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Tag: tms

The Pathway to Success in Logistics Technology

Posted on by David Priestman

Innovate and thrive to follow the pathway to success in logistics technology, writes Tim Dunn (pictured) of Phoenix Equity Partners.

In the ever-evolving world of logistics, technology is the key to enhancing efficiency and propelling companies towards their strategic goals. The logistics technology sector has undergone significant advancements in recent years, contributing to improved asset utilisation, enhanced driver safety, and better overall planning. Below, we’ll explore the critical components that have moved the sector forwards. We will also address a pressing question: What features are essential for a competitive edge in the logistics tech space?

Recent advancements driving progress

Recent technological advancements have revolutionised logistics technology, significantly boosting efficiency and ESG compliance efforts. Cutting-edge resources like in-cab telematics, Transport Management Systems (TMS), multi-modal software planning solutions, and fleet tracking and monitoring technology have been instrumental in this transformation. In-cab telematics offer real-time data on vehicle performance and driver behaviour, enhancing safety and operational efficiency. The adoption of TMS has grown, allowing for improved planning and utilisation of assets, leading to reduced fuel consumption and emissions, aligning with fundamental ESG goals.

Multimodal software planning solutions optimise logistics across different transportation systems, improving overall efficiency. Companies are also making greater use of enhanced tracking systems, allowing them to better manage their fleets, leading to cost savings and improved overall service. The integration of these technologies has had a profound impact on the industry. Better planning through TMS has not only optimised asset utilisation but also reduced idle times and unnecessary trips. Furthermore, advanced telematics tools have improved driver health and safety, further advancing ESG goals. While progress is clear, collaboration between different systems and networks remains limited, increasing the importance of platform marketplaces.

The power of platform marketplaces

Platform marketplaces are essential in the logistics tech landscape, offering a range of benefits that foster a more integrated and collaborative environment. As open networks, users can plan across multiple fleets and logistics providers. Unlike traditional TMS, which is generally confined to a single fleet, these marketplaces enable wider collaboration and optimal resource management. Additionally, smaller logistics companies can benefit from the scale and efficiency of larger networks. Palletways, one of Phoenix’s most successful investments, thrived by leveraging this technology. User-friendly and free from the complications of legacy technology, they also offer a variable cost model that makes them accessible to a wide range of users without hefty upfront expenses.

The characteristics of a successful logistics technology business

There are several key features that should define a successful logistics technology business. First, being asset-light is crucial. Businesses that do not own significant physical assets can remain agile and reduce overhead costs, allowing them to scale quickly and adapt to shifting market dynamics. Expertise in a specific market niche or segment is another invaluable trait. Companies that leverage deep industry knowledge can offer tailored solutions that meet unique customer needs. Successful businesses also capitalise on macro trends such as the growth of e-commerce and the digital transformation of manual processes to serve ongoing demand for advanced logistics solutions.

Data is another driver of success. Incorporating compliance data into core logistics solutions ensures that businesses meet regulatory requirements and can demonstrate their commitment to sustainability objectives. Finally, a scalable technology platform is a hallmark of any successful business, enabling it to handle increased demand and expand functionality without extensive need for reengineering.

The successful businesses in the logistics technology sector are those that have harnessed technology advancements, leverage platform marketplaces, and embody core characteristics, such as being asset-light and leveraging specific industry knowledge. By focusing on these elements, logistics technology companies can drive efficiency, enhance the employee experience and achieve sustainable growth. Logistics technology doesn’t stand still and embracing change will be key to a smarter, better-connected industry.

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Connectedness and the supply chain at the heart of business success

 

New CEO of Trans.eu Appointed

Posted on by David Priestman

The transportation platform Trans.eu has appointed a new head for the DACH region. Michael Otto, an experienced computer scientist with over twenty years of experience in developing and implementing digital solutions in the logistics industry, will take over the role.

