By Nikhil Sathe, Operating Partner, BGSA

1. MARKET OVERVIEW

Over the past two decades, the freight brokerage sector has weathered multiple trade cycles, from the 2008 financial crisis to the freight recession of 2022–25, emerging each time more resilient and adaptive. These disruptions have forced brokers to evolve their operating models, sharpening their focus on efficiency, scalability, and digital capability.

Today, as technology and human capital converge, labor efficiency has become one of the most decisive levers for protecting margins and driving performance. Brokers that balance people, process, and technology are redefining what operational excellence looks like in a modern 3PL environment.

This shift is also reflected in the market’s growth trajectory. The global freight brokerage market, valued at USD 54.87 billion in 2024, is projected to reach USD 98.73 billion by 2034, expanding at a CAGR of 6.05%. Rising demand for digitally connected freight solutions (e.g. those that enhance shipment visibility, automate execution, and optimize costs) is fueling this steady expansion.

As the chart illustrates, consistent year-over-year growth highlights the industry’s accelerating digitalization and adoption of data-driven platforms. These trends are paving the way for even deeper integration of AI and automation in brokerage operations over the next decade, transforming how capacity, pricing, and customer relationships are managed.

2. DIGITAL TRANSFORMATION IN BROKERAGE

The freight brokerage industry operates in a highly fragmented landscape, encompassing carriers, shippers, and intermediaries. For modern 3PLs, operational efficiency is not optional: it is essential for long-term sustainability. Freight brokers act as market makers, securing capacity regardless of market volatility.

While many brokerage models remain transactional, vested outsourcing and technology-enabled models have proven more resilient and profitable. Today, embracing technology is central to reducing costs, optimizing volume, and improving load-to-equipment matching accuracy.

One of the most significant shifts has been the rise of digital freight matching platforms, which have attracted strong venture and institutional investment and fundamentally reshaped the industry.

However, the experiences of firms such as Surge, Forager, and Convoy highlight a critical lesson: growth driven purely by load volume and revenue does not guarantee profitability. Sustainable success requires a balance between scale and disciplined margin management.

3. FROM TRADITIONAL BROKERAGE TO AUTOMATION

The industry is now in the midst of a major digital shift. Traditional brokers still excel in relationship management and customer service but can lag in speed and cost efficiency. Digital brokers, by contrast, leverage automation and AI to achieve instant load matching, real-time pricing, and scalability, though sometimes at the expense of personalized service.

We believe the future belongs to hybrid models that combine the strengths of both approaches, automation for speed and human expertise for trust and flexibility.

Traditional freight brokers remain vital for managing complex shipments and exceptions, drawing on years of operational experience. Digital brokers, on the other hand, use data-driven algorithms and automation to react quickly to market changes, as seen during the volatility of COVID-19.

Machine learning algorithms now evaluate factors such as load characteristics, origin-destination patterns, and capacity availability to optimize match quality. While these technologies reduce manual labor and improve speed, their reliability still depends on accurate, high-quality data.

As a result, the most successful freight companies are blending human expertise with automation, using technology to enhance rather than replace people.

This integration is also driving inclusivity and access. Load-matching apps have empowered smaller carriers, owner-operators, and underrepresented groups, including women and non-native English-speaking drivers, to compete for freight directly, without the need for traditional negotiations.

Moreover, digital networks such as Uber Freight, Emerge, and Convoy now act as freight marketplaces, increasing network density, visibility, and collaboration between shippers and carriers. These systems not only reduce costs and improve service reliability but also contribute to environmental sustainability by cutting empty miles and optimizing backhauls.

Automation does not remove the human touch; it amplifies it. By freeing staff from repetitive pricing and scheduling tasks, brokers can focus on customer strategy and service quality.

4. AI AND TECHNOLOGY: TRANSFORMING BROKERAGE

Artificial intelligence has become the most transformative force in freight brokerage today. In a fragmented market filled with inefficiencies, AI and automation present an unprecedented opportunity for transformation, creating leaner, faster, and more data-driven operations. Predictive analytics and real-time data are enabling brokers to anticipate needs before they arise, optimizing routes, minimizing risks, and improving asset utilization. With AI-driven decision support, companies are not just cutting costs but also achieving greater accuracy in pricing and capacity forecasting.

However, adoption levels vary widely. While many brokers use technology for basic load sourcing, only a select few have integrated advanced API connections, real-time visibility, and autonomous decision-making tools throughout their workflows.

Those who have (particularly in the pre-spot, on-demand, and contract freight segments) are realizing measurable gains. By leveraging technology as a performance toolbox, these brokers are improving internal productivity, lowering execution costs, and aligning sales strategy with operational efficiency, ultimately optimizing both margins and customer experience.

5. OPERATIONAL EXCELLENCE: LESSONS FROM INDUSTRY LEADERS

As technology reshapes every layer of freight operations, true operational excellence depends on the intelligent use of data and digital tools. The brokers leading today’s market are those that convert technological capability into measurable performance, integrating automation across pricing, procurement, and customer engagement while preserving the human relationships that underpin long-term success.

The most successful brokerage models blend technology, process discipline, and customer loyalty. Sustainable profitability comes from repeat business, reliable lanes, and strong partnerships.

A durable freight brokerage business requires trust-based relationships with both shippers and carriers, supported by data-driven processes and sound financial management. Adaptability, skilled teams, and regulatory compliance remain equally vital.

• Based on decades of industry experience, we have seen successful brokers who have leveraged some or most of these 10 key principles into their strategy to spearhead consistent growth trajectory.

To thrive in a competitive environment, brokers must excel across several key dimensions.

Excellence in brokerage requires alignment across these operational pillars, integrating financial, technological, and customer strategies into a unified growth framework.

6. M&A: STRATEGIC GROWTH AND VALUE CREATION

As operational excellence meets capital opportunity, M&A has become a central growth lever in the brokerage space. For sellers and founders, planning ahead is crucial to maximizing enterprise value. Aligning M&A timing with financial readiness and tax efficiency can materially improve deal outcomes.

The transportation brokerage market remains highly fragmented, offering ample room for consolidation. Fortune 1000 shippers increasingly rely on 3PLs, yet a large share of truckload volume still moves in-house, creating opportunities for strategic roll-ups and platform plays.

Valuations are closely linked to financing conditions and market sentiment. As capital markets stabilize, mid-market deal activity is expected to accelerate in 2025 and beyond.

As illustrated above, deal activity in logistics and brokerage followed a downward trend from mid-2022 through 2024, with early signs of recovery beginning in Q1 2025. This rebound aligns with improving market confidence and renewed capital deployment across the mid-market.

With deep expertise in transportation brokerage, BGSA stands well-positioned to guide founders through this next phase of industry evolution. Our approach goes beyond transactions, emphasizing strategy, disciplined execution, and long-term value creation.

Deal flow recovery in the mid-market segment is already underway. Buyer demand and significant dry powder indicate renewed confidence, particularly in asset-light logistics firms. This trend is expected to strengthen through 2026 as industry fundamentals improve.

Leveraging BGSA’s deep domain experience and proven M&A track record, we remain committed to helping clients optimize enterprise value and achieve successful outcomes.

About BGSA Holdings, LLC

BGSA Holdings, LLC (BGSA) is a leading M&A advisory practice specializing in supply chain, logistics, and adjacent companies. We have a track record of over 50 successful transactions for our clients, who rely on us for trusted and experienced transaction advice. At BGSA, smart strategic thinking drives our approach to M&A advisory.

Nikhil Sathe — Oct 23, 2025

Email: Nikhil@BGSA.com / www.BGSA.com

Copyright © 2025 BGSA Holdings, LLC (No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of BGSA Holdings, LLC.)

Freight Brokerage in Transition: Technology, Efficiency, and Avenues for Growth in the North… was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

I. A Market in Overdrive

The data center industry is in the midst of a once-in-a-generation expansion. Hyperscalers, colocation giants, and edge computing providers are pouring billions into new facilities, driven by the relentless growth of cloud computing, AI workloads, and digital services. This momentum is underscored by recent announcements: Amazon’s $10 billion expansion in North Carolina, Google’s $7 billion commitment in Iowa, and Meta’s $29 billion financing deal to scale AI-focused data centers in Louisiana, all announced in mid-2025.

There are over 4,000 data centers operating in the U.S., concentrated in key hubs such as Northern Virginia, Phoenix, Dallas, Silicon Valley, Chicago, Los Angeles, and New York City. Each hub has unique characteristics that influence site selection and operational requirements, from low-latency connectivity and tax incentives to cheap power and climate stability.

Behind these megadeals and the rapid growth of regional hubs lies another equally important story: the supply chains that make them possible. Every new build, upgrade, and retrofit relies on a complex web of specialized logistics services — from transporting racks, GPUs, and immersion cooling systems to handling hazardous fluids, batteries, and high-value IT equipment. Freight forwarders, white-glove 3PLs, hazmat-certified carriers, and technology platforms now play a central role in ensuring that facilities are delivered on time, operate efficiently, and meet strict compliance standards. This pace of build-out is not just a real estate story; it’s a logistics coordination challenge on a scale few sectors experience — where execution often determines whether a project meets an SLA or slips behind schedule.

For regional logistics providers, proximity to one or two key hubs can create strong local advantages and repeat business from nearby facilities.

For national and larger-scale operators, the ability to serve multiple hubs seamlessly — coordinating time-critical moves, compliance requirements, and capacity across markets — can be a decisive differentiator in winning enterprise and hyperscale contracts.

Data center logistics is no longer a back-office function. It is the connective tissue between capital investment, operational uptime, and increasingly, fulfillment of digital services — a strategic enabler of the modern economy.

II. A Market in Motion: Tailwinds and Headwinds

The market opportunity for logistics in data centers is defined by both powerful growth drivers and meaningful challenges. Each facility type brings distinct logistics demands.

• Hyperscale facilities, which account for roughly 50% of the U.S. market, require bulk deliveries of servers, racks, GPUs, and cooling systems on tightly sequenced schedules.
• Colocation centers, representing about 25% of the market, see constant churn as tenants swap racks and reconfigure space.
• Enterprise-owned facilities, at 15%, have longer upgrade cycles but higher compliance complexity.
• Edge and micro data centers, at about 10% of the market, prioritize rapid deployment and localized spare-parts logistics.

Industry Tailwinds

AI and GPU adoption is one of the most significant tailwinds, accelerating rack deployments and driving higher-density builds. In 2024 alone, an estimated 137 new hyperscale data centers came online in the U.S., continuing a long-term growth trend. The average size of these facilities is increasing, particularly to accommodate AI infrastructure. The U.S. remains the leading region for hyperscale development globally, creating sustained demand for large-scale, highly coordinated logistics operations.

Hyperscale expansion is the single largest driver of logistics demand. Between 2024 and 2030, an estimated $1.8 trillion will be deployed globally into digital infrastructure. Each hyperscale campus requires thousands of racks, generators, and cooling modules delivered on rigid schedules, creating recurring demand for project-level orchestration and SLA enforcement.

Edge and modular deployments are also accelerating. Prefabricated units delivered by flatbed and ready-to-install are opening new opportunities for specialized regional carriers and 3PLs. Providers like SunteckTTS (MODE Global) in flatbed and heavy-haul, or AIT Worldwide Logistics and Expeditors in white-glove and compliance-heavy deployments, are already playing central roles in these modular rollouts. The global modular data center market is projected to grow from $25 billion in 2023 to over $110 billion by 2032, adding recurring demand for “last-mile” logistics.

