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The coronavirus pandemic has propelled supply chain visibility from being a nice-to-have to a must-have in what seems like the blink of an eye. Where is the technology headed though? And what does supply chain visibility tell us about contemporary logistics trends?

To find the answer to these questions and more, we spoke to Thomas Spieker, CEO for Shippeo Central Europe. 

Hi Thomas, thanks for taking the time to talk to us. How was 2020 for Shippeo, and what has the company learned as a result of last year’s developments in the logistics industry?

I think in terms of learning, we are still quite a young company. We were founded in 2014, and our learning curve has been quite steep in the years since. But 2020 was definitely a very unique year. In the very beginning, when we went into lockdown mode, we saw different countries reacting differently to the pandemic and there were a lot of unknowns regarding the market.

We weren’t sure that all our plans, including our growth plans and customer plans, would be possible to realise in a realistic way, or if this was all just a big dream somewhere in February and March. Then, eventually a big bubble just exploded. 

So what really happened is, we saw something of a slight shock for two or three months. Nobody was moving; companies were looking after their cash and their stock, as well as trying to secure any raw materials to keep production going. Meanwhile, the retailers were making sure they had enough stocks of food in their warehouses to sell. 

However, once this shock was over, there was a lot of analysis and groundwork being done in the companies. As a result of that, people very quickly realized that supply chain and logistics are really vital parts of their operations. And they probably realised that logistics is not only a necessity, but also something that can give added value. 

Then around the end of April, beginning of May 2020, there were incoming requests for visibility in the supply chain – for new technology and innovations to solve simple questions like where’s my container, or where’s my truck? There was really a big wave of incoming requests into Shippeo at that time. 

If I can put some numbers into the mix, we doubled everything in 2020. We doubled our number of employees, we doubled our revenue, we doubled the number of projects we were delivering, and we doubled our connectivity thanks to new telematics TMS, IoT and other technologies. 

Finally, we understand that it was a very hard year for lots of companies and people out there. But the outcome for our business was actually a very positive one. I think this was the fruits of our labour from the years previous, during which we established standing on the market as being a reliable partner, a trusted partner. 

During a crisis, I think that’s who most companies then tend to turn to. And that’s what we saw in 2020. So for us, it was a very successful year. We saw lots of growth; somewhere between March and the end of summer, we hired 60 new people. This was all home office – sometimes we never met our new colleagues until the end of summer. For me, it’s a good number to keep in mind. So, that’s what actually happened to Shippeo your last year.

As Gartner’s research has found, real-time transportation visibility remains a top investment priority for many supply chain leaders across all industries and geographies, yet it remains difficult to build a strong ROI business case. Why is that so?

WelI, personally speaking, I don’t entirely agree with this statement. 

I’ve seen that, especially in Q3, Q4 2020, more and more Shippeo customers did actually see a return on investment once they had gone through a value assessment, in which we actually take customers through some assumptions that we have seen with other customers who are similar to them. Based on that information, we can then build a business case. So I wouldn’t say that it is extremely difficult [a ROI], but it does need an initial investment. 

I think that’s probably the main problem that we’re having. Everybody wants visibility, everybody wants to have a clear status on where goods are, where trucks are, where pellets are, where, where the different items are heading, etc. 

However, In order to get there, on the customer side we can still see some hurdles and challenges. Investing in innovation and new technology always has some kind of risk. But once the investment has been completed, and once a platform like Shippeo is up and running and is connected with the 200-500 carriers that work for your company, you have the data coming in and you can then work on and analyze the data. 

Ultimately, everybody sees a return on investment. So for me, it’s more a question of where do you put the cursor, if you put the cursor at the very beginning of a project, I think the ROI calculation relies on a lot of assumptions. And we are providing these assumptions. Then, given a period of time of say six months or 12 months, the companies then see the return on investment. 

Also, I think there’s probably a bit of a lack of communication and data sharing. I’m not sure that all the big shipping customers on our network are actually willing to share this kind of data with the market. 

So, I would say there is a clear ROI. I think we understand that our customers do understand the ROI after a couple of months, or six months of using the platform. But I think the hurdle that we’re seeing right now is in the beginning, when you still need to put some assumptions in there. 

I think it’s a classic example of new markets and of new technology. Nowadays, nobody asks what’s the benefit of having an iPhone in their pocket and being available every day at every hour. Right now, some won’t even think twice about spending  600 euros or whatever it is to have the newest one. I’m not saying that the ROI in the visibility market is already at this stage, but we are seeing a transition. We see much more understanding right now, it’s probably also been driven by the pandemic. 

