Logistics Technology Updates: Q1 2016

Brought to you by Freightos, the Internet marketplace of the trillion dollar international freight industry.

Overview | Industry Research | Tech Giants | Logistics | On-Demand | On-Demand Food

The Big Picture

Ongoing investments in the logistics sector continued strong in Q1 2016, following the investment of $1.5 billion in 2015 (up 125% from 2014). Core investments were driven by:

  • A growing on-demand economy in the United States, Western Europe and China
  • Dropping logistics sector profitability
  • Ongoing efforts by tech giants to increase stake in global logistics
  • Continued interest in drone fulfillment and alternative logistics opportunities

Freightos Industry Research

Freightos recently concluded a survey of over 90 senior logistics professionals, including VPs and senior board members from 19 of the top 20 freight forwarding companies in the world. Key results included:

Changing Industry Conditions

  • Profitability in core logistics services is declining, with 56% of professionals seeing ocean freight as unprofitable and 46% who believe air freight to be unprofitable.
  • Increased customer expectations, with reliability and cost topping the list of demands.
  • New emerging industry players. 89% see Amazon as a new logistics entrant and 31% seeing Uber as a potential entrant. 73% think carriers will increase direct online sales to shippers.

Preparing for the Future

  • 81% believe forwarders will play a similar or increased role in the next five years.
  • Changing industry conditions are pushing forwarders to rethink how they operation. The top methods for dealing with changing industry conditions are technology, followed by expansion into new service offerings and Growth/M&As.
  • Leaders are skeptical about the actual impact of hyped technology like drones and augmented vision on the logistics industry.
  • 62% of logistics providers think online sales platforms, like Freightos, are an opportunity. Only 14% perceive them to be a threat.

Logistics Technology Updates

The Tech Giants

amazon logistics technology update

Amazon leased 20 Boeing 767s for North America fulfillment in an effort to reduce shipping costs, which hit $8.7 billion in 2014 (up 31%). In 2015, Amazon announced a fleet of branded trailer trucks, while continuing to push efforts for drone deliveries forward.

Amazon also made the headlines when its Chinese subsidiary registered as a licensed ocean transportation intermediary. See Freightos’ CEO Zvi Schreiber TechCrunch analysis here. Meanwhile, Amazon also hiked up its minimum free shipping spend from $35 to $49 for non-Prime members.

Alibaba Logistics Technology Overview

Cainiao, the three year old logistics firm owned in part by Alibaba (48%) that  is establishing a courier and parcel delivery network in China and around the world, has raised an undisclosed sum of money at a $7.7 billion dollar valuation. The company also announced plans to spend $16 billion on domestic and global expansion.


ACSL, a Japanese-based industrial drone and robotic company, in which Rakuten has a 20% stake, is now commencing drone testing on a golf course, testing drink and snack delivery to golfers.

A new FAA bill continued the agency’s  previous approach of requiring commercial drone operators to receives exemptions for US operations. However, the bill also pushed for a risk-based approach for providing these exemptions, while calling for a government/industry committee to assess management of drone traffic. Meanwhile, the FAA logged more than 550 drone incidents in the second half of 2015, with the majority representing drone activity in restricted air space.

Maersk experimented with using a drone to deliver goods to a container ship in Denmark, in an effort to save costs on barge deliveries.


Trainline (UK rail/bus ticketing), acquired French Captain Train for $189 million.

Dynamo, a US tech accelerator focused on logistics, was launched with a $12 million fund.

A British aviation service company ordered 12 Lockheed-Martin blimps, each capable of carrying 47,000 pounds (20% of a 747’s cargo capacity). The blimps could be ideal for remote deliveries.

Uber-for-Trucking battle rages as Convoy raises $16 million dollars in a round led by Greylock. While domestic trucking is fairly automated, spare capacity leaves room for efficient cargo space usage.

As a result of tumbling oil prices and low carrier rates, Maersk dropped $2.5 billion in value in Q4 2015. Stocks have dropped 50% since last April (Reuters)
DAMCO launched an E-Commerce fulfillment program to 1,600 Chinese cities. Sellers orders must be submitted by EDI (January).

On-Demand Delivery & Last-Mile

Onfleet, a SaaS supporting on-demand deliveries for internal fleets, passed the one million shipment mark. The company has raised $2.3 million dollars. (Link)

UberRUSH introduced an API for automating rush delivery from stores like Nordstrom and 1800Flowers with Uber.

Postmates, an on-demand provider with 20K couriers and $138 million in funding partnered with American Apparel for fulfillment. Postmates works with companies like Etsy, Starbucks and Chipotle.

eBay expanded its partnership with Shyp, a logistics startup that picks up, packages and sends goods for customers.

On-Demand Delivery – Food and Beverage

SpoonRocket ended US operations and was purchased by Brazilian iFood.

Delivery Hero, an online network of over 730,000 delivery restaurants, shut down Valk Fleet and terminated China operations as a result of intense competition.

Google Express partnered with local businesses on the West Coast to offer fresh grocery delivery.

Frichti, a French food delivery startup raised $13.4 million dollars to continue expansion.

Doordash, a restaurant-delivery-as-a-service startup announced a $127 million dollar Series C.

Amazon partnered with Morrisons, a British supermarket chain, to deliver groceries to Amazon Prime Now and Amazon Pantry customers.