Sustainability is another catalyst. Operators under pressure to reduce carbon footprints are turning to new power solutions — lithium-ion batteries, hydrogen fuel cells, and even modular nuclear. Logistics partners such as Iron Mountain Data Center Logistics and Mainstream Global, both active in IT asset disposition and recycling, are becoming critical enablers of ESG compliance and lifecycle transparency.

For logistics providers, these macro forces translate into tighter delivery windows, more compliance-heavy moves, and the need to orchestrate operations across multiple markets without disrupting ongoing services.

Emerging trends are also reshaping logistics needs behind the scenes. Cooling technology is advancing rapidly, with immersion and direct-to-chip systems driving new requirements for fluid handling, hazardous materials transport, and on-site refills. At the same time, server refresh cycles are shortening from five to seven years down to three to five, multiplying the volume of installs, upgrades, and decommissioning projects. This also increases demand for end-of-life logistics — secure IT asset disposition (ITAD), decommissioning, recycling, and compliant disposal — which are now as critical to the lifecycle as new deployments. Finally, the rise of smaller, distributed facilities is shifting the logistics footprint toward highly localized networks that must respond in hours, sometimes minutes, rather than days.

Industry Headwinds

Supply chain bottlenecks remain one of the biggest obstacles. Delays in GPUs, generators, and power systems can push build schedules back by months or even years. In 2024, lead times for large generators stretched beyond 18 months, forcing some operators to bulk-purchase and stage equipment in 3PL warehouses to de-risk construction.

Labor shortages are compounding the issue. Hazmat-certified drivers, rigging crews, and HVAC logistics specialists remain in short supply. Even leaders like Forward Air in time-critical shipments or Iron Mountain in secure ITAD face capacity constraints as demand outpaces available certified talent.

Power availability is another chokepoint. In Northern Virginia, the world’s largest hub, utilities are rationing grid connections until transmission capacity expands. For logistics partners, delivery schedules are often dictated by when transformers, switchgear, and backup systems can be moved and installed.

At the same time, some hyperscalers are insourcing logistics to control costs, risks and security concerns. Volatility in hardware supply chains — from semiconductor shortages, to tariff adjustments, and global shipping disruptions — continues to ripple through projects. Even one missing component, such as a delayed coolant shipment or fiber spool, can stall a hyperscale build.

The result is a market with clear opportunity, but one where execution, specialization, and adaptability are prerequisites for success.

III. Logistics as a Strategic Function

In this environment, logistics is far more than transportation. A single facility build can involve thousands of inbound shipments (servers, cables, racks, batteries, and liquid cooling tanks) sourced from multiple vendors around the globe. Deliveries must arrive in the correct sequence, often into construction sites with minimal laydown space, meaning just-in-time coordination is critical. Missing even one component can stall a project and breach service-level agreements.

The range of specialized services required is expanding. IT asset disposition and decommissioning — recurring every three to five years — demand secure chain-of-custody handling, ESG-compliant disposal, and integration with client reporting systems. “Hot” expedited shipments are needed to address outages or accelerated build schedules, often moving via white-glove carriers and tech-enabled freight brokers. Cooling logistics, whether for oversized CRAC units or immersion fluids, require hazmat certification, spill protection, and coordination with contractors. Battery and generator transport is equally complex, combining heavy-haul capabilities with strict DOT and OSHA compliance.

As data centers also become the backbone of e-commerce, streaming, and AI services, logistics increasingly overlaps with fulfillment operations. Spare-parts stocking, rapid-response inventory management, and localized micro-fulfillment models are being integrated directly into data-center support networks — ensuring uptime in much the same way e-commerce fulfillment ensures customer delivery. At the same time, a rising class of AI-driven Data Center Infrastructure Management (DCIM) platforms (including UnityOne.ai, Ritaam, Aravolta, and Sunbird DCIM) are automating infrastructure monitoring, predictive maintenance, and energy optimization, further closing the loop between physical operations and intelligent oversight.

Not only are transportation-management systems, dispatch platforms, and compliance software automating scheduling, routing, asset tracking, and certification workflows, but a new wave of construction-logistics platforms (such as Veyor, Amberg Loglay, Transvirtual, and Curri) are emerging to address site-coordination challenges. Together, these logistics and DCIM innovations are integrating the physical and digital layers of data-center operations, creating new standards for visibility, efficiency, and uptime.

For mid-market providers, integrating DCIM with logistics technology is becoming an essential differentiator, and a critical step toward defensible scale and leadership.

IV. The Mid-Market Challenge

For mid-sized logistics and technology providers, the opportunity is massive, but so is the risk of being left behind as consolidation accelerates and procurement standards rise. Large REITs and hyperscalers are locking in preferred-vendor contracts, while procurement teams are raising the bar for certifications, digital integration, and 24/7 responsiveness. Meeting a 99.99% on-time rate, providing real-time tracking, and delivering automated compliance reports are now baseline requirements.

Regional players often lack the geographic reach to serve national projects or the technology infrastructure to integrate deeply into client systems. Without investment in both, even highly capable operators risk being sidelined as the market consolidates. Winning in this environment requires deliberate focus on specialization, fulfillment-style responsiveness, and digital orchestration.

Providers that can bridge data-center logistics with fulfillment capabilities, such as predictive spare-part placement, localized stocking, and rapid dispatch, will be best positioned to win national contracts and long-term enterprise relationships.

What is clear is that organic growth alone is rarely enough. The pace of industry consolidation, the capital intensity of compliance, and the technology investments needed to integrate with hyperscalers all point to the need for scale. For many operators, that means exploring M&A opportunities or strategic partnerships to combine capabilities, expand networks, and accelerate digital readiness, ensuring they can compete head-to-head with larger national providers.

V. Conclusion: The Winners Will Specialize and Digitalize

The logistics backbone of the digital economy is being forged today. The winners will be those who focus on high-value, compliance-heavy niches, integrate tightly into client workflows, and deploy technology, from advanced DCIM to AI-driven coordination tools, to orchestrate execution across geographies and contractors.

The challenge is to evolve beyond transportation into a true lifecycle logistics partner, combining deployment, maintenance, and end-of-life services with fulfillment-style responsiveness. The leaders who act now, aligning specialization, technology, and scale, will define the backbone of next-generation digital infrastructure: a system that merges logistics precision with fulfillment agility.

Two areas stand out:

1. Construction logistics software, purpose-built for hyperscale and critical infrastructure projects, could become a new category leader. Coordinating thousands of inbound shipments into active construction sites with limited laydown space remains one of the sector’s most acute bottlenecks — and technology solutions are still early-stage.
2. Platforms integrating Data Center Infrastructure Management (DCIM) with logistics systems represent a high-value convergence play. By linking real-time operational monitoring with logistics execution, these platforms create defensible integration and stickiness with hyperscalers and colocation providers.

As the market matures, mid-market logistics and technology providers that embed themselves in this connected ecosystem — offering not just delivery, but end-to-end lifecycle support — will set the standard for uptime, compliance, and responsiveness.

About Cambridge Capital:

Cambridge Capital is a private equity firm specializing in the supply chain sector, investing in asset-light transportation, logistics, and technology companies. We partner with exceptional management teams to scale businesses through strategic growth, operational excellence, and disciplined capital allocation.

Contact Us:

Benjamin Gordon, Managing Partner
(561) 932–1601 / Ben@cambridgecapital.com

Matt Smalley, Principal
(561) 932–1613 / Matt@cambridgecapital.com

Pascale Curran, Chief of Staff
(561) 932–1602 / Pascale@cambridgecapital.com

Beyond Delivery: How Logistics Powers the Data Center Economy was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

Navigating a Strategic Crossroads

The Testing, Inspection, Certification, and Compliance (TICC) industry is undergoing one of its biggest shake-ups yet. Tech-native disruptors and acquisitive incumbents are racing to redefine the market’s future, blending scale with cutting-edge innovation. This article unpacks who’s winning, who’s innovating, and how these shifts are reshaping opportunities and risks across the industry.

I. A Market in Motion

We are witnessing a true inflection point in the TICC industry. Last month, SGS, the largest company in the industry, signed a $1.33 billion deal to acquire ATS, a U.S.-based provider of testing, inspection, and forensic services, at a multiple of 11.2x 2026 EBITDA. This was not an outlier, but rather a high-profile representation of a trend already underway: demand for TICC services is rising sharply across the global supply chain, while the TICC industry’s structure is shifting beneath it.

The reasons are no longer theoretical. New EPA-enforced PFAS testing requirements, state-level emissions verification mandates, plus tighter chain-of-custody enforcement around food and pharmaceuticals are increasing the complexity and urgency of compliance. Concurrently, global demand for rare earth elements, nuclear energy, and other sensitive commodities is rising — triggering a surge in materials testing, safety validation, and traceability services from extraction to transport to export operations. As supply chains localize, we’re seeing more friction points that demand granular inspection, validation, and reporting. Reshoring, tariff uncertainty, and sourcing realignment are shifting service demand closer to U.S. ports, industrial hubs, and domestic production sites which requires TICC firms to make rapid decisions on where to invest and how to grow.

Over the past eight months, policy shifts and market responses have demonstrated how quickly political waves can ripple through the industry. Most notably, the announcement of the “Liberation Day” tariffs jostled supply chain equities, as illustrated below. In the months that followed, the global TICC leaders not only recovered, but significantly outperformed the broader BGSA Supply Chain Index, underscoring the industry’s resilience and ability to convert regulatory change into growth opportunity.

The lines between global and niche are becoming harder to draw. Capital-backed platforms are acquiring specialist firms not just for geographic reach, but to integrate technical credibility, ESG-aligned capabilities, and digital service delivery. SGS’s recent acquisitions — RTI Laboratories for DoD-certified testing, and Streamline Control for SCADA analytics — illustrate this strategy in motion. With deal activity rising and capital still in the system, TICC firms with certifications, IP, or process automation are seeing premium valuations, particularly those near ports, industrial corridors, and key supply nodes.

Meanwhile, artificial intelligence is redefining delivery models. From automated inspection scheduling to machine vision in materials testing, these tools are narrowing the gap between specialization and scale. They allow smaller firms to extend capabilities without traditional CapEx requirements, while enabling larger platforms to systematize niche expertise across regions and verticals. For middle-market operators, this technology asset makes the difference between being a local lab and a scalable growth asset.

The market is moving toward integrated models that combine footprint with automation, service with software, and compliance with intelligence. Scale no longer guarantees advantage, and specialization no longer limits it.

Recent M&A activity reflects this trend. Rather than simply scaling volume, today’s acquisitions signal a strategic reconfiguration of the industry. That said, there’s still no shortage of deal flow; Houlihan Lokey tracked 117 deals in the first half of 2024 alone. Increased deal flow and rising valuation multiples are not just the byproduct of economic growth, they are a clear indicator of a powerful convergence of compliance demand, capital availability, and tech-enabled operating leverage.

