Transparency19 kicked off on the morning of May 6 with an overview of the tech disruption taking place in the freight industry, a call for companies to move beyond sector boundaries and some prognostication about how Amazon’s recent foray into the digital freight brokerage space will impact incumbent logistics firms.
“What Amazon wants is to deliver packages faster and speedier, and for that they need dedicated capacity,” said Craig Fuller, CEO and co-founder of FreightWaves. Fuller delivered opening remarks during Transparency19, a three-day conference on digitization and disruption in freight innovation taking place this week at the Georgia International Convention Center.
Amazon’s approach to logistics is similar to the approach the e-retailing giant has taken as it colonizes other industry verticals, Fuller said.
“Look at AWS,” he said, referring to the company’s cloud services division. “Amazon built that business specifically to manage its server farms – it had to have capacity. The company spent billions of dollars on server farms, drove down costs, and then said; ‘we have excess capacity – why not sell it to the market?’ Amazon’s logistics approach is similar to that.”
Transparency19 features disruptors in freight and logistics sector as well as business and thought leaders from other sectors. Keynote speakers include Gary Vaynerchuk, an investor, best-selling author and CEO of VaynerMedia, and David Rowan, Wired magazine’s founding editor-in-chief and editor-at-large.
“Not everyone is an industry insider, because just like logistics, everything, everything connects,” said FreightWaves radio host Chad Provost, who engaged in some back and forth with Fuller during the conference’s opening session. “We need to think outside of our lanes.”
That message likely resonates with the more than 1,000 people attending Transparency19, as the internet disruption that has toppled publishing, media and retail barrels into the freight sector. “It’s natural for digitization to come into our space,” said Fuller. “People in this room are interested in what this means to them, because they don’t want to be Payless, or Sears.”
Some segments of the industry are adapting more quickly than others. “The true innovators are the third-party logistics companies (3PLs),” said Fuller. “They are the survivors; they built a business model without being tied to mode. They have better data science.”
Asset-based carriers, on the other hand – “they don’t get it,” Fuller said. As a general rule, asset-based carriers are small family-owned businesses, and “they are the slowest to adopt new technology innovations because the people running these companies have never worked outside the family business.”
Technology alone doesn’t ensure a successful freight business in the digital age. In a discussion about FreightWaves’ workplace culture, Fuller said it’s important to hire people committed to the mission and who are intellectually curious. FreightWaves also benefits from its headquarters location in Chattanooga, where costs are lower than Silicon Valley.
“Because we have low costs, the company can pass on benefits to employees like stock options and health care,” Fuller said. “All of that is important because we’re playing the long game – we’re not focused on short-term profits.”