Jochum Reuter explains why FourKites' predictive ETA is key to bridging visibility gaps

Jochum Reuter explains why FourKites' predictive ETA is key to bridging visibility gaps

The pivotal role supply chain visibility platforms now play in logistics processes has inevitably drawn attention towards the visibility space. Big players in the sector have recently attracted huge levels of investment as they seek to stay ahead of the competitors presently in their wake. One of the leaders in the market is of course FourKites, who Gartner recently ranked as the visibility provider with the most complete vision. However, with the market seemingly ripe with challengers keen to make an impact, and the evolution of logistics presenting further obstacles, the company knows a lot of hard work is required to be ahead of the game.

In order to find out about the potential of FourKites’ predictive ETA technology, its ambitions in Europe, as well as its plans to ramp up its offering amid a logistics sector that is constantly evolving, we got in touch with Jochum Reuter, Vice President of EMEA Operations at FourKites.

Hi Jochum, thanks for talking to us at Trans.INFO.

Earlier this year, Gartner released its quadrant for real time visibility platforms, which showed FourKites to be one of two leaders in the sector. FourKites was placed best of anyone in terms of the ‘completeness of vision’ axis, and was in the top 3 on the ‘ability to execute axis’. Does this analysis correspond with how FourKites sees itself in comparison with the other competitors on the market?

I think it’s marvelous to see that an independent organization such as Gartner recognizes our innovative nature. 

This company thrives on what customers and carriers tell us we should develop. We do nonetheless recognize that we were a little later to the party than everybody else here in Europe. I think that’s partially why we weren’t number one in ability to execute. 

We’re catching up fast though, so I’m very confident that we will also be number one in that aspect in the next Magic Quadrant in a year or six month’s time.

The quadrant also showed that there are no shortage of challengers keen to join the two platforms considered as leaders. How do you see the market going forward given where you and others are at this moment in time? Are you confident that you now are in a position whereby you can remain a few steps ahead of the pack for a long time to come?

Well, what I think is pretty unique about us is that we don’t have a specific product development team that sits in their ivory tower and develops the product by themselves. What we do is we have what we call a customer advisory board. And they tell us what we need to do next. 

We had purchasing order visibility, which was in very high demand – we created that In a couple of months. As long as we keep listening to the market, and to our customers; the shippers and the carriers, I think we can stay ahead.

There’s going to be a lot of organizations out there trying to do the same, and that keeps us sharp. I see a lot of acquisitions going on and I think that we need strong competition to stay ahead of the pack.

„We mustn’t, as a company, get complacent. Okay, we may make it to number one and be in the upper right corner of the magic quadrant, but that’s when we’ll really need to focus.”

So we need to see how things play out. It’s our mission to be even further up that Magic Quadrant next time and I think our customers will give us some suggestions about how to go about doing that.

From what I’ve observed, since the disruption caused by the pandemic and the Suez accident among other things, the concept of supply chain visibility almost sells itself. Therefore, it feels like the question is now which platform one should choose. What do you believe you can offer that is a cut above the rest? 

I think the biggest difference we have at FourKites is that from the start, we have been working with artificial intelligence and machine learning.

We are currently tracking over 2 million loads per day, and we are building a database where we have predictive ETA. We are easily connected to other modalities and we can connect ETAs with each individual modality just based on the information that we’ve stored from the past, and I think that’s a unique setup.

It’s hard to catch up with that because we have an advantage of six or seven years of data stored there. If we develop this and take onboard our customer’s needs, I think that we can stay a step ahead of the rest. 

As the competition in the real-time supply chain visibility market grows, and the market matures, the platform providers will inevitably be looking to lure clients who are not only using a visibility platform for the first time, but also those who currently use one. A while ago, I remember seeing a peculiar stat that said people in the UK were more likely to change their husband or wife than change their bank account. The theory was that the public had a perception that it is too tiresome to change their account, and thus they won’t bother to do it – even if they are not entirely satisfied. This then made me wonder about the supply chain visibility platforms; how easy could a company make the switch to FourKites if they wanted to?

We’ve actually seen this happen already – especially in North America, where we have a longer history. That’s also why we’ve created our platform to be very light on the implementation side of things. 

The biggest hurdle a company has to take is to start working with supply chain visibility. As soon as that’s done, switching to our system should be a lot easier than changing one’s wife or husband!

The process takes a couple of weeks maximum. It’s just a case of making sure that the systems are properly integrated – we have to make a connection to the carrier network. If the carrier network is already there, that makes everything even easier.

I’m not going to say it can be done with the flick of a switch. It’s a little bit more complex than that because every company has different systems in place and has their own tweaks to it.

So it does take some time, but it’s a case of weeks rather than months for anyone integrating into the FourKites forecast platform from any other platform.

Back in March, the company announced an investment of $100M through Series D financing, funds which you are to put into development. What are your priorities regarding development at this moment in time?

I’m very happy to say that one of the key priorities is further development with regards to ‘Europeanising’ our platform.

That’s a very big area that we are working on day and night. One of the things that we see currently is the enormous demand for sustainability.

There are some very aggressive plans from the European Commission coming up that involve significant tax increases on CO2 emissions. It’s probably going up from around 10 to 500 euros per tonne.

So providing visibility on that part for both for the carrier and the shipper is something that’s going to be enormously valuable because there’s got to be a cost reduction for them.

We also have a lot of customers that have a strategic wish or plan to reduce their carbon footprints to zero by 2030. When you consider that transportation is about 30% of a company’s CO2 emissions, there’s serious work to be done.

So that’s where we will be developing. The other area where I see opportunities on our side is increasing the added value that we can bring to carriers in Europe. We already share a lot of information with carriers, but perhaps we can add some services to that to make carriers want to use or connect with our platform.

