General Logistics Technology LogTech

The Logistics Technology Update for Q4 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 Q4 2019

Amazon had another busy quarter, including registering a one-day record for items ordered during Cyber Monday.  Amazon was busy in terms of logistics as well: their expansion into one-day free Prime delivery over the holidays saw them delivering an estimated half of their own packages in the US, but may have cut into profits as well. As part of that trend, Amazon briefly barred their third-party sellers from using FedEx Ground in December, only to reconnect in January. 

While also expanding its in-store pick up Counter service in the US, contracting with Sun Country Air to expand its US air fleet in 2020, and investing $40M in robotics innovation, Amazon was also making moves globally: they acquired digital customs broker INLT, aggressively pushed their Amazon Global Logistics freight forwarder services to Chinese sellers on their US marketplace, and battled with other international investors like Walmart for new delivery channels in India.

Meanwhile, companies like Shopify, Shipbob, ShipHawk and even Walmart are offering competing services to help e-commerce SMBs have alternatives to selling on Amazon.

Alibaba, after releasing a second-quarter report that dispelled some trade-war fears, finished the year strong.  Their stock was up 54% annually, with much of that gain coming in Q4 aided by their record $36.5B in sales during their Singles Day event in November.  Their IPO on the Hong Kong exchange also added $15 billion of capital.

In terms of logistics, Alibaba invested another $3.3B in Cainiao, a logistics platform that matches riders, deliveries and warehouses for its Alibaba’s B2C e-commerce sites in China.  Aliexpress also made inroads in attracting vendors to its European platform and in e-commerce logistics India.

The big international logistics players were also very busy in Q4, especially in terms of launches and investments related to the industry’s digital transformation. 

Among third party logistics providers, DB Schenker partnered with Qwyk to provide real time sailing schedule management for their 4.0 platform, while C. H. Robinson launched Freightquote, a platform enabling shippers to search and eBook across multiple US trucking carriers. Agility expanded its diversification by investing in an e-commerce site builder with a focus on the Middle East. 

Carriers also improved their digital offerings this quarter as Maersk launched real-time spot rate connectivity via an API, and invested in an  IoT connectivity startup. Evergreen partnered with BlueX to provide ocean freight eBooking to forwarders and SMB shippers.  Lufthansa also released an API enabling eBooking on their website.

Developments in digital track and trace technology included the Digital Container Shipping Association publishing data standards to enable tracking across carriers. In addition, IoT company Traxens developed standards for a smart container data sharing API, FourKites and Ocean Insights partnered to develop a plug-and-play ocean shipment tracking solution, and Flexport acquired Crux Technologies to enable real-time tracking. They also announced expansion of their services to the UK and EU, while going through a small 3% downsizing in early February.

ONE container shipping line announced that they are joining NYSHEX, whose members now make 60% of ocean capacity available through digital contracting.

On the environmental front, major carriers are stepping away from arctic shipping, and a coalition of global shipping associations submitted a proposal to the IMO for a 10-year $5B R&D project to reduce the industry’s GHG emissions.

Investments

In addition to the investment activities just mentioned, Alphabet held a secret meeting – with FedEx and JD among the attendees – to explore potential business models and investment opportunities in the e-commerce logistics and fulfillment space. POBA, the Korean pension fund giant, committed $111M to the AXA logistics fund, and DHL announced a planned a 10B EUR investment in the company’s IT, analytics, and digitization efforts.

In Q4 trucking digitization developments, Uber Freight expanded its platform to Canada, while Convoy closed a $400M funding round and announced a milestone in its automation efforts with 100% of the loads it brokered to carriers now done automatically

JB Hunt announced that JB Hunt 360, its digital brokerage portal, is now integrated with the JDA TMS. Logistics software developer project44 is partnering with SAP to give surface tracking capabilities to SAP logistics users in North America and Europe. The Trucker Tools trucking visibility app has added eBooking capabilities for truckload shipments.

Outside of North America, DHL launched Africa’s first eBooking platform for trucking, and Manbang, China’s Uber-like trucking group, invested in Brazil’s TruckPad.

Autonomous trucking made progress this quarter as PlusAI completed the first autonomous US coast-to-coast ride. Autoban AI also made gains in autonomous testing, while Starsky Robotics struggled and is looking to be acquired. Einride, the Swedish autonomous truck start-up, raised $25M in Series A funding and is looking toward the US market.  Israeli start-up Ottopia is working on a teleoperation solution for trucking.

Digital marketplace NEXT eliminated 19% of its workforce and several of its business lines early in the year. It is taking steps toward greener trucking and announced that it will be moving to zero emissions from its own fleet in the next five years.

Walmart made gains in grocery delivery innovation this quarter. It piloted its in-home grocery delivery in several US cities and also announced the launch of a self-driving grocery delivery pilot in the US in partnership with Nuro.

In global last-mile developments, FedEx is testing a delivery robot in Dubai, while multiple last-mile startups – including one funded by Alibaba – are vying for space in Asia.

Straight to consumer drone delivery is inching closer to reality as Alphabet’s Wing received a special FAA Air Carrier Certificate to fly beyond line of sight, and partnered with FedEx and Walgreens to execute the US’s first store-to-customer drone delivery.

UPS and CVS followed closely behind with their own store-to-customer drone delivery in November. Their drone was awarded an FAA Part 135 certificate, which they claim will allow them to scale their solution much more easily than Wing. Meanwhile, DSV Canada is planning to provide drone delivery in 2020.

In India, drone delivery operator hopefuls will soon participate in a pilot for the state’s own beyond line of sight certification.

Several players announced advancements in blockchain solutions for logistics this quarter as well.  Tradelens expanded its platform to include ports in Vietnam and Bahrain, while the Federal Maritime Commission published the Tradelens agreement – a major step toward the agreement becoming accepted.

Walmart Canada launched a blockchain-based shared ledger to track deliveries, verify transactions and automate payments and reconciliation between Walmart Canada and its carriers.

Finally, shipment management software provider CargoSmart announced gains in its freight finance blockchain solution.