Dynamo Dispatch (06/21/21)

Issue 154 | KeepTruckin, rideOS, Bringg

Dynamo Dispatch. Weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

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Weekly Commentary 💭

Stay tuned for some exciting news this week!

We Are Dynamo,

Santosh, Ted, Barry, Jon, Katie, Rachel, and Emily

Note: please add “dynamo@substack.com” to your email client, so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

The Amazon that Customers Don’t See. A new investigative report from the NYT shows that Amazon’s churn through warehouse employees has happened by design. Amazon was losing 3% of its workforce/week before the pandemic or turnover of 150% causing the company to replace its staff once every 8 mos. Turnover was in spite of the good benefits and the starting rate of at least $15 per hour in these warehouses. Inside of the warehouses, Amazon tracks an employee's every move is tracked. While this system was put in place to monitor the time a worker might be off task, this can mean that an employee can get fired after one bad day or if they are learning a new part of the warehouse where they don’t usually work. According to the data analyzed by the Times, there are also significant racial disparities in Amazon warehouses. Black warehouse workers are 50% more likely to be fired than their white counterparts. In spite of Amazon being a technology industry leader, the technology they use to provide time off and leave to employees is a buggy patchwork system that can inadvertently penalize an employee for missing work and lead to their termination. In other Amazon news, Amazon Applies AI to Worker Safety and Not Being Amazon Is a Selling Point for These eCommerce Players

UPS Sets Ambitious Sustainability Goals. On Wednesday UPS announced three medium-term goals that will move the company closer to net zero emissions by 2050. The first goal was to reduce per package delivery emissions by 50%. The second goal is to have all UPS facilities powered by renewable energy by 2035. UPS also has goals to reach 25% renewable electricity and 40% alternative fuels in its ground operations by 2025. The third and largest goal is to have sustainable fuel power the company’s global air fleet by 2035. Air fleets have the largest impact on a company’s emissions, so 30% of a company’s air fleet operating on sustainable fuel will have a huge impact on its carbon footprint. These sustainability announcements were announced on the same day that the company announced that it was considering launching outsourced same-day delivery services. This would fill a hole in the company’s offerings, but it would rely on carbon-intensive means of deliveries and it is unclear how that would fit into UPS’s vision for a net-zero future. Related, DHL Leads the Charge as Forwarders Pick Up the Pace of Decarbonizing Services and eCommerce Fuels Sustainability Goals.

Railroads Post Strong Volume But Struggle With Congestion. US railroads originated 964,356 carloads in May which represents a 30% y/y increase and more than 1.15M intermodal containers which represents a 26% y/y increase. The increase shows an increase in demand for freight compared to some of the worst days of the pandemic a year ago. According to the Association of American Railroads, 18 of the 20 commodities it tracks have increased y/y and 12 of the 20 are up compared to May 2019. The latest figures show that this increase in volume has created congestion on the rails. This surge in freight is beginning to strain rail networks and create congestion on the tracks.  New figures from the Surface Transportation Board show that all of the Class I railroads have seen their speed decline y/y and all Class I railroads except the Canadian National have seen their dwell time increase y/y. Despite the congestion increase, many in the industry are optimistic about what the increase in rail freight means for the overall economy. Railroad companies such as AAR hope that they can continue to accelerate the growth seen in the best January-May ever and hope rail can be a boon for strong, stable economic growth. In other railroad news Dwindling dwell: How Class I Railroads Are Addressing Supply Chain Congestion and US Railroads Tightening Free Time at Inland Terminals

📊 Study Calls for National Truck-Parking Standards. A new research report from the American Transportation Research Institute said that truck drivers can lose $4.6K/year looking for parking. The lack of parking and a clear parking standard has been a top issue for truckers since 2015 and is getting worse according to this survey.  Thus, the report is calling on national groups such as the National Association of Truck Stop Operators and other trucker groups to create a national parking standard that would alleviate this problem. The study confirmed that long-haul drivers are the biggest users of systems that locate parking capacity, and there is not a difference across state lines. Another finding is that smart phone apps that track parking availability are popular and the study uses this as another indicator that a national parking standard is needed. For the past two years congress has been working to pass legislation that would set aside grant money to fund truck parking expansion projects and the study emphasizes the need for that legislation to be passed. Related, ATRI: Drivers Find Truck Parking Signs Useful and Pennsylvania Turnpike Unveils a Possible Remedy to the Growing Issue of Truck Parking

