How real-time visibility's new player will change the scene for good.
Real-time visibility is a polarizing topic with a handful of main providers. Today, existing dynamics are changing as the likes of WiseTech Global start to push into the space. Game on.
Real-time visibility has been a hot topic for a while now. The subject is polarizing, and everyone is picking sides. Try to figure out the real-time visibility puzzle and you'll be inspired. Or disgusted. This area of logistics technology was gradually worsening. From increased scrutiny of the "real-time" promises, to questions about the actionable data quality. Well, for real-time visibility providers the world over, things are about to become much more complicated.
Real-time visibility needs change.
It's just a shame that this is who will bring that change.
What is real-time visibility?
Real-time visibility is the ability to know at any time where your shipment is located. The "real-time" in real-time visibility refers to the live nature of the information that is fed back to the operator or customer tracking the goods.
Sounds perfect right? But is it really useful?
Not necessarily. There are specific use cases for actual real-time visibility that provides value. Landside transport of dangerous goods or a container of iPhones springs to mind. But tracking every nautical mile the Ever Given sailed before blocking the Suez Canal seems a waste of resources.
What is more valuable? A precise ETA, or 24/7 tracking of a slow-moving ship across the ocean?
Real-time visibility is a paradox
In today's rather bloated and opaque logistics technology world, real-time visibility is all but transparent. This is especially true for ocean shipments, which make up the bulk of international moves. On the one hand carriers are particularly difficult to deal with, and their data is far from where it needs to be. On the other hand, the majority of third party ocean data suppliers who use the words "real-time visibility" should be talking about "predictive visibility".
The space is starting to become crowded, with a number of players including the likes of project44 and FourKites attempting to cement themselves as industry leaders. Add the growing startups such as Shippeo or Wakeo, and you've got a crowd. Let's not forget honorable mentions who do things a bit differently such as Gnosis. If you're interested in this space, I invite you to check out each of the aforementioned companies, and to draw your own conclusions.
We cannot mention real-time visibility without talking about devices. Sometimes seen as too expensive, devices are not really practical, and are only as good as the frequency at which they feed data back, and how that data is used. How long does a device work for and what is the environmental impact of putting devices on every container? Not the best solution for an industry that is looking to grow a green consciousness.
How will the visibility market evolve?
Before yesterday, there were three main players in this space.
- project44
- FourKites
- Shippeo
Within the next 18 months, these three companies may no longer exist as independent businesses.
project44 burns too much and earns too little.
The king of buzzwords and data dumps still hasn't figured out how to make real-time visibility work. They've tried acquisitions, a new wrapper called "Movement" which has monumentally failed, and have now gone relatively quiet aside from their new chat show (which also chose not to be in real-time as p44's approach is always to curate questions and carefully craft answers).
In a similar fashion to Freightos, they have two options: IPO or be acquired.
The former may take too long and result in a similar outcome to Freightos, especially if done this year and with their current burn rate and "contracted" revenue. Who will acquire p44 and for how much? Maersk? SAP? Google? The data they have is valuable, they simply haven't figured out how to deliver it, and are now running out of time.
FourKites looks healthier, but they need to pivot, or be acquired...
Our industry loves consolidation through M&A, and FourKites cannot escape that kind of attention. The uneducated may look at the market as a whole and believe that p44's issues can be transposed onto FourKites. A bold assumption, and a dangerous one. FourKites are no strangers to M&A themselves, and if they can fend off attention and stay true to whatever their course is, they may be able to build something different on top of the data they have.
When WiseTech announced their landside acquisitions in Blume and Envasé, adding to the already acquired Trinium, it was easy to see the missing piece(s). As they appear to be on a real-time visibility push of their own, they need the US land data. Potentially improving their ocean and air data at the same time as an added bonus.
Shippeo are a bit different, but face similar issues
Shippeo are the new kid on the block as far as these three are concerned. Real-time visibility for EU land transport, and the mention of predictive visibility on their website which is a nice touch. The problem for Shippeo is that they have no real moat, and are playing a dangerous and expensive game by expanding into the US this early in their life.
