Supply Chain Visibility player Shippeo recently unveiled its Transportation Process Automation™ (TPA™), which the company believes is set to “transform automation in supply chain management”. The product announcement was made at the recent Supply Chain Symposium/Xpo™ 2023 conference in Barcelona, and follows the release of Gartner’s 2023 Quadrant for Real-Time Transportation Visibility Platforms, in which Shippeo were among the top 3 leading players.
These developments come at a time when the visibility sector is evolving at pace amidst a more cautious investment market sparked by economic downturns in key western markets.
To discuss these current events and more, we sat down with Lucien Besse, COO and co-founder of Shippeo.
Read on to find out:
- How Shippeo’s TPA vision came about
- Why Shippeo believes TPA will transform the market
- Lucien’s thoughts on Gartner’s Quadrant for Real-Time Transportation Visibility Platforms
- How Shippeo is run with respect to its employees, investors and customers
- How Lucien sees the visibility space evolving in the future
Thanks for taking the time to talk to us, Lucien. First off, what is the purpose of Transportation Process Automation, and why did Shippeo decide to go down this path?
Since our company was created eight years ago, we have aimed to provide the best level of visibility for our customers. That has always been our focus – making sure that our customers get real value from the visibility solutions that we provide to them.
We quickly established that data quality is key. Moreover, as the market evolves, we increasingly hear from organizations using visibility solutions that they want to get even more value out of them.
This is for two reasons. First and foremost, it’s sometimes hard for them to get accurate data. It may be that the ETA is a little inaccurate at times, or the tracking quality is not great. So it’s hard for them to really reap benefits from that, and this is of course, concerning for us to hear that this perception exists for some in the market.
And the second thing is that, even if they have good visibility, sometimes they don’t really know what to do with it. I now have my container or truck showing on the map, but what happens next? What should I do with it? We have been hearing these two concerns for a few years now.
So, given this, at Shippeo we have really focused on reaching the highest level of data quality. That means having complete data and accurate predictions, and having the highest level of tracking for customers. And if you read the latest Gartner Quadrant, you will see that one of the key things they mention about us is data quality.
We think it is so integral to a visibility solution, that we address it in a very transparent way within our contracts. We have customer SLAs committing to tracking quality, ETA accuracy, and onboarding. It’s unique for a vendor to contractually commit to ETA accuracy. We can do this because we are confident we can deliver on our predictions. This is something that we genuinely believe we do very well.
We believe we have a good situation in terms of data quality, even if it is a never ending story and you always have to improve your algorithm and make sure that you are best in class.
Then, the next issue to move onto is how to make this information that our customers are using really actionable for them.
Actionable means once I see that I have a delay or another disruption, what should I do about it? And customers usually expect the visibility vendor to give them some insights on how they should respond, beyond just telling them that the truck or container will be late. This is something we started to think about some years ago, especially when Anand [Chief Product Officer] joined.
We’ve come up with an innovation that we call TPA: transportation process automation. We believe it will completely change the face of the market and we are already deploying the solution with some customers.
We believe that the visibility market needs to evolve to bring more benefit to the customer in terms of data quality and in terms of making the information actionable.
What did you make of the Gartner Quadrant findings? When we look at the ‘strengths’ attributed to Shippeo, things like product and customer satisfaction were mentioned. On the other hand, the ‘cautions’ concerned aspects like brand awareness and sales. What are your thoughts on the analysis?
I’m happy with everything we have from Gartner, but to be frank, I think the position we have in the quadrant does not really reflect what was stated in the strengths and cautions.
At the end of the day, what you need to do is judge the quality of the product and the quality of delivery for customers. This is what matters. When I read those strengths, I couldn’t be happier; the strengths are product implementations, data quality solutions, and customer satisfaction. Indeed, we have the highest customer satisfaction rate of all the vendors in the quadrant.
Looking at the cautions, one was geographical coverage to some extent, although we are now growing fast in the US. We now have an office in Chicago with some great customers. Amazon, for example, recently became our customer in the US. So we have some real traction there.
The other cautions were about brand [awareness], that we are communicating less on social media and have less sales and so on. To be honest, those don’t really move the needle for the customer.
When looking at the cautions of our competitors, they are often in areas where we have strengths, such as product quality and customer satisfaction among other things. So I think we are in a good spot. We want to focus on what the customer wants, which is good data quality.
