platforms.

At AWS re:Invent Amazon announced AWS Supply Chain. AWS Supply Chain is a cloud application with the goal of improving supply chain visibility, delivering actionable insights, and lowering costs. Customers can connect their supply chain data whether from SAP, EDI, warehouse management systems, or order management systems to the application. The data will be pooled into a data lake where ML models will run to understand, extract, and transform the data. Some functionality will include the ability to see where your inventory is on a map, communicate with supply chain managers within the tool, and create watchlists to receive alerts when risks are identified. Lifetime Brands, Traeger Grills, and Whole Foods are among their first customers. You can read the press release here.

Microsoft announces Microsoft Supply Chain Platform. Microsoft says the platform is designed to help organizations maximize their supply chain investments through Microsoft AI, collaboration, low code, security, and SaaS operations. The platform offers building blocks across Microsoft Cloud, Dynamics 365, Microsoft Teams, and the Power Platform. The platform offers connections to supply chain software such as Blue Yonder, SAS, and Oracle. At the core of this product offering is its Supply Chain Center. The Microsoft Supply Chain Center is described as a “command center” that connects customers’ data across their ERPs and other stand-alone supply chain solutions. The center also comes with some pre-built modules such as order management and the ability to talk to external suppliers through Teams. Some customers have already tried out the product such as Daimler who uses it to manage truck parts and suppliers as well as fitness firm iFit which uses it to optimize transportation costs. Here’s a video overview of the platform as well as an assessment of the “new” offering.

If you take a step back and as others have pointed out none of these appear to be new tools. It seems both companies have taken services they have already offered in one form or another and combined them into a single solution for supply chain departments.

Company News

Aurora announces it has enough money to develop its autonomous vehicle technology until its commercial launch in mid-2024. Aurora says they had $1.2 billion in cash and short-term investments at the end of Q3 2022. During their investor call, their CFO said they would need to raise more funds and according to a leaked memo they were looking at raising about $300M to add six months to their runway. Their loss from operations during the third quarter was $200M which is up from $128M in the same quarter last year but down from $1.2B in losses from the second quarter of 2022. To keep its runway going the company has looked at several cost-cutting and cash-generating options including going private, hiring freezes, layoffs, and selling. Aurora has a series of partnerships going with various customers including FedEx, Paccar, and Werner.

General Motors’ e-delivery van subsidiary BrightDrop says it’s on track to reach $1 billion in revenue next year. BrightDrop says it has received more than 25,000 reservations and letters of intent from customers such as Walmart, Hertz, FedEx, and Verizon for its electric commercial van that is already on the road. The company says it is set to generate $10B in revenue and reach 20% profit margins by the end of the decade. BrightDrop has recently expanded into the online grocery sector. Their CEO, Travis Katz, says they are a tech startup with a subscription-based product offering that’s backed by a global powerhouse. During their Investor Day, they announced BrightDrop Core, a subscription-based platform, that combines data generated from its other products to give customers insights into their operations.

Amazon unveils Sparrow, its warehouse robotic picking arm. Sparrow is designed to pick up a variety of items as easily as a human can. Identifying, picking up, and moving many different types of objects has been a long-time problem in the robotics space. Sparrow can handle millions of items representing 65% of Amazon’s inventory. For the initial rollout Sparrow will focus on grouping items together for each order. If that is successful the company has broader plans for the robotic arm. Amazon’s current CEO has recently rolled out cost-cutting plans which include layoffs in their robotics division as well as an evaluation of which robotics projects to cut. About 2% of their robotics staff is expected to be laid off with many hopefully placed somewhere else in the company. The robotic arm is currently being tested in a Texas facility where it is learning how to pick up fragile items such as ornaments. Check out a video of Sparrow in action here. TechCrunch wrote an article after their visit to Amazon’s BOS27 (North Reading, MA) facility which is the “heart of Amazon’s robotics ambitions”. The piece also discusses their electric delivery fleet, drones, and their Industrial Innovation Fund.

Waabi, an autonomous trucking startup, unveils its first generation of trucks. The trucks are powered by Waabi Driver which is a combination of Waabi’s software, sensors, and compute. This initial batch of trucks will be used for data collection and testing as well as commercial pilots. Waabi plans to go to market with a driver-as-a-service model with a focus on the middle mile. Waabi Driver will be integrated on the factory level with OEMs and will sell their services to fleets and drivers.

GXO announced that by the end of 2022 they will have increased automation use in their facilities by 50%. Last year, their chief investment officer said that 100% of their contracts signed in Q3 2021 involved some form of automation. They currently have ~7,600 technology pieces operating across their sites. This technology includes everything from robots, cobots, automated guided vehicles, and vision scanners. In July, GXO revealed they signed a multiyear extension with warehouse robotics maker 6 River Systems. GXO says they don’t want to offer boilerplate automation they want to personalize the automation solution for the customer. GXO has said that more than 30% of its revenue comes from automated sites compared to the industry average of 5%.

