UPS sells Coyote to RXO, C.H. Robinson slashes over 50% of US sales team, Uber Freight teams up with Aurora

Welcome back to Supply Chain Tech Trends, your twice monthly deep dive on supply chain tech news, events and analysis, written by Operator Stack.

Was this email forwarded to you? Subscribe Here

Top News

1) UPS announced the sale of Coyote Logistics to the technology-enabled brokerage RXO.

2) C.H. Robinson slashes over 50% of US sales team, sources say.

3) Uber Freight and Aurora Innovation launch autonomous program for carriers.

💬 The Thesis

At Operator Stack, we believe the mega-trend of workflow automation - powered by language models, agents and dramatic shifts in the nature of human<>machine interaction - will transform supply chain and logistics over the next decade.

C.H. Robinson has been on the automation train since at least 2019, but some would say they were still late to the party. At that time, they announced an aggressive, $1B technology automation program, but they’ve stumbled repeatedly with implementation over the last several years. Even still, some claim it’s been a key efficiency driver, enabling them to reduce their US sales team by 89% over a similar time period (650—>70).

Transitioning from human labor to machine labor is not easy - from a cultural, operational and technical standpoint - but we have argued before that it is inevitable for brokers to stay competitive, especially in loose markets. Unfortunately, this means there will be job dislocation, especially among carrier reps who handle the often nuanced task of matching a truckload to the right carrier to haul it.

This trend toward automating carrier capacity is why we invested in Parade.ai in 2022. Parade has been developing an AI copilot (“CoDriver”) to automate carrier conversations and dramatically expedite the email-to-quote process by: 1) processing inbound carrier emails using natural language models and understanding context; 2) starting negotiations with the carrier, and 3) escalating it to a “human in the loop” once the load is ready for booking.

With an estimated 30-40% of a broker’s workload consumed by carrier negotiations, on average, automating this last leg of the load booking process could truly revolutionize throughput for AI-first freight brokers and materially improve the broker’s operating margins.

Genlogs is another fascinating company we met with recently that enables better freight capacity matching using real-time data + automation. They’ve developed a nationwide, proprietary network of roadside sensors to collect data on trucks and equipment traversing roads. These sensors collect data on trucks at highway speeds (70-80 mph), and within two seconds of a truck passing, they capture information such as license plate, USDOT number, MC number, cap number, equipment type, and logo numbers.

So essentially, Genlogs is building a platform that can provide a "God's eye view" of all carriers on the roads, not limited by ELD access. Their value prop to freight brokers is particularly compelling in our view, e.g.:

• Real-time carrier positioning and network management

  • The system can show which carriers in a broker's network have trucks currently positioned in specific markets, which saves time making phone calls to confirm this information;

  • This helps with finding carriers for backhauls or other immediate needs.

• Lane-specific carrier information

  • Brokers can search for specific lanes (routes between locations) and see which carriers are operating on those lanes;

  • The system ranks carriers based on their activity on particular lanes, helping brokers identify the most active or relevant carriers for a given route.

• Better understand the carrier universe

  • Genlogs collects data on all carriers on the road, not just those with ELD integrations;

  • This gives brokers visibility into a wider pool of potential carriers, including smaller operators or those not typically visible through traditional tracking methods.

  • When a carrier is identified, brokers can access more detailed information about them.

Over the next decade, we expect this brokerage automation trend to further accelerate, driven by companies such as Parade, Genlogs and many others. And we are particularly excited about the potential beyond freight brokerage as well (e.g. upstream and downstream, intermodal as well as shipper and carrier specific applications), since brokers are are only one piece of the incredible ecosystem that is the modern supply chain.

Please let us know if you’re seeing anything interesting in these areas!

Notable Fundings

Vecna Robotics, a Waltham, MA-based provider of flexible material handling automation solutions, raised $100M in funding with participation from Tiger Global, Proficio Capital Partners and IMPULSE.

Prewave, an AI-powered supply chain intelligence startup, raised $67M in funding led by Hedosophia.

Route, the post-purchase package tracking and protection solution provider, raised $40M in funding led by Hanaco VC.

Hive_, a European operations platform for commerce brands, raised $30.2M in funding led by Earlybird.

CargoSense, a provider of a ‘Visibility OS’ platform for supply chain automation using visibility data, raised $8M in funding led by Lanza techVentures.

Loady, a cross-industry platform for optimizing logistics, raised $3.5M in funding led by Startup BW.

Freightmate AI, a next-gen AI freight management system, raised an undisclosed amount led by Wischoff Ventures.

Links to Ponder

C.H. Robinson joins TriumphPay’s payments platform

Ocean shipping prices are pushing towards pandemic-era highs

Foreign direct investment in Mexico at $39B in 2024 so far

🎤 Upcoming Conferences

The Logistics & Supply Chain Forum: September 8-10th, Scottsdale, AZ

ASCM Connect: September 9-11th, Austin, TX

CSCMP EDGE 2024: September 29-October 2nd, Nashville, TN