This quarterly report is compiled by the Freightos research team and can be downloaded in PDF format here. If you have any questions or submissions to make, please contact us below.
Logistics Technology in Q2 2019
With its launch of a digital trucking brokerage, Amazon stepped onto the logistics scene more boldly than ever. This sent the trucking, air cargo, and last-mile delivery industries into panic. FedEx also ended its courier relationship with Amazon, as the company began to scale up its own delivery services. New Freightos survey research across hundreds of Amazon FBA importers showed over 10% of FBA importers have been offered air or ocean import services from Amazon. Some 6.6% have actually taken advantage of Amazon’s services as a freight forwarder.
New Amazon initiatives debuted including Amazon Shipping, a seller-to-customer service, Counter, a package pick-up service partnership with Rite Aid, Amazon pick-up lockers in French supermarkets, as well as an extension of its Delivery Service Partner program.
In what has become a routine, Amazon also expanded its air operation by upping its stake in Atlas, while finally breaking ground on its new air freight hub in Kentucky. Its growing footprint fueled continued regulation debate.
In marketplace news, Amazon launched its new Middle East marketplace, rebranded following its Souq acquisition. Meanwhile, Shopify announced an alternative AI-powered fulfillment solution which could loosen Amazon’s stronghold on SMBs, providing importers with an alternative to Fulfilled By Amazon.
China’s e-commerce giant began the quarter on the U.S. Trade Representative’s blacklist for failing to regulate fake merchandise sales, but closed out the quarter strong with Hong Kong IPO rumors.
In between, the group’s logistics arm, Cainiao, reported its revenue increased by 35% year over year; closed a deal with Russian internet giant Mail.ru to build e-commerce services to serve consumers and businesses in Russia and neighboring countries, Turkey, Italy, and Spain; broke domestic Chinese records with their June 18th Mid-Year Shopping Festival; and saw the departure of foreign competitors Amazon and Carrefour from its domestic home turf.
Maersk claimed industry first credit for its digital customs clearance platform available in Europe. Kuehne + Nagel and Maersk tackled the overbooking conundrum with a K+N’s promise of guaranteed service and Maersk Spot, a new digital product which it claims guarantees cargo booked for a certain vessel will be loaded on that ship, eliminating rolled cargo.
Dynamic pricing capabilities remained on trend with Kuehne+Nagel and Toll Global announcing instant pricing initiatives. CMA CGM joined the exclusive list of carriers offering direct instant quotes through their website. Similarly, forwarders worldwide were introduced to WebCargo Sky, a free air cargo rate search and eBooking platform with access to 370+ airline rates, which includes dynamic rates from airlines like Air France and KLM.
IOT container tracking technology captured Hapag Lloyd, CMA CGM, and MSC’s attention. As part of its LIVE monitoring program, Hapag Lloyd installed tracking devices on 100,000 reefer containers. CMA CGM purchased 50,000 sensors from Traxens to enable “smart containers”. MSC shared it currently has 3,000 Traxens devices in operation, part of its plan to equip 50,000 containers with Traxens sensors by the end of 2020.
Partnerships continued to form throughout the shipping industry, both in the form of mergers and in tech collaboration. Panalpina and DSV joined creating the world’s fourth largest logistics company. Third party logistics provider Transplace teamed up with logistics technology vendor Riskpulse to offer predictive analytics.
On the investment front, Microsoft invested in AI ship fuel efficiency startup Nautilus. On-demand warehousing and fulfillment technology company Flowspace raised $12 million. TheLorry closed their series B to boost its presence in Indonesia, Malaysia, Singapore and Thailand. Finally, Georgia Tech logistics startup Stord raised $12.4 million to enable efficient, low-cost warehousing.
European startups Zencargo and FreightHub closed funding rounds, confirming continued VC interest in digital freight forwarding. This was a topic heavily explored in Transport Intelligence’s report on digital forwarding.
JD.com took steps to further automate its logistics network investing $55 million into its connected vehicle fleet and shared its cross-border expansion approach and raised $218 million to focus on smart logistics and smart supply chain technology. They also signed a joint venture with OOCL to launch an e-commerce platform.
Cargo insurance leapt into the 21st century with two new digital initiatives, one a system integration providing shippers, freight forwarders and third party logistics providers access to real-time quotes and purchase coverage as they book shipments and the second, AscendTMS, a program for small to mid-size shippers to request and obtain coverage, pay their invoice, and submit and settle claims through the TMS.
Autonomous package delivery, powered by FABU Technology, began in China with China Post and Deppon Express. DHL expanded their trucking platform, Saloodo!, to the Middle East, enabling shippers and transport providers to make fast and reliable road freight connections within the United Arab Emirates (UAE). Temperature controlled trucking equipment sourcing got easier with the launch of Cold Truck, a marketplace connecting global buyers and sellers of second-hand transport cooling units.
Investment in trucking technology continued with KeepTruckin Inc., closing its $19 million series D round and Rivian securing $500 million from Ford.
Strategic investments and partnerships continued in last-mile this quarter, like Unilever’s investment in TheLorry, FedEx Express and 7-ELEVEN package drop-off services in Korea, and Correos and Amazon click and collect service in Spain.
Last-mile apps debuted from Echo Global Logistics to Ninja Van and Grab and Mexican last-mile provider 99 Minutos bought Chilean last-mile app MuvSmart. DHL Africa eShop went live enabling global retailers to sell goods to Africa’s consumers markets.
Parcel carriers made moves to capitalize on continued e-commerce growth; UPS shared it is using Google Cloud to design routing software. Real-time shipment visibility and specialized white glove services are a few other quick steps taken.
Walmart is banking on drone delivery to best Amazon once and for all. But the verdict still isn’t clear regarding how viable drones are for last mile delivery. BNSF Railway Co. received an FAA exemption for their supplemental inspection of rail infrastructure initiative. While the government org granted its first approval to Wing, the drone-delivery unit of Google’s parent company, Alphabet, to use drones to carry and deliver packages commercially, so we may just see that viability soon.
Blockchain international trade application tests continued with some big names, Intel, Flex, and UPS to be exact. FedEx CIO boldly urged the international shipping industry to mandate blockchain. Tradelens, IBM- and Maersk-backed blockchain platform, gained more industry acceptance, giving new momentum to what began as a skeptical industry concept.
Fr8 Network penned a partnership with PayMachine to improve its shippers/truckers experience operating on Fr8 Network’s marketplace. Maritime Blockchain Labs explored how blockchain may address risks associated with declaration of dangerous goods.
Other big names jumped onboard the blockchain wagon, like Zim and Panalpina Group, but the industry is still waiting to see tangible proof of concept from any industry initiative. While the World Economic Forum’s blockchain toolkit may help speed up implementation, Gartner is not convinced.