Layoffs in the supply chain tech space:

• Arrival, an electric vehicle maker, lays off 30% of its workforce — about 700 workers
• Nuro, an autonomous delivery startup, lays off 20% of its workforce — about 300 people
• Nikola, an electric truck maker, lays off 7% of its workforce — about 100 employees.
• Voly, an Austrailia-based grocery delivery company, shuts down operations after existing backers were no longer willing to provide funding.
• DoorDash, a food delivery company, lays off 6% of its workforce — about 1,250 employees.

In 2021, Maersk partnered with Innosight to create the Maersk Innovation Center. The center was created to help Maersk explore and fund solutions that help them build supply chain resilience. In this HBR article, they discuss the three-system design principles they use in the innovation center. By November 2022, Maersk has piloted 23 initiatives and rolled out 7 of them 2 of which were canceled. A few of these initiatives include a transload facility, warehouse drones, and robotics.

Fundraising, M&A, and Stocks

November supply chain tech funding: $1.27B+

• Locus Robotics, a warehouse robotics company, raises $117M Series F led by Goldman Sachs, G2 Venture Partners, and Stack. Locus’s CEO says that the raise will help Locus extend its leadership in the market.
• Project44, a supply chain visibility company, raises $80M to help build a system for measuring scope 3 emissions.
• Attabotics raises $71.7M Series C-1 led by Export Development Canada. The company says they could not afford to wait as they’ve gotten great traction with customers one of which is the DoD. The funding will go towards growing the business and deploying its solutions.
• ISEE, an autonomous yard truck maker, raises $40M Series B led by Founders Fund. The company says they are the first and only company to achieve fully-autonomous operations in the logistics yard space.
• Saltbox, a co-warehousing company, raises $35M Series B led by Cox Enterprises and Pendulum. The company plans to use the money to open three more locations in Miami, Minneapolis, and Phoenix.
• OneRail, a last-mile delivery provider, raises $33M Series B from Piva Capital and Arsenal Growth. The company says the money will be used for growing its sales and marketing teams, as well as towards a data science initiative.
• Pickle, a truck unloading robot manufacturer, raises $26M Series A. The funding will go towards customer acquisition and building the company infrastructure to deliver more systems to customers.
• Soft Robotics raises $26M led by Tyson Ventures. The company makes soft grippers that can handle fragile and inconsistently sized food such as meat and produce. The funding will go towards accelerating the deployment of its grip systems.
• ReadySpaces, a co-warehousing company, raises $20M in all-debt funding round. The funding will be used to fuel their 2023 growth plan.
• Better Trucks, a technology-driven rapid parcel delivery firm, raises a $15M funding round led by Lobby Capital. The funding will be used to expand its footprint and build upon its proprietary tech stack.

State of the Industry

California looks to ban diesel trucks at ports by 2035. The California Air Resources Board is proposing requiring all new trucks to be powered by clean fuel starting in 2024. In 2025, California will bar diesel trucks that have more than 800,000 miles on them from operating at ports and rail yards. The state wants to transition 30,000 heavily-polluting trucks to clean energy by 2035. However, there is pushback due to the lack of charging infrastructure and the price of electric trucks. Companies won’t invest in charging infrastructure if they aren’t sure the demand is there and truckers don’t want to invest in electric trucks without charging infrastructure in place. The hope is by making this a requirement it will incentive companies to invest in the needed infrastructure. The California Public Utilities Commission has committed $700 million over the next five years to developing charging for medium and heavy-duty vehicles.

This holiday season retailers are focusing on delivering packages on specific dates rather than competing on delivery speed. Due to the pandemic, online shoppers have gotten used to supply chain disruptions causing longer delivery times. It seems shoppers now care more about visibility and when to expect their package instead of a super fast delivery. RetailBrew also wrote about two-day shipping being a solution to a problem that doesn’t exist.

From 2019 to 2021, the rate of returns doubled to 16.6% (~$761B of goods). Companies are struggling to balance customers’ desire for returns and the increasing cost of making returns possible. Consumers have shown that they won’t buy again from a retailer if they have a bad return experience. Retailers, analysts, and researchers have shared some of the best practices for balancing flexible return policies and costs, and in some cases increasing sales. Some of these practices include making returns easy, letting customers return items to different places, stopping the requirement of boxes and return labels, using technology to root out fraud, and using the returns data to improve products and the buying experience.

