Virtual logistics and venture capital are coming together to power the expanding frontier of dockside-to-warehouse distribution or drayage \u2014 seen as the area of port operations in the US receiving the lowest level of investment.<\/p>\n
A flurry of start-ups is popping up amid intensive capital crunching, driven partly by repeated cycles of congestion at bottlenecks, particularly in Southern California.<\/p>\n
And it is there that venture capitalists are taking the greatest interest. Virtual fleet owner NEXT Trucking has secured $97m from Brookfield Asset Management and others for its app which informs cargo vehicle drivers of loads awaiting transportation between manufacturers\/distributors and Los Angeles\/Long Beach. That brings total financing for the company to $125m.<\/p>\n
Describing itself as a hybrid of owned and contracted drivers, NEXT says it has added more than 15,000 drivers to its network recently. Some of the new funding will be used to launch NEXT\u2019s Relay app, designed to further streamline the process of matching available vehicles with available loads. Focused on the US at the moment, the company says it plans to expand to other countries, including the UK.<\/p>\n
“The logistics space is under more pressure than ever before \u2013 with more shipments coming into our ports than drivers and warehouses have the capacity to manage,\u201d said Lidia Yan, chief executive at NEXT.<\/p>\n
According to NEXT, drayage drivers increase their earnings by up to 20%, while local drivers increase earnings by up to 50%. On the supplier side, NEXT customers have seen 167% more containers pulled per truck.<\/p>\n
Outside investors<\/strong><\/p>\n Brookfield Ventures was established in 2017 to partner with technology-enabled businesses that are disruptive within the sectors in which Brookfield owns and operates businesses (real estate, infrastructure, renewable power and private equity).<\/p>\n Josh Raffaelli, a managing director with Brookfield Ventures, says: \u201cBrookfield, through its ownership of the TraPac terminal in the Port of Los Angeles, is creating a partnership with NEXT to offer its services for our own shipping partners. This includes technology integration that can be replicated in the future for other port assets and their customers. Brookfield is also an owner of logistics real estate, which is a natural extension for us to expand the relationship with NEXT.<\/p>\n “NEXT stands out as it is focused on enabling truck drivers who directly benefit from using the company’s platform and services. The company is solving challenges around port congestion and its approach towards starting with drayage is unique in the technology and enabled freight brokerage space.\u201d<\/p>\n But, like the congestion at Los Angeles, the marketplace for digital- and application-orientated ventures in the dockside\/warehouse chain is becoming crowded, and all the recent entrants say they aim to cut the same things: delivery costs and times.<\/p>\n Different options<\/strong><\/p>\n Dray Alliance has secured $3.5m from venture capitalists, led by Craft Ventures, for its mobile technology, connecting carriers and shippers with cargo vehicle drivers in an Uber-like model. \u201cThe drayage industry still depends on emails and spreadsheets for its daily operations \u2013 leading to massive inefficiencies that result in lower earnings for truckers, less predictability in delivery times and 20%-50% increases in the drayage trucking cost of freight deliveries for shippers,\u201d it says.<\/p>\n Startup BookYourCargo says volume grew 48% in 2018, while growth has been 45%-55% year-on-year since its launch in 2014, centred on its web-based platform. Its system extends to administration functions such as billing and scheduling.<\/p>\n Oakland-based Terminal 49 has a somewhat different digital approach. It focuses on the drivers, paying them every two weeks instead of for each load. Offering predictive insights, it also aims to avoid detention and demurrage charges.<\/p>\n E*Dray’s focus starts on the vessel, aiming to group containers at known points and doing the same for the stacks in the container yard for specific customers. Delivery vehicles save time by knowing exactly where to go for a container and where to deliver. Productivity is said to increase by 40%.<\/p>\n Says E*Dray: \u201cA driver takes the first container available and delivers to one geographic region \u2013 a \u2018taxi cab\u2019 model.”<\/p>\n Cargomatic is also back in the mix after a lean period and says business has improved immensely, partly due to a $35m finance injection in 2018.<\/p>\n Indeed, hundreds of millions of dollars have been injected into port-related start-ups over the last two years. But there remain unanswered questions as to how and whether these tech ventures will fit in with ports’ own digital systems.<\/p>\n Port efforts<\/strong><\/p>\n Oakland continues to implement its E-Modal information and dashboard system in conjunction with the supplier, Advent. The latest development uses RFID tags to keep precise track of cargo vehicles from the moment they cross the threshold of a terminal entrance to the moment they go through the out gate, measuring waiting and turn times and associated metrics. Data is updated every 30 minutes.