38 DC VELOCITY JULY 2017
www.dcvelocity.com
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Jett McCandless is one of logis-
tics’ endangered species: a tweener.
McCandless joined the field at the turn
of the century, when the industry was
mired in manual processes or, at best,
primitive technology. He first mastered
the ins and outs of the physical side, so
when the time came to seize opportunities in IT, he had enough knowledge
of the business of moving stuff to create
solutions to improve its performance and reliability.
Two years ago, McCandless, 38, founded project44,
a firm specializing in a platform called an application programming interface (API), which is designed
to handle data transmissions faster than is possible
with the legacy technology systems—electronic data
interchange (EDI), rate bureaus, e-mails, faxes, FTP,
spreadsheets—that have been the standard for decades.
Q You paid your dues on the physical distribution side of the house. Was it always your intent to
gravitate to IT?
A Yes. In the early days, we would sleep in ware- houses in order to get crucial projects back on
track. Twenty-four-hour dock shifts were a regular
occurrence. The IT side revealed itself to me almost
immediately. It was always obvious that people were
wasting time tending to manual tasks that should be
automated.
On my first day in trucking, in 1999, I sat at my
[IBM] AS400, staring at the green screen, confused by
how complicated the technology seemed. It took me
less than a day to realize my job existed because of how
terribly inefficient EDI and other legacy technologies
(FTP, fax, rate bureaus) were. I spent most of my day
answering phone calls for “important customers” to
verify that an EDI 204 [a load tender transaction] went
through. It was clear there was a massive opportunity
for growth.
At each step during this period, the problems became
apparent: Manual processes were wasting valuable
employee resources, and shoddy technology was costing money and causing turnover. The people weren’t
the problem. The technology was. The industry was
ripe for a change.
Q Do you think the IT types entering the field understand the physical aspects of the business?
Do they even want to or feel the need to?
A It’s tough to give a yes or no answer that covers every case. There aren’t many people with both
skill sets, since the logistics industry has relied on leg-
acy technology for so long. In most cases, you have to
bring in top IT talent and bring them up
to speed on the physical aspects of the
industry.
Companies that don’t understand the
asset side of the business have won most
of the funding in the logistics space.
There will be winners and losers with
both backgrounds, but the most successful companies will be those that find the
right balance.
Q The API model has gained significant traction in the past couple of years. How much runway is left
for this?
A We are still less than 1 percent of the way down the runway. As more retailers, e-commerce companies, suppliers, and third-party logistics service providers integrate with APIs, we’ll see a period of extreme
acceleration. Those who aren’t embracing APIs will be
crushed during the next bear market, and there won’t
be many non-API-focused companies emerging in the
next bull market.
Q There has been an explosion of new entrants in the IT space, and we are also seeing a large num-
ber of alliances and partnerships spring up. Is there a
glut of players, and are these partnerships part of the
marketplace’s move to consolidate in response?
A There is a lot of momentum in funding of logistics tartups. I’ve seen estimates that in 2016, there
were 315 deals involving logistics tech companies valued at more than $5 billion. That represents annual
highs in both deals and dollars—a trend that will likely
continue through 2017. But most of these deals have
nothing more behind them than marketing. Only a
few of these companies have market-ready technology.
Even fewer have robust solutions that can make an
immediate and widespread impact on how the industry
functions.
When it comes to partnerships and alliances, those
are healthy so long as both sides share a common
vision. Partners that align their goals will emerge as
winners. Companies that don’t will alienate and con-
fuse the people that matter the most—their customers.
QYou are old enough to have experienced two eras of logistics. Is there anything that today’s profes-
sionals can learn from the generation that came before
them?
A Three things new professionals in logistics should know: Never burn a bridge. Innovation will always
upset the establishment. And we are at the beginning of
rapid change.
Jett McCandless
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