CFOs Question Just-In-Time Supply Chains. Just-in-time supply chains were the norm before the pandemic, but they left many organizations unable to meet demand due to supply shortages. This has meant that many CFOs are pondering what role these supply chains will play in the future. The pandemic has shifted the corporate consensus towards resilient supply chains that are less prone to supply chain disruptions and supply shortages. Many executives in the industry fret that if they don’t have a resilient supply chain, they will miss out on growth opportunities and not be able to build brand loyalty. The need for resilient supply chains has meant a greater focus on the stockpiling of critical supplies, 3D printing, and near-shoring. All of these methodologies would keep supply chains closer to consumers and allow organizations to exercise greater control over their supply chains. Some in the industry don’t think just-in-time supply chains will be gone forever. Just-in-time enables companies to spot shortages faster and not have to worry about excess inventory hindering competitive advantages. This could lead to a more hybrid supply chain going forward that will allow organizations to stay nimble while dealing with unprecedented supply shortages. Related, Retail CFOs Trying to Manage Inventory Down and Retailers Plead With Biden to Fix Port Congestion That Has Upended Supply Chains

Robotics Efforts from Amazon, Alibaba Highlight eCommerce's Automated Future. This week eCommerce giants Amazon and Alibaba separately revealed plans to test and deploy robotic technology in warehouses and last mile delivery. Cainiao Network, Alibaba’s logistics arm, announced plans to deploy 1K robots across Chinese universities for last-mile delivery. In tests, these robots could deliver 150 packages a day with a 98% customer satisfaction rate. Amazon announced that it will be releasing “autonomous guided carts” named Scooter and Kermit in warehouses in Boston and Northern Italy. This push to digitization and automation is aligned with global eCommerce trends. Industrial robots sales have surged over the past 18 months and large companies such as Circle-K and DHL have made investments in robotics that show it will be a key part of their future. On either side of the pacific, both of these companies are looking to adapt their supply chains to handle the past years explosion in eCommerce. This means approaching supply chains will no longer be viewed solely through the prism of logistics, but through the prisms of digitization and automation as well. Also, Pop Up DCs and Warehouse Automation: The Paradox of Too Many Choices.

USPS Plan Would Slow Packages for Long Distance Hauls. As a part of a plan to save money, the US Postal Service is proposing a new initiative that would slow the delivery of parcels that travel long distances. The plan would convert USPS’s delivery guarantee for first class packages from a three day service plan to a 2-5 day window. If approved, this plan would transport more packages by truck than by plane. USPS believes that trucks are the more reliable and cost effective mode of transport which could help improve on-time delivery rates while offering lower rates to shippers. According to USPS’s projections, 68% of the affected package would still arrive in the current 2-3 day standard while 32% would spend an additional 24-48 hours in transit. This plan for long distance hauls is all a part of Postmaster General Louis DeJoy’s plan to run USPS more like a private business so it can compete with other carriers and reap greater profits in the age of eCommerce. This plan is unlikely to be implemented in the immediate future since Congress has to approve it, but the agency did take the first step in asking for an opinion from the necessary oversight organizations.In Memphis, FedEx Apparently Firing Less Profitable LTL Clients while Dynamo-portfolio company, Gatik Named WEF Technology Pioneer for Middle Mile AVs.

📊North America Will Not See Significant Supply Chain Reshoring in 2021-25. Despite optimism from US lawmakers, North America will not see significant manufacturing reshoring in the next few years, according to a report from the Economist Research Group. The report details that North American supply chain reshoring will be the exception in the medium term due to the lack of competitiveness in North America, lingering trade protectionism on the continent, and the high costs of operating in North America. North America’s strong economy won’t be enough to reshore various supply chains due to a lack of competitiveness. This lack of competitiveness stems from the lack of resilient supply chains as well as the lack of expertise that Mexico has when it comes to semiconductors and other high-tech manufacturing. Additionally, the Biden administration has yet to exempt Canada from its buy American rules and will likely keep some of the Trump administration's tariffs in place on commodities such as lumber. This combination of factors has led the Economist to predict that Foreign Direct Investment will increase in Asia--particularly in countries that offer an alternative China--over the next five years and sourcing and procurement strategies are unlikely to change as well. The report projects that North America’s share of global exports will hold steady at 14% and Asia’s will increase by 2% to represent 38% of all manufactured goods. In the realm of international trade, Cargo Key for Airlines to Deleverage

Mobility 🚗

An Amazon.com For Self-Driving Data. The China Association of Automobile Manufacturers has created a repository for self-driving vehicle data. The CAAM has made this data available to all because if individual Chinese car companies don’t have enough or the right type of training data they won’t be able to get AVs out of the lab and onto the road fast enough. Data will be gathered from individual companies, sensitive information will be screened out, anti-tampering software will be added as an extra level of security, and then automakers can browse this data and find the sets that they need. This platform could also be helpful when dealing with customers. Any tampering or misuse of the data in this repo is traceable. This means that if there is an accident or another dispute it can be found in the data set and verified. This will help build trust with the public and help AV makers better understand accidents or other issues.