II. A Shifting Landscape: Who’s Buying, Who’s Innovating

Strategic Acquirers Build Out

Dominant players are continuing to use acquisitions as a growth and diversification strategy. UL Solutions, for example, added BatterieIngenieure and TesTneT last summer to expand its U.S. testing and inspection capabilities in high‑growth sectors of batteries, energy storage, and clean energy technologies.

NV5 has been similarly active, acquiring Kisebach Consulting and Senergy BCS late last year, enhancing capabilities aligned with AI and data center demand; then agreeing to combine with Acuren (May 2025) to create a $2 billion platform with one of the largest nondestructive testing (NDT) and field inspection networks in North America.

Private Equity Is Behind Some Major Moves

TPG Rise Climate’s acquisition of AmSpec was one of the largest recent PE-backed investments in the sector, widely viewed as a landmark deal in fuel and chemical testing services. The transaction reflects a strategic bet on AmSpec’s industry-leading technical depth, and its role in certifying next-generation fuels, including biofuels, hydrogen, and sustainable aviation fuel, as regulatory and climate pressures reshape global energy supply chains.

Digital Disruptors Are Emerging

Checkfirst launched ScheduleAI, reducing inspector scheduling costs by up to 5x. Tchek, meanwhile, uses AI vision to automate vehicle inspections with 95% detection accuracy. These tech-native entrants are capturing share in workflows once dominated by manual processes. Others are pushing into more technical domains: Lumafield, offers industrial CT scanning paired with AI to identify internal defects in materials and assemblies, and Aavrtti Technologies is piloting robotic NDT units with U.S. energy and utilities providers. These platforms aren’t just improving efficiency, they’re redefining what can be inspected, and how fast.

III. Middle-Market Realities: The Squeeze

Mid-sized TICC firms increasingly find themselves in a narrowing middle. On one side, global incumbents such as SGS and UL Solutions are continuing to scale through acquisition; on the other, tech-native and AI-focused disruptors are automating specialized services once protected by labor intensity and local expertise. These trends are redrawing the competitive map, leaving less room for firms without differentiating qualities.

Unlike PE-backed platforms or multinationals with excess balance sheet strength, many mid-market operators battle to fund acquisitions, expand labs, or implement automation at scale. Meanwhile, client expectations are moving quickly: digital reporting, ESG documentation, and global compliance coverage are becoming baseline requirements, not differentiators.

Meanwhile, margin pressure is mounting. Skilled labor costs, rising regulatory complexity, and security requirements are all pushing costs higher, while automation is driving prices down in core services like inspections, audits, and materials testing.

For many, the question is no longer whether to adapt, but how, and how fast.

IV. Strategic Choices for Mid-Market CEOs

Option A: Clarify and Deepen a Niche

Firms that specialize in tight niches, such as hazardous materials transport testing or renewable energy NDT, can gain pricing power and retention. Supplementing specialization with digital reporting tools and client portals can reinforce this premium positioning

Option B: Partner Strategically or Invite Investment

A measured infusion of private capital can unlock capital for bolt-on acquisitions, technology, and scale; a proven path followed by AmSpec and other mid-market firms under PE ownership.

Option C: Consider a Timely Exit

With valuation multiples still high, especially for ESG-aligned and tech-enabled firms, now may be the optimal time to sell.

V. Looking Ahead: Aligning Strategy with the Rapidly Evolving Market

This is a pivotal moment for the TICC industry. As global players build scale and sponsor-backed disruptors digitize niche segments, mid-market firms can choose one of three strategies: scale through partnership, specialize with digital fluency, or exit at peak valuations. The decision window is open now, but like all inflection points, it will pass, and when it does, the flags flying after the dust settles will belong to those who moved early with the right partners beside them.

VI. Who to Partner With

In a sector defined by inflection points and consolidation, informed decision-making carries outsized weight. For business owners evaluating their next move, the right partner can make all the difference. BG Strategic Advisors combines deep sector expertise with a two-decade track record of advising supply chain businesses through growth, transition, and exits. With a singular focus on the broader supply chain ecosystem, BGSA offers not just transactional execution, but nuanced perspective grounded in industry fluency and long-standing relationships. For those considering their options, especially a high-value exit, a discreet conversation with one of our industry veterans can provide the clarity and strategy to move forward with confidence.

About BGSA

BGSA Holdings, LLC (BGSA) is a leading M&A advisory practice specializing in supply chain, logistics, and adjacent companies. We have a track record of over 50 successful transactions for our clients, who rely on us for trusted and experienced transaction advice. At BGSA, smart strategic thinking drives our approach to M&A advisory.

Contact Us:

Ben Gordon, Managing Partner
(561) 932–1601, Ben@bgsa.com

Nick Whelan, Senior Associate
(561) 932–1603, Nick@bgsa.com

Copyright © 2025 BGSA Holdings, LLC (No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of BGSA Holdings, LLC.)

Redrawing the Map: How Tech and M&A Are Reshaping Testing & Inspection was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

Government regulation often starts out as a solution to a specific problem, but then morphs into something much bigger. And the unforeseen consequences can sometimes dwarf the original goal.

De Minimis is one of those cases.

In 1938, Congress authorized customs regulators to waive duties on low-cost shipments (below $1). They believed the nominal revenue wouldn’t cover the printing, filing, and paperwork expenses need to impose tariffs. But over 87 years, this $1 De Minimis exemption metastasized into an $800 loophole.

Loophole is an understatement.

As George E. Bogden, J.D., D.Phil. puts it in his op-ed in the New York Times, De Minimis “allowed overseas shippers to flood the U.S. market with small-value packages duty-free and without adequate inspection…” and “low-value imports to the United States climbed 10-fold from 134 million packages in 2015 to nearly 1.4 billion in 2024.”

There are two sides to this issue. It’s true that the regulatory changes will impose supply chain costs. And it’s also true that these changes could be inflationary. That said, it’s reasonable to see how De Minimis gave China an unfair competitive advantage against US companies. Free trade isn’t really free if there isn’t a level playing field.

Smart supply chain companies are anticipating these changes and helping their customers find better solutions, including US manufacturing sources, US networks, and more compelling analytical tools. This is just the beginning of a series of massive changes underway.

Benjamin Gordon, Cambridge Capital

De Minimis = De Loophole was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

In May 2024, Cambridge Capital made a majority investment in STAT Recovery, a leading machine learning-based invoice audit software platform helping retail suppliers optimize revenue by reducing improper deductions and compliance fines from large retailers.

We appointed Cambridge Operating Advisor Kamal Sundar as CEO and brought in Ken Frieze (Chairman of Gordon Brothers), Bill Mines (former SVP, Finance and Supply Chain at Walmart) and Chris O’Brien (former Chief Commercial Officer of C.H. Robinson) to join STAT’s Board, in partnership with STAT Co-Founder Casey Roberts and the existing management team.

As we reflect on this latest investment, we should start with the Cambridge strategy.

The Cambridge Strategy

Cambridge Capital’s strategy is to build a concentrated portfolio of high-conviction investments in supply chain-focused tech and services businesses with staying power and outsized growth potential.

We begin with a set of key themes that we believe drive success in the supply chain market.

We then look to find entrepreneurs who are the best leaders, building strong companies with significant growth potential.

Our team then conducts due diligence to validate our thesis. A new investment is the product of months of hard work from many sides: the founding and executive team, the Cambridge investment and operating teams, and various advisors and third parties that helped both sides finalize the investment.

For some firms, when a new investment is completed, it may feel like the finish line. However, at Cambridge, this is just the beginning of our journey with our new portfolio company partner. Once we close our investment, we then transition our focus to supporting our teams in achieving results for all stakeholders. Each situation is unique, so whether it’s assisting with key leadership hires, improving technology, finding customers and partners, or helping with cross-portfolio collaboration, the entire Cambridge team is there to be of service.

Why We Chose STAT

STAT Recovery, founded by Casey Roberts and Todd Reeves, is a leading machine learning-based invoice audit software platform helping retail suppliers optimize revenue by reducing improper deductions and compliance fines from large retailers. STAT has audited over $250 billion in retail transactions for the largest retail suppliers in the world and has the highest recovery rate in the industry, as well as the most comprehensive claims avoidance program.

Retail compliance fines for suppliers are significant and can represent up to 2% of suppliers’ retail sales, totaling tens of billions of dollars annually just in the US. In just over 5 years, STAT has helped retail suppliers recover over $500 million from improper deductions and fines, and avoid countless more, based on over 300 years of cumulative experience in retail compliance and technology.

At Cambridge, we know this problem all too well, even though we do not invest in retail suppliers. Cambridge portfolio companies like Everest Transportation Systems and Boa Logistics, which serve as trusted logistics partners for numerous retail suppliers, must deal with a portion of these retail compliance fines and deductions daily. It is a source of friction and frustration for all parties involved.

Retail suppliers and their logistics partners can feel like the goal posts of retail compliance policies are always moving, as there is no clear explanation of the rules and retailers can change them without notice. Additionally, as STAT’s success has shown, over 50% of retail compliance deductions actually relate to errors on the retailers’ part (vs. the supplier) and should not have resulted in deductions. STAT has helped numerous large retail suppliers recover this revenue and improve overall supply chain operations, leading to higher retailer and supplier satisfaction.

As an example of the scale of the problem, one large STAT customer recovered over $50 million in one payment from one retailer after leveraging STAT’s platform to uncover years of errors in just one area.

Our investment in STAT reflects what we seek in every new portfolio company and underscores why we continue to focus exclusively on supply chain companies led by outstanding teams that benefit from the additional resources we can bring to them.

To prioritize opportunities and ensure consistency, we came up with a framework to benchmark new potential opportunities, with six pillars: Cambridge thematic fit, market tailwinds, capital efficiency, strong tech-enabled moat, top team, and the ability to create a Cambridge-influenced edge.

We believe companies that score high on all these attributes have the largest potential to become winners, and we focus on companies that match all six attributes.

How STAT Compared

STAT stacks up extremely well on Cambridge’s key characteristics:

· Cambridge Thematic Fit — STAT fits three of Cambridge’s currently published investment themes: Predictive Supply Chain Decisioning, Niche Technology Leaders, and Supply Chain Visibility. STAT has established itself as a pure-play audit software platform helping retail suppliers optimize revenue by reducing improper deductions and compliance fines from large retailers. We believe this niche focus and combination of people-driven relationships and a top-tier technology platform will allow STAT to emerge as the definitive leader in retail supplier revenue optimization globally.

· Market Tailwinds — Based on our due diligence, STAT customer interviews, and numerous conversations with Cambridge Operating Advisors and Limited Partners that built companies that sell to or ship to retailers, we estimate that the amount of retail fines and deductions in the US market is more than $10 billion annually. As technology has proliferated in retail supply chains, and as operations became less manual, the quantum of retail fines and deductions has remained stable or even increased due to system changes or stressed supply chains. Unlike STAT’s competitors who tend to offer a variety of disjointed solutions for retail suppliers, STAT’s exclusive focus and obsession with optimizing customers’ retail revenue by reducing deductions and fines puts STAT in a leading position to take market share.

· Capital Efficiency — STAT has exhibited strong financial growth since being founded in 2017, and had a ~70% EBITDA CAGR since 2021, with current annual profits in the 8-figures, amidst no institutional investment before Cambridge. Most of the growth has been driven by existing customers asking STAT to expand contractual scopes, due to significant ROI and benefit to their own profitability.

