After years of incremental change, logistics now finds itself undergoing a once-in-a-generation transformation. The impact of digital technology is finally starting to bite, disruption is growing, and incumbent logistics providers are finding their existing business models are suddenly under serious threat.

Collaboration Ignites Innovation

Accenture Freight & Logistics ASEAN Innovator Award

Digital disruption is rapidly changing the freight and logistics landscape. To accelerate their digital transformation incumbent freight and logistics players need to innovate and foster partnerships within the supply chain ecosystem. In our continued commitment to bringing innovation to the Freight and Logistics industry, we held the inaugural Accenture Freight & Logistics ASEAN Innovator Award. It provided a platform for technology-oriented logistics startups and leading freight and logistics companies to come together. Among the six shortlisted finalists and Eazyhaul was declared the winner. Watch the highlights from the event.

Accenture Leadership – Setting the stage

Participating for innovation and growth – Freight & Logistics companies and startups

Collaborating for success – Mastercard

A host of specialized startup businesses have emerged to target key aspects of transparency and automation in the logistics value chain.

Leveraging their digital expertise, fulfillment experience, and high levels of customer service, the global e-commerce behemoths – Amazon, Alibaba, and others – are moving into logistics in a big way, competing with incumbent providers while significantly raising the bar in customer expectations.

At the same time, new digital service providers have also spotted the growing disconnect between logistics needs and delivered experience. Just look at the way players like Flexport1, FreightHub2, Convoy3, Uber Freight4 and others are disrupting freight forwarding and truck brokerage by offering shippers more user-friendly services through digital platforms. With so much latent value to be released, it’s no wonder these digital disruptors have their sights firmly set on the logistics market.

In addition, a host of specialized startup businesses have emerged to target key aspects of transparency and automation in the logistics value chain, from initial quote and booking, through real-time track and trace, to end fulfillment.

Incumbents might be tempted to view these emergent players with suspicion. But, in fact, they provide far more opportunities than threats. Indeed, the vast majority of new technology-oriented logistics startups are offering innovative point solutions rather than attempting to displace entire value chains or legacy service providers.

Mapping the global startup ecosystem

The size of the logistics startup community has exploded in recent years. In 2018, logistics startups collected more than $6 billion in VC funding globally.5 And by Feb 2019 had already seen $2.5 billion invested in venture rounds raised by logistics, supply chain management, and shipping companies.6

Logistics companies can start small, effectively "bolting on" startup technologies and cutting time-to-value significantly. And then scale up fast.

Incumbents have numerous potential allies in this startup community, whether it’s the Software-as-a-Service (SaaS) providers offering customer-centric interfaces, end-to-end visibility, advanced analytics, and more, or the hardware developers supplying the key building blocks of the intelligent IoT-powered and automated value chain.

Let’s look at some examples:

  • DHL has established a Start-up Lab, working with innovative young businesses like Meerkat and Digital Manufacturing Service to rethink inventory checking, supply chain automation, and more.7
  • FedEx is just one major logistics player using Project44’s advanced visibility platform to connect with shippers and third-party logistics providers.8
  • UPS is working with Matternet, a logistics startup offering an end-to-end drone solution and cloud platform, to deliver medical samples across North Carolina in the US.9

This is just a selection of the logistics opportunities in today’s startup ecosystem. Offering targeted, streamlined, digital solutions, often out of the box, startups can help incumbent businesses resolve pain points and accelerate new capabilities at pretty much every point in the value chain.

Startup opportunities across the Freight and Logistics value chain

Hardware offerings

  • IoT sensors
  • Connected services
  • Autonomous vehicles
  • Robotics

SaaS offerings

  • Collaboration and communication
  • Routing optimization
  • Real-time or near-time visibility
  • Shipping rates and booking.
  • Performance analytics
  • Trade finance.

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Start small, think big, scale fast

None of this would be viable without the rapid evolution of enterprise technology in recent years. Whereas previously ERP systems had to be painstakingly customized to allow third-party integration, modern additions such as APIs and cloud computing mean companies can adopt new capabilities from external partners – and scale them up – far more easily.

It means today’s logistics companies can start small, effectively “bolting on” startup technologies to legacy systems and cutting time-to-value significantly. But that doesn’t mean they shouldn’t also be thinking big. Working with a startup can be an ideal way to kick-start a much larger digital transformation and then scale up fast.

In fact, that’s critical in getting the maximum value from any new solution. Ultimately, it’s about recognizing where the real value lies: not so much in getting hands on a shiny new piece of technology, but rather reorienting the whole organization around a far more powerful set of capabilities.

Ready for new friendships in the startup ecosystem?

Three key questions to get started:

1. Where in the value chain can we most benefit from a new digital solution?

Decide the business outcomes you want to achieve and select the right partner to help realize them.

2. How does a startup solution fit within our future IT and operational transformation roadmap?

Think about how any new capabilities can help your organization’s architecture get where it needs to be.

3. How does our business model need to pivot in the New?

Consider how each startup relationship will help the business adapt to serve changing customer needs better.

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1 Flexport news release, (21 April 2019), “Flexport Secures $1 Billion in Funding Round Led by the SoftBank Vision Fund to Accelerate Disruption of the $2 Trillion Freight Forwarding Market”, https://www.prnewswire.com/news-releases/flexport-secures-1-billion-in-funding-round-led-by-the-softbank-vision-fund-to-accelerate-disruption-of-the-2-trillion-freight-forwarding-market-300799829.html

2 TechCrunch, (2 May 2019), “FreightHub, the European digital freight forwarder, collects $30M Series B”, https://techcrunch.com/2019/05/02/freighthub-b/

3 TechCrunch, (21 September 2018), “On-demand trucking app Convoy raises $185M at $1B valuation”, https://techcrunch.com/2018/09/21/on-demand-trucking-app-convoy-raises-185m-at-1b-valuation/

4 TechCrunch, (20 March 2019), “Uber Freight is expanding into Europe”, https://techcrunch.com/2019/03/20/uber-freight-is-expanding-into-europe/

5 TechCruch, (23 January 2019), “Sequoia-backed NEXT gets $97M as investment in logistics heats up”, https://techcrunch.com/2019/01/23/sequoia-backed-next-gets-97m-as-investment-in-logistics-heats-up/

6 Crunchbase, (22 February 2019), “SoftBank Vision Fund Leads Billion-Dollar Bet On Freight Firm Flexport”, https://news.crunchbase.com/news/softbank-vision-fund-leads-billion-dollar-bet-on-freight-firm-flexport/

7 DHL Start-up Lab website: https://dhlstartuplab.com/our-start-ups/

8 Air Cargo World, (16 October 2017), “FedEx chooses project44 to connect shippers with truckers, 3PLs”, https://aircargoworld.com/allposts/fedex-chooses-project44-tech-to-connect-shippers-with-truckers-and-3pls/

9 Tech Crunch, (26 March 2019), “UPS partners with drone startup Matternet for medical sample deliveries”, https://techcrunch.com/2019/03/26/ups-partners-with-drone-startup-matternet-for-medical-sample-deliveries/

Christopher Logan

Freight and Logistics Industry Lead – Africa, APAC and Middle East

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