Viewpoint: What I learned after divorcing the North American logistical arena

This commentary was written by Robert Nathan, founder of Value Chain Ventures. The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

By Robert Nathan

Many of you reading this have experienced the “pull” of the freight-force: an indescribable force that supply chain professionals around the globe harness to improve the global supply chain and hence the global economy. The inertia and intensity of the question, “How can we use our supply chain Jedi Freight-Force knowledge to make the world a better place for all citizens?”

I walked away from the North American supply chain arena 24 months ago.

After founding/funding/building/and ultimately selling a top 50 freight brokerage (LoadDelivered Logistics) and a top 100 Logistics IT provider (Logistical Labs) to a top 50 3PL (Capstone Logistics Hyperlink), it was time for me to move on. 

But as a true supply chain fanatic, I found myself perplexed when the world finally came to the realization (unfortunately due to COVID) that supply chain controls the world — and that everything from our precious toilet paper to lifesaving pharmaceuticals/vaccines to the computer chips necessary for vehicle production arrive via train, plane, truck or automobile.

So I dove back into the supply chain game and here is what I see.

1. The convergence of supply chain/logistics software and services has been here and will continue to accelerate over the next five-year cycle. LaaS (Logistics as a Service) is real, and companies will need to prepare for “who their customers will want them to be” as the digital future accelerates in all modes of transportation and supply chain.

2. Digital transformation is slow; growth over profits is the new norm and will continue to be the new norm until venture capitalists decide otherwise. Digital brokerages continue to burn capital at an astonishing pace, buy business and attract blue-chip investors, thus forcing the entire North American logistics sector to mature. By bluechip, I mean not just VCs, but revered supply chain-focused private equity firms like Greenbriar and Blackrock and financial institutions like T. Rowe Price. This is good for the end consumer; this is good for the supply chain ecosystem. This is not good for a company that does not have the capital to “mature” via digital infrastructure.

3. Visibility is finally “visible” in the supply chain community! We are in a “nowhere to run, nowhere to hide” paradigm, which is fundamentally good for all participants of the global supply chain. The quality of visibility will increase and latency will decrease significantly as the visibility innovators continue to build their network footprint and distribute their data ubiquitously.

4. Big companies will continue to eat smaller companies; however, smaller innovative VC-backed companies will eat old/slow/legacy businesses at an accelerated pace. I repeat, if you think you can compete with big companies and institutional capital, then get ready for the fight of a lifetime, or sell your business today. As a mentor and dear friend Art Mesher would say, “Darwinian evolution creates hyperspecialization in the logistics sector. Don’t be a dinosaur and don’t get eaten!”

5. Data is gold (or Bitcoin depending on the day). How companies structure their gold, store their gold and embed their gold to power their business models will define their future.

6. An abundance of last-mile companies backed by venture capital will flood the ecosystem in the next five years for continued e-commerce transformation. The industry will need a combination of new physical warehouse infrastructure and digitization inside the warehouse, new e-commerce and last-mile technologies, new and innovative last-mile delivery equipment, and more last-mile drivers.

7. Autonomous trucking is still not here, and when it matures into a reality, it will look like autonomous trains, so don’t get that excited. Yes, you can go buy the stock of some really inspiring public companies that says they are close to solving autonomous trucking for the future. State and federal regulatory issues will impede the proliferation of such autonomous trucking technology.

8. Blockchain in logistics payments? Why is our industry so archaic? Why can’t we change the payment process for the good of the truckers? LogisticsCoin? I see a world where drivers get paid instantly. I see a world where smaller companies get paid IN FULL in one day, not 67 days. This is 2021— we need to figure out the flow of money in all logistics transactions. As supply chain professionals, we must work together to create a modern-day payment environment for the truckers, the lifeblood of our industry.

9. Trucking companies are in vogue now, but will there be any pure-play trucking companies left by 2030? Are there any pure-plays around now? I see a world where trucking companies will service all modes (some already do) and the big will get massive. but that’s OK for the industry. The bigger question is, who will be the leader in the space supply chain (Spacegistics? Moongistics?) The space supply chain must be created in conjunction with space exploration in order for space to be viable for humans.

10. I genuinely miss operating and innovating in the logistics sector, but investing and working with the next generation of supply chain innovators is exhilarating. Special thanks to my “freight-friends” turned great friends Jett McCandless, Travis Rhyan, Art Mesher, Justin Hall and Andrew Leto for sharing your knowledge and being the visionaries that you are.

As a supply chain participant and leader, you have the ability to impact the global economy.

SOME OF MY INVESTMENTS

Here are some of the themes that I am excited about and companies that I have invested in.

Dock Optimization via optical Sensors/Ai
Kargo

Digital Marketplaces
Emerge

Democratization for truck insurance via Episodic API
 LuLa

Upstream supply chain forecasting
Throughput.AI

Driver utilization
Haul

The future of last mile
DispatchIT

Reimagining LTL
Roadrunner

Rethinking transportation and hospitality
GoRoameo