Antifragile Supply Chains

Pressure and adversity will improve the backbone of global economies

Over the last four weeks, COVID 19 has shown vulnerabilities in the global supply chain that are not evident in a normalized environment. The healthcare supply chain is under intense pressure with a mass shortage of ventilators and personal protective equipment and an inability to quickly route products to areas of need. Similarly, the grocery supply chain is strained as consumers continually “make a run” on inventories of milk, bread, proteins, and toilet paper. While the aforementioned supply chains are vastly different, historic evidence shows the commonality is that pressure and random adversity strengthen the supply chain, the backbone of the global economy. Put another way, supply chains are antifragile

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Dynamo Dispatch (03/30/20)

Issue 101 | Forager, Lilium, Cazoo

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 💭

We are entering week three in a WFH configuration operating on all cylinders. We’ve observed the increasing prominence of the supply chain in daily headlines as the world looks to secure essential supplies for patients, healthcare providers, and the general citizenry. We are proud of the efforts coming out of our portfolio and want to highlight WorkHound’s truck driver analysis (see below), Zeelo’s Critical Worker Services (Sam discusses on the Future of Supply Chain), and the numerous efforts from the likes of Backbone, Steam Logistics, nextmv, Stord, and more to route essential freight when/where it’s needed.

We wish everyone a healthy, safe (and sane) week.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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

Supply Chain 📦

How Health Systems Are Responding as COVID-19 Squeezes the Medical Supply Chain. With Chinese manufacturers reserving more stock of N95 respirators and testing kits for domestic use, American hospital staff have been seeking alternative distribution channels to shore up the supply gap of medical equipment. Efforts include working with private textile manufacturers to repurpose their factories for mask production. Also tackling the well-publicized shortage of PPE, 3M Plans to Make More Than a Billion Masks By End of Year. In complementary reading on the difficulties facing pharmaceuticals from cost pressures to Brexit, see Making Waves: The Challenges of Pharma Logistics

Retailers Cancel Orders From Asian Factories, Threatening Millions of Jobs. With shops and malls closed across Europe and the US, a growing group of retailers that include H&M, Marks & Spencer, and Primark have suspended purchase orders from factories, many concentrated in Bangladesh and China. Without support, manufacturers warn the move could cost workers 4.1 million jobs in Bangladesh alone. Compounding problems, COVID-19 itself has reached South Asia: India, Bangladesh Close Factories Amid Coronavirus Lockdown.

CBRE Report Examines Increased Interest in On-Demand Warehousing, Due to Coronavirus. Given uncertainties about inventory procurement and a growing interest in short-term, flexible leases, LA-based industrial real estate firm CBRE anticipates the continued trend of on-demand warehousing for spaces less than 30,000 square feet. In an adjacent industry report, Yale offers guidance for optimizing distribution center operations and increasing fleet utilization in Improving DC Metrics. 

🌟International-Logistics: COVID-19 to Usher New Wall Street Focus on Supply Chain Hedging. Learning from disruptions caused by the coronavirus outbreak, supply chain managers are more likely to implement strategic redundancies and consider safety stock strategies instead of just-in-time deliveries. JoC’s Gregory Tuthill posits this, in turn, might cause a paradigm shift among equity investors to revalue organizations that are better positioned to offer business continuity during the next pandemic. Looking at ocean freight, in particular, Flexport’s Nerijus Poskus predicts more premium ocean services and greater emphasis on on-time performance in Flexport Exec on Coronavirus Past, Present and Future.

📊An Analysis of Driver Feedback about COVID-19. Dynamo portfolio company WorkHound releases an analysis of 1,954 corona-related comments left by drivers via its real-time feedback platform for frontline workers and employers. Constituting 47% of all comments, planning and sanitation were the two most frequent concerns, demonstrating an emphasis on operational contingencies and trucker safety, whereas pay and benefits were mentioned in less than one-fifth of all responses. From other coverage of the frontlines, ‘Terrified’ Package Delivery Employees Are Going to Work Sick and Who Are the People Who Deliver New York’s Food?

As Stay-At-Home Orders Spread, Deliveries Speed Up. According to data recorded by Convoy, rush hour deliveries in Los Angeles and Seattle are roughly 13% to 27% faster since lockdown measures went into effect. A bittersweet benefit of the ban on non-essential business, the commercial data mirrors reports that traffic speeds for personal travel have increased nationwide.

If Robots Steal So Many Jobs, Why Aren't They Saving Us Now?Wired’s Matt Simon observes that the recent hiring frenzy by Amazon refutes the popular narrative that automation threatens human livelihood. Instead, he argues the new wave of robotic and AI systems augment workers’ skills by doing the harder, more repetitive tasks thereby freeing humans for more thoughtful and empathetic activities. Relatedly, new Brookings paper Does the US Tax Code Favor Automation? finds that job displacement due to automation may, in fact, may be the result of policy rather than tech itself.

