This post is part of our new Future of Logistics series which interviews the leading founders and executives who are on the front lines of the industry to get a better understanding of what problems the industry is facing, what trends are taking place, and what the future looks like.
The following is an interview we recently had with Marc Schmitt, CEO and Co-Founder of Evertracker.
1. What’s the history of Evertracker? Where and how did begin?
MS: Previously, I was working as an art director for financial institutions, creating annual reports – which is a real last-minute production. The printed reports are then usually shipped by courier directly to the press conference. The real difficulties started after the delivery, as almost every single time, the reports had been delivered at the agreed time, but they still somehow went missing. Either the caretaker sent them to the post room, a colleague took them but forgot to tell the client they were here, or something else went wrong. Brochures sometimes also disappeared from conference centres or went missing in office blocks where my clients were based.
I wanted to change this and to build a solution that makes parcels or any other object traceable. In 2013, I started an Executive MBA at the ESCP Europe, where I met Peter and Vlad, my co-founders. We used Evertracker during the MBA in different courses and built a minimum viable product.
2. What specific problem does Evertracker solve? How do you solve it?
MS: Over the past three years, it has evolved from a rather simple track-and-trace solution to a platform that analyses movement patterns. We developed an Internet of Things platform that enables us to gather data through any sensor and focus on artificial intelligence. Today, our clients automate processes and can predict incidents along their supply chain and in their logistics.
Logistics and supply chains are still not transparent, efficient, calculable or predictable.
Clients can either connect existing sensors, such as RFID, Bluetooth, Wi-Fi or any other data source, to our platform, or they can buy our GPS devices. Our platform analyses the incoming data in real time and recommends actions or triggers events. Clients use our platform to recognise patterns, detect anomalies, understand problems, optimise the flow of goods, get ETAs, increase utilisation, prevent thefts, and for other purposes.
OEMs use our solution to exercise more control over their supply chains. Suppliers optimise the flow of goods to satisfy their clients, while e-commerce platforms optimise their same-day delivery structures. Parcel delivery companies optimise every last mile, and postal operators increase the utilisation of their assets.
3. What’s the future of logistics?
MS: The future of logistics will look very different. It’s easy to predict that we will see drones and robots, autonomous trucks and delivery vehicles, micro-distribution centres and underground transportation networks. There are many technological advancements that will emerge over the next few years. We will also see robots opening doors, walking up stairs and delivering pizza to the 3rd floor. It’s only a matter of time.
However, logistics is already undergoing massive changes, without many people even realising it. For many years, logistics was in the driver’s seat. Service providers planned and managed the complexity of intermodal or local distribution, as well as last-mile and line-hauling and all the other processes. The industry was driven by a push principle. The shipper was the driving force and the direct customer.
Digitalisation has precipitated unnoticeable change in the industry. The end customer, the consumer, has already taken the lead from the supply chain. Digitalisation allows them to access to products and services from around the world. The easy access and the high level of individualisation, in combination with a comfortable consumer experience, allows consumers to decide where to order products from and makes them even less predictable. The consumer is actively choosing the best service, as this is the only differentiator today.
This effect is not limited to e-commerce platforms. Since the consumer is changing its demands and expectations, even car or plane manufacturers must provide individualised services, all while complying with high quality standards and sticking to deadlines. This increases the pressure on their production facilities, as manufacturers start to produce just-in-sequence, which in return leads to higher pressure on logistics companies to deliver on-time and on-the-spot.
The future of logistics looks very different. The consumer is determining the rules and standards for the entire supply chain. As logistics is the only physical aspect of the e-commerce platform, for example, you judge the e-commerce platform by the logistics service offered – if it’s difficult to order products on one platform but not on the other, you will always come back to the other platform.
Furthermore, the consumer wants to buy individualised shoes and cars, which requires high flexibility of the production cycle. They also expect an individualised and personal delivery experience. So, delivery companies will have to provide a highly malleable service.
We will therefore see many different delivery services and logistics providers that find tiny niche markets and become experts in their domain, satisfying their customers’ customers, so to speak.
4. What are the top 3 technology trends you’re seeing in logistics?
Trend #1: Artificial intelligence will play the biggest role in the future of supply chains and logistics. It will make trucks drive autonomously and drones fly unsupervised. But it will also manage and steer all related processes. It will lead to more flexibility and a higher individualisation of services. Thanks to artificial intelligence, parcels, and products will find their way from the shipper to the receiver autonomously. It aso leads to greater efficiency of complex logistics networks, as well as to an optimal load factor for trucks. That’s why we developed one of the first Artificial Intelligence for logistics and supply chains. Our solution knows what happens tomorrow and automates processes.
Trend #2: As the number of companies and micro-services increases, supply chains and logistics are driven by data and more individualisation revolutionises logistics, there is a requirement for more security and certainty. Blockchain will play a significant role in managing all these virtual elements and physical assets.
Trend #3: Another technology that is not so disruptive but is nonetheless the most important trend is electrification. As logistics grows over the coming years, more and more delivery vehicles and trucks will be driving on our streets. This increases the burden on our environment. Many services providers are already looking into alternative transportation – Deutsche Post has started to build and sell their own electrical vehicles.
5. Why is the logistics industry ripe for disruption?
MS: Logistics was always ripe for disruption, just like any other industry. There have always been game changers in the market. In the 1970s, FedEx and DHL were rewriting the rules to a huge extent. However, I agree that logistics hasn’t seen such a massive amount of digital disruption before, and this has just started to emerge. Logistics is very complex, as well as extremely expensive. To enter the market as a new player and grow to a significant size requires capital, persistence, and knowledge.
For many years, you could only organise an international shipment if you had enough human resources to plan, manage, monitor and react to incidents, as well as access to a reliable fleet of trucks, ships or planes. In addition, pricing wasn’t transparent nor was the process as such. So, companies built on their brand and quality and invested in assets and human resources. Look at UPS: last year, they had a gross profit margin of about 76% but only a net profit margin of around 8%, which clearly shows the overhead required. Today, there is the potential of stealing market shares because existing technology lowers the bar to enter this rather complex industry. Today, planning tools allow you to plan journeys easily online, real-time translators allow you to hire non-native speakers, and artificial intelligence takes care of the monitoring and controlling. This reduces costs and enables the easy market access of today. Whoever knows their way around the technology can master the disruption of logistics.
About Marc Schmitt
Marc founded Evertracker and Schmitt., an awarded communication and digital consulting agency. He is an EMBA degree holder (ESCP Europe) and has over 10 years of consulting experience. Marc is passionate about IoT and Artificial Intelligence.