IVCA Feature: Highlights of the Luncheon Event, ‘Disruptions in Logistics and Supply Chain and Their Impact on Mature Companies’

April 17, 2019

The first IVCA educational luncheon of 2019 was a real cause and effect exploration. The modern realignment of delivery systems to consumers and B2B, motivated by Amazon and their competitors, has changed the game significantly in the last five years. “Disruptions in Logistics and Supply Chain and Their Impact on Mature Companies” was the topic of the luncheon, which took place in downtown Chicago at the Neal, Gerber & Eisenberg Conference Center on April 3rd, 2019. The event was moderated by Saurabh Sharma, Partner at Jump Capital, and featured the following panelists ....

  • Matt Bernstein, CEO/Founder of Hubtran (MB)
  • Matt Elenjickal, CEO/Founder of FourKites (ME)
  • Jett McCandless, CEO/Founder of project44 (JM)
  • Dhruv Saxena, CEO/Founder of ShipBob (DS)

Hubtran is applying artificial intelligence to replace old school back-office systems across the freight transportation industry. FourKites is a real-time supply chain visibility platform that uses a proprietary predictive algorithm to calculate shipment and arrival times. The Advanced Visibility Platform for shippers and third party logistics is project44, which automates, connects and provides visibility into key transportation processes. ShipBob offers simple, fast and affordable fulfillment for e-commerce businesses.

The event was presented in a question and answer format, with an audience participation Q&A afterward. The following are the highlights ...


Matt Elenjickal (ME) began the discussion by pointing out that when thinking of the supply chain you’re shipping something from point A to point B, there is a shipper and a receiver, and there is the use of a trucking company to move the freight. What is driving new ways of thinking in this area is fragmentation ... a half million trucking companies thousands of shippers, and a bunch of technology providers. That is what is driving the growth of alternative idea companies. Jett McCandless (JM) added it’s with this complexity a difficult problem to solve, but on an innovation bell curve the tide is changing.

Matt Bernstein (MB) added that the “point A to B” shipper-to-receiver scenario also has other parties involved, such as brokers, third-party logistics (3PL) and factoring companies. So the trading of information becomes complex, and it’s a low-trust environment. It’s also transaction intensive, in an example of one trucker doing three loads a week, that can spin off to 15 transactions, so the “back office” consumes much of time and complexity.


Jett McCandless (JM) answered that query through the work of project44. Amazon was given as the example that took transportation costs, turned it upside down, and made it the tip of the spear for the transaction experience. By doing that, they provided a visibility for getting packages delivered. That raised the bar, and challenged the supply chain to modernize and digitize their companies. “Telematics” are in-truck electronics, similar to car tech, are improving data and insights in real time. Companies can start with visibilities.

ME added that when we think of visibility it comes down to “where is my truck?,” but it is much more than that. The real question is, what do you do with the data? That is what FourKites is trying to solve, beyond where is the truck it becomes when can I expect the truck at the receiver’s location. With Amazon, the expediency experience has changed, with expectations that a package will arrive quickly, and that expectation has expanded to Business to Business (B2B). If that is not provided, it has an impact on real-world concerns like losing “shelf space.”

In customer service terms, another real-world impact is if they get a call asking where a truck is, and they have to call logistics, and if logistics has to call the trucking company, productivity takes a hit. Transportation costs were also rising because ‘there were not enough trucks on the road.” In ME’s view, it’s not the number of trucks, but the utilization of trucks. In conclusion, it’s how data can be added to the supply chain and add value.


Dhruv Saxena (DS) of ShipBob reiterated that his business is for direct-to-consumer clients who work in the $300,000 range, up to a high end of low millions. When his clients come knocking, they look to replace doing it themselves. On the low end it makes perfect sense (their clients, for example, don’t have to hire additional personnel), and ShipBob uses smart technology to do the tracking for them. On the high end, it replaces the 3PLs of “Mom and Pop” businesses. Their pitch is to compete with Amazon by shrinking delivery times. It’s cheaper and customer friendly.

Their customers can also put together a “Amazon Prime’-like catalog, and control the shipping times based on inventory. With supply chains spread throughout the country, even same-day shipping can be available for the lowest end direct-to-customer products. In essence, their clients can concentrate on building a better product, rather than building a supply chain.


MB mentioned Convoy and Transfix as examples, but admitted he hadn’t been inside them that much. But he offered insights like the newest companies may seem tech shiny but when looking “under the hood” it isn’t necessarily so. There is still phone work, both carrier and customer, and other elements associate with back office shipping. But many mid-size brokers have surprisingly more automation than expected.

The newest rub is mobile smart phones, and the assumption that most tracking work will be done through devices. He said he wasn’t sure if those models were working precisely. He mentioned, for example, that most drivers are dispatched and not necessarily automation motivated. And also the brokerage industry grew in 2018, with a softer forecast in 2019.