· Strong Tech-Enabled Moat — STAT has a proprietary software platform, powered by machine learning, that automatically reviews every retailer-supplier transaction, and automatically uncovers errors, mistakes and opportunities. Post investment, we plan on investing aggressively in AI and retooling the existing ML model as STAT transitions to a multi-retailer focus and offers more capabilities to customers.

· Top Team — STAT’s founders and existing team have 300+ years of collective experience in retail compliance and technology and have previously worked at companies including Walmart, Sam’s Club, Kroger, PwC, Conagra, GE, Helen of Troy, and Alteryx. The existing team has highly complementary skills across strategy, execution, technology, sales and operations, and they are poised to lead STAT in the next growth stage. We are also excited about the addition of Cambridge Operating Advisor Kamal Sundar as CEO. STAT’s entrepreneurial and results-oriented culture is aligned with Cambridge’s values.

· Cambridge-Influenced Edge — STAT has developed a strong market niche with demonstrated success with key customers. Cambridge can build on STAT’s momentum by leveraging its established network of larger shippers and retailers to help source and win new business for STAT. Additionally, Cambridge can leverage its relationships with top retail supply chain leaders, including the three Board Members we brought on, and other attendees of our annual supply chain CEO conference, to generate outsized growth.

We are excited to invest in STAT, fortunate for the opportunity to partner with an exciting company and founding team, and eager to help them accelerate into their next stage of growth. For any consumer brands, retail suppliers or logistics companies interested in reducing revenue leakage from retail compliance fines and deductions, STAT can be an outstanding potential partner. Please feel free to reach out to us for a direct introduction.

STAT Recovery-Cambridge Capital: Why we Invested was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

As 2023 kicks off, I’d like to take a moment to share some emerging trends and innovations in FreighTech that I’m seeing and make some predictions about what we can expect in the coming year.

You can read my 2022 predictions here: What we can expect in FreighTech, LogisticsTech, and SupplyChain Tech for 2022 and a few of the companies coming for their piece of the prize, 2021 predictions here: Top Trends in Supply Chain Technology for 2021 and the companies leading the way, 2020 here: Top Trends in Logistics Technology going into 2020 — How companies are keeping up with Uber, and 2019 predictions here: Top 4 Areas of Interest in Logistics Tech going into 2019.

The end of 2022 has shown a swing in the opposite direction in terms of venture capital investments. During the height of the pandemic, when the supply chain was at its worst, supply chain technology was in high demand. Now that global trade is beginning to even out, investments are starting to cool.

Q2 began the descent in funding enthusiasm for supply chain startups with a 19% drop. In Q3, venture funding fell 56% year-over-year, down to $3.3 billion, according to Pitchbook.

Funding for supply chain tech start-ups was growing by a few billion dollars per year, pre-pandemic, for close to a decade. In 2021, investors surged and spiked growth by 80% year-over-year. 2022’s investment totals will likely fall somewhere in the middle of the spike and the measured growth of years past.

I believe there is going to be a reckoning of sorts in terms of what technology we see getting funded. For 2023, tech start-ups that reduce the number of people needed to keep the supply chain moving are going to be the big winners. The pandemic has shown us, more than once, that human labor is a major uncertainty in the supply chain, and uncertainty creates weak spots. Startups that can digitize documents and automate mundane tasks and help companies do more with fewer people will be in the spotlight.

Interestingly enough, companies are willing to pay more for software with that kind of capability. The crisis has highlighted both problems as well as opportunities in the supply chain which means we should be seeing a lot of legitimate innovations in technology going forward.

With that in mind, I’ve chosen the following categories that I predict will be big areas of growth in FreightTech in 2023: managed logistics networks, financial infrastructure, API aggregation, and port terminal/rail depot visibility.

Managed Logistics Networks

One of the biggest weaknesses revealed in recent years was how over-extended many supply chains were. As a result, many companies are in the process of restructuring and shortening their supply chain wherever possible. Managed logistics networks and technology services that help automate logistics and smooth out supply chains are going to be in high demand as restructuring continues. While much of the focus has traditionally been on final or last-mile delivery services, we will likely see more attention being paid to the middle miles in the coming years.

WARP

WARP provides a customizable transportation service that is centered on the middle mile, picking up loads from a customer’s distribution center and delivering them to stores or wholesale partners. In addition to offering different vehicle sizes, ranging from sprinter vans up to a full-length 53’ trailer, as well as reefer services, WARP shines by connecting customers to cross-docking facilities, which can help consolidate loads and cut down on fulfillment costs and delivery times, while adding a suite of automated and digital tools that focus on supply chain optimization.

A pioneer in supply chain start-ups founded WARP: Troy Lester, founder of Covet Shipping. Partnering with, Daniel Sokolovsky, who created Berkeley Delivers as well as AxleHireWARP has hit on middle mile technology.

“What we’ve done is we’ve built a software platform that connects cross-docking facilities, and different sizes of trucking companies and different sizes of trucks, to stitch together a digital LTL network. And so basically, what’s happening is we’re putting tools — back-office tools, front-office tools, logic and optimization, and things like that — into the hands of everyday operators,” Sokolovsky said.

ClearJet

ClearJet offers customers a zone-skipping network by utilizing airline capacity. The software reads the customer’s address and then secures the ideal flight path to that location on either freight or passenger planes. By eliminating the number of touches per package, overall transit time and cost are reduced, as is the need for multiple LTL shipments to distribution centers or warehouses. Additionally, package visibility is increased due to fewer moving parts, allowing for more accurate ETA predictions for customers.

While it’s not necessarily direct-to-customer, it makes a fair approximation and can be immensely helpful for companies with diverse customer locations or inconsistent product volumes. Because of the zone-skipping via airfreight, the overall length of the final mile is reduced. ClearJet has a “BYOC” (bring your own carrier) policy, meaning the system works with all final mile carriers and can be easily integrated into current logistics networks and operations.

ClearJet services also include sorting packages for the correct destination and customer and applies to both domestic and international shipments.

Grip

Perishable shipping networks have been gaining in popularity due to the rise of meal kit delivery services. Cold chain, in particular, can be notoriously difficult to execute profitably and is more prone to issues than typical supply chains and shipping. Grip brings something different to the table. Labeled a “smart logistics engine,” Grip automates much of the shipping process by connecting ecommerce stores to 3PLs and carriers. Grip has created a dynamic logistics solution that assigns various shipping values, such as carrier, shipping service, warehouse location, box sizes, etc., based on current network conditions.

One of the most interesting capabilities of Grip is that it will automatically adapt and adjust itself to customer feedback in real time, effectively closing the logistics feedback loop holistically. Users can monitor KPIs and track delivery, transit times, and failure rates which, when combined with customer feedback, can be used to create a root cause analysis and effectively adjust and improve overall service levels.

Additionally, the Grip dashboard provides adverse weather event tracking and can keep customers informed in the event of delayed shipments. Grip successfully raised $2 million, pre-seed, in early 2022.

BlueTruck

Blue Truck offers a different take on logistics and final mile deliveries, specializing in large, bulky items like furniture, offering furniture sellers the opportunity to “have the same ability their peers selling parcel-sized items have” without the concern of the logistics necessary to sell furniture online. As most e-commerce brands can rely on parcel carriers, a managed logistics network that specializes in furniture is a niche market that will be rife with opportunity.

With a background in Uber as well as other tech companies, founders Peter and Johnathon Hsu have created a logistics network that has a built-in differentiator. What sets Blue Truck apart from the competition is that they focus more on the customer experience as part of the delivery service. The White Glove Delivery provides customers with enhanced communication from the driver as to the exact delivery time in addition to assembly and set of the new furniture in the customers’ home.

FetchGoat

Founded and backed by some legendary folks from the final mile space, FetchGoat is building technology tools and applications to support small final mile delivery providers in an effort to aggregate the capacity so desperately needed by today’s brands and 3PLs. Following the successes of players like OneRail and Grand Junction, the team at FetchGoat aims to arm mom and pop couriers with the most modern tech stack available today so even the smallest players can compete with regional and national couriers like Veho, FrontDoor Collective, Ontrac and more.

While FetchGoat is starting with the tech tools needed to run a courier business, eventually it plans to aggregate the small and midsized players its supporting, and offering that capacity to larger, more established players that need flexible, reliable capacity.

Financial Infrastructure

FinTech is already a cornerstone of the modern supply chain. So much so, that everytime a shipment travels in one direction, money travels in the opposite direction. In many instances, the speed of the supply chain is dependent not on the speed of the cargo carrier but on the speed at which they get paid. Add that to just how quickly things can change; take spot rates for example, and it’s easy to see why automated payment systems are going to be in high demand. Financial infrastructure has several possible venues, from lowering operating costs to reducing the number of people necessary to handle payments and invoice processing, all of which will play a vital role in streamlining the supply chain.

OpenEnvoy

If you’ve followed my previous predictions, it should come as no surprise that OpenEnvoy has made the list for a third consecutive year. OpenEnvoy allows companies to audit invoices before they are paid and is one of the only solutions on the market today that eliminates wasted spend without the need for expensive consultation services. The system audits invoices in real-time before the payment is issued, eliminating overpayment due to audit mistakes which are quite common. As a traditional audit process can take anywhere from 30 days to six months before producing actionable findings, OpenEnvoy’s real-time solution has been revolutionary in the industry.

Moreover, OpenEnvoy provides transparency into spend issues through a user-friendly dashboard that can be used to track metrics and invoice disputes as well as track the billing performance of individual service providers. To this day, OpenEnvoy remains one of the few cost-effective means of audit processing through an out-of-the-box solution instead of relying on a consulting firm.

“We created OpenEnvoy to address the fact that there wasn’t a fixed-cost, tech-first freight audit provider which provided white-glove service. OpenEnvoy was built out of a personal need, with each of the founding team members having been directly responsible for auditing billions of dollars in spend. The global pandemic created an acute awareness that finance departments lack the tools required to scale their operations, and invoices are an immediate opportunity to increase cash flows,” said Matt Tillman, founder, and CEO of OpenEnvoy.

Loop

Originally known as Quali, Loop is a payment infrastructure for logistics companies that utilizes technology to digitize contracts and other transactional documents, such as inspection tickets and bills of lading. Loop is designed to prevent errors and exceptions from happening and does so by organizing users’ data through an application programming interface (API) that meshes with several third-party service providers. Using that data, shipping invoices can be matched to payment agreements, allowing for precision cash flow tracking and real-time invoice audits.

Under the hood, Loop uses both AI and machine learning, but rather than using optical character recognition; it works via a combination of computer vision and a natural language processing system. All of that to say, the Loop system can be adapted to work with any template, making it universally applicable, regardless of the document type.

Co-founded by Matt McKinney and Shaosu Liu, both of which helped create Uber Freight, Loop raised a total of $6 million through seed funding and approximately $24 million through a Series A round. In its first year, Loop has handled over $1 billion worth of transactions.

OnRamp

Fuel cards aren’t new to the trucking industry, but OnRamp goes beyond providing just a fuel card service. The OnRamp solution helps trucking companies maintain expenses through digital, tax-compliant expenses solutions, which can help keep track of driver expenses and control overall spend. The fuel cards provide real-time security features in the event the card is lost or stolen for added peace of mind.