“On the Trans.eu platform, we can already solve many challenges faced by freight forwarders and carriers that are insurmountable with a traditional TMS. Through partnerships with TMS systems, we can become an AI-based assistant for dispatchers and reduce the boundaries between the contract and spot market,” announced the new CEO.

‘Connecting People – Connecting Freight’ is the philosophy under which the company aims to establish itself definitively as a central transportation platform across Europe under his leadership. According to Otto, the German market plays a key role in this endeavor.

“The logistics location of Germany will continue to influence the European economy due to its central location. With our platform, we support the
companies based here in leveraging the full economic potential within the European Union and beyond, thereby gaining advantages in the
transportation market,” he added.

Otto initially carried out numerous successful outsourcing projects as a project manager in the mid-sized business environment and was responsible for the conception, further development, and marketing of proven and innovative software solutions. His extensive background in the logistics sector includes developing strategic initiatives that streamlined operations and introduced advanced technological solutions.

After holding several senior positions up to management from 2000 to 2022, he has been working independently as a consultant for the past year and a half. In this capacity, he assists internationally operating companies with digitalization, process automation, corporate governance, optimal team composition and development, growth financing, as well as business development and M&A tasks. His comprehensive approach ensures that companies not only implement digital solutions but also achieve sustainable growth and operational efficiency.

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Road Transport Platform Trans.eu Eyes Far East Opportunity

 

Gregory Distribution Scales Up Operations with Manhattan

Posted on by David Priestman

As supply chains and logistics becomes ever-more complex, companies increasingly need agile technology providers that can help them navigate challenges and meet the continuously evolving expectations of the end customer.

To meet the soaring demand for bespoke customer experiences, Gregory Distribution, one of the UK’s top independent logistics businesses, has chosen Manhattan SCALE, from Manhattan Associates, to optimise its warehouse operations and deliver improved satisfaction to its 400+ customers.

Renowned for its comprehensive range of transport, warehousing, and 3PL services across the Southwest and throughout the entire country, Gregory sought a solution that could match its commitment to growth and innovation with its customers. Manhattan’s flexible, configurable SCALE solution proved to be the ideal fit, enabling Gregory to adapt instantly to evolving customer needs, delivering personalised services that set the company apart in a competitive market.

It also allowed the company to operate with unparalleled efficiency through seamless integration. Manhattan’s SCALE solution blends effortlessly into Gregory’s existing ecosystem, creating a streamlined, feature-rich experience the end-user. Gregory has also been able to prioritise growth. With technology taken care of the team can focus on what matters most: driving business expansion by delivering exceptional logistics outcomes for its customers.

Liam Jordan-Martin, Head of Technology at Gregory Group says, “Our recent business growth demanded a scalable solution and a partner with proven expertise. Manhattan Associates exceeded our expectations, offering both a robust platform and leading industry knowledge. Manhattan SCALE’s configurability empowers our teams to respond swiftly to customer needs, while seamless integration with our existing systems ensures ongoing operational harmony. With Manhattan’s support, we’re confident in our ability to adapt, innovate and continue exceeding customer expectations.”

“Our technology provides the agility needed to thrive in today’s demanding market and we are thrilled to be part of Gregory Distribution’s ongoing journey towards logistics excellence,” commented Craig Summers, MD UK/VP Northern Europe & MEA, at Manhattan Associates. “With our 90-day innovation cycles, SCALE will continue to deliver on the exacting requirements of Liam’s team and their customers, long into the future.”

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Gregory Distribution acquires Shepton Mallet distribution company

 

eBook: End to end Costing in Express Logistics

Posted on by David Priestman

Logistics Business magazine, together with the Information Factory, have produced a new 6 page digital magazine on managing end to end costing in express logistics. Editor Peter MacLeod talks to iFactory CEO Robert Jordan to understand how transport and logistics businesses can manage costs and grow. Learn how accurate costing of each individual process within the supply chain can be used to make commercial and operational decisions that are absolutely key to driving a business forward.

Read the free eBook here.

