TradeLink CEO Frederic Krahforst talks warehouse efficiency and company goals
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Digitalisation continues to make its mark on the world of logistics, with companies large and small creating a myriad of solutions to foster efficiency in the sector. Warehousing is no exception, and one startup whose digital solution is gaining attention is TradeLink, founded by Frederic Krahforst, Tobias Nendel and Prof. Dr. Michael Bücker.
The company claims to offer “the simplest and most effective form of delivery coordination around your warehouse”. Given the individuals in the sector who have invested in the company, such as sennder CEO David Nothacker, there’s clearly a sense that TradeLink is onto something.
Keen to learn more about the conception of TradeLink, its unique way of working remotely, the manner in which its system is cutting RDC waits for hauliers, and the next steps the startup is about to embark on, we caught up with CEO and co-founder Frederic Krahforst.
Thanks for taking the time to talk to Trans.INFO, Frederic. TradeLink is a rather new company, having been founded as recently as February 2020. The co-founders don’t come from the industry, but are said to love solving the day-to-day challenges of people in logistics. There are nonetheless many of these day-to-day logistics challenges to be solved, so what was the motivation for focusing on warehouse operations?
Back when we started, Tobias and myself talked to a lot of logistics stakeholders, and their pragmatism really struck a chord. We didn’t understand why collaboration between many parties is still so complex given technological advancements. In B2C we communicate and collaborate completely differently compared to 50 years ago, yet some logistics companies still use a lot of outdated and complex tools.
We thought to ourselves that Europe and North America are shipping € 107 trillion worth of goods across b2b supply chains. At the same time, most of the coordination is still being done in a completely unstructured manner. Manually, by email, telephone or fax.
We had this intuition that this will obviously change and that there would need to be some form of collaboration layer where people work, and companies meet to align, increasingly automate, and optimise.
That was our first hunch, and so we wanted to go in this direction. Then we started talking to people in logistics, as we thought logistics is the best place to start for supply chain collaboration.
If we look at warehouses in particular, they are already the most connected pieces of the supply chain. Warehouses are seen to aggregate everything that goes in and out, while they are also hubs. Moreover, within them, you have people who are already highly connected across the supply chain.
Another factor was that Tobias had some initial insight from his experience founding an ecommerce company, Outfittery. He was especially aware of the challenges faced in a warehouse. In warehousing, you’re acting at the end of the information food chain, if you like. So everything is happening in purchasing and across the supply chain. At some point, logistics needs to handle it.
Next, as we started talking to even more people, we realised that many individuals have little interest in hearing about end-to-end supply chains or a Control Tower. They just want the problems they are suffering from right now solved.
That’s what was really motivating for us, so we started work on our digital solution for warehouses.
TradeLink is described as having 100% remote workforce who work on a ‘remote-first’ basis. Post-covid, such a concept does not seem anything out of the ordinary. However, I’ve seen that you have taken somewhat novel steps to enhance the remote working experience by creating a ‘virtual office’ using a service named Gather. How has this shaped the working environment for yourself and your staff and helped to better facilitate a team atmosphere compared to standard remote working practices?
Yeah, Gather kind of looks like the old Zelda platform games some of us may have played in the past.
With the 2D map, everyone has their own little area. Then on the map there are meeting rooms that I and others can join. I simply move my character into the room and the video conferencing platform pops up.
It helps to create a place of belonging where you see people are working with you on the same journey. It’s more than just face time because you see that people are working with you towards the same goal.
Meetings can happen incidentally too, just like when you might ask someone to have a coffee and a chat in a real office. I might be working in the evening for example, and an employee might just come over and say, hey there, I just want to have a chat with you.
This is something you typically don’t have in a remote company. For example, new starting interns are unlikely to schedule a video meeting just to say “hi”.
In Gather, it’s like in a real office, where especially around offtimes, you can simply come by and chat. This is the kind of physical office atmosphere we’ve tried to recreate in the virtual, remote world. We still want to have those accidental meetings and the feeling that you’re in a group and working towards one goal.
