Dynamo Dispatch (10/8/18)

Issue 38 | Shipper/Carrier Dynamics, XPO Ramps Warehouse Automation, Honda/GM Cruise

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

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Weekly Commentary 💭

We are gearing up for Founders Camp this week and are super excited to host 20 startups, several founders/operators, and 20 corporates. A special thanks to our sponsors Covenant Transportation, Chick-fil-a, Omnitracs, EPB, and Market Street Partners in helping to make this happen.

Meet the 20 startups joining us from across the US and Europe. I’m off to prep for the week — check out our social media to stay on top of the Founders Camp activities!

We Are Dynamo,

Santosh 💥

What We’re Reading 📖

Supply Chain

New Normals Drive Closer Shippers/Carrier Dynamic. At CSCMP Edge this week, over 80% of those polled believe we are in a new normal- high rates driven by increasing volumes and a low qualified driver base. It's resulting in closer partnerships and a renewed respect between shippers and carriers vs a highly transactional dynamic.

XPO to Deploy 5k Robots in North America & Europe. XPO is partnering exclusively with GreyOrange for their goods-to-people automation to improve fulfillment times, manage costs, and improve safety. The deployment is expected to help one worker fulfill 48 orders at once and underscores growing labor scarcity in a 24/7 world.

Flexport Enters ELD Market with Transmission. The new company is focused on driving efficiency and transparency in trucking. The ELD product will be sold to drayage and intermodal carriers (as it bridges to ocean freight) for $25/mo in partnership with AT&T. Operations visibility and document digitization are some of the key benefits for the initial end customers.

Instacart Expected to Top $3B Orders in 2018. Grocery logistics has got hot in 2018 in the aftermath of the Whole Foods/Amazon tie-up. Instacart is doubling their 2017 GMV (includes membership fees, delivery fees, and value of groceries purchased) as grocers are pushed to compete and opting for Instacart's services. Walmart's grocery pickup is wildly successful in (an informal poll) and looks to be ramping (we could say delivery is still in beta).

Flexible Shifts in Warehousing Becoming Commonplace. Low unemployment and high demand is driving labor shortages in eCommerce DCs. Wage increases ala Amazon are common measures but a more empathetic and flexible lifestyle is winning for some warehousing groups. Its worth noting that wages have typically been at $15 — in 2016, Harrisburg, PA area workers earned $15.34 — and might need to go higher till automated solutions ramp further to improve the working environment.

McLeod Increases Focus On Freight Matching. In a hot freight environment, McLeod's latest feature release enables improved load matching with a new rating system. Users can rank load opportunities and better predict forward yields and profitability.

Robots Head for the Fields. Automation is forcing us to rethink farming, ag science, and associated supply chain functions. There will be massive positive impacts on labor productivity, crop yields, waste, and transportation. Shout out to our friends at Root!

$150M Later, Rethink Robotics Closes. Pioneers in cobots, Rethink faced weak market adoption for it's revolutionary solutions. It turns out an acquisition fell-through at the final hour whereby their IP will begin to be sold-off.

Transportation

Honda Invests $3.75B in GM Cruise. Reilly Brennan at Trucks VC summed it up best: "Going it alone with $167M/yr to work on Level 5 unstructured AV isn't smart capital allocation. It's just not enough capital, off by an order of magnitude. Putting that money to work as a part of a syndicate doing unstructured L5 makes at least more sense than doing it alone."

Bird Launches Delivery with All Day Rental. A savvy (and logistically-challenging) offer from Bird might help address citizen and regulatory concerns regarding "scooters being left everywhere." It could also prove to be a potent last mile distribution network if successful.

Truck Electrification and the Coming Maintenance Training. The industry is realizing that new EV technologies will require maintenance technicians to retrain. New semis will be electric and rely on more sensors and advanced software — a different and unfamiliar set of complexities vs incumbent vehicles.

The Information's Micromobility Conference Call Recap. Executives from JUMP, Scoot, and Skip discuss the competitive environment, regulatory concerns, form factors, business models, and more. It's worth noting that the cost of charging is the massive pain point as hardware and battery technology lag. Interesting how analogous business model dynamics and economics are to last mile delivery.

Toyota/Softbank Partner on AV Services. The initial investment will be shy of $20M and focus on developing a multi-party mobility service based on Toyota's ‘e-Palette’ for Japan. Toyota plans to produce the hardware and software for convoys of shuttle bus-sized, self-driving multi-purpose vehicles used, for instance, as pay-per-use mobile restaurants and hotels.

Company Building

Frameworks for Product Success. Frameworks are a great place to start when tackling a complex problem. It's important for founders to develop and iterate frameworks to build and scale products and businesses.

Scaling Engineer Teams by Sharing Knowledge. Great engineers are in need and great CEOs help their CTOs maintain a pipeline of talent. But retention and development is important especially as a startup scales. Some great thoughts here that leverage very basic operating principles/procedures.

Case Study: Developing New Markets. Lemkin uses the e-signature market that he helped pioneer in a case study about building large businesses in blue oceans. Some takeaways: new markets are often met with skepticism, early on; huge lag on feedback loop; progress compounds; market shifts lend to increased market size.

What We’re Listening To 🎧

Micromobility Podcast: Setting the Scene. On my queue for a while, this series is hosted by Oliver Bruce and famous analyst, Horace Dediu. A great collection that highlights the dynamics behind the explosion of small mobility form factors — scooters, bikes, and more.

Who's Hiring? 👩‍💻

NLP Engineer at Vector AI in London, England or New York City.

Software Engineer — ML Infrastructure at Gatik AI in Sunnyvale, CA.

Junior Full-stack Developer at Stord in Atlanta, GA.

Check out other jobs at Dynamo portfolio companies.