Grocers are turning to vertical storage systems (aka vertical lift modules — VLM) for online grocery fulfillment. Vertical storage systems can hold products for distribution to stores, inclusion in online orders, and completed orders. Modula, an Italy-based VLM manufacturer, says it has started to see more interest from customers in the retail and grocery sector. Modula says they have talked to representatives from grocers such as HEB, Kroger, and Whole Foods. Part of what makes VLM attractive to grocers is it is proving to be a lower-cost alternative to micro-fulfillment centers. Grocers have also started looking temperature-controlled totes to be stored within the VLMs.

Autonomous Delivery and Work Drones Will Still Need a Human Minder. Delivery drivers of the future may sit several miles or time zones away in a control room overseeing several delivery robots or drones. Serve Robotics’ CEO predicts that eventually, you will see one person responsible for hundreds of robots at a time. Autonomous forklifts and self-driving trucks will also be impacted. Remote supervisors are responsible for these autonomous vehicles when they encounter unexpected obstacles. The hope is that eventually these machines will become smarter and require less supervision. Thus allowing an increase in the ratio of supervisors to autonomous robots, drones, and vehicles.

A recession may push more investors to invest in supply chain startups. According to Harvard Business Review, during a recession investments in categories across tech such as biotech, consumer products, and internet startups tend to drop or stagnate. The only exception was “industrial startups” — the kind of companies that make tech for factories, farms, and other supply chain players. The article suggests that the reason supply chain startups were overlooked for so long was that they carried the perception of not having a large addressable market and fast sales. Big corporations that tend to be industrial startups’ best customers move slowly causing a long sales cycle. Also, there’s a smaller market for customers wanting to buy let’s say warehouse robots compared to consumer-facing startups. However, over the past two years due to the supply chain crisis investors started recognizing the opportunities in supply chain startups. In 2021, supply chain tech startups raised $41.3 billion up 120% for the category since 2019.

In a similar fashion to the previous paragraph, Sapphire Ventures wrote an article about the opportunities within supply chain tech investments. The significant shortages experienced in 2020 and 2021 revealed the fragility of the existing supply chain and logistics infrastructure. These disruptions over the last three years have served “as a catalyst for investment in people, processes, and technology that will lead to a more resilient supply chain and logistics ecosystem.” According to Pitchbook, VC investment in supply chain tech reached $58B, and $23B has been invested in the first half of 2022. The article goes on to discuss emerging supply chain & logistics trends. Some of the trends mentioned are visibility, customer experience, risk management, and supplier sourcing. Finally, the article rounds out with a market map to lay out the supply chain and logistics landscape.

If you read no other article in this newsletter, I strongly encourage you to read the above Sapphire Ventures article.

This month was the announcement of several publications recognizing innovations and technology. Supply chain technology was no stranger to these lists. Check them out here:

• Transportation, robotics, and automation: The 9 next big things, from delivery drones to warehouse bots — Fast Company’s Next Big Things in Tech 2022
• 22 logistics firms among fastest-growing companies — Deloitte’s Technology Fast 500
• Supply chain, logistics firms show out on Time’s Best Inventions of 2022 — Time’s Best Inventions of 2022

Transport Topics breaks down the who’s who in self-driving truck development.

Amazon ordered 100,000 electric delivery vans from Rivian. Here’s a video explaining why this deal is crucial for automakers. If you are interested in seeing what’s inside the vehicle and what’s it like to drive check out this video.

Check out how this awesome woman makes $144K driving trucks.

Read this in-depth newsletter post about B2B marketplaces by Rex Woodbury, writer of Digital Native.

Podcast Recommendations:

• Odd Lots — Truckers Are Working Countless Hours That They’re Not Getting Paid For
• The Digital Supply Chain — Startups, Funding, And Corporate In Supply Chain — A Chat With Silicon Foundry CEO Neal Hansch
• Bad Bets — The Unraveling of Trevor Milton (Nikola founder)

Companies Hiring

Locus Robotics

• Customer Success Manager — Remote
• Sales Engineer — Remote
• Business Development Representative — Remote

ISEE

• Business Development Manager, Robotics — Remote
• Principal Perception Engineer — Remote
• Principal Product Manager — Remote

OneRail

• Product Manager, Routing — Remote, Orlando
• Account Executive, Enterprise Sales — Remote
• Senior Backend Engineer — Remote

Other Companies

• Arkestro — Customer Success Manager — Predictive Procurement — Remote
• GXO Logistics — Industrial Automation Engineer — Atlanta
• Maersk — Project Manager Warehouse Automation Solutions — Copenhagen, Denmark
• Microsoft — Azure Supply Chain Control Tower Product Manager — Austin
• Wayfair — Senior Technical Program Manager, Supply Chain Technology — Austin

Follow me on Twitter where I share even more supply chain tech news here.