That’s why we took it upon ourselves to work in this way. It has changed a lot for us. We still need personal relationships though, so we organise offsite gatherings twice a year. They allow everyone to get together, and then we make up for all the missed parties.
It’s certainly an interesting concept. Some say the best and most productive meetings in business are those incidental ones in the cafeteria, corridor or by the water cooler. I take it you felt it important that such meetings can still happen despite you working all remotely?
I think that’s right. Also, when working remotely, we realised a lot of the exchange you need to make more explicit. So for example, our interactions with the entire company are more frequent than you would have otherwise.
Every Monday, the entire company and every team member gets an update about who is doing what and what’s going on, and there’s quite a lot happening every week, right. It’s important to have everyone see everyone.
Every morning, there’s also a shared routine where someone goes through the company KPIs and broadcasts them to the team. As everyone is doing the same thing at the same time, that fosters more and more togetherness.
Finally, on Friday, we have a checkout session too. It’s a half-hour meeting where people just share their learnings with the entire company. So I think you need to nudge people a little bit more than in the offline world to make these things part of their routine.
Besides receiving investment from well-known American venture capital company Insight Partners, it’s also notable that you have received investment from the likes of Alexander Doll, David Nothacker and Stefan Kniewasser, all of whom are in or have held major positions in the logistics industry. Does this give you more faith in what you are doing, and to what extent can you turn to those individuals for insight and advice?
Yes, even if you talk to customers every day, it’s still invaluable to be able to consult some people who’ve spent decades in the industry. It’s super valuable for us to draw on that experience, as well as their introductions of course.
We have used that quite a bit, to be able to review where we’re going, and discuss how we think about certain things. Particularly when we started, as nowadays we have a good idea of where we’re going.
Before we started, when we just had this idea that we might be onto something really useful, Stefan would be able to tell us what he’s seen, where there’s room for improvement and how he can help.
This was huge at the time. It gave us a lot of confidence that someone who has been successful in the sector was saying he understood how we saw things. Nowadays, the discussions have evolved and are more about strategy.
It is said that your target market is those companies that handle physical goods and are run by “pragmatic logistics leaders,” which are often found in the mid-market across commerce, contract logistics, and production companies across verticals. To what extent do you see TradeLink widening its target market in the future, and what kind of clients could you be reaching out to in the future as the business grows?
I think it’s also important to note here that the enterprise customers we have today are pragmatic deciders too.
When we say pragmatic and mid-market, we’re generally not thinking of people who are not mulling over big, multiple-year IT projects. We are rather talking of those who have something that makes sense on paper and want to prove it works. Then we can try and roll out their plan right away.
This is the sort of spirit that we work with. We’re more than happy to do this in enterprise as well. Indeed, it’s important to stress that we already do that.
We’ve been working on implementing all required functions for an automated/fully integrated system. The first version of a public API is going live this week, which will boost our ability to serve enterprise customers.
I notice that in one of the case studies on your website, waiting times at the RDCs for the Swiss supermarket chain Denner were reduced by 70% thanks to TradeLink. This is an interesting development as there is growing scrutiny from hauliers regarding waiting times at these facilities. Indeed, there are even fines now in Spain for delays longer than an one hour. Could you perhaps explain some of the practicalities here regarding how your system reduced waiting times?
In Germany we also have the regulation that you should be compensated if you have to wait too long. It’s not always enforced though. This was especially true in the past, because a lot of the process wasn’t transparent and transport companies didn’t have the strongest negotiating power with their customers. However, this is changing quite drastically now due to the driver shortage.
We see increasingly that transport companies are simply refusing to drive to warehouses or locations where it’s a mess. They’re just not going there anymore. That changes the equation a lot more than just the impact of fines.
It means you’re not getting your supplies, which is itself quite a dramatic situation. This is at least beneficial for the drivers, because they’ve had to carry most of the weight. It is also a positive development to see there being more pressure to improve operations.
Solving the problem is actually rather easy. In theory, you should have a warehouse that has enough capacity to unload and you just need to orchestrate and align on a good time for both parties. This is what we call the collaboration piece.