Customs organisations are definitely becoming much more mature, and therefore much more open to having these discussions. And then also, once again, once they use the platform, once they have the data once they see the results. I think the ROI comes across very, very easily.

There is a lot of talk nowadays about the mutual benefits of data sharing in the transport industry, particularly in the light of last Autumn’s IRU conference. What is your opinion on the matter? 

Let me start with what our philosophy is; it’s a very simple one. We are a European company with a European data culture and European data DNA. What does it mean? It means that even if we are aggregating data, even if we are receiving data from hundreds of thousands of different means, this data is not being shipped. This data belongs to the customer. 

Very often a shipping customer says to a carrier, please pick this up at point A and drive it to point B. During this driving time, we do tracking, we use data, we use a lot of metadata, we combine this data, and then we predict an ETA, that’s what that’s what we do. 

Sometimes we’re talking about GDPR, about personal data, because naturally there’s a human being inside these trucks. And we are also talking about the data of the customer. So in our opinion, our way of doing business is very simple. We will never give any data that doesn’t belong to us to anybody else without having the permission of the data owner. 

I know that other platforms are handling this differently. I can only talk about us and the way we do things – we have this as a very strict rule. We are probably the only company being 100% GDPR compliant, which is a huge technology step because in everything that we do, we need to make sure that if there is any personal data involved, we need to protect this in accordance with the standards of  European law. 

This is our philosophy and our way of understanding our business. We do optimization, we do work in a network, and there are different companies with different people involved. Within this stream of data, we ask everybody if they want to share this data with their peers.  If they are OK with this, we then share that data. 

Let’s take a customer example – you have somebody who is shipping something to a customer and then we will ask the shipper questions like “Do you want to share this data with your customer? Do you want to show your customer you have access to this data? What type of data do you have shown? Is it just ETA data? Shall we share with them a point on a map where we can see the truck moving?” and so on. 

Depending on what the shipper says, we’ll share the data with a customer. And that’s the way we work. We will never give away any data which doesn’t belong to me or to somebody else. 

However, the point you made earlier is something we fully support. The idea that everything that we are doing, that Shippeo is doing is not only limited to giving the answer to where trucks are, or when a truck will arrive at a certain area. It is about using this data to do something with real potential.  

In retail, we are talking a lot about slot booking for example. So, what if you have a slot booked at a DC which says I arrive at 10. But then Shippeo says the ETA is at 12. Why not use this data and free up the slot and book a new slot at 12 without any intervention from any human being? 

Or in the event you are delivering to a specific site in a production area, why not combine the data that we generate with the yard management data, to make sure that the yard is organised properly? This is something that we do with big industries, but we only do it once we have agreement from the customer side. 

So I am fully with you, I think the future of everything that we do is a future that lies with  automation. And automation means absolutely data sharing. So we need it. I think it’s our job and the job of the technology companies to make sure that we have the right data sets that respect all the rules and regulations that are in place, but also in a way that we can drive more efficiencies in processes.

Shippeo picks up data from many sources, including IoT devices. How can these devices aid with visibility and to what extent do you seem being more heavily utilised in the next couple of years? 

The answer is yes, we do see lots of projects and lots of money coming into R&D and new innovation projects regarding IoT.

Traditionally, we’ve very much focused on telematics, on tracking data to understand where the goods are. Around 18-20 months ago, we slightly changed the way that we structure our data. 

So we moved away from simply tracking a truck or a tracking container. We are now more on the level of what we call unit level tracking. This concerns what is inside the truck or what is inside of a container. It isn’t enough to only have the position of a truck. It’s fine as long as the pallet is still on the truck, but what happens if the pallet goes away, it is offloaded or goes to a DC? You may lose track of the pallet. 

That’s exactly where we see the new IoT technology coming into play. And that’s why we are, together with running projects with our customers on this to go deep on this level – away from the shipment level towards the unit level. 

For some areas and for some industries, we are working on material number tracking. And of course, then comes the question of money. Right now, putting an IoT device on a yogurt pot is probably not very cost efficient. 

However, if you have, I don’t know in the automotive industry, some spare parts, worth 5-7000 euroa let’s say, then it’s worth putting a tracker on there for 5 euros. Is it worth it for a yogurt pot? Probably not. 

So we can see that the market is currently split into different segments. There’s what we call the premium segment, where the product in itself has a higher value. And in that segment we definitely see more and more customers equipping these products with IoT trackers. 

