Logistics is complicated, not complex

Welcome to the 47th edition of The LogTech Letter, a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I looked at how the length of the product lifecycle of a given shipper is a good window into their appetite for technology investment. This week, I’m exploring a topic that seems particularly important these days: the extent to which logistics is complex versus complicated.

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@ihsmarkit.com or on Twitter at @LogTechEric.

Logistics isn’t rocket science. You don’t need an advance degree in the sciences to “get it.” In fact, some of the jobs in the industry require knowledge that isn’t really taught in classrooms. Drive a forklift, enter data, negotiate rates.

So logistics, in a sense, isn’t complex, at least in the way that being a virologist or a NASA engineer is. Yes, as I wrote previously, it requires systems thinking and an ability to process multidimensional dynamics, often in a very tight timeframe. But the ability to manage those situations is generally based on experience, not advanced degrees. Logistics knowledge is built layer by layer, and there are few shortcuts in this process (more on this in a bit).

In this way, logistics is not complex, but it is complicated. It takes a mindset of being comfortable with a lack of uniformity. It requires being adaptable, and fluent in problem-solving, not mathematical equations or programming languages. It demands simple solutions to what can seem overwhelming problems.

Here’s one way I like to this of this, of logistics’ inherent messiness even as the problems seem simple enough on the surface. Think of the moment in late November or early December when you go into that storage closet and drag out all your tangled strands of holiday lights. It’s a big clump of wires, you don’t know where it starts or ends, and you have no clue how many knots need to be undone to get it in a position to hang on a tree or a fence or a roof.

A set of holiday lights is not complex. It’s a line of little bulbs held together by plastic-coated wiring. There’s a plug on one end. You plug it into the wall. You can buy it at a million different shops. You can hang them on your own. But when that tangled set of lights comes out every year, it’s complicated. How do you get this set of lights untangled? Do you ask someone for help? They may end up making it more complicated. They may tug on a knot that you have loosened, re-tightening it and ultimately creating more work for you. Do you give up, toss the tangled set and buy a new, untangled one? Holiday lights are pretty cheap and fungible. Or do you hire someone to set the lights up – I guess we could call the process of outsourcing the untangling and hanging the lights LaaS (lights-as-a-service).

The way to combat the messy complications of logistics is generally to seek out knowledge – the people who have been there before. That’s the reason there are a lot of gray hairs in this industry. Those people have layered knowledge. It’s like one of those Showstopper Challenges in the Great British Banking Show. You can’t put the royal icing on until you’ve baked the cake, and you can’t pour the batter in until you’ve blind-baked the crust (don’t @ me here, I’ve watched a of this show but still can’t bake my way out of a paper bag).

So let’s address this dynamic in the current environment, where you have a cavalcade of polymaths entering the logistics industry trying to wipe away that messiness. I’ve come across so many insanely intelligent people over the last few years that have gravitated toward this space, and I’ve often wondered, what if these people were addressing even crazier problems than boring ol’ shipping and trucking.

But that underplays how big a challenge it is to unspool the complicated nature of logistics. If logistics is not complex, but it is complicated, then maybe it is the perfect industry to be attacked by technology. Maybe technology can provide a shortcut to knowledge accumulation. Investors clearly see this as a reasonable outcome. I’ve stopped hearing investors talk about this as a winner-takes-all market – instead they talk about it as a massive market rife with ineffeciences that can be resolved in small, but impactful ways by technology.

That feedback loop is accelerating, as supply chain-focused VCs raise their second and third funds, and broader funds seek growing exposure to the logistics industry. Technology companies that provide a path to automated knowledge accumulation will find an audience as receptive as ones that are pure automation-as-FTE-eliminator plays. What technology can do for logistics is untangle that set of holiday lights in an elegant way. It doesn’t need to launch a rocket into orbit.  

🚨LogTech Market Map update

At long last, our intrepid team has released v1 of our LogTech Market Map. This is a work in progress and there’s lot of improvement that needs to be done still, but we’re getting there. See this link for more context on next steps for you and us.

🚨TPMTech is coming to Long Beach Feb. 24-25!

I’ve lost track of the number of times I’ve been asked if we’re holding our LogTech conference in Las Vegas this year. While the answer to that is no (as far as it being in-person), the good news is we’re holding the first ever TPMTech in advance of TPM22 next year. You can think of TPMTech as a sort of hybrid of LogTech and El Dorado, the concurrent tech event we never got a chance to hold in Long Beach during TPM20 due the onset of COVID-19. More news to come on TPMTech in the coming weeks, including how to register, hotel options, programming, and of course demos and networking. Can’t contain my excitement about this.

Here’s a roundup of pieces on JOC.com the past week from my colleagues and myself (note: there is a paywall):

• Portchain is steadily building a global customer footprint for its berth planning and optimization software, including the addition this week of its first US customer in Charleston. Definitely a company to watch.

• Tive has been making waves (pun intended) in the sensor-based visibility market in recent months, and part of that is the growing network of complementary providers it has built. This week, the Boston-based company added vessel location data provider MarineTraffic to the list.

• The development of software for the drayage industry has really taken off in the last couple years, and one of the drivers of that is TMS provider PortPro, which last week launched a drayage app for small carriers and independent owner-operators to manage their businesses from their cabs.

And here are some recent discussions, reports, and analysis I found interesting:

• Love love love this short piece from CarrierDirect’s Ryan Schreiber about technology as a driver, not a destroyer of job creation.

• This DHL piece on digitization in logistics is well worth a read.

• Zencargo CEO Alex Hersham with an outlook on container rates.

• Carly West of Gartner on some use cases for real-time visibility.

• Great infographic here from QAD Precision on who benefits from free trade agreement compliance.

• My colleagues Ashlee Williams and James Kwan discuss tech transformation trends in the maritime industry.

• Loved reading this about the emerging opportunity in Latam. So much activity there and a market that probably needs tech to unravel the messiness of the logistics industry as much as any region.

• Roy Bahat at Bloomberg Beta with a helpful thread on VC motivations for encouraging founders to take additional capital, even when they might not need or want it.

• Finally, Antonio García Martínez on the implications of data privacy – he should know, having been in this industry for a very long time.

• No links here, but the opposite of engaging with polymaths is engaging with goofballs. Much more valuable to engage with polymaths.

Some upcoming events I’ll be involved in:

• I’m delighted to be joining Eytan Buchman of Freightos to celebrate the one-year anniversary of his Future of Freight series on July 14. I was honored to be the very first guest and pumped to discuss a range of really important topics with Eytan, who is dangerously close to being a journalist himself with the incisive questions he asks.

• My new monthly show on the Let’s Talk Supply Chain network premieres 10 am EST Aug. 6. It’s called LogTech Live and I’ll let you know who our first guest is very soon. I’ll be discussing tech topics of the day, which buzzwords are meaningful or not, with a healthy sprinkling of #dadjokes. Count on it being fun and informative.

  

Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or IHS Markit, and any opinions are mine only.