The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
There has been an abundance of discussions these past few months around logistics technology companies, their role and whether they can survive the current economic downturn. This discussion has only become louder with the recent bankruptcies of Convoy and Slync. These events have given incumbent vendors and technology “doubters” alike the opportunity to put into question the role of a startup and the topic of innovation.
But does that really mean that all logistics technology startups are doomed to fail or that end user companies should not continue to invest in these technologies as part of their innovation strategy?
Next week FreightWaves will announce its FreightTech 25 at the FreightWaves F3 conference in Chattanooga, Tennessee, and so it is a timely question — a question that I will try to answer from the perspective of an end user, a thought leader, a technology executive and a VC partner at Venture53. I have been part of startups since the early 2000s and have seen companies blossom to success as well as fail in the past 23 years.
I write this as I return from a logistics technology conference in Dallas where a few main themes stood out. End users are continuing to invest in technology but are doing this in a more organized way, aligning their technology investments to their business strategies. They are partnering with technology vendors as well as with their customers to co-innovate. Education plays a big role in successfully implementing a technology, and it is a key responsibility of the management team.
But with so many new technologies and technology startups around and so much hype around topics like AI, are we really approaching technology the right way? Companies should have a clear strategy that leads the innovation in their organizations. But innovation is not the same as technology. Innovation is the process of creating and implementing new or improved ideas, products, services, processes or methods to bring about positive change, solve problems, meet new needs or seize new opportunities. It involves the generation, development and application of creative and novel solutions to address various challenges and enhance different aspects of life, including business, technology, health care and society. Innovation is a critical part of our progress and as such we need to continue innovating.
Innovation strategy plays a crucial role in logistics by driving efficiency, cost reduction and improved customer service.
One of the speakers I interviewed shared some great insights. “Innovation isn’t just about technology,” he said. “Innovation includes focus on new processes, new business models and new services. Innovation is also a team sport. People across the organization should be involved in the innovation strategy. And finally make sure you involve your customer in your innovation strategy.” He also pointed out that there is no guarantee that innovation will always be successful, and that technology always brings the right outcome. But it should not deter us from driving forward as long as it aligns to the direction outlined by the business strategy.
And yes, we will see more technology companies go out of business, but that doesn’t mean that they weren’t innovative or that they didn’t play an important role in the progress made in logistics. In 2001 Kozmo.com and Webvans went out of business. Twenty years later the same services and technologies were adopted by the likes of Amazon or Instacart. Although Webvans and Kozmo are no longer around, they showed us what was possible. Convoy and companies like it showed the importance of technology in freight, and while they did not disrupt the industry as intended, they led the way in the recent freight technology revolution. Most 3PLs and brokers have accelerated their technology adoption and innovation in the past five years. And now the Convoy technology will live another day within the Flexport platform.
Logistics remains a complex industry with many problems left to tackle. We should encourage innovation as it brings us closer to the end goal. But we also have to accept that this innovation sometimes comes at a cost — the cost of failure. As Winston Churchill put it: “Success is not final. Failure is not fatal. It’s the courage to continue that counts.” A more recent quote from Pitbull reads, “There’s no success without failure and no winning without losing.” So let’s encourage those who dare to innovate rather than attack them. Let’s co-innovate and collaborate rather than compete and discourage.
If you want to provide your comments, come look for me in Chattanooga next week at FreightWaves F3.
Look for more articles from me every Friday on FreightWaves.com.
About the author
Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.