OnRamp also offers payroll services that streamline driver payments while providing flexibility on a case-by-case situation, which was designed with driver retention in mind. The biggest draw for OnRamp is that it is focused on drivers specifically, which isn’t typically common among most FreightTech companies. The team is comprised of some amazing technical talent, well established executives from the trucking industry (specifically fuel cards) and the CEO is from the credit card processing/payment space, making this group very special and uniquely positioned to make a difference in 2023 and beyond.

BuzzPay

Founded by supply chain veterans Scott Deerwester, Andrew Jillings, and CEO Mark Baines — the team at Buzzpay knows well the cash flow challenges that can be created by changing supply chains. Originally focusing on building digital tools to automate global trade for freight forwarder, the team at Buzzpay recently pivoted to trade finance because it was the single most attractive element of the platform they were building.

“All the forwarders cared about was cashflow and getting paid so we asked ourselves, why would be build anything else?” Baines comes from a supply chain and finance background while Deerwester and Jillings have both held several executive roles in global transportation companies like Tigers, BAX Global an UTI. This team of high powered founders is among the best I’ve seen and is a testament to the horsepower entering the logistics tech space over the past several years.

API Aggregation:

API aggregation is becoming a necessity rather than a nicety. It tends to be fairly common throughout the industry that companies are operating with a number of disparate systems, especially those that are still operating on legacy systems and dated ERPs. There are some new FreighTech startups that are helping bring a little cohesion to these systems and creating tools that allow for higher levels of functionality.

Axle API

Axle API is an interesting premise that is still in early access. Designed for the trucking industry to integrate and onboard electronic logging devices (ELDs), the Axle API allows developers to integrate telematics data from several different sources. Once coded, Axle will transform all data into a singular, unified schema.

In addition to the sandbox approach for development, users will have more options in how they choose to manipulate or utilize their data. Using the Axle system, developers can essentially create their own applications and create custom programs tailored to their company.

Newtrul

The ‘Expedia’ for load board searches, Newtrul aggregates spot loads from different sources, simplifying the process of booking loads and saving time for shippers, brokers, and carriers. Shippers and brokers can easily post and update loads and can choose to work with their preferred carriers or select a vetted carrier from Newtrul’s network. Carriers, on the other hand, benefit from avoiding deadhead miles and have wider access to available loads.

Newtrul was something of a pioneer in the digital freight marketplace as they were among the first to integrate its API with transportation management service providers, which eliminates the need for brokers and shippers to leave their TMS portal. Newtrul also has an excellent track record in its choice of partnerships, like McLeod Software in 2020 and MercuryGate in 2021.

In 2022, the company received another $5.3 million in funding.

“We are going to be investing heavily in the software that carrier reps and truckers used to find each other, and that will be ancillary to our marketplace,” said Newtrul CEO and co-founder Ed Stockman. “The marketplace is where the transactions happen — there’s a lot of free software that we can provide to both sides to make their lives easier, make communications easier, and those are the tools that we’re going to double down on.”

BlueX Trade

The BlueX API essentially allows carriers and freight forwarders to expand their business through an integrated ecommerce platform. By utilizing the API, carriers can create a user-friendly digital booking platform, making it as easy to book freight as it is to book a flight with a specific airline.

For freight forwarders, BlueX can create branded portals that allow the forwarders’ clients to browse through their carriers, rates, and available dates through an automated and digital platform. This hands-off approach to booking can expand service hours and provide a higher level of service to customers. Built-in analytics can help both carriers, and freight forwarders get a better insight into their customers.

BlueX has also simplified the payment process — a pain point for shippers operating internationally. The digital wallet allows for payments to be made to service providers around the world in a matter of minutes. BlueX also allows shippers some flexibility when it comes to paying for freight transportation. With the “Pay-it-Later” option, shippers can choose to delay a payment for a period of time for better cash flow management.

Port Terminal & Rail Depot Visibility

Visibility has long been touted as a cure-all for the logistics industry. While it might not fix every issue, better visibility could have a profound impact on the way freight moves, especially at ports and rail depots. Through the course of the pandemic, ports were inundated with containers which effectively clogged supply chains moving inland. Despite the relief in congestion in our ports and rail depots in America, many think (myself included) that these critical pieces of infrastructure represent the “final frontier” in visibility for North American transportation.

OpenTrack

OpenTrack is a port and rail visibility system that was designed to be integrated into existing tech stacks. As an all-in-one platform, the system combines all available carrier, terminal, third-party, and proprietary data sources, providing a complete view of international freight shipments.

OpenTrack covers 97% of all global shipments and is integrated with all major carriers, terminals, and railroads. Exception notifications can be set for shipments that provide ample warnings in the event of delays or stops in movements which can be used to prevent detention and demurrage charges.

Where this system is especially viable for intermodal shipments as freight can be tracked from the port to the railyard as containers make the journey inland.

Gnosis Freight

Rather than focusing on general shipments and freight, Gnosis instead focuses on container lifecycle management by labeling, tracking, and prioritizing containers from the initial load to the return of the empty equipment. In particular, Gnosis breaks the container down into three macro-cycles; booking, tracking, and scheduling. The Gnosis Freight platform is likewise broken down, with each macro-cycle specifically laid out for a holistic view of freight movement from start to finish.

The main draw of Gnosis Freight is the end-to-end visibility created within the supply chain. Gnosis supports intermodal transportation and has the capability to track rail and air freight in addition to containerized ocean freight.

Additionally, Gnosis Freight provides a suite of “bolt-on” options that increase functionality and utility, offering a range of services, including (but not limited to) ISF filing, invoice auditing, and cost optimization software.

Shipzzer

Shipzzer is an all-in-one solution for rail depot management. Railyards can manage every aspect of their depot through a singular dashboard and can benefit from a wide array of automated processes.

Automated report generation is of particular interest from this company. With 600 pre-generated reports, many rail depot processes can be streamlined and simplified, including repair tracking and scheduling and container entry/exit.

Shipzzer is one of the only platforms on the market that has a pay-per-use option, as opposed to a fixed cost or CAPEX, providing a little more flexibility for users in terms of cash flow management.

In summary, investors and venture capitalists are still making deals, but they are looking for systems that specialize in automating or enhancing technology that is already out there. While many of the supply chain disruptions from the past two years are still lingering, the dust is beginning to settle, and we are seeing the global supply chain being restructured towards resiliency and efficiency. As such, we will continue to see growth in these areas and plenty of opportunities for innovation.

2023 Freight & Supply Chain Technology Predictions — and the Startups Changing the Game was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

Reverse logistics is a vital market that is skyrocketing in importance due to the growth in ecommerce. For apparel and other categories, the return rates are as high as 30%. Cambridge Capital invested in ReverseLogix in order to help logistics firms, brands and retailers provide a better solution for reverse logistics. In this interview, Cambridge Capital CEO Benjamin Gordon interviews ReverseLogix CEO Gaurav Saran.

Gordon: The supply chain is a vast and complex industry. What influenced your focus on reverse logistics and specifically returns management?

Saran: When I was with Microsoft, I got an up-close look at how the supply chain works in high tech industries. That’s when I saw a huge gap that wasn’t being addressed: how to efficiently manage product returns.

Tell us more about that gap.

At the time, there wasn’t any sort of purpose-built platform for returns management. Most companies were piecing together a bunch of systems to handle their returns, but that wasn’t truly helpful or cost effective. And it didn’t give them any insight into their returns, such as trends around return reasons or strategies for reducing returns altogether. I saw an opportunity for a new type of supply chain technology that could address all of that.

You founded ReverseLogix, a company that offers a returns management system for B2B, B2C and hybrid enterprises. “Returns management system” is a relatively new solution in the mix of supply chain software.

When I founded ReverseLogix in 2014, there was no other tech platform that could manage product returns from start to finish. So we started on the journey of helping enterprises move returns management from a spreadsheet-based operations to an automated platform.

An RMS — returns management system — complements and completes the value of an OMS, WMS and TMS. It’s the final piece of the supply chain picture. An RMS integrates with other supply chain systems to orchestrate the entire returns journey and after-sales care management. Its two major functions are 1) managing the end-to-end returns process and 2) centralizing and analyzing returns-related data.

Tell us about the first function. There’s a lot that goes into returns processing and management. Does an RMS handle all of it?

From start to finish, an RMS manages everything that goes into a return. This includes returns processing, repairs, return-to-vendor, customer portals, returns merchandise authorization (RMA) initiation, and customer notifications.

What about returns data? What role does that play?

Managing product returns — a customer portal for initiation, team workflows, rules and policies at the facility — that’s the how of returns management. The data is the why behind it. With ReverseLogix, companies can finally understand the why of their returns, and pinpoint areas that are costly, or slow, or that may reveal a problem (like higher-than-average return rates for a certain item type).

Some companies hesitate on enterprise technology implementations because they can be long and disruptive. Can an RMS work around that?

One of the best things about an RMS is that implementation can be as fast as 4–6 weeks. We just had a customer tell us they saw an ROI within days of the go-live. We’ve had other customers report up to a 5% increase in profits and a 15–25% increase in customer satisfaction after streamlining and optimizing their returns. An RMS is quick to get up and running, quick to learn and quick to show results.

What are the trends driving companies to invest in returns management?

There are three major reasons companies are addressing returns management. I think of them as the three Cs: Cost, Customers and Carbon.

Let’s start with cost.

A ReverseLogix survey found that 80% of retailers said the cost of returns to their company is “significant to severe.” That echoes other studies that found not only are returns expensive, but a lot of companies don’t know what to do about that cost.

An RMS drives down expenses by providing standardized, digital workflows that speed up processing and reduce errors. For example, more than one ReverseLogix customer has doubled their return processing rate because of our automation and guided workflows. Managers can use the RMS to see the number of returns coming into a facility, and proactively staff up or down.

How important is customer satisfaction when making a return?

B2C and B2B customers alike expect an easy returns process. In practice, this could mean a really easy online portal or app to initiate a return and print a shipping label, and then automated communications about the return’s status. An RMS can handle all of that.

Customers also want choice about returning a product: Perhaps it’s returned in the mail, or in the store, or at a third-party drop-off location with a QR code. For the company, an RMS can track the efficiency and cost of those options, which is important for balancing customer ease with cost efficiency.

What’s the carbon angle?

Return volumes are impacting the planet — more transportation emissions, more packaging waste, and more products in the landfill. For companies that want to shrink their carbon footprint, supply chain sustainability is a major focus. Smarter returns management opens up a lot of opportunities; for example, rules in an RMS can reflect corporate priorities for recycling and repairing rather than landfilling. Data from the RMS can align return operations with greater corporate sustainability goals.

We’re just at the beginning of returns management technology, but what do you think the future holds?

For the most forward-thinking companies, sustainability efforts and carbon-reduction will continue to drive investments in RMS technology. RMS data will be used to track which return strategies work, which don’t, and what the cost is (both in hard dollars and from a sustainability perspective). I also think there will be a greater emphasis on avoiding returns in the first place, which companies can tackle using customer incentives and good data from their RMS. It’s all about doing right by the customers, the shareholders, and the planet.

Thank you Gaurav!

For more information on ReverseLogix, please visit here.