Why AVs Need a Large-Systems Approach to Safety. Research shows that public support for AV adoption hinges on the public’s perception of the safety of these vehicles rather than the economic impact that they can have. The AV safety systems that we have today are disparate and often rely on one metric which doesn’t bolster the public’s opinion on AV safety. Thus, the World Economic Forum is calling on AV organizations as well regulatory bodies to think big and develop a large-systems approach to AV safety that can be applied to all AVs and won’t be a hindrance to innovation in the private sector. The large-systems approach to safety includes recording traditional safety metrics, aggregating voluntary AV safety standards, proactive safety metrics, comparative driving tests, and anonymized databases that include best practices, safety metrics, and driving scenarios. The most important things that this large-systems approach would do is get the relevant data in one place, share best practices so they can be standardized across the industry, and give concrete examples of how an AV can differ from and even be an improvement over a human-driven car. If this project is done in a technology-neutral environment and there is cross-industry collaboration a large-system approach could be a boon to the AV industry. Related Looking at Hybrid Supercapacitors

Additive Manufacturing is Changing Automotive’s Future. Additive manufacturing has the power to make today’s manufacturing footprint obsolete and that has tremendous implications for the automotive industry. This process will change the way designs are created, the nature of auto dealers and auto repair shops, and the technology needed to manufacture cars. Additive manufacturing will eliminate the need for complex parts and complex manufacturing technology by relying on the cloud, sensors, 3D printers, and other connective technologies to transform the industry, but there are several barriers to making this a reality for Tier 1 automotive companies. The lack of vision, slow technology adoption, and lack of capital to invest are the biggest barriers in the way of additive manufacturing. In order for the automotive industry to rise to the challenges of industry 4.0 and change as fast as the world did over the past 18 months, they must embrace and invest in additive manufacturing or risk not being able to compete in the coming decades. In other auto manufacturing news, Volvo Cars Wants to Make a Concept Car Using Fossil-Free Steel and VW Plans to Use New 3D Printing Process in Vehicle Production

GM Ups Its Planned Investment in EVs, Will Build New Battery Plants. This week GM announced investments in AV, EVs, and battery plants that it hopes will propel it to advance and eventually lead in EV sales. The automaker announced it will increase its investment in AV and EV technology to $35B through 2025 which represents a 75% boost from its initial commitment made in 2020. GM also said that the company will build two new battery cell manufacturing plants by mid-decade in the US, but declined to specify the location. The automaker will also add additional US assembly capacity for EVs and will specify specifics at a later date.  GM CEO Mary Barra said these investments will enable GM to reach if not exceed its goal of selling 1M EVs by 2025 and increase their pipeline of at least 30 new EV models to be on the market by 2025. The automaker also wants to boost its battery production capacity since EVs revolve around the battery and the automaker can sell its batteries. Elsewhere in Detroit, GM, Liebherr-Aerospace Collaborate On Hydrotec Fuel Cell Power Systems and Despite Pressure From Investors, GM CEO Insists Company Is More Valuable Keeping its EV Battery Group

Battery Monitoring is Critical for EV Safety. The proliferation of EVs and other eMobility devices is increasing calls for battery monitoring technologies. Many experts agree that battery monitoring technology should include cell voltage, current, and temperature. Temperature is one of the most important things to monitor regarding battery health. At temperatures below five degrees celsius, lithium-ion batteries do not work well and struggle to charge. The same is true at temperatures above 45 degrees celsius where the battery is not allowed to charge above a certain temperature and is prevented from discharging as the temperature increases. Voltage and current can then be monitored once the temperature of the battery is stable. Effective battery monitoring technology will be able to determine if an open-circuit voltage of a cell is higher than the rated charge voltage, the device will identify as a cell overvoltage and prevent further charge from occurring. Thus, battery monitoring technology that can see the relationships between temperature, current, and voltage will be an essential part of the future of EVs because they will protect both the battery and the consumer from the ill effects of battery mishaps. In other battery news, UK in Talks With 6 Firms to Build Gigafactories for EV Batteries and EV Battery Research Powers Ahead Toward Next Big Breakthrough

Mazda Plans Its Own Electric Platform For 2025. Mazda is the latest automaker to announce ambitious electrification plans. This week the Japanese automaker announced plans to introduce 13 EV models by 2025 and this includes both plug-in and hybrid plug-in models. The automaker also announced that all of the vehicles it produced by 2030 would incorporate electrification. On top of this Mazda announced that it will up its battery-EV ratio to 25% up significantly from a previously announced 5%. Mazda, which currently has only one EV on the market, will release three hybrids, five plug-in hybrids, and 3 EVs next year. The main geographic focus for these vehicles will be Japan, Europe, China, and Southeast Asia. The automaker announced that it will develop a scalable platform for EVs and will roll out several more EV models between 2025 and 2030. In other electrification news, Audi Sets 2026 End Date For Combustion Engine Cars and Lincoln Going Full EV by 2030, Starting with an eSUV in 2022.