Inside Instacart’s COVID-19 Playbook. With orders spiking 10x across the country, CEO Apoorva Mehta and the team have rapidly scaled up operations to meet demand they had not anticipated for another 2-4 years. New initiatives include revised time slots for delivery with a contactless option, the creation of sanitation stations in stores, and collaboration with hospitality businesses to provide a soft-landing for workers laid off from other industries as Instacart adds 300K new shoppers. For complementary reading, see the grocer’s perspective in How H-E-B Planned for the Pandemic. Speaking of groceries, A Plea to Not Panic Buy

Mobility 🚗

VW Burning Through $2.2B/Week with Production Shutdown. VW has suspended sales and production to cope with the coronavirus but warns that a prolonged slow down will force a round of layoffs. The apparent baseline plan is to restart production well ahead of summer. However, The Group Still Eyeing August Roll Out for ID.3 EV to avoid fines from the European regulator to offset ICE sales.

Auto Sales Expected to Slump 80%; Demand to Be Elastic. It’s expected that the bounceback in sales once the virus abates should help automakers recover. There’s also a silver lining here that dealers will be forced to embrace online sales after years of avoiding and even lobby against it. Also, Aluminum Surplus to Grow Amid Weak Demand (note that aluminum is a widely watched leading indicator of the economy).

🌟Plotting NYC Subway Usage and Looking at US Traffic Volumes. We have seen public transit come under increased pressure as people curb usage as the coronavirus pandemic plays through. In NYC, weekly usage in 2020 was as high as ~5.5M/day but is most recently down to ~0.75M/day. Nationwide traffic volumes are down 30% M/M and likely on their way lower as social distancing and shelter-in-place orders expand. Also, SF to Stop All Trains on 3/30 (Today).

Bird Laying off 30% of Staff. It’s also been noted that VanderZanden has reduced his salary to $0 during the COVID-19 period. Also, Wheels is Deploying Self Cleaning Handlebars and Brakes.

GM Ramping Ventilator Production. GM is working with Ventec Life Systems to build ventilators and was already planning to produce 1K units by the end of April prior to Trump invoking the Defense Production Act. Ford, Toyota, and Tesla are also working on the effort but it’s not easy. Related, Detroit Auto Show is Cancelled, Venue to Become Field Hospital.

France Leveraging Rail to Load Balance Patients. “Those first 20 patients, all in stable condition, traveled in train cars that the railroad and France’s EMT service, SAMU, had converted into rolling intensive care units, stocked with equipment and staffed by aid workers. EMTs stacked oxygen bottles in the luggage racks and lay stretchers across seat tops, securing them with orange cords they ran around armrests and seat legs. Ambulances carrying patients from local hospitals drove onto the train platform, where medical workers wearing face masks, protective gowns, and goggles brought them aboard. Each retrofitted car carried four patients and six medical workers.”

Fundraises, M&A, Talent 💸

Lilium Raises $240M Inside Round Led by Tencent. The lack of new investors might suggest challenges for the company following recent prototype accidents; nevertheless, the round size sets a new high watermark for flying taxi companies. The Munich-based builder of vertical take-off and landing (VTOL) aircraft targets 2025 to deliver on its regional air mobility goal. 

Cazoo Raises £100M Led by DMG Ventures. Founded by serial entrepreneur Alex Chesterman just 18 months ago, the UK-based startup buys used cars to sell online and then delivers them to customers’ driveways. Also participating in the round were General Catalyst, CNP (Groupe Frère), Mubadala Capital, Octopus Ventures, Eight Roads Ventures, and Stride.VC. 

Helm.ai Raises $13M Seed Round. Applying deep learning technology to interpret sensor data, the company has developed software that can train neural networks without the need for simulation or annotation. Investors include A.Capital Ventures, Amplo, and Sound Ventures as well as NBA player Kevin Durant and General David Petraeus. 

Twaice Raises €11M Series A Led by Creandum. The Munich-based startup creates digital twins of battery systems in electric vehicles to provide real-time analysis and predictions about battery health. Given the increasing popularity of lithium-ion batteries, the company sees a natural progression into providing predictive maintenance and extending products’ warranties. 

Forager Raises $10M Series A Led by US Venture Partners. Based in Chicago, Forager provides a comprehensive cross-border pricing and booking portal that enables shippers to easily transport and monitor products moving between the US, Mexico, and Canada. The new funding will help the startup weather out Covid-19, while investing further into the platform itself.

Kargo Technologies Secures Investment from Amatil X. The Indonesia-based trucking marketplace bags strategic investment from Amatil X, the venture capital arm of Coca Cola Amatil. The fresh injection not only supports the platforms’ transporters during the coronavirus downturn but also primes the ground for regional expansion in giving the company access to the Coca Cola family in other nations of Southeast Asia. The investment size has yet to be disclosed.

FourKites Acquires TrackX Yard Solutions. Integrating TrackX’s Yard Management, Dock Management, and Gate Control solutions into its real-time tracking platform, FourKites extends its range of visibility from trucks in-transit to trucks on-site. The combined visibility product, called Dynamic Yard, will allow facility managers to better anticipate bottlenecks and improve gate-in and gate-out processes.

BigBasket Acquires DailyNinja. The Bengaluru-based online grocer looks to secure its position in the subscription delivery space through its purchase of online milk delivery app DailyNinja. By leveraging the BigBasket delivery network, the merger is expected to double volume for milk deliveries within a month. 

Company Building 🛠️

📊The Economics of Pandemics. For those looking to understand the impact on supply chain and mobility, pay attention to slides 61-64 but don’t ignore the following slides that suggest necessary global policy to help us emerge from this and avoid a vicious loop of economic disaster.