Understand costs and grow your business

Ever-higher levels of visibility across the logistics and wider supply chain sectors offer businesses considerable knowledge of the status of goods in transit and storage. But whilst the digitisation of the sector helps identify to a granular level where any individual item may be located anywhere in the world, the knowledge of what are a business’s key end-to-end cost drivers is less widely known.
In logistics and transport, operations are often highly complex and feature innumerable variables. But if the cost information on which decisions are based is either unreliable or – worse – non-existent, businesses can miss the opportunity to make decisions that have the potential to improve profitability in a sector where margins are sometimes wafer-thin. Furthermore, they may inadvertently make a decision that could prove costly to the business.

read the previous eBook on data driven logistics here

eBook: Data Driven Logistics

 

 

Descartes Acquires BoxTop Technologies

Posted on by David Priestman

Descartes Systems Group, a global leader in uniting logistics-intensive businesses in commerce, announced that it has acquired BoxTop Technologies Limited, a provider of shipment management solutions for small- to mid-sized logistics services providers (LSPs).

Based in the UK, BoxTop helps LSPs digitize their operations and connect to the wider logistics community to manage the lifecycle of shipments. LSPs use the BoxTop platform to manage the secure and efficient movement of goods from quoting through to routing, booking, and final delivery. BoxTop is an existing Descartes partner, leveraging the Descartes Global Logistics Network (GLN) to help their clients gain visibility into shipments across multiple modes of transportation and to complete electronic customs filings.

“We’ve been working successfully with BoxTop for a number of years, and this was the next logical step in our partnership,” said Scott Sangster, General Manager Logistics Services Providers at Descartes. “BoxTop has an excellent solution for small- to mid-sized LSPs and we see an opportunity to integrate it with more solutions on the GLN. This will help us deliver more value to BoxTop customers and expand the geographic footprint into more countries in Europe.”

“LSPs will continue to play a vital role in trade in the global economy,” said Edward J. Ryan, Descartes’ CEO. “As LSPs continue to digitize their operations, we want to make sure that small- to mid-size LSPs have access to the same breadth of solutions to manage the lifecycle of shipments in a secure and efficient manner. The acquisition of BoxTop puts us in a better position to deliver even more value to this community. We’re excited to welcome the BoxTop employees, customers and partners into the Descartes family.”

BoxTop is headquartered in Windsor, England. Descartes acquired BoxTop for approximately £10.25 million ($US 13 million), satisfied from cash on hand.

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How to Win During Peak Shipping Season

 

40% of Shippers and 3PLs to Invest in Transportation Technology

Posted on by David Priestman

Descartes Systems Group, a global leader in uniting logistics-intensive businesses in commerce, released the results of its 8th Annual Global Transportation Management Benchmark Survey of over 630 companies. The study shows that 40% of the shippers and logistics services providers (LSP) surveyed are planning to invest in transportation technology to prepare for industry and regulatory changes. For top financially performing companies where senior leadership view transportation as a competitive weapon, this number rose to 44% compared to 32% for poorer financial performers.

In terms of areas of focus, for the 7th consecutive year, real-time transportation visibility held the top spot for greatest transportation IT investment. Visibility was cited as the priority technology investment by 36% of respondents and was closely followed by order management at 35% in the 2nd spot. Jumping into the 3rd spot, fleet routing was noted by 29% of respondents as an important technology investment, compared to being 8th in 2023. Carrier sourcing continued to decline as an IT investment area for the 3rd year in a row, cited by only 20% of respondents and landing in the 10th spot in the capabilities rankings.

“This year’s study once again shows a correlation between business performance and management’s perception of the importance of transportation, as companies that place a higher strategic value on transportation realize stronger financial performance and growth,” said Mike Hane, Director, Product Marketing, Transportation Management at Descartes. “Top performers continue to take more aggressive actions to grow and expand delivery options for customers, which requires increasing technology investments such as visibility and order management. By contrast, poorer performers are more focused on cost cutting and are 10X less likely to expect growth greater than 15% annually than top performers, according to study findings.”

