Project44, a leading real-time transportation visibility provider, is meeting the challenge of COVID-19 and the supply chain crisis head-on, with an ambitious plan to grow aggressively in multiple global regions, including Latin America and Southeast Asia.
Recent acquisitions by project44, conversations with company executives, key new hires and documents obtained by FreightWaves tell the story of the visibility startup’s evolving approach to international expansion.
Adam Compain, senior vice president of product marketing at project44 — and previously the founder and CEO of ClearMetal, which p44 acquired in May — described the complex, multidimensional snarl that global supply chains are in. Ports in North America and Asia are congested, overflowing with freight and waiting vessels, while intermodal service has deteriorated and tight trucking capacity has sent spot rates through the roof. Shippers are trying to adapt their operations but often lack the situational awareness that would guide their decisions.
“We know where the problem is coming from,” Compain said in an interview with FreightWaves. “Demand is at an all-time high, but customer expectations for fast delivery and visibility into those shipments are also at all-time highs. But the disparate systems in the transportation industry still aren’t connected. It’s not that legacy technology was necessarily bad, but the industry is finding itself in a new game.”
Compain said that companies like Walmart, Home Depot, FedEx and UPS have been working harder to keep up for more than a year now. And now the Biden administration’s order that Southern California ports keep their gates open 24/7 amounts to saying, “Let’s work harder, too: Let’s open the ports more and increase capacity that way.”
“That’s all well and good,” Compain said, “but we have to work smarter. Extending hours indefinitely may not be sustainable, and we’ve been adding more people to the problem for years. It’s very hard to deploy hundreds of thousands of people globally to solve this with our hands. But working with software and data, and surfacing the right insights at the right time to the right people can have a big impact.”
Part of the problem at the ports, Compain suggested, was that shippers don’t even know when their freight has arrived at the port of destination. On average, shippers or beneficial cargo owners are notified of arrival at port — a key milestone event — 36 hours after the fact, and 10% of the time, cargo owners are never notified at all, Compain said. That latency extends the duration between arrival and pickup by days as drayage arrangements and dock appointments at receiving facilities are all pushed back.
“Project44 uses a density clustering algorithm with satellite data, plus our own maps of 11,800 berths down to 20 meters of precision, to drive that latency down to just five hours,” Compain said. “And we fill in the 10% gap of shippers who are never notified with data that doesn’t exist anywhere else, but that we generate.”
Compain emphasized that the present situation is not due simply to the impacts of COVID, changes in consumer behavior and infrastructure bottlenecks, but also to shippers having changed their operations in recent years. To keep inventories lean while cutting fulfillment times, shippers have had to accelerate throughput in their supply chains, making disruptions even more painful.
“It’s not like the shippers are steady-state actors but their supply chains just stopped working,” Compain explained. “The demands companies are putting on their supply chains are growing greater. The only thing you can do is get more agile and responsive for the purpose of being more resilient.”
project44 puts the hammer down on global over-the-road coverage
The yearslong supply chain disruptions caused by COVID-19 and the policy responses to the pandemic did not just increase the demand for freight or accelerate e-commerce’s penetration of retail, two consumer trends that have been well covered by the media.
The confusion and whiplash of unpredictable demand and spotty capacity have also driven shippers into the arms of FreightTech companies like project44. According to project44 documents obtained by FreightWaves, the company has responded to the crisis by initiating an aggressive global expansion, adding employees in locations as far-flung as Medellin, Colombia, and Melbourne, Australia, Bangkok and Dubai, United Arab Emirates.
p44’s global strategy fascinates not only through its sheer ambition, but also by revealing how much the company has learned about international growth since its acquisition of Denmark-based visibility provider Gatehouse Logistics in December 2018, its first serious international foray. Europe’s adoption of logistics technology is relatively mature, and an easy way for project44 to enter that market was through the acquisition of an existing visibility provider. Other key hires like Solutions Engineering Director Jatin Garg and Regional VP of Sales Mickael Devena were poached from Shippeo, the French visibility provider that is an important competitor in the EU.
Today, project44 has hundreds of employees and approximately 50% of its revenue in Europe.
But that M&A-based strategy couldn’t work in markets like Latin America or Southeast Asia, where the adoption of technologies like transportation management systems and truck telematics devices is relatively nascent.
“There were multiple points of entry into Europe, which had already adopted a significant amount of telematics technology and logistics software,” a source at the company told FreightWaves. “Now we’re expanding into greenfield markets.”
CEO Jett McCandless and Chief Growth Officer Jason Duboe, project44’s main dealmaker, could not simply buy their way into a Brazilian or Thai visibility market that didn’t exist yet, but they knew they needed local partners to grow quickly in new markets. Instead, p44 decided to invest heavily in regional hubs staffed with a plethora of teams led by transportation industry veterans. Clara Terrien, a French-born Berkeley alumna who was sent to Amsterdam by Uber Freight back in the summer of 2019, is now a vice president at project44 in charge of people and running international growth from its European headquarters, reporting directly to McCandless.