Supply chains appear to be becoming more complex due to new modes of transport and a desire to become sustainable, which should present further challenges to real-time visibility providers like FourKites. We’re seeing a rise in intermodal transport and also lots of different ideas about urban logistics and the various types of cargo vehicles that could be used in cities. On top of that, there’s the possibility of autonomous vehicles further down the road. This suggests that the journey of a particular set of goods may be noticeably more diverse than it is at present. Is this a trend that FourKites believes will progress, and if so, what are you doing to be ready to face these changes?

I totally agree with your observation, and this is something that we’ve seen developing both in the US and here in Europe, the same goes for the shortage of drivers you referred to earlier, which is very acute in the US as well. 

So what we’ve done is develop several services so as to provide visibility on all kinds of multimodal or intermodal loads. 

The key is in the details. If we know the GPS provider for let’s say, a cargo bike, then we can connect to it. So that’s not the difficult part. The difficult part is establishing which bike they are going to use so that we know exactly which bike to track for load x.

That’s why we are talking to all those kinds of terminals. A port can be a terminal. A distribution center with smaller vans and cargo bikes is also a terminal. That’s where we need to get the information from. Then we can determine that load xyz is going to be transferred from trucks a&b to cargo bikes 1&2. As long as we have that kind of information then we’re going to be able to keep tracking. 

Does it always work? Unfortunately, it doesn’t. However, that’s why we are developing and building our team to stay connected to those kinds of smaller terminals throughout the European region.

As far as today is concerned, what gaps are supply chain visibility providers such as FourKites keen to bridge? Are there any situations in particular where it is difficult to provide complete visibility?

Well, one area is those terminals I mentioned. We’re putting a lot of emphasis on making sure that we know exactly which part of the load is going to which asset. 

The other thing is the trackability. If you have a truck, and you drive it through the mountains in Switzerland, the chances are that you’re going to lose connection to your GPS provider.

We’re working hard to make sure that we collect enough data as time passes to be able to provide visibility, even if we don’t have the tracking at that specific moment.

The whole database that we are building is actually intended to fill the gaps in blind spots such as these.

In June, the company announced that it had been granted a US patent for its AI-Powered ETA Using Smart Forecasted Arrival Engine. How important was it for you to have this patent and what does it mean for FourKites going forward?

Yes, it is important and it actually links to your previous question. There is never going to be 100% visibility of an individual lane or an individual load that’s going to be held. 

So that’s why we need to build data to be able to predict. We have the ambition to have over 95% ETA accuracy that we can provide to shippers, carriers and the end customers. 

Generally speaking, we can use such patents as a basis from which to develop future wishes that come from our carriers or shippers.

As far as Europe is concerned, what are the company’s future plans for the market over here?

Well, we opened our European headquarters in late 2019. If you look at our competitors, they’ve been in this area of the world for a longer period of time. 

So what we’ve done in recent years is build a chain to make sure that we have a mature operational team. We’ve accomplished that now and what we’re going to do next is to further build on the products that are needed here in this region. 

We are also increasing our ability to cover languages. There are of course many smaller carriers in Europe with 10-15 trucks. A lot of them are in East and Central Europe and don’t always speak Russian or German or English. We need to cover that part, make all our systems even easier to use and add more value for our carriers.

Naturally, carriers give us their data, right, which is something that they own. And I think one of our key issues is that we should provide more value for those carriers in the near future.

There’s about 480,000 road transportation carriers in Europe. They could be just three people, and the owner may even be a truck driver who does everything by night via an Excel sheet. That’s who we want to connect to. 

If I take my team of around 30 people, and reach out to all of them, it will take me a century to reach out to them. So I’m looking for something that’s going to be adding so much value that carriers will actively want to reach out to us. I want to make that threshold as low as possible for the carriers to join us.

When it comes to those plans, do you feel it is essential to have a team on the ground here in Europe? 

Yes – that’s exactly why FourKites decided to set up a headquarters in Europe. 

We’ve been active in the market here in Europe since 2017. We know that using the American approach simply doesn’t work. We very quickly found out that the European transportation market is extremely more complicated than the one in North America. 

Our processes from there do not work; there is an ELD or tracking mandate for all devices on the roads, which isn’t active here. That’s a very big difference. 

If you ask someone in the US about the ELD information they can give it to you with the snap of a finger. Nevertheless, rightfully so, they will first ask you first “What are you going to do with that information? What are you going to use it for? And where are you going to store it?”

This kind of approach here in Europe is completely different from what we do in North America. So we have been building a team here in Europe and we’ve been successful. 

One of the highest possible percentages you can reach for tracking is 80-85% for all loads for any customer. I think, in practice, that is about the maximum. We are really achieving that level of tracking now for our current customers. We have the ambition to grow very rapidly and be number one here in Europe. 

That means that we need to expand and we can only do so by knowing more about how to communicate to a carrier somewhere in Europe, whether it’s Romania, Ukraine, Spain, or Scotland. Those details are vital to building a relationship with the carriers and shippers, as well as being able to provide added value to them.

Finally, looking forward, what are the biggest goals you wish to achieve in the foreseeable future? 

My biggest goal within the European region is to make it clear to carriers and shippers that supply chain visibility is essential for the optimization of their supply chains, as well as finding out how to reduce their CO2 emissions in order to become a more sustainable company. I think that’s vital.

We have a relatively young team in the company; I think I’m by far the oldest one. The average age is around 30-35. They all have a very, very strong feeling about sustainability, so we really need to do something about CO2 emissions.

Transportation is a big chunk of CO2 emissions, so that’s where a very big part of our heart is. We really want to make a very big impression as far as sustainability is concerned. We have the tools to allow us to do so. The next step is for us to make sure that everybody is able to use those tools and reduce CO2 emissions in the process.

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