Descartes and SAPIO Research surveyed 630 participants representing the logistics community (i.e., brokers, forwarders and third-party logistics providers) and shippers (i.e., manufacturers, distributors and retailers) from a wide variety of industries. The goal was to understand how companies view the role of transportation management; uncover which capabilities, technologies and competitive strategies/tactics are having the greatest impact on transportation operations; and provide an outlook on future transportation IT investment.

Respondents were based in the United States, Canada and in Western Europe.

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Sustainability in Retail Transportation Management

 

Staying ahead of unpredictable weather

Posted on by David Priestman

Weather is an unpredictable force that can wreak havoc on logistics in Europe, but there are strategies to mitigate its impact. As we navigate through the continent’s diverse and often harsh climates, it’s clear that we need a proactive approach to ensure our supply chains remain reliable and efficient.

Advanced Weather Forecasting and Planning

Investing in advanced weather forecasting tools is not just a smart move; it’s a necessity. Companies like DHL have shown the way by using sophisticated weather forecasting software to re-route deliveries and adjust schedules during severe weather. This proactive approach minimizes delays and ensures that packages still arrive on time, even when Mother Nature throws a curveball. It’s high time more logistics companies embrace this technology to stay one step ahead of the weather.

Infrastructure Improvements

We can’t control the weather, but we can control our infrastructure. Regular road maintenance, especially in areas prone to snow and ice, is crucial. Sweden’s investment in winter road maintenance, including regular snow plowing and de-icing, is a prime example of how to keep transport running smoothly during harsh winters. Germany’s post-2021 flood improvements in flood defenses and drainage systems show that learning from past weather events can lead to better preparedness. If more European countries followed suit, we’d see fewer disruptions and more resilient logistics networks.

Flexible Supply Chain Strategies

Flexibility in supply chain management is another key to weathering the storm. Diversifying suppliers and maintaining buffer stock can significantly reduce the risk of supply chain disruptions. During the 2018 “Beast from the East,” many European retailers avoided stockouts by having diversified suppliers and buffer stock in regional warehouses. This kind of forward-thinking approach should be the norm, not the exception, in the logistics industry.

Technology and Automation

Technology is our ally in the fight against weather-related disruptions. IoT devices that provide real-time tracking and automated warehousing systems can make a huge difference. Maersk’s use of IoT devices for real-time tracking helped them minimize delays during severe weather by enabling quick re-routing decisions. Amazon’s automated warehouses in Europe continued processing orders efficiently even during storms, thanks to their advanced systems. These examples show that investing in technology is a game-changer for logistics companies facing unpredictable weather.

Collaboration and Communication

Effective communication and collaboration between stakeholders are crucial for improving weather resilience. Cross-sector collaboration and keeping customers informed about potential delays help manage expectations and maintain trust. During severe winter storms in 2019, UK logistics companies collaborated with the government to clear highways, ensuring the continued flow of goods. In Spain, courier companies used SMS and email notifications to keep customers updated during storms, maintaining customer satisfaction despite delays. This level of transparency and cooperation should be standard practice in the logistics industry.

Sustainable Practices

Sustainable practices are not just good for the environment; they also help mitigate the impact of weather on logistics. Climate-resilient infrastructure and using electric vehicles improve reliability and reduce environmental impact. The Netherlands’ climate-resilient infrastructure has maintained logistics operations during severe weather. In Paris, logistics companies’ switch to electric delivery vans ensured efficient operations during fuel shortages caused by a snowstorm, as these vehicles were less affected by disruptions in fuel supply. Embracing sustainability is a win-win for logistics companies and the planet.

Conclusion

Mitigating the impact of weather on logistics in Europe requires a multifaceted approach. By investing in advanced forecasting, resilient infrastructure, flexible supply chains, technology, and effective communication, we can enhance our resilience to weather-related disruptions. As Europe faces more extreme weather, these strategies are essential for maintaining the smooth flow of goods, benefiting businesses and consumers alike. It’s time for the logistics industry to take weather seriously and implement these proactive measures to keep our supply chains running smoothly, no matter what the forecast says.