Then we have this medium level, where we must see a lot of initiatives, a lot of understanding, some playing around to see if this brings something. 

However, we also see other companies, especially in commodities, where they have tried IoT, where they are trying to goto unit level tracking, and they have finally decided that the current cost of entry means it doesn’t make sense for them. So I guess there’s three segments in the market right now in relation to IoT tracking. 

The supply chain visibility service sector is becoming ever more competitive as companies learn of its importance to supply chains. Ultimately, what will companies need to do and offer in order to succeed, maintain a competitive advantage, as well as a solid share of the market?

It’s a mix of different things. The first one is like in every new market that’s dominated by innovation. You need to innovate, but you can only innovate if you have a very solid foundation. 

I think that’s one of the key elements going forward. The companies who are going to survive will have a very solid technical foundation that allows them to scale quickly and is also able to embrace new technology and upcoming innovations. I think that’s probably the key thing. 

Companies who are built on different technology stacks already struggle with integration, especially where you have different data pools. We have different data rules in Europe compared to some other countries or regions of the world, where data privacy is less strict. 

I think that could be a problem in the future. So we believe that the first thing is technology. 

The second thing is actually the customer story that you tell. We believe very strongly that overselling and not delivering on promises, not going deep into the integration of your network will not work in your favour. 

We do things a bit differently. We don’t do all the projects, we sometimes even tell companies, they are not mature enough yet, so it doesn’t make sense to start your project. We’ll then request that they do certain things, and when they’re ready, we’ll be more than happy to do the project. 

When we do a project, we probably do a much deeper integration than others on the market. When we say integration, it means going into TMS, going into a WMS, going into EAP, going into all the different systems which are either on the customer side, on the carrier side or pon the shipper side. 

We make sure that we get the required information out there, and then we create a very high level of automation. That touches on what I mentioned earlier, integrating also into the world. 

After shipping, once the truck arrives at a loading site or at the delivery site, you need to believe that the level of automation and integration needs to be much higher. This will basically separate the market in the future; there will be a part that’s less sophisticated, probably more manual driven, and you can talk about another that’s a huge network size. But this doesn’t mean everything in this huge network is automated, everybody is still doing 10% or 20% of their tasks manually. 

We really believe automation and deep integration is the key to making sure that the carriers are on our side. It’s not just the big carriers either. We have some 600,000 carriers out there, and most of them have between 3 and 10 trucks in the yard. We need to make sure that we can make them part of this journey. 

We believe this is really possible through less manual work and more automation through deep integration, I think that’s going to be the key element in the future, which will probably decide who’s going to win this race.

You are the CEO of Shippeo’s Central European operations. In what way does the market in this region differ from Western Europe, and to what extent is a different client approach required?

Yes, well one thing is that we do see a different level of maturity in different markets. 

The Western European market is very much driven by a vision of customer intimacy, customer support, making customers happy, and probably also the use of transportation data to work on customer centric visions.

When it comes to the Central European market, these things are becoming more and more important. The customer centric vision in particular. However, we also see a lot of focus on processes – not only in one’s factory, but in one’s network. There is a desire to enable networks to use suppliers, carriers and logistics providers, which makes things more efficient, quicker, and possibly less costly. 

All of this nonetheless needs to be done in a slightly different way. Of course, in the end, you have got the customer, but you also have this focus on your own network. And I think that’s where a lot of chances lie in the next 8-24 months.

There are countries like Poland, for example, where we have seen a lot of demand for this. Again, it’s about automation, integration and making sure that all your network can participate. This includes the smaller carriers, but also the companies who are probably not equipped with an IT team or high level IT infrastructure.

We tend to address these questions and these discussions very early on in what we call sales cycles. Together with our customers, we sit down and discuss “What’s your journey? What’s your journey in transportation? What’s your journey in the supply chain? Where do you stand today? Where do you want to stand tomorrow?” 

By showing less sales habits and more expertise, we’re actually seeing our customers say, yeah, I am going to choose Shippeo – not only for the technology and the best ETA and so on, but also because they can project themselves into this journey together with us. 

It’s less about what we call a quick win and it’s more about creating stable long term partnerships. That’s definitely something that we see a lot in Central and Eastern Europe.

What can you offer to carriers in Central Europe that other supply chain providers cannot?

Now, going back to what I said earlier, I mentioned that technology for a company like us the most important thing. I think this also goes when we talk about the value that we bring to carriers, especially in incentives. 