BMW Starts European Road Tests of Hydrogen Fuel Cell Cars. BMW has begun to test out hydrogen-powered vehicles in everyday conditions on European roads. These tests are designed to see if hydrogen-powered vehicles can meet a range of safety, reliability, and efficiency standards. Hydrogen-powered vehicles will play a huge part in decarbonizing the automotive industry. The first element on the periodic table can provide an alternative to battery-powered vehicles and could be especially helpful for customers who don’t have an at home charging station or who drive long distances.  Toyota has been providing the German automaker with fuel cells and BMW is developing the fuel cell stack and drive system. The automaker hopes that the tests will lead to the production of a small series model in 2022. BMW’s hydrogen next tank can be filled in 3-4 minutes and can and has a range of several hundred kilometers in all weather conditions. BMW has been developing hydrogen technology since 2006 other automakers will likely join BMW in producing hydrogen-powered cars in the near future. In other hydrogen news, Jaguar Land Rover Is Developing a Hydrogen-Powered Vehicle and Plans to Test It Out This Year and Honda To End Production Of Its Hydrogen And Plug-In Hybrid Clarity Cars

Americans Are Keeping Their Cars Longer Than Ever Before, As Used-Car Prices Hit Record Highs. The average American car is about 12 years old and this is an increase of nearly two months over the previous year. While last year's COVID-19 lockdowns kept drivers off of the road, the average age of the American car has been increasing for the past 15 years since cars are more likely than ever to change hands and last for over 200K miles. The surging prices of both new and used cars is another reason that Americans are holding on to their cars longer. Last month used car prices hit a 68-year record and the average price of a new car hit a new record at $38K. The semiconductor shortage is the primary culprit behind both. Repair and maintenance shops should be poised to capitalize on the increased life span of cars, but supply shortages are making repairs even more expensive. Last month, Fox reported that customers in Texas were waiting 15-30 days for new parts to come in, due to a backlog at overseas ports. Overall, it has been an expensive year to be a car owner and surging prices on top of economic uncertainty have made Americans less likely to invest in a new car. In the same vein, EVs Cost More to Buy, But Less To Own and From Car Ownership To Car Sharing: The Changing Face Of Mobility

Fundraises and M&A 💸

Scurri Raises €9M Led by Gresham House Ventures. Scurri is an Irish eCommerce ordering, shipping, and delivery process optimizer. Scurri takes over the logistics process for merchants by calculating delivery routes, creating labels and tracking data, and making recommendations on how to best run operations in the future. The fresh capital will be invested in scaling the business. 

Vässla Raises $11M Led by Skabholmen Invest. Vässla is a Stockholm-based maker of eScooters. The startup offers three tiers of eMopeds and has recently released an eBike for private purchase. The fresh funds will be invested in rolling out the Vässla Club rental platform for individuals, companies, and delivery drivers. 

Customs4trade Raises €17M Led by 83 North. Customs4trade is a one-of-a-kind SaaS solution that automates customs and trade compliance. The company helps a wide range of businesses go to market faster and help them be strategically visible in their customs operations. The new round of funding will be used to accelerate integrations and ramp up sales efforts across Europe. 

Tractable Raises $60M Co-Led by Insight Partners and Georgian Partners. Tractable is a platform that uses computer vision tools to enable remote damage appraisals. The company says they work with more than 20 of the top 100 auto insurance companies and have seen 600% growth in the past 24 months. The new round of funds will be used to expand into natural disaster appraisals as well as build out their AI technology.  

Motorway Raises $67.7M Led by Index Ventures. Motorway is a British startup that enables professional car dealers to bid in an auction for privately-owned cars for sale. Car owners upload their car to the platform and car dealers bid on the car in a daily online auction. This format removes a lot of friction and car owners typically earn £1K more than they would on another auction platform. The capital infusion will be used to extend its platform and grow its team. 