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Transforming Transport Operations with Mapping Intelligence

Posted on by David Priestman

Route optimisation has become ever more important in recent years. The rise in ecommerce has created new routing pressures, especially in the last mile; while rising fuel costs, the push towards net zero, load theft have placed the spotlight on using preferred refuelling locations and the need for safe, comfortable parking, especially overnight.

Layering these demands over the traditional goals of controlling costs and meeting tight deadlines has highlighted the limitations of generic mapping and routing solutions. From large HGVs stuck in tiny rural lanes to the damage – and cost – incurred when a HGV hits a low bridge or the risk of compliance breach associated with taking a hazardous load through a tunnel without permission, many transportation companies have learnt the painful lesson of relying on a phone’s satnav.

Consumer mapping technologies may be ubiquitous but they lack the depth of insight required to manage the complexity associated with the commercial movement of goods. As Kate Legnola, Sr. Product Manager, Map Data at Trimble explains, dedicated commercial route mapping technology has been developed to address the very specific demands of transportation fleets, from height and weight restrictions and hazardous materials transport designations to improving driver well-being and safety.

Meeting Operational Goals

Reliance on online maps has become standard for most drivers but effective commercial route optimisation requires far more depth and breadth of insight than the basic, ubiquitous directions that cannot differentiate between a driver in a heavy goods vehicle or a two-seater sports car. Commercial mapping intelligence has evolved beyond simple visualisation on a map to offer a wide range of insights on business and driver behaviour that can significantly enhance fleet management. Complex routing algorithms are used to determine the most efficient routes for delivery or service vehicles by considering factors such as traffic patterns, road permissions, congestion and clean air zones, low bridges, narrow lanes and fuel consumption. Data, including not only construction of new infrastructure, but also any changes in existing restrictions is continually updated following routine bridge and tunnel inspections undertaken by highways authorities to give planners confidence in the safety and legality of the designated route.

Making Transportation Sustainable

Transportation companies can leverage this depth of information to plan based on different priorities, comparing routes based on sustainability, cost and time objectives. The ability to offer clients different routing models provides a competitive advantage by enabling a transport business to demonstrate how it is supporting a client’s sustainability reputation, for example. It is also assisting fleets in future-proofing their operations so they can better serve and meet their sustainability goals. Among them are a better ability to adhere to environmental rules and guidelines, a better understanding of vehicle carbon footprint, a reduction in operating costs with the efficient allocation of vehicles based on electric vehicles thus achieving long-term, sustainable cost reduction.

Boosting Fleet Efficiency

Complex algorithms are used to determine the most efficient routes for delivery or service vehicles by considering factors such as traffic patterns, road permissions, congestion and clean air zones and low bridges.. Route intelligence software can also track dwell time, a perennial problem for all transportation companies. Using precise polygonal geofencing to improve the accuracy of arrival and departure notifications, the overall journey time, including both travel and stop time, is more precise. It is also enabling companies to better understand the overall efficiency and performance of the fleet, information that can help to reduce empty miles, cutting costs and reducing emissions whilst adding revenue.

Keeping Drivers Safe

Indeed, by investing in smart mapping technology, elements such as planning processes will automatically consider drivers’ hours of service (HOS) and can include specific locations for resting and parking to avoid the risk of drivers being compelled to park up on the roadside which is both uncomfortable and unsafe. Further, using intelligent route mapping, transportation companies can optimise loyalty programs and discounts around specific brands of fuel to optimise routes, understand freight spend, and plan routes more efficiently. The routes can be designed around the use of rest stops preferred by drivers wherever possible to ensure they have access to good quality food and showers.

