Issue #2: So. Many. [Freight] Issues.

Thanks for following along with us and subscribing to The Helm, where I quickly share some of the news items we're paying attention to and thinking about at Cargologik:

1. Relevant supply chain news and tech, (+trends when we find out/read about them). ????
2. What we're learning from the independent, small to medium-sized, freight forwarders and brokers which remains the toughest to challenge in the forwarding landscape. ??????????????
3. How we plan to push the boundaries of freight forwarding/brokerage tech with our independent freight forwarders and brokers. ????

Let's get to it then and we'll have you back to the day-to-day of your super busy logistics day.

Eyes on the Future of Freight ????:

As things barrel along in the shipping world and economic recovery heating back up in 2020, innovation continues to pick up steam. If you haven't read McKinsey's "Startup funding in logistics," report,

"Venture capitalists (VCs) have recently invested around $28 billion in logistics startups, nearly all of it since 2015.

When capital starts flowing (and that fast) into a sector with baked-in problems, legacy solutions, and bad user experiences....usually impact happens. Things that were the same for the last 10 to 15 years (*cough* supply chain *cough*) get cheaper, better, and faster. Problems get solved. Efficiency increases. Costs decrease. Revenue flows. Client shippers become happier. ????

But it's not just us and McKinsey who are excited. TechCrunch also feels that "B2B is having its Moment," and even further that,

Another trend is creating the “next-level” versions of tools, taking into account the workflow issues of the customers a startup is trying to fix. For example, in the supply chain vertical, many companies are still using spreadsheets to keep track of their workflow approvals and billing.

This is a huge problem for independent freight-forwarders and brokers who have historically been stuck using legacy software and dated interfaces along with their shippers who are often forced to tag along for the ride. And they're drowning in paper, human error, and portals which is another big reason why we started Cargologik. The stakes have never been higher for them, and when competition and international trade KPIs are going crazy, it becomes that much more critical:

• The Loadstar is reporting the "golden age for SME forwarders" out of the Container xChange Digital Container Summit this past month. Speakers there reporting that Maersk Spot bookings now account for roughly 11% of the total. Air France KLM's online bookings are also up 20-43% according to Eytan Buchman at Freightos. For those primarily focused on the spot business, this is great news. And for those that have specific niches, lanes, human expertise, an opportunity to embrace market needs while staying true to that initial strategy that has paid off during these tough times.
• BLOCKCHAIN ALERT??: One of the few actual proofs-of-concept out there in the wild is showing its promise in Canada. DL Freight (SCMP recognized) has been working with Walmart Canada across 60-plus transportation carriers since November 2019. DLT Labs' CEO, Loudon Owen: "After tens of thousands of loads in the supply chain, we proved that our solution worked. By the end of August 2020, the system had processed over 150,000 invoices, with fewer than 2% resulting in disputes." ?
• How Chewy.com has been beautifully dealing with its supply chain surge: more warehouses, and less $20 million in extra fulfillment spend. They built a brand new, centrally located fulfillment center in the Kansas City area and will carry a "limited assortment of products aimed at improving the company's readiness for volume spikes" according to their CEO in Supply Chain Dive. Two full assortment centers are also in the works on the east coast. (PS. Did we mention that they're a #miamitech, sofla based company? ????)
• Chinese exporters are grappling with rising shipping costs ahead of the holiday season. Shanghai to US West Coast rates remains high. Grappling with consumer demand, and worried about escalating trade conflicts, the season's showing up a few months early as those importers feel out the right inventory levels with their logistics partners. According to the South China Morning Post:

"exports to the US by sea started growing in June from a year earlier. In July, exports to the US rose by 7.8 per cent from a year earlier, while imports increased by 16 per cent."

• Maersk is retiring the Damco brand by the end of the year and integrating the Safmarine brand directly into the Maersk line - this following the heels of CMA also retiring the APL Line from transpacific commercial cargo (Source: FreightWaves).