SBA and Disaster Relief Loan Programs. This is a great resource for companies trying to understand the assistance they might be eligible for as part of the Federal stimulus bill. MSP has been great about updating their resources as more information and insight is gleaned around eligibility and the application process (the bill is 800+ pages!).

A Composition of Sage Advice from the Twitterverse.Bill Gurley on Listening to the Experienced, David Ulevitch on Handling the Departure of Key Employees, and Samir Kaji Offers Insights into How VC Works in Soft Economic Environments.

Who's Hiring? 👩‍💻

Director of Product Management at Backbone in New York, NY.

BDR at Skupos in Denver, CO.

AV Field Ops Lead at Gatik in Palo Alto, CA.

Check out other jobs at Dynamo portfolio companies.

💥 Seen any interesting startups or have any tips for the Dispatch? 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.

Dynamo Dispatch (03/23/20)

Issue 100 | COVID 19, EasyPost, Huboo

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

💥 Seen any interesting startups or have any tips for the Dispatch? 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.

Weekly Commentary 💭

We are entering week two (week three for some) of rigorous social distancing and work from home arrangements. As supply chains come into focus due to COVID-19, we will be publishing a series of perspectives on our blog in the coming weeks - stay tuned.

We hope everyone stays safe, healthy, and positive. Please reach out if you think we can be helpful during these turbulent times.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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

Supply Chain 📦

Coronavirus-Era Food Supply: America Has a Lot. Moving It Is Tricky. Whereas just weeks ago the US meat industry was concerned about oversupply due to halted exports of pork and poultry to China, today processing plants are working overtime to meet demand as shoppers stock up on staple foods. Analysts have seen no shortage of food in the US; however, the surge in demand has led to a spike in prices with boneless chicken breast up 30% per pound since the start of the month. Related: ‘There Is Plenty of Food in the Country’, Disney Donates Excess Food to Local Food Banks, McDonald’s Ready to Stay Open if Government Asks.

One Company’s Hands-On Effort to Ramp Up Sanitizer Production. Bay Area producer of high-end hand sanitizer, EO Products has hired temporary workers, added shifts, and converted factory lines to quadruple its output. Nevertheless, the company’s fill rate of orders placed is expected to drop from 98% to 60% this month as year-over-year sanitizer sales have shot up more than 470% nationwide. Jumping into production, LVMH to Manufacture Disinfectant Gel in French Factories to Help Prevent a Hand-Sanitizer Shortage. Also, Fleet Vendors Ramp to Support Telemedicine, BP Offers Free Delivery of Essentials.

Amazon Suspends Non-Essential Shipments to DCsas it Plans to Hire 100K Workers. While last-mile delivery of products already in its facilities will be unaffected, Amazon moving forward will accept only household staples, medical supplies, and other high-demand products from sellers using Fulfillment by Amazon. The policy is slated to last until April 5 as the e-commerce giant copes with a spike in demand for toilet paper, hand sanitizer, and other home goods. See also: Jeff Bezos’ Letter Regarding COVID-19 and Amazon Manages First COVID-19 Case in NYC Facility.

McKinsey on Supply Chain Recovery in Coronavirus Times. The management consulting group offers recommendations for responding now as well as steps towards building long term supply chain resilience. In the current landscape, managers are encouraged to establish transparency on multi-tier supply chains, assess inventory, and estimate realistic customer demand before seeking to optimize production, secure logistics capacity, and model working capital outlays. Long term, it is recommended that a ‘nerve center’ is formally established to map vulnerabilities, digitize the supply chain, and actively triage during crises. Related: 53% of US Manufacturers Expect Operational Impact From Coronavirus.

📊COVID-19 and Implications for Logistics Real Estate. Given the industry standard for long-term occupancy contracts, the Prologis report finds the logistics real estate sector well-buffered from short-term disruptions. The continued growth of e-commerce volumes coupled with managers seeking to insulate supply chains from future shocks are, in fact, likely to drive up inventory levels. In trucking, Truckload Rates Could Stay Volatile Through Summer.

Coronavirus Could Deliver 17M TEU Blow to Container ShippingSeaIntelligence Consulting expects a 10% drop in overall shipping volumes this year. Although SeaIntelligence anticipates a strong rebound in 2021, they warn that the world is only in the early stages of a global decline in demand as the pandemic begins reaching Europe and North America. Speaking of international logistics, Maersk Pauses Crew Changes and Launches Door-to-Door Insurance Solution with Zurich.

MIT: Is It Time to Rethink Global Supply Chains? With remote production and subcontracting becoming increasingly popular, many companies have limited visibility over their suppliers. To obviate supply chain vulnerabilities, responsible managers are encouraged to consider co-locating their production sites with supplier facilities and handling a broader mix of products within a single facility to ensure optionality in case of crisis. Also weighing in on the effects of outsourcing and just-in-time inventory: The Modern Supply Chain is Snapping

DHL Declares Force Majeure. The forwarding giant has found it difficult to deliver on its ocean and air contracts due to the disruptions related to COVID-19. This clause exists for unforeseen circumstances such as the ongoing pandemic. Also, DHL Hurt by Amazon Insourcing Efforts, DHL Places 10K Order with Locus Robotics whom we had on Episode 45 of the Future of Supply Chain podcast.

