The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
Google and J.B. Hunt announced that they are teaming up to implement Google Cloud solutions and create the most efficient transportation network in North America.
The press release issued on Feb. 17 highlighted Google Cloud’s artificial intelligence and machine learning tools, as well as J.B. Hunt’s expertise in transportation and logistics.
This announcement highlights two themes that we have been exploring in this column: First, between July and December 2020, we explored some of the developments taking place in the application of artificial intelligence and machine learning to problems in supply chain and operations management. Second, the shift toward supply chain platforms and ecosystems is a topic we have also explored in the past — for example, in Commentary: FedEx/Microsoft partnership points to era of supply chain platforms, posted to freightwaves.com on June 10, 2020.
To be specific, this partnership between Google and J.B. Hunt is meant to “accelerate J.B. Hunt’s digital transformation” and allow the companies to “collaborate on next-generation supply chain platform technology.”
The announcement highlights a few other themes that regular readers of this column will recognize;
- Establishing digital connections between shippers and carriers.
- Increasing efficiencies within the transportation network.
- Increasing and enhancing visibility across the network.
- Using real-time data and information to reduce waste and friction.
- Improving decision-making through the use of Google’s prowess in artificial intelligence and machine learning.
Another interesting detail in the announcement is that it appears Google and J.B. Hunt have envisioned that this will ultimately become an innovation platform to support the J.B. Hunt 360 marketplace.
That is an interesting detail in the context of Why digital freight brokers might fail to disrupt the freight brokerage industry and Commentary: Why are digital freight brokers struggling to solve their Uber-scale problems?, posted at freightwaves.com on Sept. 11 and Nov. 5, 2019, respectively.
What is an innovation platform?
That detail is important because of the following definition, which I am repeating from the Nov. 5, 2019, commentary; In “The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power,” Michael Cusumano, Annabelle Gawer and David Yoffie define an innovation platform as one that offers “technological building blocks that third-party innovators use to develop new complementary products or services. The building blocks usually include tools and connectors that facilitate the creation of complements such as software applications for computers and smartphones. At least one side of an innovation platform always consists of complementors, and at least one other side always consists of end users.”
So far, digital freight marketplaces like J.B. Hunt 360 have been mostly focused on creating demand-side innovations by focusing on transactions for shippers and carriers who are poorly served by existing offerings. In other words, until now J.B. Hunt 360 has been a transaction platform.
I am not privy to the details of the conversation between Google and J.B. Hunt. However, I have been in the audience at conferences organized by FreightWaves at which Shelley Simpson, chief commercial officer at J.B. Hunt, has spoken at length about the technology the company is developing.
Connecting the dots between what I recall from Simpson’s presentations AND this announcement, my instincts lead me to believe that this alliance between the two companies is about creating and enabling supply-side innovations.
Supply-side innovations are what would transform J.B. Hunt 360 from a transaction platform into an innovation platform. Disruption of traditional freight brokerage will not happen till a company figures out how to combine a demand-side innovation with a supply-side innovation on the same digital freight marketplace.
Also in “The Business of Platforms,” the authors state: “The key for successful innovation platforms is to identify complementors that will stimulate demand for the platform by making new products and services that add significant value. Of course, we don’t always know in advance which companies or individuals will create those innovations. Innovation platforms (especially digital ones) often try to solve this problem by broadly exposing their application programming interfaces or APIs (meaning they release information and allow access to the platform’s internal instruction sets and communication protocols). They also actively encourage third parties to design complementary products or services, such as through sending out free software development kits and organizing developers forums, or creating incubators and venture funds that subsidize new developers of complementary innovations.”
We are still in the early days of this shift to supply chain platforms, because the conversations taking place at both the grassroots level AND among senior corporate executives still center on reducing waste and the operational opacity that result from manual, paper-based processes in companies’ internal operations as well as within their extended supply chains.
I cannot predict the future, but I can say that it will be interesting to watch how the supply chain platform wars unfold.
If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we’d love to tell your story in FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at firstname.lastname@example.org.
Author’s disclosure: I am not an investor in any early-stage startups mentioned in this article, either personally or through REFASHIOND Ventures. I have no other financial relationship with any entities mentioned in this article.