At Shippeo we’ve focused our investment on having the best data quality. I think there is a clear difference there in terms of our strategy. At the end of the day, we believe that the winners will be those vendors that focus on data quality. Yes, you can offer a lot of functionality in your application, and you can also have a very large network of carriers but nothing can really be done if your data quality isn’t right.
Of course, we do have a large network; we have hundreds of thousands of carriers. We have a lot of functionalities too. That said, if we have to make a decision on whether to invest in functionalities, or gain more carriers, or have better data quality, we will always choose data quality first.
We are now confident that for the most advanced customers we have, when they have 90+% tracking rates and good data quality, and accurate ETAs, we can move to the next step with them, which is transportation process automation.
I recall talking to a customer a couple of weeks ago who was looking to get more out of our solution. One thing that came to our minds was that perhaps the tracking rate was not good enough. It turned out that the tracking rate of this retail customer was 95%, but the customer still wanted to move onto the next step – to make even the remaining 5% of the data actionable. This is a customer for which we are now activating workflows to make visibility actionable.
Looking at social media in recent times, there appears to be a bit of scrutiny on the tech sector, including logistics and supply chain technology companies, with regards to things like sustainable growth, corporate governance and over prioritisation of sales versus product development. As far as Shippeo is concerned, how have you gone about growing as a company and meeting the needs of your stakeholders?
Well, we have four company values; ambition, collaboration, delivery, and care. It’s what we call the Shippeo ACDC framework. The care aspect is especially important.
We care about multiple stakeholders as we grow our business. First we care about our employees, which we believe is extremely important. We care about making sure they have a sustainable future at Shippeo, and we try to provide them with the best possible environment to work in.
And we certainly care about our customers: we exist to provide solutions to them.
And equally, we care about our investors too; we care about providing them with sustainable returns. It means a lot when you care about that – you automatically want to make sure that you are spending money wisely..
I think that’s probably the best representation of what we try to do on a daily basis. We want to be sure no one is left on the sidelines, whether it be employees, customers or investors.
As for everything that you said about the markets seeking profitability, more sustainable growth and less cash burn etc, although I would hardly say we are visionaries here, we’ve never waited for the market to tell us to do that.
Now when someone says that suddenly the market is asking for profitability, and a sustainable way of managing the company and that layoffs are being made because the market wants it, it surprises me.
I think that with myself and fellow co-founder Pierre Khoury, we have always had a very prudent or cautious approach towards growth. We have wanted to make sure we won’t be in a situation where at some point, we wake up in the morning, see the market has shifted and need to make a hard decision for the company.
So we try to be reasonable in our approach when it comes to evaluating the company and investing into the product and so on. We are always driven by ambition, but also care. I think that’s the balance we are trying to find every day when making decisions.
I’m not saying that this means we are immune to market impacts. Of course, what’s happening in the market impacts everyone. Even so, we’ve always tried to manage the company in a responsible way. This is what we care about at the end of the day – being able to anticipate things and make reasonable decisions for the company.
How do you see the category developing in the future? A noticeable year-on-year trend between each quadrant has been the loss of some players. To what extent do you see this continuing?
I think there’s two things to touch on here. First, there’s the category itself and how it will evolve. Then there is the topic of the future in general.
On the category itself, I think what we’ve seen is a natural evolution of a market that is maturing. There is now a greater concentration of players. The complexity to enter the market is higher too, because you have some established players. Also, the last thing is that there is a scale effect at play.
We are doing a very difficult job, onboarding carriers, improving data quality and making data actionable. This is a lot of work; we have been continually investing millions and millions of euros continually for seven years. So I think there is a scale effect. The more areas that need to be addressed, the more complex it becomes for new players to come in. On the other hand, there are some very interesting new players on the market, and we are very cautious when looking at what the market is offering these days.
The long term question is how this category [of Real-Time Transportation Visibility Platforms] will evolve.
That’s why we are talking today about our TPA offering. We believe it is a natural evolution of the category.
So to sum up, yes, there will be less vendors because the market will be more concentrated. As the market matures, the scale effect will take hold as what we’re doing isn’t easy and requires a lot of investment. Finally, in the future I think the visibility category will continue to evolve and perhaps new categories surrounding the sector will emerge.