I've Got 99 Problems, But Data's the Biggest One
I've Got 99 Problems, But Data's the Biggest One
Welcome to the 93rd edition of The LogTech Letter. TLL is a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I tried to explain why we need to moderate discussions of layoffs at tech companies just as we do with funding rounds. This week, I’m wondering aloud whether too much of a good thing ends up being a bad thing.
As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.
For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@spglobal.com or on Twitter at @LogTechEric.
At some point in the last decade - it’s hard to pin down exactly when - we shifted from the era of Big Data to the era of Too Much Data in logistics. I’m not the first to note this phenomenon, clearly. But it is interesting to reflect on how quickly that switch flipped. It’s like the faucet turned on, and no one has been able to slow down the flow.
That would be preposterous, of course. Everybody wants all the data. They don’t want to slow it down, they want to control it, and channel it, and make it more usable. Instead of slowing it down, a new cohort of data providers has emerged to create yet more data, and software vendors have focused on contextualizing and filtering all the data.
We’re in a messy period of this evolution right now. Behind every data provider - great, good, bad or ugly - is a tangled web that would make the Matrix blush. But here’s the especially tricky thing: the flood of data being generated before the pandemic has smashed headlong into a historic set of economic and logistics-specific circumstances since the start of pandemic. Demand patterns are out of whack. Ordering is out of whack. Transportation networks are out of whack. Labor availability is out of whack. Physical capacity - ships, trucks, rail, warehouses - is out of whack. And guess what…there is more data about all of this than ever before.
What does this mean? Confusion reigns. There are conflicting signals about container demand, truckload demand, fuel prices, peak season shipping volume, drayage capacity, and rail congestion…and that’s just off the top of my head. This may be a hot take, but to me, the flood of data about all of this is somehow…not helping. Part of this is because logistics systems are nowhere close to being automated and are still reliant on human processing and decision-making. And thus, those humans are tasked with considering historic dynamics and an inordinate amount of data points about those dynamics.
The other part is that systems that are gaining traction are not quite ready to process the voluminous amount of data being generated. That will eventually change, but we’re in the thick of this now, and depending on a single system to process the data, contextualize it and guide decisions…let’s just say not many companies are truly set up to handle that now. It’s not that there are a lack of quality systems, it’s that they’re still designed to handle discrete functions - optimizing the use of a container, auditing an invoice, creating a carrier scorecard - but not the totality of all the functions, including the totality of all the data that underpins or impacts those functions.
I’ve written about this before, that the most innovative companies face a tough choice: it’s more transformative to build a platform that impacts multiple areas, but it’s easier to actually get traction by focusing on a niche.
In any case, I think we can say that some of the confusion surrounding which way the economy is going, and which way freight rates will go, and which way the venture capital market will go, is down to the volume of data that’s available, and our relative inability to effectively process it all at scale. I see it myself on a day-to-day basis. Some days, my brain is firing on all cylinders, weighing up information I gather through interviews and briefings and contextualizing that with other news and reports and charts I see. Other days, it feels like I’m a Jackson Pollock painting, with packets of information splattered on my brain but not quite making any sense.
The volume of data being generated will not slow down - so let’s hope the systems upon which we rely will help us cope with this volume of data. Otherwise, we may feel like we’re in an era of permanent crazy, an era where the volume of data is not illuminating but is rather confusing our ability to analyze.
Neal Peart Lyric of the Week:
Against the run-of-the-mill
Swimming against the stream
Life in two dimensions is a mass production scheme
Here’s a roundup of recent pieces on JOC.com from my colleagues and myself (note: there is a paywall):
Seeing project44 let go of staff last week was an opening for those who think the VC-backed model of logistics software just won’t work, but as I preach over and over: nothing is black and white. project44 was neither an unstoppable force on the way to global domination in January, nor is it a train wreck in July. Their executive team graciously walked me through a bunch of revenue and pipeline metrics this week, which helped underpin my story on why they restructured (which includes plans to hire nearly four times as many people in the 2H22 as they’ve let go).
Meanwhile, a more niche visibility provider, Vizion, announced a funding round this week, yet another sign that the VC market is not a Zeppelin headed for the ground (despite what you may have read in last week’s newsletter!).
Before digital forwarding and freight matching became en vogue, ExFreight was building a transactional tool to effectively price international moves. I wrote about the company’s approach and how that’s helped it navigate the choppy waters of the last two years.
And here are some recent discussions, reports, and analysis I found interesting:
A great examination by Adrian Gonzalez about whether to choose a best-of-breed or one-stop-shop 3PL, and what drives shippers toward the two approaches.
Another cool thing to read: Synapsum’s most recent blog on predicting freight costs.
Have to link to this one just because of the sheer number of people who sent it to me this week.
Missed my chat on LogTech Live last week with Eytan Buchman, CMO at Freightos? Catch the replay here.
Some upcoming events I’ll be involved in:
I’m joining Philip Blumenthal, chief transformation office of ECU Worldwide, for a discussion on forwarding technology at 10 am ET July 26. Register for the free discussion here.
As noted above, our Inland Distribution Conference in Chicago Sept. 26-28 is coming up fast. I’ll be doing a one-on-one with Emerge CEO Andrew Leto and then leading four tech-oriented discussions, including the one on small carrier tech, as well as sessions on LTL tech, freight procurement advances, and venture’s future role in trucking. Don’t miss this - it’s the most substantive surface transportation conference in the market.
Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or S&P Global, and any opinions are mine only.