Driver safety can be further enhanced with vehicle specific information throughout the journey especially regarding the trickier problems that can arise during the last mile. Commercial mapping intelligence solutions pinpoint the actual final locations, such as the delivery entrance to the shopping centre rather than the consumer entrance used by the generic mapping solutions. In addition, transportation companies can opt to customise the mapping, overlaying a preferred approach path for specific locations to ensure every driver, however new to the business, has the optimal, safe route to each location, whether that is a store, warehouse or distribution centre.

For transportation companies wrestling daily with the need to mitigate disruption, reduce costs and meet escalating customer demands, intelligent route mapping and routing is becoming a strategic imperative. Companies can no longer afford to rely on traditional manual route planning processes or allow drivers to rely on their own generic mapping systems. The risks of delays, damage and missed opportunities are simply too high.

Intelligent route mapping provides businesses with a chance to improve day to day planning and ensure routes are optimised for each vehicle, taking into account the essential features of weight, size and hazardous materials. It gives the chance to focus on both driver performance and well-being, enabling companies to prioritise access to safe overnight parking and rest stops. Finally, it also delivers vital insight into the intricate interplay of suppliers, processes, and partners that allows transportation companies to optimise operations, intelligently consider innovations in areas such as EVs, and confidently navigate today’s complex marketplace.

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3D City Models for Geospatial Transportation Data

 

Manhattan Redefines Supply Chain Planning

Posted on by David Priestman

Manhattan Associates has announced Manhattan Active® Supply Chain Planning (SCP), the industry’s first unified business planning platform that enables bi-directional collaboration between supply chain planning and execution systems. This groundbreaking solution enables planners to evaluate all operational factors in real-time, and align all systems, inventory, and resources to a common business objective, such as reducing total landed cost or increasing speed to market.

With traditional supply chain planning, inventory, labour, transportation, and warehouse operations are planned and optimised in isolation. This approach yields fragmented strategies that often conflict with one another and lack feedback from the execution team.

Manhattan Active Supply Chain Planning is the first and only solution unified with supply chain execution to eliminate systemic and operational silos, unlocking enterprise-wide optimisation for the entire inventory assortment and all the resources required to flow it through the supply chain. From inventory and labour to distribution and transportation, all elements are synchronised and harmonised in real-time, seamlessly united under a single plan.

“The ability to coordinate with solutions like OMS, WMS and TMS is a gamechanger. Now inventory, labour, and transportation planning can be considered together to ensure the optimal outcome to benefit the organisation as a whole,” said Scott Fenwick, senior director of Product Management for Manhattan Associates. “It simultaneously considers all these factors to smooth operations and deliver exceptional experiences at the lowest cost.”

Supply Chain Planning

Manhattan Active Supply Chain Planning harnesses the power of AI to combine external data sources with internal patterns to produce more accurate and actionable demand forecasts. This innovative solution is capable of ingesting and rapidly processing vast amounts of syndicated data from external sources, such as influencer activity, industry-specific data sources, and localised data, all of which can influence and shape demand.

Manhattan Active Supply Chain Planning completes the company’s vision of a truly unified supply chain commerce ecosystem. Manhattan is uniquely capable of delivering this fully unified solution because of its technology platform architecture. All Manhattan Active solutions are cloud-native, microservice API applications, engineered to be extensible and evergreen, with regular updates every 90 days. Built on the proven Manhattan Active Platform, Manhattan Active SCP is the most modern, scalable, and adaptable supply chain planning solution on the market.

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Manhattan Associates Transforms Retail Returns

 

 

Why Financial Models Matter for Route Planning Viability

Posted on by David Priestman

It is important for vendors to make a financial model in order to get route planning visibility, writes Gary Taylor (pictured), VP Fleet Solution in EMEA at Descartes.

Most distribution companies keep their route planning solution for 15 – 20 years before replacing it. Today, more so than ever before, within that timeframe businesses, industries, economies and technologies undergo significant change. Distribution business models need to ensure they change in step, which in turn means their route planning solutions need to evolve and grow in the same direction.