Mobility 🚗

Detroit Car Makers to Temporarily Close U.S. Plants Over Virus Concerns. Executives from General Motors, Ford, and Fiat Chrysler suspend factory operations across the US, Mexico, and Canada until the end of March following talks with union leaders concerned about the virus’ potential to spread among autoworkers. The halt should not have an immediate effect on dealers, who on average have two months worth of vehicles on their lots; however, industry analysts still anticipate a drop in car sales by as much as 20% for March. Meanwhile, US automakers study medical manufacturing as coronavirus squeezes capacity. Yet there remains skepticism of crossover production: SpaceX and Tesla Might Make Ventilators. But Is It Really That Easy?

Airline Execs Seeking $58B Warn Congress 'Time Is Running Out'. Chief executives from US airlines including Oscar Munoz of United and Ed Bastian of Delta warned House and Senate leadership this weekend that without cash grants thousands of workers will need to be laid off. However, if the industry can receive at least $29B, the airlines have promised they will not let go of employees, eliminate stock buybacks and dividends, and accept limits on executive compensation. For a look into how air traffic controllers have also been affected by the outbreak: Understanding ‘ATC Zero’ in the Face of Coronavirus.

COVID-19 Is Bad for the Auto Industry—and Even Worse for EVs. Given plummeting oil prices and dependence on global sourcing for critical parts like batteries, industry analysts expect a rough year ahead for EV sales. EV manufacturers not only face immediate disruptions in light of COVID-19 but also diminished consumer demand if the economic downturn continues and tight-fisted customers opt for cheaper internal combustion engine alternatives. Case-in-point, Rivian Shutters Facilities Over COVID-19

How Coronavirus Is Disrupting Public Transit. Offering real-time estimates of public transportation ridership, Transit has shown a 60% drop off compared to normal demand. Likewise, transportation data provider TomTom NV finds: Road and Transit Use Falls, Hinting at Declining Commercial Activity. Transit agencies themselves have already taken notice. Anticipating $6 billion in lost fares over the next six months, Hard-Hit Transit Asks Congress for $12.9B in Emergency Funds

A Surge in Biking to Avoid Crowded Trains in NYC.New York City’s bike share program, Citi Bike, sees demand spike 67 percent in year-over-year growth as commuters avoid contact on public transit. Meanwhile, bike share programs in other major metros like San Francisco and Seattle have seen declines in ridership. Some uncertainty over the future of commuting is likewise evident among investors in reports that US Mobility Startups Feel the Chill From COVID-19.

Lime Pauses Scooter Operations in Select Markets amid COVID-19. In divergent responses to the coronavirus outbreak, Lime suspends operations in hotspots Italy, Spain, California, and Washington while competitor Spin instead chooses to remain operational in affected areas. Believing that e-scooters provide a safe option for essential transportation, Spin management has stated its desire to remain active unless municipalities explicitly command a halt. Meanwhile, in a win for all micromobility startups, Electric Scooters to Get Green Light to Go on Britain's Public Roads

Anthony Levandowski Pleads Guilty to Stealing Waymo Secrets. Ending a multi-year legal saga between Uber and Alphabet's autonomous vehicle unit Waymo, the self-driving car engineer has pleaded guilty to stealing trade secrets from Google. Admitting he downloaded one Waymo spreadsheet file, Levandowski now faces up to 30 months in prison. Speaking of AVs, Ford Releases a Data Set to Accelerate AV Development

Uber Says Rides Down by as Much as 70% in Cities Hardest Hit by Coronavirus, Looks at Delivering Meds. With assurances that the company has “ample liquidity,” Uber CEO Dara Khosrowshahi acknowledges this week that ridership has plummeted by as much as two-thirds in cities like Seattle. To support business, the company has actively pushed drivers to its Eats unit, which has remained a strong performer through the outbreak. Related: Lyft Offering Delivery Jobs to Drivers and autonomous development is on pause as Argo AI, Aurora, Cruise, Pony.ai, Uber Halt Self-Driving Tests and Waymo Quickly Followed As Well.

Fundraises, M&A, Talent 💸

Gojek Raises $1.2B in Fresh Capital. As the second close of the ride hail giant’s Series F, the new funds push the total round size to just under $3 billion. Investor names have yet to be disclosed. Following rumors last month of a possible merger with rival Grab, some industry analysts now speculate the two companies might instead be headed for a regional truce: A Grab-Gojek Union? Hope Wrapped in a Tangled Mess of Issues.

James and James Fulfilment Raises £11 million in Development Capital from LDC. The Northampton-based startup enables multi-channel order fulfillment and order tracking through its cloud-based platform, ControlPort. The new funds will support a larger UK fulfillment center and further product development.

Jumingo Raises €1M Angel Round Led by TS Ventures. The digital shipping marketplace connects merchants with service providers including TNT, DHL, and UPS. The new funding will support international expansion and a roll out of more direct-to-consumer and same day delivery options.

Huboo Receives Investment from Maersk Growth. The venture arm of Maersk lead the bridge round for Huboo, a UK-based multi-channel fulfillment startup. Founded in November 2017, the startup stores, picks, packs, and delivers customers orders, allowing merchants to focus on more impactful areas of value add. The investment amount has yet to be disclosed.