It’s important to make sure that when you do that, that both people feel it’s not a one sided commitment. It needs to be a mutual commitment whereby the carrier aligns on the arrival time. At the same time, the warehouse must make sure that if the carrier arrives around that time, there is sufficient capacity.
That’s the sort of the collaboration that we try to foster – one that’s not one-sided.
TradeLink is said to enable quick and easy recommendations for action for staff at the ramp and warehouse. How does your technology determine such recommendations?
The system gives you an overview of all the processes and relevant info – what kind of truck, how many packages there are and the reference number. You’ve also got the status, who’s involved – the carrier and supplier. You have the delivery notes too. That’s just the basics of course.
This is all going towards the direction of a digital paperless transaction. You can pull everything up at the gate, and you have the full history of what happened and who was involved.
Essentially, TradeLink is sort of a digital twin of your warehouse; it already knows what kind of processes you can do and at what dock. It knows how much capacity you have, as well as the opening hours and the operating hours, it knows how fast you can unload certain load times at what doc, it also knows your overall limits, for example, for certain load units.
So that’s why we call this a ‘digital twin’ and that’s the first step is a lot of the decisions you typically have to make. If you don’t have that during the day, you don’t have to any longer because the system just manages your capacity and what you can do or cannot do.
The system also prevents human error in that when someone accidentally tries to book a vehicle into a bay that doesn’t support it, the booking is denied.
Then you can go into the analytics section, which shows you recommendations when it comes to your partner management. It points out which of your partners are using the system or not, and suggests who you should talk to so as to optimise collaboration with those partners.
What future technological developments do you believe will give TradeLink and other digital logistics players the means to genuinely bring about more significant efficiency improvements?
I think the best way to answer this is to differentiate between organisational efficiencies and technological efficiencies.
Technological efficiencies come from technical advancements that bring about a paradigm shift in our effectiveness. I think most of the effectiveness or efficiencies we can get via technology has already been developed. There are a couple of ones that are still relatively unknown to us, like autonomous trucks, where we still need to make a big technological leap.
However, the rest is pretty much developed. We have the internet, we have the cloud, and we know how it all works. If the RFID chips are already very cheap, they will get cheaper. So most of that is developed.
Now, the biggest barrier for me is the drive towards making more organisational efficiencies. I think the single largest opportunity here is better supply chain collaboration. The only reason we don’t have a higher amount of technology adopted right now is because it’s always dependent on your partners sharing infrastructure with you. It’s pretty much always been the case.
If we want to get rid of paper, if we want to use IoT across the board, if we want to have our smart containers, if you want to know the ETA, it is all technologically no problem. We nonetheless need to align our partners to one communication standard in order for all of that to be effective. So for me, this is the largest opportunity to be made right now.
It’s what we want to drive forward. On top of that, there’s also room to be a lot more effective at applying IoT and sharing data among other things.
At the beginning of the year, when talking about 2022 ambitions, you mentioned ERP interfaces, simplification of collaboration and communication with supply partners, and enhanced user management. You also talked about focusing even more intensively on building a common brand that gives logistics and your partners the opportunity to shine. As we enter the last quarter of the year, to what extent do you feel you will have met these ambitions by the end of 2022?
Well, our API just went live. We’re currently implementing this with our first customers. So that’s great and was a huge step. The user management and capacity management have been delivered as well, and we released our check-in terminal for immediate driver check-in.
So as far as products are concerned, we’ve been extremely successful and I’m very happy with our progress.
The next step is the communication area that you just mentioned. That likely won’t be ready in 2022, but we’ll see.
As regards building our brand, we’ve made some leaps. That said, we’re not nearly where we want to be. So that’s one of the areas where I wouldn’t give us top marks just yet. We still have four months to go before the end of the year though. So let’s see what we can do about that.
Looking towards the future and the following year, what are your main goals?
I think what we want to see is for customers to benefit even more from companies that are already using TradeLink. So they might ask others to work with them using TradeLink. But we want to make that better on both sides of the equation.
So I’d say benefiting more from putting the network into action for sure. That, and getting rid of paper, those are our big two goals.
So let’s see where 2023 takes us with regards to that.