Körber Logistics Systems, part of the Körber Group, based in Hamburg, has acquired Centriq, a leading provider of voice-recognition and modeling and simulation warehousing solutions. Körber Logistics Systems has been consolidating warehouse technology and software services in recent years, acquiring German logistics software firm inconso in 2014 and the Portuguese company Consoveyo in 2015. In 2016, the Körber Group had about 11,500 employees and generated revenue of $2.59B. In 2016, Centriq reported revenues of about $24.5M, and said its revenues grew another 27% in 2017. Centriq’s valuation was not disclosed.
The explosive growth of e-commerce in the past five years has changed the warehousing and logistics industries. The number of warehouses is growing, while the average square footage is decreasing and their distance from urban centers is shrinking. Warehouse prices, whether by square feet for existing facilities or by acreage for new builds, have spiked in nearly every real estate market in the country.
At the same time, customers—both businesses and individual consumers—want more visibility into where their shipments are at any given time, faster fulfillment times, and painless returns. Even as automation has impacted warehouse logistics more profoundly than transportation, warehouse employment growth is outstripping both trucking and retail, rising 46% in the past five years against 7% growth in trucking and 6% growth in retail. The bottom line is that warehouses are under pressure to be more productive than ever and do more (throughput) with less (space and workers).
That pressure has created an enormous business opportunity for tech-focused companies offering warehouses measurable efficiency gains and customers better services. Centriq really did two things: their Voiteq division created a voice-powered software solution in their product “VoiceMan” that warehouse workers can speak to through a hands-free, eyes-free wearable device, and under their subsidiary Cirrus Logistics, they built a warehouse modeling and simulation product to help warehouse operators identify bottlenecks and smooth out their processes.
FreightWaves spoke to Chad Collins, the Co-CEO of Körber Logistics Software, and David Stanhope, the CEO of Centriq, by phone.
“We formed Voiteq, our voice recognition business in 2001,” Stanhope said, “with four directors and seven other people; we formed it because we’d done voice recognition in our business before… we put it into our own warehouse in 1998 when we were in the convenience store business, and it was such a fantastic addition in terms of adding functionality and automating processes in our own warehouse, that when the business was sold we decided to go out and sell the technology that we had benefited from.”
“Then we looked for opportunities to sell voice recognition solutions across the UK,” Stanhope continued. “In 2009, we looked to spread the portfolio a little bit and found Cirrus modeling and simulation of warehousing, so we bought it and formed the Centriq group at the time to house Voitech and Cirrus, in 2009, then we looked to expand our footprint beyond the UK. In 2012, we opened up a North American office, first Chicago then Atlanta. We did that by putting people on the ground in North America and starting from scratch… then we looked to getting into mainland Europe, and in 2014 we acquired a French business, then in 2015 a German business, and started to build a model for a global voice business over the years.”
Stanhope said that 17 years in, aging leadership and a sense that the directors had proven the concept of a global voice business meant that the strategic time to exit had arrived, and Körber was “our number one option from day one.”
“We’ve had a strategy as we’ve brought together a number of logistics software businesses,” said Collins, “so that we can expand the market and offer solutions globally. We identified voice technologies for distribution operations: we would take the expertise from North America and organically build that out in Europe. We learned about the Centriq Group, and the opportunity there.” Collins said that while many warehouses use software to automate processes and find efficiencies, an estimated 90% of warehouses worldwide have not yet implemented voice recognition technology to enhance the productivity of their workers.
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