However, the financial models of many route planning vendors are not designed to foster that seamless evolution, innovation and growth over time. Instead, many solutions become operational liabilities because of changes brought upon by vendor financial models that disrupt product innovation.

Private equity owned vendors

Private equity firms have two guiding principles that significantly and negatively impact the evolution and growth of the once-successful route planning solutions they acquired. First, they need to make the route planning business more profitable to pay themselves and service any debt they may have used to finance the purchase. Second, they need to get the business in a financial position to sell the company at a profit to generate a return for their investors – typically within a five to seven-year timeframe.

With the clock ticking, private equity firms focus first on cutting costs: all non-revenue generating roles such as development and support are subject to extreme scrutiny. Combined with the consequential “brain drain” that occurs as leading employees become disillusioned with the cost reduction focus means product innovation and attention to customer issues begin to diminish. Over time, what was an industry leading solution becomes an “also ran” as the product does not keep pace with new capabilities required by customers or industries, leverage the latest technological advances or highly evolving cyber security requirements.

Key questions to ask to ascertain future product and support direction of a PE owned route planning solution:
• What future product plans does the business have for the product and support organisations? Are they growing or shrinking in headcount?
• What similar or complementary companies does the PE firm own and what are their plans for integration?
• How many years has the PE firm held the route planning vendor and when does it anticipate selling that company?

Consolidator-owned vendor

Industry consolidators are acquisition-based technology companies. They look for companies whose founders are looking to sell or distressed companies’ shareholders who are trying to get some level of return. Industry consolidators are similar to private equity firms in that they focus on improving the profitability of the acquired company and do it through cost cutting. The difference is that an industry consolidator maintains ownership indefinitely. However, industry consolidator owned companies suffer the same fate as private equity owned ones – product innovation, evolution, growth and support diminish over time.

Key questions to determine future product and support direction of an industry consolidator owned route planning solution:
• What future product plans does the industry consolidator have for the product and support organisations? Are they growing or shrinking in headcount?
• How have those acquired companies grown their solution capabilities and support since being acquired?
• What similar or complementary companies does the industry consolidator own?
• Are there plans for integration of those companies?

Venture-backed vendors

A number of route planning companies were started in the early to mid-2010s powered by low interest rates and the ability of venture capital (VC) firms to easily raise money. With a growing economy, that accelerated after the initial impact of the pandemic. VC firms were happy to have their portfolio route planning companies prioritise market-share growth over profitability. Capital for investing was cheap and the ability to borrow money was easily available. This aggressive ‘growth without regard to cost’ business model does have some upside. It allows more capacity for innovation and risk-taking; however, growth without profitability is not sustainable in the long-run and few companies grow their way out of unprofitable operating models.

The global economic downturn has, in recent years, meant that VC-backed route planning vendors have had to shift focus towards profitability. This shift in strategy puts extreme pressure on their growth-first operating models, the maintenance of higher levels of product innovation and support, and possibly even the outcome of the company.

Many VC-backed companies have been forced to restructure, cutting resources across the company to reduce or eliminate their cash burn. The impacts have been significant in terms of the reduction in sales, development, support and other parts of the company. In some cases, route planning vendors have left major geographic markets.

Key questions to determine future product and support direction of an industry consolidator owned route planning solution:
• Is your company profitable and is the most recent financial statement available for review?
• Have you had to restructure recently because of a tougher economy or less access to capital?
• How many years into your last VC investment round is your company?
• If you are VC-backed what is their timing for closing and liquidating your funding round?
• Do you anticipate needing additional funding to operate in the next 2 years and how do you plan to obtain it?

Route planning solutions are foundational to any logistical fleet operation and the company’s success. This is why it is so important to understand the financial model of the route planning solution vendor and the role that outside funding resources play in the growth, innovation and evolution of the company and its products. This can tell you much about your existing route planning solution vendor, its time to replace them, and whether a potential new vendor will have the wherewithal to meet your needs today and in the future.

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Party Time for German ECommerce Vendor with Descartes WMS

 

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