Spotlight on Reverse Logistics was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

This month, Cambridge Capital led a $56 million Series C investment in byrd, the leading digital e-commerce fulfillment provider in Europe and the UK. Startups across the globe are generating explosive growth and many entrepreneurs are considering their options for capital amidst a changing environment. We thought it might be helpful to share why we chose to invest in byrd and how we at Cambridge continue to apply a consistent framework when looking at investments in the supply chain sector.

It all starts with the Cambridge strategy, so let’s begin there.

The Cambridge Strategy

Cambridge Capital’s strategy is to build a concentrated portfolio of high-conviction investments in tech-enabled supply chain-focused businesses with staying power and outsized growth potential.

We begin with a set of key themes that we believe drive success in the supply chain market. These themes include e-commerce fulfilment, last-mile delivery, cross-border flow of goods and supply chain visibility. Companies in these categories have tailwinds that provide an instant catalyst for growth.

We then look to find entrepreneurs who are the best leaders, building strong companies with significant growth potential.

Our team then conducts due diligence to validate our thesis. A new investment is the product of months of hard work from many sides: the founding and executive team, the Cambridge investment and operating teams, and various advisors and third parties that helped both sides finalize the investment.

For some firms, when a new investment is completed, it may feel like the finish line. But at Cambridge, this is just the beginning of our journey with our new portfolio company partner. Once we close our investment, we then transition our focus to supporting our teams in achieving results for all stakeholders. Each situation is unique, so whether it’s assisting with key leadership hires, improving value-based selling practices, finding customers and partners, or helping with cross-portfolio collaboration, all of the Cambridge team is there to be of service.

Why We Chose byrd

So… how did we apply this thought process to our latest investment?

byrd, founded by Alex Leichter, Petra Dobrocka and Sebastian Mach, is the leading independent digital e-commerce fulfillment platform in Europe and the UK, enabling next-day e-commerce fulfillment via a network of approximately 25 warehouses in seven European countries and the UK. byrd uses its technology platform combining various OMS (Order Management Systems) with its proprietary WMS (Warehouse Management System) to connect more than 350 online retailers and D2C brands with fulfillment centers and shipping services across Europe.

The investment in byrd is an amalgamation of what we seek in every new portfolio company and a reminder as to why we continue to focus exclusively on where we can be the most impactful in supporting the amazing teams that we are fortunate enough to back.

In order to prioritize opportunities and ensure consistency of focus, we came up with a framework to hold ourselves accountable to benchmark new potential opportunities, with six pillars: Cambridge thematic fit, market tailwinds, capital efficiency, strong tech-enabled moat, top team, and the ability to create a Cambridge-influenced edge.

We believe companies that score high on all these attributes have the largest potential to become winners, and we make sure that we only focus on companies that have all six attributes.

How byrd Compared

byrd stacks up extremely well on all six of Cambridge’s key characteristics.

1. Cambridge Thematic Fit — byrd fits four of Cambridge’s currently published investment themes: e-commerce fulfilment, last-mile delivery, cross-border flow of goods and supply chain visibility. byrd’s cloud-based logistics solution allows retailers to optimize operations and unlock their growth potential on a global scale. By bringing online merchants closer to their customers, byrd helps merchants reduce delivery costs and shipping times. As a result, it helps retailers to turn fulfillment and shipping into a competitive advantage for e-commerce companies in the region.
2. Market Tailwinds — Cowen & Company estimates that the global e-commerce fulfillment market will reach $960 billion by 2025, which represents a 16% CAGR. As global parcel volumes and proliferation of e-commerce continue to rise, byrd is well-positioned to capitalize on this opportunity — particularly in a currently underserved market.
3. Capital Efficiency — Although byrd has previously raised venture capital, the company is extremely capital efficient. Gross profit-adjusted payback for customers has averaged just six months, and both customer count and average revenue per customer doubled over the last twelve months. Additionally, quarterly cohort dollar retention averages between 125–355% over the life of the business, and with a current focus on smaller customers, that is quite impressive.
4. Strong Tech-Enabled Moat — Many digital e-commerce fulfillment businesses in the US and Europe laud their technology, but we have found most were not as advanced as advertised once we took a closer look. byrd, on the other hand, has a full platform of applications already in the market, with both customers and partners praising it as the best technology they have used to-date to manage e-commerce orders and fulfillment (and in some cases asking byrd to sell them their technology separately for other parts of their business).
5. Top Team — The byrd team is simply best-in-class. Alex, co-founder and CEO, was a competitive rower and e-commerce entrepreneur in Europe who saw a huge opportunity to improve e-commerce fulfillment in a highly fragmented region with tremendous growth potential. Petra, co-founder and CCO, has a strong e-commerce sales and operational background in various European markets, and Sebastian, co-founder and CTO, is a brilliant software engineer with a compelling and achievable vision to continue to deepen byrd’s technology offerings to customers, partners and other stakeholders in e-commerce fulfillment.
6. Cambridge-Influenced Edge — Since byrd has achieved strong product-market fit, exciting growth and high retention with existing customers in a variety of geographies and industries, they are ready to continue to exponentially scale up their sales and marketing engine. byrd sells to SME+ e-commerce merchants, with customers and partners throughout all of Europe, and Cambridge has strong relationships with many additional potential customers and partners, especially those that attend our annual conference held every January.

For all these reasons, we are excited to invest in byrd, grateful for the opportunity to partner with a terrific company and founding team, and eager to help them accelerate into their next stage of growth. For any e-commerce merchants who are active in Europe or the UK, or who want to be more active in Europe or the UK, byrd is a great potential partner. Feel free to reach out to us at Cambridge Capital for a direct introduction.

Byrd: Why we Invested was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

2021 was the year “Supply Chain” entered the public lexicon. What can we expect in 2022?

A unique window into the future comes from the CEOs who lead the industry. We just completed the 16th annual BGSA Supply Chain conference, hosted by BGSA Holdings and Cambridge Capital. The event is by invitation-only and features over 300 CEOs across all areas of the supply chain sector. This year, I thought we would share highlights for the benefit of the many people who have become interested in transportation, logistics and technology.

A Representative List of Industry Speakers and Leaders

Here’s what many of the industry’s best and brightest are talking about!

2021 was the year the world discovered the importance of the supply chain. Some recent headlines illustrate this point:

• “The World Is Still Short of Everything. Get Used to It.” — New York Times
• “Big business bosses are warning that supply chain issues and inflation are here to stay” — CNBC
• “How a perfect storm of factors led to ‘the mother of all supply chain disruptions’” — Penn Today
• “Economists see supply constraints, labor shortages as bigger risks to economy than Covid-19” — Wall Street Journal

And from the outside, it appeared that the supply chain was broken. Ocean rates shot up from $3,000 to $20,000 per FEU. And congested ports drove delays, as China-US end-to-end transit time doubled from 40 to 80 days.

Table 1: Spiraling Ocean Rates, and Expanding Transit Times

Source: Flexport

In turn, shortages rippled through the economy. For instance, five of Ford’s top ten car models faced major delays. And GM’s CEO said the semiconductor shortage could cost GM $2 billion in lost earnings.

Given these challenges, you might expect supply chain companies to falter. Instead, they had a record 2021. What explains this surprise?

Let’s take a look at the data.

At BGSA, we track the BGSA Supply Chain Index, which is a basket of 60 companies across nine segments, including logistics, trucking, rail, supply chain technology, and all other related segments. In aggregate, the Supply Chain Index increased 28% in 2021. In addition, all nine segments produced a positive return.

The 2021 BGSA Supply Chain Index: Surge Led by LTL Software, Tech Distribution and Truckload

Source: Capital IQ, as of December 31, 2021

So how do we explain the fact that supply chain challenges have never been more evident, and yet supply chain companies are performing so well?

In sum, we see four key issues:

1. Capacity crunch and low-cost networks
2. Volatility surge
3. eCommerce
4. Innovation

First, we are in midst of a record shortage of capacity. The last 30 years reflect a steady decline in inventory-to-sales. As the FRED government data illustrates, inventory to sales is now at an all-time low. This is a function of the rise of “just-in-time” supply chain strategies. As companies have run on an increasingly lean basis, they have chopped out excess inventory.

This lean strategy saved the US consumer a tremendous amount of money. 40 years ago, supply chain expenses represented 15% of GDP. Today, that expense is just 7.4%. The savings all accrued to the consumer. But that benefit came with a risk: shortages. We are now confronting that challenge.

Table 2: Record-Low Inventory Levels, and Supply Chain Cost Savings

As capacity has tightened, asset-based companies have benefited.

The data reflects this thesis. Less-than-truckload companies as a category shot up 96% in value. Indeed, 3 of the 5 publicly-traded LTL carriers spiked over 100%, including Yellow (up 186%), ArcBest (up 178%), and TFI (up 119%). The number one overall performer was truckload carrier PAM, which grew 204%. And logistics companies with asset-based networks, like XPO Logistics, continued to surge as well. XPO added $11 billion, growing its enterprise value from $15 billion to $26 billion.

Second, we are witnessing a massive increase in supply chain volatility. From 2010 through 2020, freight rates consistently stayed within a fairly narrow range, typically not changing more than 10% per year. In 2021, we saw rates shoot upward rapidly and violently, reaching nearly 27%. These cost shocks rippled through the supply chain, delivering record profits to asset-based carriers while fueling 6.8% inflation.

Table 3: Supply Chain Volatility: Freight Rates in August Accelerated at the Fastest Level in 15 Years

Third, ecommerce growth is driving new logistics needs. Consumer behavior has shifted suddenly. As McKinsey and others have noted, COVID compressed 10 years of forecasted ecommerce penetration into 3 months. As a result, supply chains must adapt. The ecommerce boom has caused a surge in last-mile software, in-market real estate, reverse logistics, and supply chain visibility, among other key areas.

Table 4: Ecommerce Penetration as a Percentage of Retail Shot up from 15% to Nearly 35%

Fourth, the convergence of supply chain disruption and ecommerce growth has fueled a wave of innovation. Money is pouring into the supply chain sector. In the last 5 years, supply chain technology investment has shot up 4x, from $6 billion to $24 billion. And in the last year, the number of supply chain unicorns more than doubled, from 25 to 51!

Table 5: Supply Chain Technology Investment Quadrupled, Driving a More than 2x Increase in Unicorns this Year

Public market performance reflects this wave of software growth too. Supply chain software was the second-highest performing category in 2021, generating 60% growth. PFSweb and WiseTech increased 98% and 82%, respectively. And in the private markets, we saw even faster growth from many of the beneficiaries of the $24 billion of investment.

While investors were pouring capital into logistics, corporate acquirors stepped up their activity as well. In 2021, we saw record levels of M&A. These deals can be classified in five categories.

1. Consolidators looked to buy up competitors. For instance, LaserShip bought OnTrac to build a denser regional network for next-day delivery.
2. Ecommerce companies sought to move into logistics. Uber Freight acquired Transplace to combine transactional and contractual freight and data capabilities.
3. Logistics companies pursued deals to expand in ecommerce. Maersk, fueled by a record profit of $17 billion, purchased Visible SCM to build a parcel logistics network.
4. Infrastructure giants moved into services. The Port of Singapore Authority (PSA) bought BDP to create a global freight forwarding and logistics network. Meanwhile, DP World acquired Syncreon and Imperial Logistics.
5. Retailers took control of their supply chain. In one of the most innovative moves of the year, American Eagle Outfitters bought Quiet Logistics and Airterra. Will other retailers follow suit?