Costco Buys Logistics Firm From Sears Owner for $1B. Costco pays cash for Innovel Solutions in the company’s largest acquisition since its merger with Price Club in 1993. The Illinois-based Innovel expands Costco’s last mile capabilities with its 11 distribution centers and more than 100 last mile cross-dock stations specializing in bulky deliveries. 

EasyPost Acquired by Ruby Has. Ruby Has, leading fulfillment company for direct-to-consumer brands, expands its capacity 25% with the acquisition of EasyPost Fulfillment Services. Based in New York, Ruby Has gained national coverage, adding the Midwest to its bi-coastal footprint. 

Shen Takes Reins as Transfix’s New CEO; McElroy to Be Chairman. Founder of the digital freight brokerage, Drew McElroy steps aside as Lily Shen, former chief operating officer, takes the reins as new CEO. “For a while now it’s been in the back of my mind that I’m not the right tip of the spear if we’re going to go as fast as we possibly can,” McElroy said. “With the complexity of the business, to maximize efficiency and velocity is the role of a true operating badass, and that’s absolutely what Lily is.”

Company Building 🛠️

The Matrix for COIVD-19. Sequoia put together this matrix that lays out the possible scenarios of the ongoing coronavirus epidemic. This reflects a lot of the fundamentals we’ve discussed with startups on an on-going basis. 

Eight Steps for Startups to Survive the Coronavirus Crisis. Drive Capital shares its recommendations for the current environment. The most controversial is pulling down on all bank debt lines - this could create a “run on the bank” if all clients called on their liquidity. Speak to your investors if you are weighing a drawdown to provide more liquidity.

Holloway Guide to Remote Work. This will cost $25 but the team at Holloway accelerated the release of their guide to help managers wrangle a remote workforce. There are pros and cons to remote work that we’re all discovering - this guide is a great resource to remain productive during this prolonged WFH period.

Who's Hiring? 👩‍💻

Operations Specialist at Stord in Atlanta, GA.

Customer Success Lead at Backbone in New York, NY.

Systems Integration Lead at Plus One Robotics in San Antonio, TX.

Check out other jobs at Dynamo portfolio companies.

💥 Seen any interesting startups or have any tips for the Dispatch? 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.

Dynamo Dispatch (03/16/20)

Issue 99 | Leaf Logistics, Backbone, Ride Report

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

💥 Seen any interesting startups or have any tips for the Dispatch? 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.

Weekly Commentary 💭

We’re in unchartered territory as the world moves to secure society in the face of COVID-19. We are standing by to support our portfolio, LPs, and the broader ecosystem. We wish everyone a safe and healthy week.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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

Supply Chain 📦

Supermarkets Ration Supplies as Coronavirus Fear Empties Shelves. To ensure flu-related items stay in stock, grocers like Kroger have begun limiting the number of sanitizers, tissues, and cold products per order. Sales of hand sanitizers spiked 313% year-on-year for the week ending February 29. On the delivery front, As Coronavirus Fears Grow, Operators Offer Contactless Options.

How Shopify Is Leading the Online Resistance to Amazon. Powering stores ranging from Allbirds to Kylie Cosmetics, Shopify has emerged as the go-to platform for direct-to-consumer startups. Having invested $1 billion into its fulfillment network to enable two-day shipping, the company looks to compete more directly with Amazon, which today rules over half of all e-commerce sales in the US. Speaking of Amazon, Prime Will Falter During Coronavirus Crisis, Experts Say

Making Luxury Goods Under Coronavirus Lockdown. The Italian government’s ban on public gatherings has carved out an exemption for business activities. With remote production impossible, Italy’s artisans continue crafting for luxury brands under additional measures like daily temperature checks and mandatory face masks.

🌟Coronavirus Is Proving We Need More Resilient Supply Chains. Failing to learn from the aftermath of the 2011 Fukushima earthquake, many multinationals have been affected again by ill-prepared second- and third-tier suppliers based in the quarantined regions of China. Tech-enabled supplier mapping and monitoring tools are recommended as necessary investments to ensure resilient operations in the face of such crises. Related: 3 Ways to Manage Coronavirus Risk in the Supply Chain Also, Designing Flexible DCs for Uncertain Times.

MSC Deploys Mega Ships to Reposition Containers. Throughput across West Coast ports has dropped precipitously since the outbreak of the coronavirus. As part of its effort to overcome the problem, MSC is leveraging its fleet of 23K TEU vessels to bring much-needed empty containers back to the US.

Trucking: Uncertain Market Spurs Trucking Contract Innovation. For an industry generally opposed to rate flexibility and guaranteed volumes, the coronavirus has prompted new forms of negotiation between shippers and carriers. Industry players report more flexibility in contract pricing, allowing for some adjustment should rates jump or fall dramatically. Check out this toolkit from MIT, Future Freight Flows: Scenario Planning.

📊The 2020 MHI Annual Industry Report - Embracing the Digital Mindset. Top three company challenges include hiring/retaining qualified staff; meeting demands for lower delivery pricing; customer demands for faster response times. It’s unclear how the adopted technologies map to these priority areas but in the current environment expect investments in reducing overall costs. In terms of budgeting, most companies plan to spend <$1M on supply chain technologies over the next 2 years. Blockchain was at the bottom of adopted technology survey results so... Who Is Buying into IBM’s Blockchain Dreams?.