• The U.S. keeps consuming: trade deficit at highest levels in 12 years, with "a record 10.9% increase in imports which rose to $231.7 billion."(AP). China's also not too happy with Australia, slapping tariffs on the country's barley exports, leading to the biggest drop in 40 years, "a staggering 38%" according to the DailyMail. India's seafood exports to China & the US are also down sharply compared to the previous year, "anticipating at 15-25% drop in exports in the current fiscal year" (Financial Express). ??
• In more non-statistical news, Reuters Supply Chain was reporting on the newly-signed "Supply Chain Resilience Initiative (SCRI)," comprised of its members, India, Japan, and Australia. The big idea is that Japan would invest more in Indian manufacturing, while Australia to reduce its reliance on China as the key buyer of its resources. ????????????

What we have learned this past month:

• That the Forwarder's Customer-facing vision & philosophy is #1. Our platform isn't for everyone. It's why we clearly state that our product is for "forward-thinking, freight forwarding organizations." We already know we're not going to have all the features our clients want. What we find with our early user base: they want "," which is enjoyable, easy-to-use, and dependable for their many customers and their own logistics team.
• Transparency doesn't exist in a vacuum. It is a differentiator across the board - for our startup as well as for freight forwarders, brokers, customs houses, etc. The Amazon Effect is a major driver of this new set of modern customer expectation. Here's the story in two images:

1. Amazon PR on hiring this past month

2. Amazon hiring, in relationship to traditional Retail jobs:

• The customer/shipper's expectation is paramount. Their success drives that of their logistics partners - our logistics clients with Cargologik. It is the voice that drives product features, and overall product development, improvement, and innovation within the supply chain. Our 45+ or so early adopters from around the world including Tokyo to Tashkent, Hong Kong to Tel Aviv, from Miami to Guayaquil, etc. are asking us for consistent features on behalf of their customers. ??

Their shippers' needs > their own immediate, internal operations needs.

• Clear, strategic vision and consistent execution make a big difference. It's very easy to simply say "Yes" to all client requests - but saying "No," is just as important, if not more so. Walk your line carefully. Just as we do the same with our clients, Forwarders should be doing the same with their Shippers. ????

How are we pushing the boundaries of freight tech with Cargologik:

Our top client and first adopter is Logunsa - a respected, innovative top tier international forwarding operation based out of Guayaquil, Ecuador. They saw the solution when it was first mockups and they're the biggest driver of improvements to the system. Our backlog items and fixes are 100+ with just this company alone, and while it seems daunting the majority of those are small things.

These are nuanced improvements that are then quickly relayed to my fellow cofounder and success lead, Luis F. Trujillo Jr, who then takes that feedback, analyzes our notes with them, other similar clients, and then preps it for rapid design, development, and execution with the product and engineering team in Bogota.

Since we launched the Private Beta back in February 2020 starting with the Logunsa team, we had just a few loyal clients on the Cargologik platform to begin with. And once we improved and delivered on their requested improvements, they uploaded an additional 140+ additional clients using our in-house CRM component to populate past shipment data. Logunsa's team is using this feature to build up sales and marketing intelligence that they can use in their commercial relationships - to better advise and drive more business with their loyal and past spot clients as a whole.

Quick ways we can use your help:

1. Try Cargologik ??% free for 15-days, no credit card required (for now), and give us your forward-thinking feedback on a customer success call! (But wait - there's more: Ping me or Luis F. Trujillo Jr. directly here on Linkedin to set up a free demo consultation.)
2. Forward this article to a colleague, client, friend, or anyone else who may find this newsletter interesting. And if it's not worth forwarding, let me know how I can make it more interesting and useful.
3. Share, comment, and let me know how wrong or right I am below. We're always up for healthy debates and transparent conversations that help push the industry as well as our platform forward.

With Love and Gratitude ??????,

Miles J. Varghese