COVID-19 General Logistics Technology LogTech

Special COVID-19 Logistics Technology Update for Q1 2020

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 Q1 2020

Since the end of January, the COVID-19 pandemic has had far-reaching impacts on the logistics sector.

Despite the pain and the disruptions, the industry has persevered and had overwhelming success in moving the world’s goods where they need to go.

Many in the industry have turned to tech to bridge the gap, ensure operations continue with many teams working remotely, and offer customers new tools to help them manage during the crisis. 

What follows is a special COVID-19 version of our quarterly logistics technology report, combining the usual updates and developments in the industry with highlights of how different players and segments of logistics have adapted and addressed the havoc caused by the pandemic so far, often by leveraging or adapting digital tools.

Amazon had to implement broad changes to adjust to consumer demand shifts to household and essential goods, and to contend with the surge in eCommerce activity due to shelter-in-place restrictions. 

The company started an estimated 100,000 distribution worker hiring spree to accommodate the increase in orders, but even so struggled to meet two-day delivery commitments and grocery deliveries. 

In addition to battling price gouging and counterfeits on its marketplace, it also scaled back the services – like Fulfillment by Amazon for non-essential items and  last-mile delivery – offered to third party sellers to focus on their own customers and on high demand goods.  In addition, it delayed its annual Prime Day until August. 

But before and even during the crisis, Amazon continued its push further into the logistics and logistics technology space, making moves in auto tech, and in robotics-based fulfillment centers. 

The eCommerce giant also extended its logistics reach by expanding its current air cargo operations services to Europe. In addition, it may be planning a start-up cargo airline of its own.  

The company’s success is also drawing new forms of competition. Walmart announced the launch of a paid membership program as well as fulfillment services for third-party sellers on Walmart.com to rival Amazon Prime and FBA respectively.

Alibaba’s logistics services were key to meeting the surge in demand for online orders early on in China’s shutdown. 

It was also a key player in applying logistics technology solutions to help in the fight against the virus – making deliveries in Wuhan early on during the lockdown and launching a dedicated platform to expedite the ordering and fulfillment of PPE and medical supplies in China.  

Alibaba also took steps to support its customers during the pandemic, including a recent webinar featuring Freightos Group experts providing market insights and best practices for managing freight during COVID-19.

The virus and shutdown did not slow Alibaba’s steps in logistics and eCommerce, as it expanded its Alibaba.com marketplace to include US SMB sellers, continued the roll out of Aliexpress in Europe, and further invested in express and last-mile delivery in both China and India.

The logistics community has unfortunately been hard-hit by the crisis. In terms of freight technology, though, the volatility of the market seems to have served as an accelerant for digitization.  

Multiple examples of logistics providers rolling out or seeing the increased use of digital tools popped up since the outbreak. Examples include Kuehne+Nagel releasing a feature for updates on blank sailings and disruptions in its Sea Explorer platform, Zim launching electronic bills of lading to expedite freight during the crisis, and WebCargo logging a record number of air cargo eBookings – even from hard-hit locations like Spain and Italy – during the shutdown. 

But more pronounced than these examples of freight tech during the pandemic has been the conversations and awareness of the need for digitization that the crisis has spurred. A recent study saw two-thirds of freight forwarders reporting that they intend to invest more in technology as a result of the crisis, and numerous industry leaders and analysts see the pandemic as pushing tech from being considered unnecessary or nice to have, to essential for moving forward or weathering the next storm. 

Important steps in freight digitization not related to COVID-19 also managed to take place this quarter, such as the Ocean Network Express announcing it has joined the ranks of carriers offering electronic bill of lading.  Evergreen took a big step forward in launching GreenX, a digital platform offering instant quotes and eBookings.  The DCSA consortium also published guidelines for how to comply with the new IMO cyber security requirements. 

Air cargo eBooking gained traction this quarter, with examples including WebCargo’s new partnership with Etihad Airways, and Lufthansa releasing an eBooking API.  

Tech developments among freight forwarders included C. H. Robinson launching an innovation incubator to develop supply chain solutions, Kontainers adding air and road freight to the online sales portals it can develop for forwarders, and DCSA announcing a partnership with Chain.io to develop track and trace APIs connecting carriers, forwarders and shippers. 

On the environmental front, CMA CGM joined a group committed to developing hydrogen-powered shipping.

In other logistics tech investment news, Shipamax, offering back-office automation solutions for logistics providers, raised $7m in series A funds, Slync.io raised $11m mostly from major freight forwarders for its logistics data automation solution, and SourceDay raised $12.5m for its supply chain management software.  

Digital drayage marketplace Dray Alliance raised $10.2m, and Maersk Growth invested in eCommerce fulfillment provider Huboo.

The focus on household and essential goods made for a surging but unbalanced trucking market as the shutdown took hold in the US. 

With the industry focused on only certain verticals and carriers hustling to transition to those specific parts of the supply chain, some logtech providers, such as Trucker Tools, sought to ease the pressure through releasing new digital booking and tracking tools. The volatility of the market may have also raised the profile and shipper interest in predictive pricing tools for road freight.  

In non-COVID-19 developments, road freight booking platforms took several steps forward as Uber Freight announced record revenues, Emerge raised another $20m, Transfix launched a guarantee for rates predicted by its platform, and Transplace acquired LaneHub. Sendy, a freight and last-mile booking platform in Africa, also raised $20m in funding from Toyota

Developments in self-driving vehicle technology included Locomation and Waymo respectively announcing that their self-driving trucks will be tested on US highways, while Starsky Robotics has effectively closed its doors.

In addition to the Amazon and Alibaba examples of reliance on logistics tech during the pandemic, last-mile tech companies such as Bringg also sought to help the supply chain through to delivery.  

Bringg made its shipping management software for SMBs free during COVID-19. The company also raised an additional $30m in funding this quarter. 

Shippo, a platform that helps eCommerce sites integrate with last-mile providers, raised $30m in new funding, last-mile provider Shipt added Office Depot and OfficeMax to its same-day delivery service, and Instacart announced plans to be in all 50 states by the end of the year. Skipcart, meanwhile, announced it would no longer provide delivery for Walmart’s grocery service. 

In driverless and electric car developments, California regulators approved Nuro driverless delivery vehicles to run pilots in cities across the state, while Amazon, DHL and others announced the launch of a coalition to develop electric vehicles for their fleets.

Drone delivery solutions were put to the test in multiple ways during the crisis. 

In Ghana, for example, Zipline delivered COVID-19 test samples by drone, UPS and partners tested their drones for COVID-19 support in Virginia, and Alphabet’s Wing serviced record volumes of household goods deliveries in its pilot cities in the US and Australia. 

In other drone-related developments Swiss Post and Matternet were able to resume drone deliveries in Lugano, JAL received approval to test its medical delivery drone, and Volocopter raised $94m in funding from DB Schenker and others for the development of its unmanned air taxi.

Even blockchain logistics solutions were tapped to help in the COVID-19 response as 3PL SF Express used blockchain to track critical goods during the shutdown in China, and blockchain solutions related to the food supply chain were categorized as critical services, exempting employees from any lockdown restrictions. 

In other blockchain developments, Alibaba’s Koala import platform is now using blockchain for shipment tracking, CargoX’s electronic bill of lading blockchain product was approved by an international insurance body, Standard Chartered Bank became the first bank to join TradeLens, and members of CargoSmart-led Global Shipping Business Network signed a shareholders agreement.