Mobility 🚗

📊The Congestion Con: How More Lanes and More Money Equal More Traffic. Transportation for America (T4A) report finds that congestion increased 144% from 1993 to 2017 despite the US adding 42% more freeway lane-miles during that time. Among its recommendations, the report encourages public officials to encourage driving alternatives, focus on improving existing infrastructure, and consider implementing congestion pricing. Speaking of roads, Why the US Sucks at Building Public Transit

Big Data Could Revolutionize Transportation. Is That a Good Thing? With the advent of smartphones and tech-enabled micromobility options, city officials now have the capacity to make data-informed planning decisions. However, pushback exists not just from private companies, loathe to share data, but also citizens concerned about privacy. Related, What Happened After Market Street Went Car-Free and in Asia, SoftBank Shareholders Push For Grab, Gojek Deal to Consolidate Ridesharing Market.

📊Charging Electric-Vehicle Fleets: How to Seize the Emerging Opportunity. McKinsey estimates annual revenue for EV charging to be as much as $15 billion by 2030. According to the firm’s report, companies will need to look beyond existing business models and consider partnerships or combined services to win the market. On the topic of electrification, Samsung Claims New Solid-State Battery Tech Can Give EVs a 500-Mile Range.

🌟Public Transport and Infectious Diseases. A review of Hong Kong, Seoul, and Singapore mass transit systems suggests that major cities can still maintain public transportation through a viral outbreak. However, upgrades like hand sanitizer dispensers and infrared sensors for temperature checks are warranted to make transit less infectious. On how cities can practice ‘social distancing,’ Public Transit and Public Health.

How Travel Startups Are Coping with Coronavirus. On average new bookings have fallen by half while customer inquiries have spiked. Nonetheless, the travel startups surveyed affirm that customer satisfaction remains a top priority with some even rolling out new products to ensure users’ medical safety during the Covid-19 outbreak. Also, Coronavirus Exposes Gig Workers to Risks.

Coronavirus Raises Fears of U.S. Auto Sales Slowdown, but Production Not Suffering Yet. Robust supply chains have prevented any production delays thus far for US automakers. However, cities hardest hit by the outbreak have already seen a significant decline in auto sales; Seattle falls the furthest with a 20% drop off. Related, Chinese Manufacturing Slowly Begins Recovery From Coronavirus Disruption.

British Airways Warns Airline is Fighting to Survive. In a dire memo titled “The Survival of British Airways,” chief executive Alex Cruz warns staff of impending job cuts and route suspensions. Comparing the current outbreak to September 11 and SARS, Mr. Cruz in his memo writes “What is happening right now as a result of Covid-19 is more serious than any of these events.” Also, Delta is Slashing 40% of Routes while Airport Operators Come Under Stress.

Fundraises, M&A, Talent 💸

Leaf Logistics Raises $20M Series A. Dynamo portfolio company, Leaf Logistics will use the fresh capital to expand its forward contract platform, which facilitates the buying and selling of transportation capacity through long-term binding rates with carriers. 

Backbone Raises $4.7M Seed. Dynamo portfolio company, Backbone emerges from stealth and has secured its first Fortune 500 customer with 15 more in the pipeline. Backbone offers a platform for automating data and workflows between companies.

Neolix Technologies Raises $29M Series A Led by Leading Ideal. The Beijing-based startup joins a host of other autonomous vehicle developers that have raised in recent weeks. The company will use the fresh capital to boost production of its Level 4 autonomous delivery shuttles.

Overhaul Raises $17.5M Series A led by Edison Partners. The Austin-based startup has developed a real-time visibility platform for managing cargo and will use the fresh injection to build out AI tools for predicting supply chain disruptions.

Ride Report Raises $10M Series A led by Unusual Ventures. The micromobility monitoring team already has a presence in 70 cities across the US and New Zealand. The fresh funds will support expansion into emerging markets.

HaulHub Acquires Trelar. Fresh off a $30M raise, HaulHub, a digital supply chain platform for the construction industry, announces acquisition of material ordering platform Trelar for an undisclosed sum. The purchase helps cement HaulHub’s position as a leader in the construction space. 

The Man Behind the Plan to Remake FedEx. Having started his career at the company as a marketing analyst, Raj Subramaniam has risen to COO and joined the FedEx board as of January. The architect of the company’s Air-Ground integration, Subramaniam is seen as founder Fred Smith’s likely successor, although the chief executive has no plans to step aside as of now. Related: UPS taps former Home Depot CFO Carol Tomé to succeed David Abney as CEO. Also, Mike Lenz to Succeed Alan Graf as FedEx CFO

Company Building 🛠️

A Guide to Managing Remote Teams. 60 pages of research to help leaders with the practicalities of managing a remote team. It could be useful for first-time managers or those new to the dynamics of remote work in face of WFH arrangements.

Advice for Companies with Less than 1 Year of Runway. “The hardest part of dealing with a low runway situation is managing your own psychology. You have to simultaneously manage your own anxiety to not be overly negative about your prospects, but also not be irrationally positive. It’s a delicate balance.”

Some VCs Urge Startups to Jump on Opportunities Amid Downturn. Ted had a similar rally for our startups - “Customers are going to need help right now and there will be huge opportunities for startups to help them in crisis management. Let’s all stay ultra aggressive.”

