General Logistics Technology LogTech

The Logistics Technology Update for Q3 2019

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 Q3 2019

Amazon kicked off the quarter with stellar Prime Day sales, selling more than 175 million items and breaking online sales records yet again. In Germany, Amazon took steps to gain full control over last-mile, opening 11 more distribution centers and recruiting more drivers.

Stateside, Amazon took greater control of its US rail transportation, acquiring 250 branded intermodal containers, and announced it will open a region air cargo hub in Texas. In Japan, Amazon was still hardware keen, installing parcel pickup lockers. The AmazonFresh grocery delivery program was expanded to three additional cities: Minneapolis, Houston, and Phoenix.

Amazon’s focus on international freight stood out yet again when it purchased cloud startup INLT. INLT’s software manages costs and cross-border customs clearance, a big benefit to Amazon sellers. Not surprising, given the company’s plans to spend $15 billion in 2019 on a range of initiatives to better support small-business sellers.

Finally, in India, Amazon expanded beyond eCommerce to brick-and-mortar stores after signing a deal for stake in India’s number two retailer, Future Retail Ltd.

Even though chairman Jack Ma stepped down and the Hong Kong IPO was postponed, the Chinese e-commerce powerhouse did not slow down this quarter. The company acquired NetEase Kaola, creating the largest cross-border e-commerce platform in China.

It shared a successful 42% increase in sales and more than doubled quarterly profit and boasted in September it hasn’t felt any pain from the US-China trade war.

The same month, the US State department targeted the technology company, comparing it to Huawei as a tool for the Chinese government.  That didn’t stop Alibaba from introducing new digital tools to attract new American small business owners.

Starbucks launched a voice-activated delivery on smart speaker Tmall Genie with Alibaba attempting to stay ahead of coffee rival Luckin. Alibaba Group subsidiary UCWeb discussed its plans to launch an e-commerce service and content platform in India.

Logistics analysts began Q3 contemplating DSV’s takeover of Panalpina and CMA CGM’s offer for CEVA, pondering if these are indicators the industry is embarking on another consolidation wave.

Maersk continued implementing its technology strategy, launching its spot shipment platform, and sharing plans to significantly increase its IT staff. The company also shared news of its partnership with Indian online marketplace Blackbuck in a push to bring the country’s container trucking supply chain into the 21st century.

Maersk invested $19 million in Loadsmart, a technology that matches truck drivers with the best available container based on appointments, wait time, travel time and other factors. On the Tradelens front, Maersk extended an invitation for freight forwarders to join its digital standardization efforts.

Qatar Airways Cargo is exploring index-linked agreements to sell air cargo. If pursued, the global air carrier would make history and leapfrog ahead to one of the fairest sales approaches the air cargo industry has seen to date.

B2B cannabis logistics platform Wayv launched its Dynamic Distribution platform in an effort to solve cannabis supply chain obstacles. CMA CGM’s approach to logistics technology made headlines, specifically its decision to let its investment arm, ZeBox, function independently – something big corporations rarely do.

C.H. Robinson announced its largest investment in technology to date: $1 billion in technology over the next five years. The announcement included key customer research insights, showing C.H. Robinson is listening to shippers and preparing for their changing needs.

As rain forests burned and Greta Thunberg campaigned, climate change was on the shipping industry’s radar in Q3.

Wind-powered vessels are being produced, which would greatly benefit shippers, carriers, and the environment. Hapag Lloyd turned to robots to improve the quality of ship painting, which has environmental and financial benefits.

JD.com partnered with supply chain software firm Llamasoft to provide clients and merchants with a one-stop supply chain optimization solution, a move to capture a growing share of the logistics market in China. Stateside, MasonHub began operations in Los Angeles.

The start-up provides real-time omnichannel inventory and order management via its proprietary software platform and Shopify app.

Investments

In investment news, Kuehne + Nagel teamed up with Reefknot Investment to launch a $50 million fund for logistics and supply chain startups. Anvyl raised $9.3 million in its series A, furthering its mission to help direct-to-consumer brands manage supply chains.

Shipper raised $5 million in seed funding from Lightspeed ventures, and Waresix, a tech start-up focused on making the logistics more transparent for clients and more efficient for haulage companies and truckers, raised $14.5 million, highlighting e-commerce potential in Indonesia.