<\/p>\n Four digital dashboards are being set up for beneficial cargo owners to log into a terminal information system to check on the exact status of containers \u2013 arrival, customs and ocean clearing and associated paperwork. A trial roll-out is set for August.<\/p>\n “The next step for E-Modal is to extend the system to the street outside the terminals,” says maritime director John Driscoll. “Drivers will be able to see whether there are problems in the streets leading to the terminals and so plan their schedules accordingly.”<\/p>\n Mr Driscoll says the port and Advent are “open to working with other applications, provided certain criteria are agreed to. The system is not a huge bells and whistles approach and takes a basic approach.” Total cost of implementation has been just north of $100,000.<\/p>\n Meanwhile, Los Angeles is spending more than $10m on its Port Optimiser, in conjunction with General Electric.<\/p>\n Says LA spokesperson Phillip Sanfield: “The project is going very well. We are currently in the registration phase for stakeholders. Currently LA has about 60% of our cargo in the data feeds from ocean carriers. Over the next 30 days we expect that number to increase with additional carriers and we expect to have 90%-95% of our containerised cargo in the Optimizer data feed.<\/p>\n “At this moment, the NEXT Trucking app is not integrated into the Port Optimizer platform,” says Mr Sanfield. “By design (with its APIs and microservices architecture), the Port Optimizer platform is flexible to connect to third party vendors, with the ultimate purpose of optimising the broader port community.”<\/p>\n Beware the giants<\/strong><\/p>\n Small digital start-ups specialising in a niche market such as ports and terminals should probably be aware of giants taking an interest. Maersk is again getting back into logistics and trucking, while the commerce behemoth Amazon has officially declared itself a maritime and aviation company in its most recent filings with the US securities and exchange commission. Both have said they want to be involved in the “last mile” of cargo delivery.<\/p>\n The drayage sector is also becoming less easily defined with the entry of digital-related logistics\/warehouse businesses. In March Olimp of Chicago launched a service to match warehouse space and available cargo vehicles with demand \u2013 be it for just a few miles or across the country.<\/p>\n But venture capitalists, notorious for their short attention spans and fixation on profit above all else, could soon divert their focus to start-ups that make the “last mile” part of a broader business model, so perhaps ports are right to make hay while the sun shines.<\/p>\n OPTIMISING THE SUPPLY CHAIN<\/b><\/p>\n GE’s Port Optimizer is a platform that \u201cdigitises disparate supply chain data\u201d, says LA spokesperson Phillip Sanfield, “and brings it together into a single source. To alleviate the need to access multiple systems and data sources, Port Optimizer was purposely built to be data and system agnostic, meaning that it has been built with the capabilities to integrate with any application and ingest data in any fashion \u2013 it’s a \u2018system of systems\u2019 that fits into the existing supply chain ecosystem for interoperable visibility.”<\/p>\n Adds Mr Sanfield: “This capability directly addresses a top request from our users for a single portal to collaborate with supply chain partners, and we continue to add new data providers to the platform on an ongoing basis. “<\/p>\n Mr Sanfield says the port has worked with GE in developing the system and was not a passive customer. “We did much, much more than ‘install’ the optimiser. We co-developed it for the benefit of the broader supply chain. The port’s investment has been an approximate $12m contract with GE. For other ports, the contracts will be different. Depending on size, complexity, and requirements, GE has a number of different pricing models.”<\/p>\n","protected":false},"excerpt":{"rendered":" Last mile ventures are a current favourite of venture capitalists in the US, but might their attention be short-lived? Martin Rushmere reports<\/p>\n","protected":false},"author":8,"featured_media":429,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"sponsor":[],"class_list":["post-428","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-products-services"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/comments?post=428"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/428\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media\/429"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media?parent=428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/categories?post=428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/tags?post=428"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/sponsor?post=428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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