Table 6: Supply Chain M&A Markets at Record Levels

Perspective at Cambridge Capital

Our private equity firm, Cambridge Capital, specializes in the supply chain sector. At Cambridge Capital, we believe we are in the early innings of a transformation in high-growth digital supply chains. Some of the key themes we see include last-mile logistics, AI to automate supply chains, supply chain visibility, reverse logistics, and tech-enabled “man + machine” services. To illustrate these ideas, please see below.

Cambridge Capital Key Investment Themes

At Cambridge Capital, we believe in putting our money where our mouth is. We have made a series of investments in companies in these arenas. Here are four recent investments, along with the rationale:

• Bringg: for the B2C supply chain, last-mile delivery comprises 41% of total costs. In last-mile logistics SaaS, we believe Bringg is emerging as the market leader. We have backed them since 2016, have watched them scale up from a startup to the incumbent, and are pleased to welcome Insight Partners and others in backing one of the latest unicorns in logistics.
• ReverseLogix: as ecommerce increases, returns are shooting upward, since 30% of online purchases are returned. The reverse logistics market suffers from manual processes, a lack of visibility into returns data and metrics, and a poor customer experience. We believe ReverseLogix has built the first true end-to-end returns management system (RMS).
• Parcel Perform: ecommerce growth is also driving demand for supply chain visibility. Founded by DHL alumni, Parcel Perform understands the market gap in visibility, and is giving consumer brands and marketplaces a powerful tracking solution. We are proud to back them, along with Softbank.
• Everest: as freight markets continue to exhibit volatility, shippers need reliable and high-quality freight management companies. The Everest team has built a tech-enabled truck brokerage and logistics solution that is growing rapidly with blue-chip CPG companies.

We have a simple philosophy: back outstanding CEOs who are building top-quality businesses in all areas of the supply chain arena. Cambridge is willing to invest on a majority or minority basis, and focuses on $10-$50 million checks.

Cambridge Capital is currently seeking new investment opportunities, so please let us know if you would like to discuss how Cambridge may be a fit for your business.

In closing, we all learn and benefit from the collective wisdom of outstanding CEOs and industry leaders. If you would like to be a part of our community, we would welcome you. Please feel free to join us next year, on January 18–20, for our 17th annual conference. For an invitation, reach out to Jennifer@BGSA.com. And if you’d like to discuss strategic, financial, or deal ideas, we are always interested in learning more!

-Benjamin Gordon, Cambridge Capital

Supply Chain 2022: What to Expect? was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.

What we can expect in FreighTech, LogisticsTech, and SupplyChain Tech for 2022 and a few of the companies coming for their piece of the prize

Heading into the new year, I like to reflect on the emerging trends and innovations in FreighTech in the last year and share my predictions — what you can expect to hear more of in 2022. Read my 2021 predictions here: Top Trends in Supply Chain Technology for 2021 and the companies leading the way. 2020 here: Top Trends in Logistics Technology going into 2020 — How companies are keeping up with Uber, and 2019 predictions here: Top 4 areas of interest for 2019 & companies that are making the biggest impact — Hint — It’s all about keeping up with Amazon.

2021 was a year of high demand from investors to get in on FreightTech.

As of Q3 2021 for the third straight quarter, supply chain technology VC investment has exceeded $7 billion, up over 100% year over year, according to a recent report by Pitchbook. For pre-pandemic comparison, 2019 saw roughly $7 billion from Q1 and Q2 combined. This year has been characterized by higher valuations and larger checks, with the highest YOY growth from rounds in the late stage. We’re seeing new capital going after fewer mature companies to invest in, driving up demand.

2021 also had a theme of mergers and acquisitions in transportation and logistics. With this year’s fuel of cash enabling growth, one common strategy was putting it toward advancing supply chain visibility.

Then we had the continuing port congestion in US ports, particularly California, which had a moment getting mainstream attention this year, arguably much more attention than the supply chain issues of 2020.

It’s within this context — with some aspects of freight getting a mainstream spotlight plus a few niche aspects of FreightTech having their own industry spotlight — that we’re starting 2022.

I’ve chosen the following categories that I predict will be big areas of growth in FreightTech in the next year: computer vision AI, payments, capacity aggregation, TMS and OS, and eCommerce enablement.

Computer Vision AI

Computer vision (CV) is an area of artificial intelligence the freight industry is only beginning to explore. It has been estimated that the CV market in the U.S. will expand from $9.03B in 2021 to $95.08B by 2027. Anywhere we can take measurements or make decisions based on the visual world, there’s the possibility of using CV for that analysis and interpretation — in spaces such as warehouses, containers, trailers, roads, and curbsides and for objects such as boxes, dunnage, pallets, and more.

Voxel

A voxel is a three-dimensional pixel — the word volume plus pixel — typically used in imaging applications like medical imaging. Voxel is a startup that uses computer vision to identify risk from security video footage. They are dedicated to reducing workplace injuries and improving efficiency in retail, manufacturing, oil and gas, distribution, warehousing, and transportation. Voxel was founded a year ago, and in Q4 2021, they raised a $3 million seed round.

This AI-powered solution connects to a facility’s existing security camera system, unlike other risk prevention solutions which require wearables and sensors on the person or equipment. With Voxel, companies use their camera footage that otherwise goes unmonitored. Voxel analyzes footage in real-time to detect problems and create an immediate alert. It can detect high-risk employee activity and unsafe work conditions — for example missing hardhats, vests, glasses, or footwear, operating forklifts incorrectly, blocked aisles, ergonomics such as poor lifting form, incorrect loading or unloading procedures, spills, and hazardous objects.

The goal of the solution is to reduce workers’ compensation, general liability, and insurance costs. Voxel does not track personally identifiable information or connect the detected behavior to the individual employee. It’s meant to alert someone on-site of a potential problem, correct behavior in real-time, and create a safer and more efficient work environment.

curbFlow

As eCommerce and the delivery economy increases the number of parcel and on-demand delivery vehicles on the road, cities have a growing need for a smart solution for curb space. Drivers circling for parking and double parking can congest traffic. These drivers contend with parking tickets, wasted time, and the greater chance of mistakes made while rushing to avoid a ticket. The problem is more complex than a parking spot management system; until now, curb space data has rarely been recorded, but it holds a wealth of information.

CurbFlow, headquartered in San Francisco, most recently raised $8 million in a seed round of funding in 2018. They have created their computer vision platform that turns video into data — counting vehicles or pedestrians, measuring wait times, and creating heatmaps according to usage. Delivery drivers can use the visualization tool curbMap to get a real-time reading of the availability of popular curb locations. With the positive results curbFlow has quickly seen — helping to reduce double parking in Washington DC by 64% (https://ddot.dc.gov/release/ddot-curbflow-research-project-finds-high-demand-pickup-dropoff-zones) — curb management is getting attention from other congested cities, (https://www.phillyvoice.com/philly-high-tech-solution-delivery-trucks-traffic-parking-streets/) and curbFlow will be making big impacts in the future.

Rabot

Rabot is using video to build smart tools for fulfillment warehouses’ pack-out processes, the final step before packages are ready to be sent out. CEO Channa Ranatunga is committed to avoiding the common problem that plagues engineers — being so far removed from the end-user that the solution is less than ideal or introduces new inefficiencies. To prevent this, he spent three months working at a handful of fulfillment centers to learn everything he could about the pack station and the issues that workers experience.

Rabot designs robotics and software to help standardize the pack station, with the goals of reducing inefficiencies and errors, minimizing waste, and enabling transparency in the process that is often missing. Their solutions can help reduce the number of touches on a package or use visuals to measure the empty volume of a box and automatically determine the right amount of dunnage to use. With video data, Rabot uses AI for visual recognition to identify areas for improvement. Rabot, founded in 2018, had a pre-seed round of funding this year and raised $100K, and the company’s innovative usage of CV technology gives them the potential for growth in 2022.

Payments

Payers and payees of all kinds are demanding faster and cheaper methods of sending and receiving money, and the flames have been fanned by cryptocurrency and blockchain technology rewriting the rules for what’s possible. Various aspects of payments in freight are now getting their overhauls, from shipper payments to short-pay disputes to factoring.

BasicBlock

BasicBlock was created to make freight factoring easier for trucking companies, inspired by Bitcoin and the ease of use for sending and receiving payments without a days-long delay. The goal is to solve the factoring problems of even the small carriers and brokers. Traditionally, the factoring process requires time and resources for manual invoicing, involves clunky interfaces, and lacks transparency on the payment histories of shippers and brokers. Smaller companies, those with a smaller cash flow as it is, find themselves with factoring limits and other barriers to getting paid quickly and seamlessly. BasicBlock is working to revolutionize the entire factoring process, making it simple and fast, without hefty fees. Their app is designed from start to finish for the convenience of the truck driver.

BasicBlock was founded in Omaha, Nebraska in 2018, when CEO and founder Taylor Monks learned about the cash flow difficulties that small carriers experience. New, contactless processes that came with the start of COVID have made it even more important for carriers to have streamlined, automated payments with document retrieval. BasicBlock raised $820K in its most recent round of funding in March 2021.

OpenEnvoy

Founded in 2020 and reporting an impressive 3568% growth in 2021, OpenEnvoy is changing the way companies approach the accounts payable process and wasted spend. Typically, companies address AP automation with pricey consulting services. OpenEnvoy’s solution makes real-time automation easy and accessible, allowing companies to audit invoices before any payment is made and preventing overpaying suppliers due to mistakes. They offer the first of this type of solution made for freight audit. Shippers can avoid a delayed process for identifying payment errors, which might require multiple rounds of audits taking 30 days to six months before getting actionable findings. OpenEnvoy, on the other hand, works in real-time.

OpenEnvoy is the only AP solution that specifically helps companies eliminate wasted spend. Spend Insights gives transparency to spend issues through an easy-to-deploy dashboard to track metrics and disputes and show the billing performance of individual providers. OpenEnvoy brings essential analytics for a better-informed process that enables finance teams to scale their operations. In April 2021, they raised $6.5 million in a seed round. (https://www.prnewswire.com/news-releases/openenvoy-announces-6-5m-oversubscribed-seed-round-led-by-riot-ventures-to-capture-the-500b-financial-audit-market-opportunity-301267512.html)

Freightpay

Freightpay, headquartered in Los Angeles, is an early-stage startup that found its mission from the reported $140 billion that is disputed between shippers and BCOs and freight forwarders each year. The solution’s usability makes it likely to gain traction in 2022.

Freightpay’s solution handles accounts receivable and payable for forwarders and 3PLs by enabling automatic freight payments from shipping customers within their platform. The idea is to have an all-in-one place for transactions and payment data. Freight forwarders can request payments, either from the platform or simply by submitting an emailed form, and shippers can pay from the same solution with the link they receive. By simplifying this process, forwarders avoid chasing lost payments made with other payment processors. Users can create workflows to manage payments and reminders. Freightpay connects invoices to payments and manages the data analytics of those payments, including payment methods, payment intervals, and any short pay reasons from their customers. The solution helps forwarders and 3PLs save time, manage disputes, and gain access to data insights from these transactions.