JM added that he worked in 3PL, in MobileTrans in Phoenix, a two billion dollar logistics company. He opined that the mid-level brokerage has proprietary code, often more that the bigger companies. But the nuances and complications of it are real, especially for concepts that are like UBER, but for trucks (UBER Freight). He feels they are more like traditional brokers, but the newness is tech enablement. They defy categories, and in 2019 it takes tech and automation to protect revenue, so there is investment there.

ME added that he sees no difference from newest brokers to the mid-level established companies. Although in the concept of UBER for trucks, he can’t envision a truck sitting in garage waiting for it’s digital order. And there is a finite number of trucks on the road, so where would the new capacity come from? All the brokers are going after the same trucking companies. The competition then becomes about automation, whereas 10% is about getting a truck, and 90% is all the machinations around realizing the journey. So the challenge is to customize that 90% and improve it.


ME explained that ELDs are a combination GPS and data logging machines, which in some point started in the 1980s. Then there was a federal mandate that all trucks must have a form of ELD, mostly for driver safety. The data was logged on paper, which meant many problems with “two sets of books.” Now logging is digital based, but different trucking companies – because they are competing – have not standardized the data. That’s how FourKites came along to create standardization.

MB brought up that long term, what will finally trigger the obsolescence of documentation that proves loads were delivered, etc? Can we use digital data to move paper out of the equation? While it’s not happening today, the industry in moving forward on it. But it will probably take awhile. He went on to talk about the theories of capacity. With less paper cheating, wouldn’t logs have less capacity? The opposite has actually occurred. ELDs are identifying the slack in the system, which adds up to more capacity than the industry expected.

JM added that ELDs are a big “tail wind.” With technology, comes evolution. With our society and economy depending more on GPS-type technology, what we’re learning is more and more significant for modifying and changing the supply chain industry. It helps small businesses who serve the industry, for example, by focusing on problem solving ... like a tire blowing out to the repair shop that can fix it.


DS of ShipBob said that the very reason his company exists is because of the Amazon delivery standard ... it raised the bar on the customer experience with e-commerce. Customers have an expectation of same day or narrow timing on deliveries from other e-commerce sites. ShipBob gives other sites the competitive edge, and gives them distance from being commoditized on Amazon (which takes a percentage of sales).

ME added that Amazon created a sense of urgency for what FourKites does, along with a willingness for shipping companies to cooperate and share, for efficiencies and competing against Amazon. Amazon’s movements are also followed closely, which adds to the overall infrastructure.


JM said that shipping options have become awesome. In the history of supply chains and tech, prime investments were first made in the late 1990s/early 2000s in mainframe and EDI structures. As decision-makers in companies and consumer tastes change, supply chains are impacted. We need to accept that some costs much be accelerated from 20 years ago. The question is ‘what is the path to that modernization?’ It will be interesting to see how the new players, like ShipBob, level the playing field. It will be interesting to see how it shakes out.

DS added thanks for the plug, and how’s it true. He mentioned when someone starts an e-commerce company, they don’t go in wanting to know everything about 3PLs. It’s about creating a product, and getting it to a customer in the cheapest and fastest way possible. The onus is on companies like ShipBob to remove that shipping friction, to make it easier to built a brand. Most of their customers are surprised to hear the company has not existed for a longer time. There is opportunity to modernize supply chains, and technology is a solution.


MB talked some stories regarding HubTran fund raising. For West Coast funders, the push back was always ‘well, you should be doing UBER Freight.’ So after private investing, HubTran went with Jump Capital in Chicago. The advantages of here, according to MB, was access to brokerage companies. Having the transportation network and concentration in one area to start out was essential. It’s ‘the Silicon Valley of trucking.’

JM added it is the ‘transportation logistics mecca of the world.’ The capital raising has also matured significantly. Chicago is logistics.


How does driverless technologies change a business model?

- ME thinks it will happen. The way he thinks it will work out is that there will still be a “driver” for pickup and delivery, but once on the highway the driverless tech will kick in. The impact, in his view, will be on the trucking companies and brokers. JM thinks it becomes a more consolidated industry, because of costs.

Since you have a close-up view of the economy, are you seeing slowdowns in 2019?

- JM indicated that transportation is a barometer, but at the present time it’s TBD. From a company stand-point, they are still growing. MB talked about how funders were interested in seasonality, but there jumping off point was so successful it hasn’t been an issue. There has been a slight dip between 4th quarter 2018 and 1st quarter 2019, but they are different seasons.

How does the concept of UBER Freight and similar concepts play out in the market?

- JM talked about the brokerage space, which still dominates. One company can’t overcome that, in his view, although UBER has made inroads. He still sees a number of small brokerages coming into the market. MB sees a lot of M&A activity in the brokerage companies, but small business brokerages are still effective in the market. Tech has leveled the playing field. ME believes there is room for the UBER Freight style companies, in the sense of product companies, ‘just want to ship.’ It’s a commoditized market at this point.

To access the presenter’s companies:

  • Click here for Hubtran
  • Click here for FourKites
  • Click here for project44
  • Click here for ShipBob