SEPTEMBER 2024LOGISTICSTRANSPORTATIONREVIEW8 OPINIONIN MYBy Llew Claasen, Managing Partner, Newtown PartnersI've had the unique opportunity to invest in various supply chain and logistics startups. Over the years, these experiences have given me invaluable insights into the key success factors and potential pitfalls in this dynamic sector. Here are some of my key takeaways:Freight Forwarding: Depth Over BreadthIn the freight forwarding sector, success is not about expanding trade lanes but instead increasing trade lane density. This `depth over breadth' approach enables companies to maximize efficiency and profitability. Digital freight forwarders increasingly morph into software platforms, offering seamless integration and automation. Yet, the digitization wave threatens smaller, traditional forwarders as it disrupts established relationships. While carriers are keen to bypass forwarders and deal directly with Beneficial Cargo Owners (BCOs), BCOs are unwilling to put all their eggs in one basket.Road Freight Challenges in Developing MarketsContract logistic requirements in developing markets pose unique challenges. The need for more reliable, high-quality trucks with tracking capabilities makes road freight exchanges ineffective. Moreover, integrating embedded financial services into Digital Freight Exchanges (DFEs) is complicated due to the need for digitized channel partners. Though DFEs might seem like a cost-efficient solution, they often merely shift costs from one part of the supply chain to another, offering no real advantage over traditional 3PLs (third-party logistics).Cross-Border E-Commerce: A Technological and Operational ChallengeExecuting cross-border e-commerce economically as an end-to-end (e2e) solution requires direct integration with all 3PLs, especially air & ocean carriers and customs UNPACKING THE FUTURE: STRATEGIC INSIGHTS FROM INVESTING IN SUPPLY CHAIN AND LOGISTICS STARTUPSLlew Claasen
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