By Jett McCandless
The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
Today, project44 announced that we are parting ways with 116 of our talented team members. I want to express my deepest gratitude and appreciation for the exemplary work, dedication and contributions our departing team members have made during their time at project44. These brilliant individuals will be provided with severance packages for their dedication to the company. I know that organizational restructuring cannot be taken lightly. As a form of accountability, I want to take a moment to explain the changes in the market necessitating this decision.
As the CEO of a leading supply chain technology company, I have a front-row seat to observe macro and industry headwinds. First and foremost, shipping and logistics are cyclical industries, and right now we are in a trough. During the height of the pandemic, the global supply chain broke in unexpected and expected ways. With consumer goods in high demand and capacity constricted, businesses needed more insight into the obstacles and the whereabouts of both raw materials and final product deliveries. Even though many of these matters have now stabilized, companies should be prepared for the reality that the global supply chain will always be in a “never normal” state. Nonetheless, companies have deprioritized some of their supply chain projects, resulting in longer sales cycles for project44 and the market as whole.
Due to shipping costs soaring to new heights between 2020 and 2022, especially for trans-Pacific shipping containers, we are now seeing deflationary pressures. This has resulted in lower shipping costs across both road and ocean. At the same time, due to macroeconomic conditions, companies are facing inflation in labor costs and higher interest rates. Everyone is feeling the impact of this shift and reducing spend — and we are not immune to the adjustment.
During the height of the supply chain crisis, project44’s strategy was to grow aggressively, which proved to be the right approach. We acquired three companies with best-in-class solutions to add to our platform. These acquisitions allowed us to deliver to our customers the most comprehensive supply chain visibility platform, Movement, that provided us with a technological advantage and market leadership. Now that these acquired companies have been fully integrated into project44, we face a different set of objectives.
I am turning our focus to delivering on established SaaS growth benchmarks leading to profitability. This translates to being more conservative in how we spend our capital and build our team. We need every project, initiative and dollar spent to profoundly impact customer value and our organization’s positive trajectory. The current market conditions will knock out some of the competitors in this business cycle. It’s a new road to be navigated.
We pioneered what we refer to as “little v” or real time visibility (transportation visibility). This provided critical, first-of-its-kind visibility of a truck, a container or a package, so shippers and carriers could monitor the critical supply chain middle mile. We’ve led in this space with unique capabilities that provide unmatched visibility across all transportation modes and around the world, even into critical but historically untapped regions like mainland China. Today, our product road map is focused on the broader “big V,” inventory-in-motion visibility. This expands our scope to providing control over business inventory and assets in motion, such as sales orders, purchase orders, part numbers and SKUs. We have expanded and extended our reach past the middle mile through critical supplier facilities, warehouses and yards — right to the doorstep of the consumer.
The industry has been plagued with siloed data layers and a disconnected ecosystem, making this a challenge that other vendors simply can’t meet. Inventory-in-motion visibility provides customers with the ability to manage and optimize their assets in motion, driving new supply chain and logistics efficiencies, agility and velocity. Today, project44 is the only company that can provide this control from inland China to the doorstep of every consumer in the Western world, across over 240,000 carriers, all in real time. These business-critical insights enable enterprises to proactively identify and address any issues that may arise, ensuring an efficient order fulfillment process, happy and satisfied customers, and significantly reduced business risk, despite the constantly changing and unstable infrastructure it relies on.
We are building a business of consequence that will change the supply chain with this bold vision, driving toward something that has never been done before in this space. We are building the connective tissue for an $8 trillion industry moving $70 trillion of goods in 220-plus countries. There will be setbacks; this bold vision requires both setbacks and learnings. We have maintained a strong balance sheet and have over $100 million in the bank and the ability to leverage new debt. We used clear guiding principles to make these difficult decisions. Our focus remains on being the platform that transforms our customers’ supply chain with consistent ROI throughout their journey and ensuring they are delighted, but we will do it through responsible and efficient growth and innovation.
Project44’s cost reduction efforts are not driven by the same structural business issues impacting tech-enabled logistics service providers. Last week’s news highlighted the struggle of such businesses. Although these companies are in a similar sector, it is important to understand that they are not enterprise SaaS companies. From the day I started project44, I knew our trajectories would diverge and project44’s SaaS revenue model would be more predictable and sustainable. As the business environment changes, we will adapt to market conditions but stay true to our vision to make supply chains work. We’ll ensure prudent management of our resources and optimize value for our valued customers. From customer surveys and reviews in both G2 and Gartner, we know that our customers, representing the world’s most respected brands across a wide range of sectors, are the happiest in the industry. Nonetheless, we can always improve our offerings to increase customer satisfaction, and we will do just that.
Without a doubt, these are the times when companies and their leadership teams will be tested, and the actions taken now will determine who loses, survives or thrives. I have full confidence in the project44 team’s ability to navigate these challenges. Once again, I want to thank our team members who have helped get project44 to where we are today. I also want to acknowledge the steadfast support of our loyal customers. My vision for project44 is to continue to build the industry’s most comprehensive platform, which addresses the broadest set of supply chain use cases and delivers the highest ROI for customers and carriers. The journey we’ve shared is one of achievements and growth, and I’m optimistic about our future despite any current or future headwinds.
About the author
Jett McCandless has two decades of experience working in the transportation and logistics space, guiding multiple startups from ideation through to growth and scaling. After becoming principal at GlobalTranz, a company with a gross annual revenue of $500 million, McCandless sold his stake in the company to pursue his own ventures. He started building companies like Inc. 500-ranked advisory firm Metafora (formerly CarrierDirect). Next, he founded project44, the world’s leading supply chain visibility platform. Project44 cemented its position as the No. 1 company in supply chain visibility with global port-to-door coverage across all modes of transportation.