Viewpoint: How Silicon Valley is transforming the freight industry

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

By Ryan B. Schreiber 

Because of the work we do at CarrierDirect, the single most common question I get is, “Where’s the industry going?” Yet, often the same companies that ask this also reject out of hand what the most innovative companies in the space are taking on. The ethos seems to be, “That’s not how it’s done here.”  

The recent announcement from Redwood Logistics shows how accessible it is for companies to define their future by engaging with the simplest ideas — and yes, they may come from Silicon Valley. 

Almost one year ago, after Uber announced it might be getting out of freight, I wrote an opinion piece that, for myriad reasons, suggested this move would be bad for the industry. That is not a humblebrag (maybe it’s a little bit of a humblebrag), but one of the reasons Uber’s involvement in freight was (is) important is that by extension, involvement from Uber creates the imperative to consider how to be different, not incrementally better.  

So when as part of the FreightWaves LIVE @HOME event, Redwood Logistics announced its newest offering — Logistics Platform as a Service (LPaaS) — it became clear that the Silicon Valley approach is really transforming logistics. 

Transportation companies broadly, and particularly logistics service providers (LSPs), have long considered how to snuggle up closer to shippers — or get “stickier” as it’s called in “The Valley.” 

In a way, some might look at the LPaaS announcement as nothing new — integrate tighter and deeper into shippers’ systems to get more freight or more data or both. It looks a lot like capitalizing on a recent trend of technology companies and LSPs doubling down on integrations within existing TMS platforms, from BlueJay to MercuryGate to SAP, to get there. 

In that sense, it may be true that LPaaS is not new and Redwood Logistics CEO Mark Yeager admits the same when he says, “[W]e’re reorienting our suite of services and giving a name to what we do best.”

So what? Redwood deserves credit for claiming it. Convoy has done this incredibly well. I have had myriad conversations with leaders in logistics who complain that Convoy “isn’t doing anything new,” and while I disagree that Convoy is not doing anything new, there are parts of its approach that are simply repackaging what LSPs have done for years. 

What Convoy is doing that others aren’t is, as my friend Kevin Hill (FreightWaves executive publisher) calls it, “Name it and claim it.” My response in these conversations is invariable — “[Insert company being talked about] is telling the story, and you can too.” 

In the sense that Redwood is taking this page out of the Silicon Valley playbook, it still deserves credit. It speaks to how the investment in our space is pushing our industry to think differently and be better. 

But it isn’t entirely true that this is played out; it is new, in a sense, or at least for transportation. 

Time for an unpopular opinion: Historically, transportation companies have looked to solve customer problems by solving their own problems first. It can work — look at what U.S. Xpress is doing with Variant, looking in the four walls of the building and delivering better for its clients by being better by rejecting what’s been done before. 

There is nothing inherently wrong with this approach, but there are inherent risks and problems with it. 

Most often, what customers want and need diverges from what vendors offer. An echo chamber is created as vendors look at other vendors to see what “they should be doing,” with each telling the story about how it is giving its customers what the customer wants. The customers, for their part, are clamoring for something different and better. 

The outcome is…

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