DC Velocity - October 2018

18 DC VELOCITY OCTOBER 2018 www.dcvelocity.com
newsworthy
About two-thirds of commercial
motor vehicles sold in the U.S.
in 2040 will be powered by die-
sel fuel, down from 80 percent
today, as growth in shorter-haul
transportation boosts demand
for alternative powertrains for
medium- and heavy-duty trucks,
according to a study released in
mid-September by IHS Markit, a
consultancy.

Diesel is expected to remain the dominant fuel type globally through 2040 due to increases in fuel economy and to diesel or diesel-hybrid vehicles’ greater capability for the range and load requirements of long-haul trucking, the study said.

Still, the report forecast a 15-percent compound annual growth rate (CAGR) for battery electric vehicles in the U.S. during the 22-year timeframe, as adoption rates rise in the medium-duty truck segment. This growth will come from an increase in urban trucking services sparked by the expected growth in e-commerce transactions.

Diesel’s share of U.S.
truck market will
shrink by 2040,
study says

Australia-based third-party logistics company Toll Group
has opened a new DC that features several Dematic
solutions, including multishuttles, goods-to-person work-
stations, and AGVs (automated guided vehicles). …
Foodservice distributor Southwest Traders has selected
Blue Ridge’s forecasting and inventory planning system to
more accurately forecast customer demand while reduc-
ing its inventory levels. … Dupré Logistics, a transporta-
tion and logistics service provider, has chosen Descartes
Systems Group’s MacroPoint freight visibility solution
to support the growth of its brokerage division. … In
partnership with software developer iWMS, supply chain
software specialist HighJump has taken on the task of
modernizing the operations of Bidco Africa Ltd., a mul-
tinational consumer goods manufacturer. … Swisslog
Logistics Automation has secured an order to implement
its CarryPick AGV-based order picking system for electronic
components manufacturer Waytek’s Chanhassen, Minn.,
DC. … InMotion Global Inc., the developer of Ascend TMS
software, and Truckstop.com, an online freight market-
place, have expanded their partnership to offer more of
Truckstop.com’s services through the Ascend TMS platform.
… Temperature-controlled service provider Emergent Cold
has selected consulting and IT firm enVista to support the
company as it selects an enterprise warehouse manage-
ment system and labor management system.
alliances
Convoy lands $185 million for online
trucking marketplace

Online truck brokerage Convoy said in September it had landed a whopping $185 million in financing for its freight-matching platform, in the latest example of investors betting that small logistics technology startups can displace the entrenched freight brokers that have traditionally served as intermediaries between shippers and carriers.

The “Series C” funding round was led by CapitalG, the investment arm of Google Inc.’s parent company, Alphabet. The investment follows a 2017 funding round of $62 million led by the high-profile Silicon Valley firm Y Combinator Management LLC. All together, Seattle-based Convoy has raised more than $265 million in capital. The firm says it plans to use its new funding to accelerate product innovation in order to meet growing demand from shippers and carriers.

In recent months, investors have continued to pour money into technology startups that provide smartphone-based freight-matching apps and software platforms they say can disintermediate traditional brokers by connecting shippers and carriers directly. Examples include Cargomatic Inc., which raised $35 million in August; Transfix, which raised $42 million in venture capital in 2017; and Uber Freight, whose parent company Uber Technologies Inc. recently spun it off as a standalone business unit and pledged to double its investment in the unit over the next year.

Predictably, many freight brokers are skeptical that these new arrivals can deliver the level of personal service and the skilled handling of exceptions and other thorny issues that clients have come to expect.

Though he acknowledged that demand for brokerage services grows as freight markets tighten, one industry consultant noted that at its core, the industry still works on contracts with volume commitments, as opposed to instant matches through smartphone apps. “There are still far too many variables that impede the simple matching of loads to capacity—freight type, pickup and delivery locations and times, the next load commitment of the truck, payment terms, contractual and insurance terms, and driving and safety records,” said Tony Wayda, supply chain practice senior director and principal at Boulder, Colo., consulting firm SCApath. “I think apps will evolve to help perform ‘better’ matching, but I still do not see any major change in the industry in the near future.”