Who's Hiring? 👩‍💻

Business Development Manager at Tenderd in Dubai, UAE.

Backend Engineer at Verusen in Atlanta, GA.

Fullstack Developer at ChAI in London, England.

Check out other jobs at Dynamo portfolio companies.

💥 Seen any interesting startups or have any tips for the Dispatch? 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.

Dynamo Dispatch (03/09/20)

Issue 98 | Waymo, WhereIsMyTransport, HaulHub

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

💥 Seen any interesting startups or have any tips for the Dispatch? Introduce us.
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Weekly Commentary 💭

Good morning! The S&P just dropped 7% within the first 15 minutes of the day triggering the circuit breaker which puts a pause on trading activity. Markets have been rattled by the threat of coronavirus that’s continuing to hamper cross border trade flows but driving consumers to shop online and stock up on rations at outlets such as Walmart and Costco. As a result, national and regional supply chains continue to perform as businesses work through existing inventories to fulfill demand.

Adding fuel to the fire (pun intended), uncertainty around the energy markets, namely the wrangling between Russia and Saudi Arabia only hurts in the short run. We’re mindful that cheap oil makes the ROI for alternative energy more difficult which could hamper efforts for decarbonization. Even if the price dislocation is for a short period of time, the ability to build up inexpensive inventory would help some nations “kick the can” on electrification. We do note that existing supply chain transportation providers would benefit from lower energy costs as freight demand slows.

We are not expert epidemiologists so will refrain from suggestions around the virus and focus on business building and financing through macroeconomic softness. Great businesses will continue to be founded and built in such an environment and we’re excited to support Founders on the journey. Our general thoughts are best distilled in five points: ensure the battalion is safe; expect the unexpected; cash is king/queen; embrace optionality; stay positive.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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

Supply Chain 📦

Box Carriers’ Bill for Volumes Lost to Coronavirus Nearing $2B. Research from SeaIntelligence Consulting estimates that container lines have now lost 1.9M TEU in volumes since the outbreak began. While the number of blanked voyages have finally declined this past week, industry experts still warn the ripple effects are not yet over. Meanwhile, shoppers stocking up on goods domestically has led to Trucking Volumes Spike Despite— Because of—Coronavirus Concerns. Related, IHL Looks at Coronavirus Impact on Retailers’ IT spending

🌟Amazon Opens Smaller Warehouses Near Big U.S. Cities for Faster Delivery Times. The additional infrastructure will expand Amazon’s same-day delivery options from 20,000 items to more than 100,000 products in Phoenix, Philadelphia, Dallas, and Orlando. The option is free for Prime members who spend at least $35, but will otherwise cost $12.98 per order -- a price likely to encourage sign ups. Related, Target Reports Mixed Fourth Quarter, but Notes Same-Day Services Grew More than 90% in 2019.

The Final-Mile Headache Gets More Painful for Walmart as Skipcart Quits. Following its aborted partnerships with Uber and Lyft, Walmart loses another last-mile grocery courier in Skipcart. Despite handling more than 50,000 deliveries per month for the retailer, Skipcart was losing money “hand over fist” according to chief executive Ben Jones. Meanwhile, Fear of the Coronavirus Is Driving a Surge in Grocery Delivery Services.

TuSimple Expands Autonomous Trucking Program with UPS. UPS announces the decision to increase its pilot with autonomous trucking company TuSimple to 20 trips per week. Until now, the pilot has run between Phoenix and Tucson, AZ; the additional 10 trips will introduce a new route to El Paso, TX.

Freight Tracking Remains Unsolved. According to a recent survey of 1,700 companies, 81% do not have full visibility into their supply chains and 54% have no visibility at all. Dynamo’s Matt McHugh discusses the shortcomings of current freight monitoring solutions and what technology is still needed to overcome the interoperability hurdle.

The Coronavirus Will Reveal Hidden Vulnerabilities in Complex Global Supply Chains. The Brookings Institute warns that vulnerabilities in nodes within global economic networks might only be realized upon their sudden failure. However, using the current shock to map supply chains and implement strategic redundancies is likely to bring forth alternative approaches that could ultimately prove more robust in the long term. 

H&M Opens Up Global Supply Chain to Rivals in Green Push. The Swedish retailer launches a new venture called Treadler, allowing midsize brands to tap into its supply chain. In line with its goal of becoming carbon-neutral by 2030, the sustainability strategy will give brands access to the fashion giants’ suppliers, production facilities, and logistics network. Related, IKEA Seeks to Cut Costs, Waste With Smarter Approach to Customer Returns.As for retailers pursuing different priorities,Amazon Nixed ‘Green’ Shipping Proposal to Avoid Alienating Shoppers.

Mobility 🚗

Hackers Can Clone Millions of Toyota, Hyundai, and Kia Keys. Flaws in the DST80 encryption system used by the OEMs allow criminals to easily lift cryptographic data from fobs. Coupled with some old-fashioned hot-wiring, these vulnerabilities allow criminals to impersonate the key and start the car’s engine.

🌟Airlines Could Lose $113 billion in Passenger Revenue Due to Coronavirus, IATA Says. The International Air Transport Association’s best case scenario is now $63 billion in lost revenue, assuming a V-shaped recovery in March. Should the virus continue spreading broadly, losses are expected to exceed $100 billion -- roughly one-fifth of worldwide passenger revenue. Related, Airlines Face $100 Billion-Plus Virus Hit, Discounts 'Wouldn't Do Any Good'.