Right now, when customers compare different ETS on the market, we are often chosen for having the best performance on ETA, which is not only precise two or three hours before arrival, but possibly 678 hours in advance. 

Why is this so important for customers? Why is this so important for the market? It’s because based on this ETA, they can plan subsequent processes and other steps in their value chain. So for as long as you are not precise on the ETA, all this value is kind of lost, because there’s no trust in the ETA. 

That’s why we have invested a lot of time and a lot of money in the last couple of years to have the best ETA on the market, especially in Europe, where you have a complex network and lots of different regulations, driver time etc. All this needs to be taken into account to make sure that you have a good ETA. So I think that’s definitely one area that our customers see as being very different to others on the market. 

The second one is something we discussed earlier, we talked about the European data culture. No carrier, whether it comes from Poland, Ukraine or the Baltics, will want to see their data ending up somewhere where they don’t have control over it. So we give a very strong commitment to the carrier, to the shipper, but also to the customer, that all the data we manage is handled in a GDPR compliant way. It is not sent outside, it is not being sold. We only store it, we archive it, and after a year we delete it. 

Of course right now we’re talking about Europe, if we go and look at other regions, that may be different. Regardless, right now we see this as a very, very strong argument for customers making sure that they are also compliant. 

The third one is, about the change in the market in relation to unit tracking. I think this level of going down and making sure that we really track what the customer wants is a third very strong argument.

That, in combination with what we had in the beginning, with our integration and our very powerful app, we can also manage picking flows within the real world. So the combination of these and the intuitive way the platform works is probably the third big area where we stand out from others on the market. 

Finally, there’s another point I mentioned earlier – the fact we don’t oversell. We clearly tell our customers what’s possible, what’s not possible and then go together and embark on a long journey. That’s the fourth argument I would definitely include. 

Earlier this month Shippeo announced a new tie-up with Upply, a French digital freight marketplace. Why have you decided to work with them instead of expanding your business offer to compete with them? 

I think there’s a very simple way of looking at this. 

As I mentioned earlier, we have the best ETA, in order to have the best ETA, you need to be totally focused on your core business. The core business for us is real time visibility, as we called it in the past, now we call it predictive visibility.

We’re looking into the future and we’re kicking off processes for the future of our customers. Nowadays, you either commit to something 100%, or you don’t do it at all. So we tend to focus on our core business strength, and on some processes which are very closely linked to it. 

As I mentioned, for instance, picking and preparing orders before they go into the truck. That this is where our business lies, the market is huge. The market is growing  every year, we see a lot of opportunities here. 

We don’t want to become a software vendor who does everything without going into it in a really deep and sufficient way. We really want to concentrate on what we’re doing today with tracking, predictive visibility and automation in the network. 

For everything else, there are other people who can do things much better. Probably they can also earn a lot of money from it. That’s excellent. But our strategy is very simple. We do continue to do what we are doing today, and we stick to it. We focus on this and we want to be the best in class and what we’re doing

I think that that also shows to Upply that there might be other partnerships announced in the future. You could also ask the question the other way around of course, “Why did Upply actually work with us?” They could also develop a tracking solution. However, they saw that for their customers, the main value comes from having a very well performing tracking solution with a very high quality level. 

That’s why they came to us and had the discussion with us. So again, in our market, If you do something, you need to be the best at doing it. This is basically what sets you apart from the rest, as once you start losing focus, you won’t be able to do what you’re doing today. 

Your platform gives you a wealth of data from which you must be able to see some logistical trends. With regards to Brexit, are you seeing a huge drop in freight volumes between the EU and the UK as a result of the new trading arrangements? 

Well, before the end of the transition period in November and December, there was a much higher volume of road freight going into the UK, especially because companies were stockpiling to make sure they were prepared for the situation at the end of December and the beginning of January. 

So we are not really surprised by the drop in volume so far this month. Where we are surprised is, let’s say the naivety of some politicians, I think both sides of the channel.

There’s such a complex network here In Europe, it is rather naive to think that the different supply chains would not be disturbed by adding complexity to the procedure when you’re leaving one or the other country.

So no, there was no big surprise with volumes. We also had a lot of customers actually asking for specific features, if we could predict waiting times if we could integrate into some other areas, and to give more information. So that’s something that we are going to be looking at.

I think that’s what our job is, to actually see what’s going on to take the information out of different sources, prepare it and make it available, our ETA calculation in customer systems etc. 

I personally was most surprised by the activity on both sides. I think that the companies we are working with, they tried to anticipate and they tried to prepare themselves as best as they could. 

