Dynamo Dispatch (10/29/18)

Issue 41 | UPS eCargo Bike Pilot, Tradelens Blockchain, Coord's AR

Dynamo Dispatch. Weekly update from Dynamo covering the latest and greatest in commerce and trade, #logisticstechnology, and building venture-scale businesses.

❤️ We would love your support. Please forward to friends or share on Twitter, Facebook, or LinkedIn.

🗞️ If you were forwarded this and found it interesting or helpful, please sign up.

Weekly Commentary 💭

Hello from Las Vegas, ahead of the Journal of Commerce Logisticstech Conference. I had the good fortune of spending time with several founders this past week in San Francisco at Techstars #FounderCon and a variety of conversations had me thinking about the technology layer in last mile environments and specifically, real-time, on-the-ground data. So this week, as carriers finish preparations for peak holiday season be it related to sort facilities or delivery networks, this seems worthwhile to discuss.

Last mile is a big hairy problem — in the US alone, think of the 2B+ parking spots, 3M+ miles of road are non-highway, 300K+ intersections, 12B+ parcels delivered/year, and the current rise of micromobility startups speaks for itself. While a local can make it seem simple to move from point A to point B in a small city like Chattanooga, the concrete jungle of New York, or the hustle and bustle of Chennai, the world is seeking a system for efficient point-to-point mobility. The particulars are often hard to capture, difficult to keep up to date, nuance is often in the head of a citizen, and the necessary inputs are seldom complete.

Consider a simple parcel delivery: optimal route, order of drops, vehicle form factor, road conditions, traffic, weather, closures/obstructions, neighborhood safety, optimal pick up/drop off point (front door or back), appropriate parking/delivery zones, dedicated lanes (bike lanes) vs shared lanes (conventional roadways), etc. You get the point — there’s a lot that goes into the dynamic decision making of effectuation get last mile mobility. Despite the startups that have sprung up (many who are great), the opportunity is still large, underserved, and without a clear winner. The $2T+ market opportunity across last mile alone won't be unlocked without relevant data and associated actionable insights.

The data layer and associated infrastructure software is a necessary layer as we think about seamless multi-modal transportation, efficient parcel delivery, and a utopian smart city environment. I suspect that winners will be mindful of a 3 key areas in terms of product and business model: scalable data capture and on-going updates, multi-stakeholder integration (I have routing and you have safety, let's work together), and monetization strategies similar to software infrastructure companies (to avoid a slow ramp and earn while gaining immense value). We would love to chat with startups working on providing intelligence in such last mile environments. Reach out — santosh at dynamo dot vc.

We Are Dynamo,

Santosh 💥

What We’re Reading 📖

Supply Chain

UPS Doubles Down on Automation Ahead of Peak Season. UPS is looking to retrofit or build-out 22 automated facilities, globally that are 35% more efficient than existing facilities. As eCommerce continues to drive higher volumes and shorter delivery times, UPS expects 70%+ of Ground volumes to be processed by automated distribution facilities by year end.

TradeLens Shipping Blockchain Struggling to Gain Traction. The Maersk/IBM partnership appears to be having a difficult time courting other shipping carriers given the tie to Maersk. As I had stated previously, such an effort needs a ground-up decentralized architecture, right multi-party incentives, and remove any ability for a major global shipper to influence (or be perceived to influence) key decisions.

Haven Launches Origin for Multimodal Freight Bookings. The TMS now offers a one-stop for shippers, forwarders, and brokers to book capacity for freight regardless of mode — air, ocean, rail, or truck. The offering is fully automated and has the ability to deal with low-tech partners by processing communication with little to not human involvement required to resolve disputes.

Trucking Companies Maintain Pricing Leverage. As the Cass Truckload Linehaul Index continues to show strength (+9/8% y/y), truckers are able to maintain pricing advantages which is turning up the heat on shippers. We've discussed this trend before and it's ultimately hitting consumers on the store shelves. P&G commented that trucking costs alone could be 25% y/y. As markets go, this is a cycle of ups/downs, the duration of this "bull market" in freight rates is yet to be determined.