While project44 has been tracking international freight in the form of containerized ocean cargo for years, expanding its over-the-road coverage in emerging markets that have not yet adopted visibility technology would take a nuanced approach that acknowledged local differences and leveraged local talent. In project44’s Australia/New Zealand region, a new senior manager of carrier operations was plucked from Amazon. In Sao Paulo, the general manager whom project44 is putting over Brazil is a veteran from Intelipost, an e-commerce logistics platform.
p44 chose its new regions — Latin America, Australia/New Zealand, China and Southeast Asia — according to four criteria listed in an internal communication: size of the trucking market, contribution to global freight, current percentage of global ocean volume moving in and out of the country, and demand from existing customers.
During a “soft launch” phase, project44 would establish a partnership or close integration with a well-regarded local partner. Those initial partnerships look different from market to market but typically involve an integration with a critical piece of logistics technology infrastructure. In Japan, project44 partnered with Yamato Transportation, the most important parcel delivery company and a fast-growing freight forwarder. In China, project44 is integrating with YunQuNa, a Shanghai-based freight booking platform that has raised more than $250 million from venture capitalists, with plans to “go live” in China this year on track.
Later, in the “hard launch,” the local teams are ready to scale and sell into more regional customers. Latin America is already at that point: Project44 has more than 40 team members in Medellin, for instance. Talking points and a slide deck prepared by Terrien outlined how project44 concentrates sales, customer success, solutions engineering, engagement and carrier-facing teams in regional hubs, leaving the company’s global headquarters for core strategic and product leadership. Project44’s regional teams will offer 24/7 support in local languages, and help create products for particular local needs, key to maintaining the 132% net revenue retention rate the company reported in Q3.
Thinking globally, acting locally: Project44 appeals the FourKites lawsuit
Project44 is fighting a multifront war for end-to-end, multimodal visibility at the purchase order level, a source close to the company said. The source consistently used the phrase “a global race” to describe project44 management’s view of the competitive landscape. But project44 is still finding ways to keep the pressure on its chief competitor and hometown rival, FourKites, back at home in a Chicago courthouse.
In April 2020, project44 sued FourKites for defamation and civil conspiracy, accusing its rival of sending false pseudonymous emails to project44 board members and employees alleging accounting improprieties, fraud and intimidation of former employees. COVID delayed the lawsuit, which picked back up in the spring of 2021.
Judge James Snyder ultimately granted FourKites’ motion to dismiss, finding that the disparaging emails to project44’s board members did not constitute “publication,” a necessary element of defamation, which involves an injury to one’s reputation. Project44’s board members, although they were not direct employees of the company, could still be considered agents of the company, and the emails could not defame project44 to itself, Snyder reasoned.
Project44 believes the court erred in dismissing its suit, and filed an appeal in September.
“The circuit court’s dismissal order was unprecedented and unwarranted under Illinois law,” wrote Douglas Albritton, project44’s attorney, in the appeal. “Pursuant to its holding, any speaker may send defamatory communications of any nature regarding a company to any of the company’s executive or managerial employees, and to any non-employee directors of the company, without fear of facing a defamation claim. In reaching this conclusion the court rejected several, on-point Illinois decisions which previously had not been called into doubt by either this Court or the Illinois Supreme Court.”
A source close to the suit told FreightWaves that project44 does not appear to be seeking monetary damages, but wants FourKites to acknowledge what in its view was an embarrassing, unforced error by its founder and CEO, Mathew Elenjickal. FourKites was under pressure and needed to slow project44’s growth by hook or by crook, the source said.
Indeed, one of the emails covered in the suit — “the May 27th Defamatory Communication,” as Albritton put it — was sent to Tim Bertrand, who was at the time project44’s incoming chief revenue officer.
“I wanted to shed some light so you can fled [sic] ASAP and go find another job,” the email to Bertrand read. “You don’t want to be part of the next Ponzi scheme or next theranos [sic].”
Bertrand’s most recent quarterly results at project44 illustrate why FourKites wanted to sow doubt and try to keep him from taking the job. Project44 booked $11.1 million in new annual recurring revenue during the quarter, according to a LinkedIn post by McCandless. According to an internal document obtained by FreightWaves, new customers that project44 added in the quarter include major shippers like Goodyear, Parker Hannafin and Tesla. p44 closed Graphic Packaging after a head-to-head process against FourKites, and the document claimed that in Q3 project44 won 88% of the deals in which the company was competing against an identified key competitor.
More prospects are asking for global, multimodal capabilities, a source at project44 told FreightWaves. A September report by Gartner’s visibility expert Carly West noted that shippers are increasingly focused on visibility into inbound logistics and supplier operations, highlighting a key factor driving project44’s expansion into Asia.
FourKites has neither confirmed nor denied publicly that Elenjickal was behind the emails to project44 employees and board members.