Bringg Raises $100M Led by Insight Partners. Bringg is a last-mile delivery platform that helps retailers with last mile logistics. The company has seen 180% growth in its number of customers over the past year due to the pandemic. The fresh round of capital will be invested in expanding their customer base and expanding the company’s capabilities.  

PayCargo Raises $125M Led by Insight Partners. PayCargo is a freight payment platform that gives logistics companies the ability to securely pay all of its entities across the supply chain. The company has more than 67K users and it is on track to process $10B in freight related payments this year which is a 250% increase from 2020. The new capital will be deployed to grow the company.

KeepTruckin Raises $190M Led by G2 Venture Partners. KeepTruckin is a fleet management technology company. The company has a network of more than 400K vehicles and uses cutting edge computer vision and AI to solve a broad range of problems for its fleet. The fresh capital will be invested in supporting Keeptruckin’s strategic priorities. 

Carro Raises $360M Led by Softbank Vision Fund 2. Carro is a Southeast Asian car marketplace. The marketplace, where 90% of the vehicles sold are used, saw its revenue grow by 2.5X in the past year. The capital injection will be invested in expanding into new markets, expanding its financial services capabilities, and developing its AI capabilities. 

Waymo Raises $2.5B. Waymo is Google’s sibling company that makes AVs. This fundraise comes after Waymo let go of its CEO earlier in the year due to taking too long to commercialize the company’s AV tech. Waymo ultimately wants individuals to own and operate its AVs which have driven millions of test miles in cities throughout the US.  The capital infusion will be invested in advancing its AV technology and expanding its team.

Gopuff Acquires rideOS for $115M. Gopuff, a last-mile delivery service for everyday essentials, has acquired rideOS, a startup that provides cutting-edge technology for routing, fleet optimization, and logistics. As Gopuff accelerates its geographic expansion rideOS’s technology will give them the tools they need to speed up delivery times and provide innovative multimodal deliveries. Terms of the deal are private, but people close to the deal have confirmed that Gopuff is paying $115M in cash and stock for the rideOS, which was valued at $180M in its last funding round. 

Mitsubishi HC Acquires CAI International for $1.1B. Mitsubishi HC has acquired CAI International, a transportation finance and logistics company. The deal consists of $104M worth of preferred stock and $986M of common equity stock value. The deal has been approved by CAI’s board of directors and the company will no longer be listed on the NYSE after the deal is completed. 

Full Truck Alliance Could Raise $1.5B in IPO. Full Truck Alliance, a Chinese trucking company that connects shippers and truckers, has filed for a US IPO. The proposed terms of the IPO could raise $1.5B and value that company at $30B. In the private market, the company has raised more than $3.6B from the likes of Softbank Vision Fund 2.0 and Sequoia Capital China and had a private market valuation of $11.7B.  The company claims to be the world’s largest digital freight platform by gross transaction value and shows just how lucrative and competitive the Chinese logistics market has become. 

Ford Acquires Electriphi. Ford has acquired Electriphi, a battery management fleet monitoring software company. Electriphi will become a part of the Ford Pro business unit, which is focused on providing services to the owners of Ford’s EVs.  Terms of the acquisition were not disclosed. 

SPAC Radar 📡

Solid Power in $1.2B Deal with Decarbonization Plus Acquisition Corp III. Solid Power is a solid-state battery developer backed by Ford and BMW.  The company has said that its batteries can go 500 miles on a single charge and have double the lifespan of a typical lithium-ion battery. The transaction will likely generate $600M in cash and $165M in PIPE. The transaction will likely be completed in Q4 of 2021 and will trade on the NYSE under SLDP. 

Company Building 🛠️

Harder Than It Looks, Not As Fun as It Seems. The green-eyed monster can make it seem like the grass is greener on the other side but remember we all have our own challenges to navigate.

How to Convince Investors. “Jason talks about the investor needing to ‘believe in the inevitability of your success.’ They have to picture that this is going to work, with or without them. To get there, they’ll need to have the following mindset about your startup: 1) They must have an instinctive belief that your company is attacking a substantial opportunity with plenty of whitespace; 2) The thing you are doing actually solves the problem in that market; 3You have the ability to execute well against this idea.”

Protips for Managing a Remote/Distributed Team. It should surprise no body that the really helpful tips here are about HOW to communicate. Also, Retreats Are Now A Must.

Who's Hiring? 👩‍💻

SDR at Plus One Robotics in San Antonio, TX.

Content Manager at Vizion API in Palo Alto, CA (remote ok).

Head of Sales at ChAI in London, UK.

💥 Have you seen any interesting startups recently? Introduce us.
❤️ We would love your support. Please forward to friends and share on social media.
🗞️ If you were forwarded this and found it interesting, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.

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