Goldman Sachs invested $20 million in Nigerian logistics start-up Kobo360, which connects truckers and companies to delivery services. Indian tech start-up Rivigo raised $65 million for its technology to build a more reliable and safer logistics network. Sennder, a German start-up, also attempting to digitize an antiquated logistics market, closed its series C with $70 million.

Fully integrated first-mile solution provider Cubyn raised its €12 million series B round, bringing world-class logistics to e-merchants. Robotic logistics solutions continued to be a popular investment. Chinese start-up Geek+ raised $140 million for its automated warehouse technology.

And Simbe Robotics Inc. raised $26 million to fund its Tally robot, created to count inventory in retail stores. Autonomous trucking start-up TuSimple achieved unicorn status with the closing of its series D, reaching a post-money valuation of $1.095 billion. Large valuations like this caused logistics industry insiders to question if  VC backed ventures will topple industry incumbents.

Automation took a few steps forward, as Japanese logistics company Nippon Express plans to begin road tests of automated trucks. Self-driving truck startup Kodiak Robotics announced plans to make its first commercial deliveries a year after coming out of stealth mode.

Class 8 trucks, heavy duty, and last-mile delivery vehicles are Waymo’s next target. Daimler Trucks’ Freightliner Cascadia hit public Virginia roads under complete command of its autonomous driving software.

The world may get a little bit greener, with Agility Logistics’ pledge to reduce greenhouse gas emissions, investing $18 million in clean technology.

On the digital side, trucking businesses made progress standardizing data to keep tabs on the general industry trends. Uber plans to invest 200 million to expand Uber Freight, a process that seems to already be underway since Uber Freightlaunched its freight platform in Germany.

Michelin shared plans to sell a container-tracking system it created for its own shipments. GEFCO acquired Chronotruck, a digital load-matching platform that  connects shippers and road freight carriers.  DHL partnered with Convoy, a digital freight broker, and Turvo, a software provider, on a digital platform to provide exceptional customer experience using robotic process automation.

Lastly, A Missouri-based trucking company, Prime Inc. is suing Amazon for using the word “prime” on its truck trailers.

Automated food delivery took one step closer to becoming a reality with Doordash acquiring Scotty Labs, an autonomous vehicle remote startup. And one step back, as food delivery companies worked to retain restaurants with new technology as part of a retention plan to balance thin margins in hopes of keeping them interested.

Walmart announced its plan to invest 1.2 billion in China as part of its strategy to cement itself as part of the country’s “smart retail” movement.

The retail giant also began offering same-day grocery delivery nationwide in Canada after a successful pilot with partner Instacart, and released a new pilot with autonomous-vehicle company Gatik, transporting orders via a single vehicle on a 2-mile route in Arkansa.

Starbucks made strong financial push to speed up its mobile ordering and payment options offering. FedEx Freight expanded its home delivery service shipping large goods direct to consumer. Amazon’s one-day delivery has changed the last-mile game for key players – here is a deeper look at how it has impacted UPS, FedEx, Walmart and Target.

US lawmakers and regulators approved a drone-based food delivery pilot, barring federal agencies from buying drones from China, and creating rules for parcel carriers, like UPS, to operate commercial drone flights.

Drugmaker Merck & Co. tested drone delivered temperature-sensitive vaccines and drugs to remote locations, while vaccine maker Serum Institute of India funded a drone drug delivery initiative to close the Indian healthcare accessibility gap.

Both Elroy Air and Air Canada Cargo achieved milestones with their drone strategies. Bell’s APT 70, the largest commercial cargo drone, began fully autonomous flights.

Maersk’s CEO proclaimed the company’s blockchain initiative, Tradelens, has grown enough to “force’ suppliers into joining, triggering discussions around Blockchain’s antitrust risk.  Hapag Lloyd, CMA CGM, and Cosco signed on to Tradelens competitor Global Shipping Business Network (GSBN), an ocean shipping blockchain initiative.

Freight forwarders talked about unifying to ensure their interests are prioritized as blockchain plans develop.

The Port of Rotterdam achieved a blockchain first, managing its first successful door-to-door paperless shipment.  Cathay Pacific Airways became the first airline to use blockchain technology to manage its ULDs in real time via a mobile app.

Bumble Bee Foods shared positive retailer feedback prompted by using blockchain technology to track products all the way through its supply chain. OpenSC, a seed stage start-up, raised $4 million for its blockchain tools promoting ethical supply chains.

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