But of course, we all know, especially when we’re looking at this situation right now, there are products, especially fresh products; lettuce and fruits and vegetables – all these kind of products, where there are very time critical supply chains.

I think it was pretty clear that some of the shortages will occur. I just hope that all these political discussions and problems will be solved quickly, not only for people like us, but especially for the truckers. They are the main people who are suffering from the results of this; they are standing by waiting for two days, three days at some ports.

Are the customs requirements a “bridge too far” then? 

I don’t know if I could call it a bridge too far. I still find it amazing what we’ve seen actually on the platform though. thousands of trucks have not been able to go across the channel as planned. 

I still believe that especially on the carrier side, these guys did an amazing job and when we could help, that’s what we tried to do. We send the data that was needed to help carriers and trucking companies, but also to help our customers to inform them as early as possible that a shipment wasn’t going to arrive as originally scheduled.

I still believe that with all the circumstances, not only Brexit but also Christmas and COVID, 2020 was a very challenging year for carriers. I still think they did a really great job, and I can only express my great admiration for all the guys sitting in their trucks and doing this. 

Could it have been planned better? Were there more potential scenarios to think about earlier? Yes. I mean, of course. But I still believe that the logistics machine as I would call it was running. There were some hiccups on the way, I fully agree. But all in all, I think until now, I’m not saying that in the next two or three months, this is going to change, but until now I believe it has been quite a good performance. I wouldn’t start pointing fingers and blaming somebody.

The RHA talked recently about the idea of their being “Invisible queues”, as trucks will be stuck in depots rather than at ports or lorry parks. Is this a genuine phenomenon?

I actually wasn’t aware of the term “invisible queues”, but I think it’s a good one that I might use in the future. So yes, we do see these invisible queues. However, are they only linked to Brexit? To be honest, I can’t tell. 

We’ve also seen a situation in the container business in the maritime sector, especially for lanes to China going into Europe, where we had a lot of problems on the Asian side in the ports. Lots of containers were getting stuck there, then everybody put their containers on the vessel, then all the vessels arrived at the same time, or in the same period of time in the European harbor. So, as we also had a huge concentration of containers, we then needed to rent extra space to put the containers somewhere. 

That meant that a lot of the transport capacity was actually linked to this one event, and was not available to other parts of the market. Now, with Brexit, as you mentioned, these invisible queues began because there’s a lot of paperwork and people don’t know yet what is actually needed to go across the channel. 

I wouldn’t say that Shippeo has the data to give a clear message on why or how to solve this. We do see these queues, and what we actually see is that the demand in certain areas in Europe is stronger than the offering and vice-versa, which of course, leads to disturbance in the market. 

Shippeo’s work is not to solve these disturbances, but to see how existing capacity can be used in the best and most efficient way most of the time. I think that’s what we are focusing on.

Yes, we do have invisible queues, but are they only linked to Brexit? No. Will we see more and more turbulence in the market? I think we can definitely say yes, 2020 was already very challenging. We still have this pandemic situation in some areas. We have Brexit too, and I think we are also probably going to see some industries free up capacity because they will go out of business due to a post-COVID economic crisis.

The other industries who will probably recover strongly are the pharmaceutical companies, or those who manufacture PPE and so on. I think there will be a shift in capacity and demand. Will it be a fluid process that translates into a very easy shift? No, of course, such change always creates disturbances. 

Again, I’m not sure that we are the ones who will be setting the rules here. Our job is really to help our customers and that’s what our customers use us for. Once you have the capacity, you have your predictions, then you can make sure that you use your transport means or your transport capacity in the best and the most efficient way possible.

Finally, looking forward, how do Shippeo see themselves developing in 2021?

Looking ahead, we always have to have a quick look in the back mirror too. We have already seen in the last week that we are on a very strong growth path. Lots of new customer projects are kicking off right now, new customers are coming in and asking us to extend and to add functionality.

So we definitely see very strong growth on the market on the customer with regards to the projects that we will deliver in 2021. We also continue to grow internally; we still have a lot of new hires out there. We are really looking to complete the missing bits and pieces of our teams to make sure that we can address this growing demand. 

All in all, I think we’ll have a challenging year ahead of us, because things are unpredictable, but it should still be a very promising one too. I think this true of most of the companies in all different sectors in industry. 

Now I’ve realized that really having real time visibility, having more information and having more analysis about capacity, definitely helps one to go through these uncertain times. I think we have a positive year ahead of us, even if of course, the situation around us remains challenging.

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