Capacity Aggregation

Data analytics is driving a deeper understanding of inefficiencies and improvements that companies can make on their transportation spend. As a result, capacity aggregation is becoming increasingly an important strategy. It’s the reason for the surge in mergers and acquisitions this year. For the 12 months before November 15, 2021, there has been an 11% increase in the volume of M&As in transportation and logistics compared to the full-year 2020. (https://www.pwc.com/us/en/industries/transportation-logistics/deals-insights.html) These companies involved in M&A are responding by improving their reach, while the following three FreightTech companies are using technology to strategically pull capacity where it’s needed.

Newtrul

Newtrul is an aggregator of spot loads from different sources, essentially an “Expedia” for load board searches. They simplify the process of connecting shippers, brokers, and carriers while making it a better matching process that saves its users time. Shippers and brokers get a simple way to quickly post and update loads and can utilize their preferred carriers or expand to Newtrul’s network of vetted carriers. For carriers, the solution helps them avoid dead-ends that are common with load boards.

Newtrul, founded in 2018, was one of the first digital freight marketplaces to integrate their API with leading TMS providers, which eliminated the need for shippers and brokers to leave the TMS when trying to find capacity. Carriers get a free and easy-to-use search engine and booking tool. In 2020, Newtrul began working with McLeod Software, (https://www.prnewswire.com/news-releases/newtrul-announces-integration-partnership-with-mcleod-software-a-leading-transportation-management-system-provider-301185263.html) and in 2021, Newtrul announced their partnership with MerguryGate TMS. It is key moves like these that prove the growth Newtrul is headed for in the near future. In early 2021, Newtrul raised $2.25 million in seed funding.

Colony Freight

Colony Freight has been around only a few months, since June 2021, but they already have the right strategy in action to bring reliable and quality service to their customers. They are an LTL freight partner out of New York City providing capacity in the surrounding states and Texas. More specifically, they are a network of carriers and cross docks designed to optimize capacity for LTL shipping, as powered by their platform. With this type of network, their customers get the benefits of competitive rates with a high quality of service from their carriers. Colony Freight also maintains transparency throughout the shipping process, providing real-time tracking and notifications.

On the other side of the freight transaction — carriers — Colony Freight stands out for their relationships with their carriers. They assist new entities with creating and growing a business as a carrier, taking care of paperwork and insurance through their own partnerships. They also offer a financing program for carriers to get running quickly with a new truck plus the opportunity for carriers to get consistent work. By helping new carriers get started, Colony Freight is creating a strong network for the benefit of their shipping customers. Much like Uber brought new car drivers to the taxi space, Colony is arming a new generation of over the road truck drivers with their focus on e-commerce rich, middle mile lanes. Colony has been able to find drivers operating in other areas (food and people delivery mostly) and entice those drivers towards box truck and sprinter van businesses, giving Colony first crack at engaging and hiring new truck drivers who are eager to grow their empires beyond a single vehicle. This strategy is unique and has already proven valuable for Colony who has attracted blue chip customers from the ecommerce and freight forwarding industries.

Pelicargo

Pelicargo is a digital booking platform for air cargo that launched in late 2021 with origins in the MIT MBA program. Pelicargo helps match shippers and brokers with cargo capacity on airplanes. The same idea is used in trucking but had not previously been applied toward air freight, a $130 billion market where wasted available space is a common occurrence on cargo planes. Air freight is already significantly less efficient compared to other methods of shipping, in terms of fuel and other resources. Having the solution to match loads with capacity can cut back on waste, which has proven to be even more important since the start of the pandemic. Many small and medium-sized companies have difficulty securing capacity that is reserved for the biggest logistics companies first. Pelicargo helps smaller companies access capacity and provides rate transparency in the process, bringing an end-to-end digital solution to replace the outdated and time-intensive booking processes for air freight.

Pelicargo is currently in the pre-seed stage of fundraising and has begun testing with pilot customers as of the fall of 2021.

TMS / OS

As FreightTech innovations grow, there is more of a demand to design systems and platforms that are native to these new developments, that were designed for the technology in its current context. There are new, deep-diving systems designed for advanced capabilities while valuing simplicity for its users, and there are also new systems tackling wide, overarching needs for supply chain technology.

EvenFlow

EvenFlow is a demand-driven communications platform that eliminates age-old friction points between shippers, carriers, and other supply chain partners — in procurement, accountability, risk management, and loyalty. For many organizations, it’s taken the pandemic for them to realize their archaic planning and purchasing processes haven’t been able to keep up with changing demands, and these companies are only now establishing digital customer portals. The growing problem is, with a different tech stack for every supply chain partner, who has the time to become an expert in everyone else’s technology? EvenFlow answers by providing interoperable performance and resilience, leveraging standard intelligence streams to the leading ERPs, TMSs, and SCMs. They have a round table of industry leaders in retail, manufacturing, and transportation building a solution to break down old barriers and accelerate collaboration.

EvenFlow is currently an early-stage startup led by Joe Hudicka, who brings experience in global supply chain and logistics, ranging from the U.S. Department of Defense and later supporting Oracle as eCommerce was just beginning, helping the first online toy retailer navigate global direct-to-consumer delivery. He brings ambitious plans for EvenFlow, making it a company to watch in 2022.

Leverage AI

Leverage AI was founded in 2018 and came out of stealth in 2021, positioning itself as the modernized supply chain control tower, delivering previously unattainable end-to-end purchase order visibility for companies.

Leverage eliminates the need to manually follow up with suppliers and freight forwarders to get purchase order status updates by automatically collecting those updates for every line item in real-time.

Leverage caters to companies that operate with a revenue-driven necessity for strategic supply chain management. Through AI-powered automation and white glove integrations with customers’ existing systems, the cloud-based platform covers an extensive number of workflows from purchase order lifecycle management, inventory visibility, shipment tracking, delivery status updates on bills of material and sales, supplier performance automation, and more.

Prior to using Leverage, supply chain and sourcing teams were spending an average of 50% of their time manually following up with suppliers and freight forwarders. With Leverage, they were able to eliminate repetitive manual tasks from their workload, spend their time far more strategically, and their companies reported an average of 7x ROI in the first year after implementing the platform.

Leverage is funded by a handful of well-known investors, including Mark Cuban Companies. The most recent funding was from a seed round in 2021, for a total of more than $4million in funding.

iON SupplyChain

iON was created in 2018 to increase supply chain visibility and help resolve blind spots for small and medium-sized businesses. Typically, a business can expect visibility and tracking to begin once their goods are shipped, not any earlier. iON is the first supply chain company addressing visibility within the factory. There are production-line level tools that provide this information, but these are rarely utilized due to their complexity to integrate with. iON takes care of these integrations and provides a tool for monitoring the details of production and shipping. The result is a resource for every piece of the business’ network, from suppliers to customers, which helps reduce the chance of unexpected delays and reduce costs.

iON was founded by industry leaders with over 50 years of combined experience managing multinational supply chains. Their cloud-based visibility platform provides digital order records for easy management, a transparency dashboard for real-time reports, and interactive checklists to eliminate inefficiencies and errors.

eCommerce Enablement

eCommerce is on everyone’s radar in 2022, as it has been since the start of the pandemic. According to Adobe, U.S. eCommerce spending in 2021 will land between $850 billion and $930 billion. In 2022, that number could exceed $1 trillion. For a recap on the eCommerce growth since 2020, that year saw 42% growth compared to 2019. For 2019 compared to 2018, it was a much more standard 14% increase. Retailers are looking to meet the eCommerce demand and the accompanying consumer expectations for shipping, and these FreightTech companies are looking to help them get there.

QuikReturn

Founded in January 2021, QuikReturn helps retailers manage reverse logistics for their local customers in the NYC Metropolitan area. They tackle what is typically a logistical nightmare, offering an end-to-end, streamlined return service. QuikReturn provides a courier service to pick up items for return on behalf of the customer. They aggregate these items to ship in bulk, which saves on shipping costs, reduces the number of trucks arriving at retailers’ warehouses, and allows retailers to more easily batch their returns processing. Retailers can see a decrease in shipping costs by over 30%, and this has the added benefit of reducing carbon emissions caused by inefficient freight usage.

Founder and CEO Ethan Susser created QuikReturn from his own frustrations with the traditional return process and out of a concern for environmental issues that wasteful returns contribute to. The QuikReturn solution integrates with eCommerce retailers’ websites, to provide a frictionless experience for the customer where they don’t have to contend with printing labels and remembering to drop off items for shipping. QuikReturn has raised $395K in funding so far, in a pre-seed round in July 2021.

FlavorCloud

Seattle-based startup FlavorCloud is a cross-border carrier network with worldwide shipping to over 220 countries. The traditional international shipping process has been riddled with complexities for global direct-to-consumer brands, where they have faced a high-cost and fragmented process to deal with any aspect of global trade, tariffs, customs, and their carrier network. Founders at FlavorCloud saw a need for streamlining this process from start to finish. They bring tracking and visibility, frictionless operations through automation and integrations, and optimization for every stage of transportation. When users need to estimate their landed costs, FlavorCloud helps calculate with 99.9% accuracy. As a result of the solution, the average user sees an international cart conversation rate of 11%, an increase of 80% on average, and a 140% year-over-year increase in sales.

FlavorCloud, founded in 2017, just announced they hired their first chief revenue officer, Mike Sanchez, and they plan to double their employee count by the end of 2022. Their recent growth looks promising, and they have the benefit of the explosion of eCommerce in the last year and a half working for them. Earlier this year, FlavorCloud raised $6.3 million Series A funding, for more than $10.1 million in total funding.

ShipHawk

ShipHawk was founded to solve shipping problems for ERP-connected, high-volume retail, wholesale, and eCommerce companies whose needs don’t fit basic shipping options. For many retailers, shipping is the second largest cost after the cost of goods, and yet ShipHawk cofounder and CEO Jeremy Bodenhamer realized many retailers, especially those shipping large items with unique requirements, had no way of knowing their shipping costs in advance. ShipHawk created an all-in-one platform for shipping parcel, LTL, truckload, and home delivery to help retailers by taking care of the manual processes involved in managing shipping. They reduce shipping costs, errors, and time by automatically finding the right carrier and service, including comparing rates. Their automation extends to optimizing packing decisions and eliminating manual warehouse processes.

ShipHawk has secured $37.5 million in funding over seven rounds since its start in 2012. They recently brought in supply chain technology veteran Ron Riggins as CTO, announced December 2021. A funding round earlier this year raised $17 million, to be used for further developments of the platform and ERP and carrier integrations to support customers’ eCommerce needs for greater throughput.

In summary, 2022 will bring with it some new challenges and opportunities but will be very similar to 2021 in that, consumer demand will remain strong, keeping capacity tight and shipping rates high. These factors, along with low-cost capital, signal another banner year for FreightTech, LogisticsTech, and SupplyChainTech companies. There has never been a better time to launch a business in these categories and the world has never needed solutions more than it does now.

Cheers to another year and another batch of top-tier founders making their mark on the world’s most interesting and opportunity-rich industry!

What we can expect in FreighTech, LogisticsTech, and SupplyChain Tech for 2022 and a few of the… was originally published in Supply Chains on Medium, where people are continuing the conversation by highlighting and responding to this story.