project44, the Chicago-based visibility solution provider, has secured major contracts with Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT), two of the world’s largest retailers, FreightWaves has learned.
These customer acquisitions are significant not only because of the retailers’ respective scales but also because both Amazon and Walmart have reputations for supply chain innovation. Both companies are major drivers of technology adoption in the supply chain, from Amazon’s robotic warehouses to Walmart’s recent blockchain initiatives.
Just as importantly, both retailers go to great lengths to place inventory where their customers can access it, and have used their leverage to drive efficiencies in their own suppliers’ operations. Amazon and Walmart’s on-time, in-full (OTIF) requirements are some of the most stringent in the retail industry.
The sheer automation in Amazon’s facilities necessitates additional requirements – packages need to be labeled and oriented very specifically, for instance, in order to be properly scanned and handled by robots. Walmart, over the years, has worked to eliminate unnecessary product storage by using electronic systems to have vendors manage their own inventory in Walmart stores.
Prior to these recent deals, those two customers have eluded the major visibility solution providers. project44 tracked more than two million shipments for Amazon last year. According to a Walmart memo to its contracted less-than-truckload (LTL) carriers seen by FreightWaves, Walmart is moving all of its LTL capacity to project44’s visibility solution.
project44 has also been able to piece together a continuous supply chain network of suppliers (Bayer, Exxon, PepsiCo, Unilever), carriers (FedEx, J.B. Hunt, Old Dominion) and third-party logistics providers, or 3PLs (C.H. Robinson, Coyote, Echo, TQL, Worldwide Express).
On C.H. Robinson’s second quarter earnings call, chief executive officer Bob Biesterfeld called real-time visibility “table stakes,” suggesting that the visibility market is rapidly maturing. Down-cycles in the freight market when capacity is loose relative to volume and rates are depressed tend to drive technology adoption in carriers as they compete for shippers’ business.
For all of the above reasons – the largest retailers partnering with the same visibility solution provider, real-time visibility becoming a basic customer expectation, and an industry poised for another round of tech adoption – FreightWaves believes that the visibility market has reached an inflection point. It’s worth considering how rapidly the space has matured and from where it started.
All of the major players in transportation and logistics visibility are less than a decade old, except intermodal data and visibility provider Blume Global, founded in 1994 as REZ-1. REZ-1 was acquired by Direct ChassisLink in 2014 for $62.65 million; in March, Apollo Global Management bought DCL and Blume Global for a reported $2.5 billion.
MacroPoint was founded in 2011 and acquired by Descartes in August 2017 for $107 million. 10-4 Systems was founded in 2012, spun out of GlobalTranz, and acquired by Trimble in September 2017. FourKites was founded in 2013 and closed a $50 million Series C in February 2019, bringing its total capital raised to $98.4 million. FourKites’ chief revenue officer, Steven Bachert, left in May after a little more than two years with the company.
Finally, the youngest and arguably most technologically advanced player, project44, was founded in 2014, as an API-native platform. The visibility layer is just one service offering – data analytics tools can be easily built on top.
project44 closed a $45 million Series C round in October 2018. At FreightWaves’ Transparency19 event in Atlanta last May, project44 took on an additional $20 million investment from 8VC, a venture capital firm that had previously invested in project44 in an informal round not open to other investors. That raise boosted project44’s total capital raised to $110.5 million.
At Stifel’s transportation and logistics conference in February, project44 chief executive officer Jett McCandless said that on the technology adoption curve, visibility is in the “early majority” phase.
“Eighteen months ago we were being chased out of offices, but now the top of our funnel is 10x what is was then,” McCandless said in February.
FourKites, the remaining independent competitor in the visibility space, is taking a slightly different tack by offering predictive load-matching capabilities traditionally handled by 3PLs.
In October 2018, FourKites hired Kristopher Glotzbach, veteran of Uber Freight and C.H. Robinson, to be the vice president in charge of the new load-matching service. Glotzbach left in May to become the chief revenue officer at Shipwell. Despite persistent industry rumors that FourKites wants to begin brokering freight, multiple current and former FourKites employees have said the company has no plans to do so.