LOGISTICS THE NEXT WAVE

I was reading through few data points about the online retail freight and some interesting findings

Uber founded in 2009 has a mcap of UDD 68 billion 

But Uber still just has 13% market penetration in New York, with traditional taxi companies responding by also going online.

Netflix launched in 1999, but Blockbuster didn’t shut its doors until nearly a decade later, forced out by online streaming platforms. If anything, 10 years was fast. Twenty years after Expedia was founded, only 32% of leisure travelis booked with online travel agents, while airline websites steadily take back market share.

With slow changes it’s not easy to identify the tipping point. But in one sector — freight — it’s starting to become quite apparent.

Yes, freight. Just about everything people eat, wear, and use is manufactured in China, woven in Vietnam, or grown in Brazil. Most products are shipped by ocean or air. And while world trade is massive — $19 trillion dollars worth of goods are shipped cross-border annually — cutting-edge and logistics are not traditional bedfellows.

And what is very surprising is that while we book our tickets in seconds to get quotes we need 3 working days . I know there are customizations but still 3 days.

But things are changing lot of money is being invested in technology 

Over $1 billion dollars have been invested in the sector in the last 18 months, compared to half that in the previous five years. And tech outlets now regularly cover the sector; 300% more freight-related articles were published in the first half of 2015 than than the first half of 2012.

Growing demand for transparent logistics, changing industry mindsets, big data-technology, flexible supply chains, and growing demand for cross-border e-commerce is setting 2016 as the year freight goes online. And it’s coming from the freight companies, it’s coming from huge tech companies, and it’s coming from an exploding number of startups.

The tech heavy hitters

Amazon is getting into freight. Rumors are flying of an Amazon air cargo operation. The company already makes deliveries with thousands of Amazon-brandedtrucks and operates over 165 fulfillment centers around the world. Not be left out, Uber is getting into the last mile cargo market.

But the tipping point isn’t necessarily coming from technology leaders.

The logistics incumbents

Air, ocean, and trucking leaders are onboard. Delta Cargo launched online air cargo booking this year. Trucking has heated up with CH Robinson snapping up domestic online quoting platform Freightquote for $365 million(January 2015). Other incumbents, like the world’s biggest ocean freight forwarder, Kuehne+Nagel, are revamping technology to enableonline booking for less-than-container load (LCL) shipping.

The logistics startups

While market leaders slowly turn their huge ocean liners, nimble startups are popping up. Tech-powered freight forwarders likeiContainer ($1.4 million, April 2015) and Transporteca are emerging to compete with industry incumbents, as is Flexport ($20 million, August 2015), a Y-Combinator graduate.Fleet (née Shipstr) is filling a key niche as a Yelp for reviewing forwarders, while at Freightos ($14 million, September 2015) we started automating forwarder pricing in 2013 and released a beta marketplace for freight quote comparisons across multiple forwarders this year.

The “Uber-for-Trucks” business model is taking off too. In early 2015, Cargomatic picked up $8 million in funding to connect companies that need to ship goods with truckers. Jeff Bezos and an Uber cofounder are investors inConvoy, another Uber for trucking.Transfix ($14.5 million, November 2015), Trucker Path ($20 million, June 2015), Cargo Chief ($10 million, September 2015), Quicargo, and others are also in the race. This isn’t limited to the US; a recent Goldman-Sachs logistics report found aninflux of Uber-type trucking apps in China.

It’s happening across the industry.Haven raised $3 million in March to provide instant ocean container slot booking. Even the Boston Consulting Group is testing the waters launching xChange, a marketplace for empty shipping containers (November 2015). The same is true with Flexe’s “Airbnb for warehouse space” ($4.4 million, November 2015) and Xeneta’s big-data pricing analytics ($5.3 million, February 2015).

2016 will be a big year

Smart money is on a wave of modernization in the freight industry. The enabling technologies are in place, startups are well-funded, and incumbents are also moving online. The demand is there too, with shippers expecting better, more automated services.

It’s true that it takes a long time for industries to change, but 2016 is the year where freight embarks wholeheartedly on that road.