The availability chain industry has faced a series of challenges over the past few months, including Convoy’s shutdown and the recent layoffs at FourKites. While these events create an impression of widespread instability in logistics technology, that’s not the case — there’s plenty pointing to how the industry is continuous to grow.
I actually have encountered more innovation across the complete logistics ecosystem this yr than I actually have ever before. It shows how supply chain corporations are digitizing their processes from procurement to payment and the way picking the proper log tech partner is important.
A recent study by McKinsey shows that technology investments in logistics proceed to grow.
“Some 87% of shippers reported maintaining or growing their technology investments since 2020, and 93% said they plan to take care of or increase their spending over the subsequent three years,” the study says. The study also shows that shippers and providers are moving beyond foundational technology into the subsequent frontier of productivity which come from leading-edge solutions resembling real-time transportation visibility, robotics, network digital twins and real-time insights.
And although we read negative news stories day by day and we see occurrences of events within the logistics industry resembling strikes, bankruptcies, layoffs at tech firms, security incidents, weather events, etc., there are also many positive things that occurred within the last yr. The logistics industry, now greater than ever, is an incredibly connected network of corporations and individuals who’re extremely enthusiastic about this industry and can work countless hours to maneuver this industry forward.
Private equity (PE) and enterprise capital (VC) money may not be as accessible as a couple of years ago, but there are many opportunities where these corporations will proceed to take a position in recent technology as witnessed by a constantly increasing variety of startups. These FreightTech startup founders are equally passionate and motivated to create recent or improved solutions to enhance the efficiency of the industry and to create capabilities we now have not seen before.
This has turn out to be abundantly clear when talking to each investors but in addition to founders of startups.
As for the larger VC- and PE-backed tech corporations, we now have seen several close shop resembling Convoy or Slync. But we now have also seen the identical within the non-tech side with corporations like Yellow Corp. Most recently, we saw leadership changes at Flexport during which the CEO got ousted. Similarly, we saw a management shakeup at FourKites with several executives being made redundant and a 15% layoff in its global workforce. This all creates the perception of lots of instability out there even when others are continuing on their growth trajectory.
It also increases the importance of picking the proper solution partner or what I prefer to call the proper “value creation” partner.
Not should tech vendors think by way of selling solutions but somewhat consider selling value creation mechanism enabled by their platforms. But equally vital, as corporations start this journey with this partner, are other aspects resembling the seller’s financial stability, its workforce that may support the project, its culture, its ethical standards and its physical global presence.
What’s equally vital to investors is the moral compass of the CEO, the power to draw the proper talent, with the ability to execute on strategic sales plans and the partnerships with key technology providers and trusting that the proper leader is in place long enough to see those plans through. The proper log tech partner won’t depend on gimmicks to sell your product but will prove its value in droves by helping you overcome the obstacles you’ll inevitably face.
End users should proceed investing in technology to enable their supply chains to realize a better velocity. This in turn will help with the numerous points of friction that exist today and the increasing recent events that can occur in the long run. Visibility will remain a key to providing not only transparency but create insights that can transcend supply chain execution and can assist corporations in higher overall planning.
The important thing to success of those technologies is picking the proper partner that can walk alongside your digital transformation with the vision and the runway to be around for the long term.
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