John Engstrom introduced Craig Fuller for the opening remarks of Demo Day at the inaugural Transparency18 event at the GICC in Atlanta.
“I came from this industry,” FreightWaves CEO Fuller began. “I saw how my dad used technology to gain an edge in the market. Trucking is a very competitive business. It’s high asset, and requires a lot of capital. The way my father built his business was using data and technology to gain an edge in the marketplace. Venture capital continues to pour into the freight industry, billions and billions of dollars from VCs who believe they can disrupt the industry.”
“When I tried to raise money in 2006, most VCs said trucking and freight isn’t that interesting. But it’s now become pretty transformative. One of the foundational things that they’re focused on is transparency: free from pretense or deceit, easily detected or seen through, readily understood, characterized by visibility or accessibility of information especially concerning business practices.”
“Startups and incumbents you’ll see today are building transparency into their products. Historically freight has been very opaque: how do I know where my freight is?”
“A couple of years ago I had a payments company,” said Fuller, “and this format for this particular event was modeled after what I saw in the payments business.”
What is Transparency? To be free from pretense or deceit; easily detected or seen through; readily understood. That is the goal, and today the Transparency18 event has 885 attendees representing 569 companies, 189 tech companies, 111 3pLS, 90 carriers, 38 VCs, 35 Financial Institutions, and 24 OEM/Tier 1. They also represent 16 countries. If innovation is going to happen, however, it’s going to be in North America. Atlanta’s a great place because of the logistics hub that it represents.
Fuller also pointed out that for as enormous as the U.S. trucking market is, it is currently without a futures contract market. To create a futures market you have to have a large enough market to begin with. It’s certainly a big enough industry. So, what do you need first? You need data: and that’s how FreightWaves began.
So how to we think about the industry? It’s like a Smokey and the Bandit, Convoy, sleepy and slow industry. However, that’s really not the case. Many freight brokers and other companies in the industry right now look like a veritable trading floor.
But for all the excitement and change—both in reality and perception—there are still problems. Fuller first discussed the Tesla Semi and the innovation behind it. He also mentioned the Nikola fuel-cell vehicles. Anheuser-Busch bought in with reservations to both Tesla and now 800 from Nikola. Then, entered Thor. Tesla’s cars, however, still draw on the coal-based power grid. Not to mention the fact that cobalt is such a rare commodity there is the humanitarian crisis of labor exploitation.
“Historically freight has been very opaque: how do I know where my freight is?”
The industry is also dealing with a driver shortage, which is better coined a “squeeze.”
Another topic is ELDs. Ultimately they give carriers pricing power, whatever you think or feel about it. Of course ELDs don’t make the industry safer. The 14-hour HOS rule is the most dangerous of all. Carriers are also still getting majority of loads directly form shippers, while digital apps are a non-factor. From a FreightWaves survey 63 percent are still made from shippers, 23 percent from brokers, and 14 percents from load boards. Only about 2 percent is through digital apps.
And the incumbents have something to say about the digital changes as well. XPO Connect’s for instance, and J.B. Hunt’s 360 program. FreightWaves estimates Hunt’s is the largest digital application out there now.
Fuller also discussed the power of having aggregated loads of ELD data from across the nation. ELD data identifies shippers who detain truckers.
“Data don’t lie,” said Fuller.
It creates visibility for companies, helps companies in a cooperative way, not in a way that “outs” the bad players. Also, sometimes shippers don’t even know exactly what’s going wrong and how and why.
Sometimes its hard to always identify what a company is. Shippers aren’t always as clear that they are, in fact, a shipper. UPS has had to see themselves differently. What factors are pushing UPS to change, to work with Werner for last mile delivery for example?
Also, freight brokers have been thinking about compliance and transparency, and are beginning to think about who they are in a different way.
The demo day is a fast-paced day of 35 companies giving seven-minute demos broken up into four blocks.
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