Before p44 started falling apart, I imagined a future where they would acquire Shippeo and further cement their European presence. This is no longer a reality. WiseTech could also acquire Shippeo as a cheaper option, and use their technology and a fat chunk of change to build-out the US land tracking functionality themselves.
Decisions, decisions.
What will they do?
Real-time visibility from CargoWise
Real-time visibility has been on CargoWise's mind for a while now. Back in February 2021 they launched a page about real-time data visibility to optimize operations with their platform. As recently as March 14 2023, they released a new article about streamlining booking and consolidation processes. What's the link? Half the content is about visibility, disruptions, and up-to-date information.
This seems to be only part of their visibility plan, as they want to position their product as the "single source of data truth". Sounds great, and slightly egotistical.
Maps and dashboards seem to be a real-time visibility must-have
Through changes in technology and how we interact with it, customer experience is no longer an afterthought. Maps and dashboards seem to be the preferred delivery methods of choice when it comes to visibility. So CargoWise went and built just that.
Why is this product feature such a big deal? Aside from the fact that forwarders using CargoWise are likely to see their license fees increase by another 20% of so for the privilege of having access to the functionality, it is a meaningful change. This is the first step towards something bigger: NEO.
Right now, this product is air cargo tracking only. CargoWise integrates with a number of Air carriers, so we can safely assume that the data shown is a mixture of direct from carrier and the forwarders' own milestones from their CargoWise instance.
Real-time visibility with real data?
Could we finally be seeing real-time visibility's first meaningful form? A product that allows forwarders to use a combination of direct from (Air) carrier and their own data to have a realistic view of what is happening. If they have built interactions the right way, then a couple of clicks will be able to take operators to where they need to be, direct from the insights provided by the map and dashboard. I'd say that is actionable data, right?
The data quality is yet to be confirmed, and hopefully we'll see some 3PLs or data suppliers bold enough to benchmark everyone and share their findings.
What is the outlook for the real-time visibility market now?
Current market conditions and the dark cloud hanging over the world already make things challenging. But this could really hurt real-time visibility solutions. If CargoWise has the data quality, then they are effectively removing a large chunk of the freight forwarding market from p44, Shippeo, and FourKites' reach. The good news for them is that they still have a huge BCO market to serve. Right?
CargoWise for BCOs?
Real-time visibility for Air shipments is just the beginning. Next up will be ocean, and once they get their hands on land data, that will be the final stop. The strategy is coming together, and others will need to adapt.
Although CargoTracker is limited today, and only for internal use for freight forwarding operators, that reality can quickly change. WiseTech have been testing NEO for some time, which should in theory allow forwarders to provide maps and dashboards to their BCO customers. If said BCOs enjoy this interaction enough, they could push forwarders to provide it as a service, look to CargoWise for their own BCO version, or both.
We're not there yet, and it could potentially be years before this hypothesis becomes reality. The good news is, we're finally seeing some movement in the real-time visibility space. Unfortunately for the existing providers, innovation may be coming from elsewhere.
Don't miss my take on what logistics technology will look like in a year.
How freight forwarding is changing and what to expect.
Eric Johnson's newsletter is back and on a roll:
Eric Johnson
Huge quote in this week's issue from WiseTech Global Founder and CEO, Richard White:
Last week, WiseTech Global CEO Richard White put it more bluntly to me: “The cash burn model is no longer viable. You have to have a very clear way to go from a land grab business. As interest rates rise, cash burn companies become less and less sustainable and fundable. If you’re focused on land grab and your product is an inch deep, that means it’s replaceable.”
If that is a realistic take, then the likes of p44 and Shippeo mentioned in this article, could be in for a world of hurt.
I'm Anthony, ex-WiseTech'er and Logistics Technology nerd.
You can find me on LinkedIn: https://www.linkedin.com/in/anthonymlr/
And I may start using Twitter if Elon doesn't kill it first: https://twitter.com/Anthonymlr1
My opinions are my own, although I'm sometimes told they are shared by many, yet voiced by few.
My goal is to make Logistics Technology a healthier place and to provide everyone with the kind of information they need to decrypt this magical and mad industry we either love or hate depending on the day and if someone has blocked the Suez Canal again.