Behind the Renren/Trucker Path Acquisition. Renren paid $7.6M at time of acquisition for a company that raised $20M at $180M valuation. While Trucker Path didn't hit it's stride, it was a leader in logisticstech and it's sale can serve as a lesson around trucker acquisition, and monetization in the industry

E2open Buys Intrra to Expand into Ocean Shipping. E2open has no existing exposure to ocean shipping but expects a pro forma revenue of $260M, $200M coming from it’s core (and acquired) supply chain and manufacturing technology products. It’s expected that Intrra can benefit from product synergies as well as access to shippers/BCOs already using E2open products.

Grocery Delivery Still in Vogue for Investors. VCs are $3.5B in and still hot for grocery delivery. I recall Instacart’s prospects were once unclear but now seen as a savior for grocers in the face of Amazon/Whole Foods. It does feel like valuations might be ahead of the unit economic validation required in the industry, the need (and opportunity) to provide groceries and prepared food to a consumer-base primed to get what they want, when they want it, where they want it, is huge.

CEVA and CMA CGM Expand Partnership. The marriage comes as part of CMA CGM’s plan to be a more sophisticated provider of supply chain solutions. CEVA will assume oversight of the CMA fright management business while CMA offers a tender for the remaining CEVA shares. CEVA hasn’t been profitable since being established by PE firm Apollo in 2007 but such a tie-up with CMA CGM could be exactly what it needs.

Transportation

UPS Launches eCargo Bike Pilot in Seattle. UPS is running a year long pilot with electric-assist cargo bikes in Pike Place and surrounding areas. The form factor is built in partnership with Silver Eagle Manufacturing that allows for the containers to detach from the frame. This flexibility can spur efficiencies — integrate automation systems with more nimble last mile efforts, streamline outbound/inbound functions, container pools, and micro storage units.

Coord Launches AR Effort for Sidewalk Mapping. Data in the last mile environment is hard and hairy problem. It's interesting to see where technologies can come solve real world problems. The sheer volume of roads (4M+ miles), parking (2B+ spots), and intersections (300K+) make it very hard to gather and maintain data around. A simple phone camera helps Coord mark sidewalk environments in a cost effective way that leverages interest application of vision and data science.

India's eRickshaw Revolution. India has 1.5M battery-powered, three-wheeled rickshaws – a fleet bigger than the total number of electric passenger cars sold in China since 2011. Without any government incentive, operators have realized the flexibility it affords on the busy streets of Chennai, Mumbai, or Bangalore.

European VCs Back Tier Mobility to Rival Lime and Bird. History rhymes and it looks like global scooter wars are no different than ride sharing. Belgian-based Tier Mobility has received a €25M investment under the guise that a large company could be minted that captures on the mobility dynamics of European cities (high walkable, micromobility-friendly, increasing balance between cars and bikes, scooters, and people). “If you win just five or 10 markets, even as the number two or three player, you’ve got a massive company.”

Walmart and UPS Share Lessons on Electrifying Fleet. At scale, Walmart and UPS share lessons around charging, maintenance, and roll-out at scale. The consensus is that more work needs to be done but electrification unlocks many operational and regulatory efficiencies.

The Information On Bird's Unit Economics. It looks like Bird's gross margins are expected to almost double from 19% to 33% and is generating about $3.65/ride as of May. The company is gearing up for another fundraise as Uber and Lyft plan on investing $1B+. It looks like as a whole, users love the service but vehicle fragility is an issue.

Company Building

Finding Yourself A Great COO. It's not uncommon for startup CEOs to hire a COO to help them during a phase of hyper growth and often times to fill-in experience gaps. "Hire a COO when things are going well, not as a fix."

Get Inside Your Buyer's Head — Improve Conversion Rates. David Skok on improving the buyer's journey and funnel process by removing sales complexity — some great case studies.

What We’re Listening To 🎧

a16z Podcast: Tesla and the Nature of Disruption. I caught up on my queue on my second cross-country flight in a week. A lively conversation about disruption using Tesla as a case study — great gems on the history of the auto industry and current innovation (disruption) strategies in the space.

Who's Hiring? 👩‍💻

Trucking Technology (Operational Software Engineer) at Starsky Robotics in San Francisco, CA.

Senior Full-Stack Rails Engineer at Stord in Atlanta, GA.

Full Stack Developer at Vector AI in London, England or New York City.

Check out other jobs at Dynamo portfolio companies.