IT logistics providers come in all sizes, come from various sectors and offer a dazzling array of services to supply chain practitioners. Some of the logistics providers are household names like Amazon (Amazon Web Services) or Oracle while others are newly launched like CIT (Consolidated Intermodal Technologies) and WIN (Web Integrated Network). Whether ubiquitous or unknown, the goal of these IT providers is to use technology – particularly web-based systems – to enable the supply chain to run with greater visibility and efficiencies for transportation and warehouse providers and shippers.
The number of ways that individual companies developed into logistics tech providers offers an object lesson in the evolution of the transportation sector itself. Take the example of Atlanta-based SMC3. Originally, SMC3 was called Southern Motor Carriers Rate Committee and founded in 1930 with the purpose of publishing rates for Florida truckers. In the late 1990s it created rates-related software for truckers and this eventually led to the development of the SMC3 platform.
Other tech providers were from inception designed to be logistics tech providers while many more were built and initially started as inhouse projects to address a specific problem.
Now, no matter how they were started, logistics tech providers are an essential component to every link of the supply chain.
Restructuring Shipping Tech
Probably no event has challenged the global supply chain like the COVID-19 pandemic. From the dizzying drop in demand with the lockdowns, major shifts in consumer behavior and now with the surge stressing handling capacity, nothing has come close to the pandemic in testing the resilience of the supply chain. And at many turns, the supply chain has proved wanting. Congestion and thousands of other issues, large and small, have been exposed over the last two years. But this challenge to the supply chain has become an incubator for new companies, new ideas and new IT products. From a business perspective, it has also been a period that has seen both a high number of launches and acquisitions, as the “field” is at once widening with new players and simultaneously restructuring.
What will eventually evolve from the restructuring of the tech side of the supply chain is difficult to say at this juncture.
There has always been an overlap between 3PLs (3rd Party Logistics Providers) and logistics tech companies offering TMS (Transportation Management Systems) and WMS (Warehouse Management Systems) and related systems. After all, 3PLs like C.H. Robinson or Transplace (which actually uses the tag line “a technology company”) with their platforms both compete and partner with technology providers like SAP and Oracle. Equally, logistics technology companies like Ontario-based Descartes provide technology, platform and network services to virtually every segment of the supply chain right down to the manufacturer. And indeed this all-embracing concept of the supply chain is concurrent with the rise of AI (artificial intelligence), Big Data and the proliferation of new inputs from sensors.
Given the numerous overlaps, it’s not surprising that “systems integration” is becoming a buzz phrase for the industry.
Until recently the biggest business separator was that 3PLs and other tech heavy companies were asset light. In the near future, even that line may fade.
And as the IoT structure of the supply chain broadens and the lines blur between automation and digitalization, carriers and even terminal operators are becoming IT companies. Both Maersk (For example, TradeLens is a platform that has been jointly developed by Maersk and IBM and open to other parties as “members.”) and CMA-CGM, two of the world’s largest ocean carriers have already taken steps down the road to becoming “tech” companies. The investment in blockchain technology, the development of network platforms and the adoption of push technology are all leading in that direction. After all, how different is their progression towards being a tech company different from Amazon being a delivery service?
With the kaleidoscope of movement within the logistics tech sector, it isn’t surprising that spinoffs are being added to the space. Often these new companies evolve from the development of proprietary systems and are further developed as standalones.
For example, in April, Consolidated Chassis Management (CCM) a neutral chassis pool manager launched a new division Consolidated Intermodal Technologies (CIT). Tom Martucci, chief technology officer (CTO) of CCM explained that the new standalone operating division was a direct result of taking an inhouse platform that CCM used to collaborate with pool managers and building it into a standalone offering for third parties. While this system is a now niche product for chassis management for companies operating chassis pools such as equipment providers, motor carriers, railroad operators, IMC’s, and terminal operators, the system’s flexibility and scalability is applicable to a wider range logistics niches (it already features a toll app).This especially true since the apps work on virtually every operating system opening up CCM’s product to nearly every smart device made.
Another recent spinoff was Web Integrated Network (WIN) which formally separated from Odyssey Logistics & Technology earlier this year. Odyssey has long operated in “high-barrier-to-entry markets” niche involving specialized transportation services include bulk truck, ISO Tank, railcar and tanker, as well as food-grade product lines. And WIN was created as the inhouse platform supporting the diverse needs of the company’s wide base of industrial and consumer clients. Glenn Riggs, President of WIN explained the company’s development in a release saying, “It was clear to us early on that WIN filled an industry void for an open, transparent and neutral platform. We were able to build exactly that, a neutral platform that does not compete with transport brokers or carriers and provides an open marketplace for the participation of all parties in the supply chain. The focus is on the shipper allowing the use of existing carriers, as well as spot market shopping and execution.”
Visibility through the supply chain is the battle ground of logistics tech providers. It is the singular feature driving development throughout the entire logistics tech sector. But achieving visibility through the entire global supply chain in real time is demanding – end-to-end visibility means end-to-end networked digitalization and cloud-based platforming. This level of integrated technology is often a challenge in the very countries that are manufacturing the products to be shipped. For example, linking elements of China’s domestic supply chain (especially trucking) to the global network for real-time tracking is still a challenge.
Logistics tech providers like project44 a company that uses its global network to track all modes of movement through the supply chain which recently announced its expansion in Asia – are trying to close the digital gaps in coverage.
And these gaps in coverage are becoming more meaningful as congestion and equipment shortages stress the supply chain. And while these may be only momentary events of a heated market, the rise of e-commerce is only going to increase the need for greater visibility throughout the supply chain. Visibility that is only achievable through the expansion of logistics tech.