📊The Frequency and Characteristics of Improper Scooter, Bike, and Car Parking: Report. Despite concerns across major American metros about “scooter clutter,” new research by leading urban planners finds that motor vehicles are the biggest culprit of parking noncompliance. Of the 3666 transit modes that were observed, cars were found to impede access far more (24.7%) than bikes (0.3%) and e-scooters (1.7%). Another topic for urbanists to consider: Pandemics Are Also an Urban Planning Problem.

Americans Spend 15%+ of Their Budgets on Transportation Costs - These US Cities Are Trying to Make It Free. Kansas City follows in the footsteps of Corvallis, OR and Olympia, WA to become America’s first large city to implement zero-fare public transportation. Supporters point to the fact that fares in most transit systems comprise less than 10% of revenue and a switch to a free model reduces operating costs for collection. A related opinion on improving mass transit: It's Time for Some Cheap and Boring Transportation Solutions. As for a new solution boosting last-mile mobility, L.A. Metro to Launch Ride-Hailing for Short Trips

Uber Prepares to Pay US Drivers Exposed to Coronavirus. Following similar moves in Mexico and the UK, the ridehail giant affirms it will compensate American drivers affected by Covid-19. Those who are quarantined or diagnosed with the virus will receive compensation up to 14 days, according to a recent company email. In other news regarding driver compensation (and classification), Uber Ruling in France Boosts Gig Workers’ Rights.

GM Lays Out Ambitions for Electric-Vehicle Lineup to Rival Tesla. Chief executive Mary T. Barra announces plan to sell a million electric vehicles annually by 2025. According to Barra, the new line of EVs would be profitable just shortly after the first models were introduced. Taking a similar tact towards electrification, Ford Confirms US-built Electric Cargo Van under Its $11.5 Billion Plan

Fundraises, M&A, Talent 💸

Waymo Raises $2.25B to Scale Up Autonomous Vehicles Operations. The massive injection closes the Alphabet subsidiary's first round of funding. Silver Lake, Canada Pension Plan Investment Board, Mubadala Investment Company, Magna International, Andreessen Horowitz, and AutoNation all participated.

Spinny Raises $43.7M Series B Led by the Fundamentum Partnership. Also participating were General Catalyst Partners, KB Financial Group, Accel, SAIF Partners and Alteria Capital. The startup is among the leading Indian platforms for selling used cars online.

Five raises $41 million Series B from Trustbridge Partners, Direct Line Group and Sistema VC. The UK-based startup has developed a cloud-based platform to assure the safety of self-driving software. Lakestar, Amadeus Capital Partners, Kindred Capital and Notion Capital also participated in the round. 

HaulHub Raises $30M Series B Led by T. Rowe Price Associates and Durable Capital Partners. The Boston-based startup provides a platform for construction companies to manage material movement with real-time tracking and automated scheduling. The startup looks to bring on additional engineers and operational staff.

Bolt Mobility Raises $30M Series A Led by Rokk3r Fuel ExO. Among the executives of the Miami Beach-based e-scooter startup is world-record-holding track star Usain Bolt. With the new injection, the team plans to kick start expansion beyond South Florida.

WhereIsMyTransport Raises $7.5M Series A Led by Liil Ventures. The startup maps public transport routes in emerging markets, having already documented 50,000 km of routes in 39 cities across Africa, Latin America, and Southeast Asia. The fresh capital will be applied to further expansion. 

Sweden’s X Shore Raises €5 million Led by Peter Dahlberg. Emphasizing sustainability, the Swedish startup has developed all-electric, silent boats for personal recreation. The new funds will support the growth of the team, facility expansion, and product development. 

BoxLock Raises $4.5M from DHL, TNT, uShip, Aramex, InXpress and Maersk Executives. The Atlanta-based startup offers smart padlock devices that thwart porch pirates and support couriers' successful delivery rates. CEO Brad Ruffkess had previously been featured on hit TV show “Shark Tank” in 2018 but failed to secure an investment.

Nikola to Go Public with $3.3B Valuation. The fuel cell Class 8 startup builds hydrogen-powered big rigs. Following a merger with publicly-traded VectoIQ, the company plans to list on the NASDAQ under ‘NKLA’ in Q2 of this year. 

Company Building 🛠️

Coronavirus: The Black Swan of 2020. “Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive ‘are not the strongest or the most intelligent, but the most adaptable to change.’”

🌟Zapier Guide to Remote Working. Many companies are offering or mandating remote work for their staff as the threat of coronavirus remains. This guide from Zapier is a worthwhile read/can help ease the growing pains.

The YC Guide to Raising a Series A. In light of the coronavirus, some founders might determine that they would like to accelerate their fundraising plans or are looking for perspective on closing out an outstanding fundraising process. This is a worthwhile primer.

Who's Hiring? 👩‍💻

Simulation Engineer at Gatik AI in Toronto, ON.

DevOps Engineer at SVT Robotics in Norfolk, VA.

Director of Engineering at Plus One Robotics in San Antonio, TX.

Check out other jobs at Dynamo portfolio companies.

💥 Seen any interesting startups or have any tips for the Dispatch? 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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