One of the two leaders in the real-time transportation visibility market is FourKites. The CEO – Matt Elenjickal – told me that the company has roughly $100 million in revenue. That is fast growth. ARC Advisory Group did a study on the supply chain collaboration network (SCCN) a couple of years ago. ARC considers real-time visibility solutions, like the one from FourKites, one type of SCCN solution. In that study, FourKites 2021 revenues were estimated to be $65 million. This is a fast-growing market, but FourKites has clearly gained share.
The interview occurred during athe FourKites Visibility 2023 user conference on September 7th in Chicago.
What accounts for FourKites Growth?
The network has grown in size. FourKites believes they have the largest repository of supply chain data in the world. This allows the company to do some interesting benchmarking. FourKites, for example, can tell one of their shipper clients how long carriers are sitting on average at their warehouses and how this compares to the industry average; Or they can tell a shipper client the appointment reliability at one of that shippers customer’s distribution centers.
FourKites is on the cutting edge of applying artificial intelligence (AI). The company’s customers report that the ETAs provided by these FourKites are more accurate, timely and easier to access than those provided by carriers. And at last week’s FourKites Visibility user conference, the tech pioneer reported investment in a different form of artificial intelligence, Generative AI. Priya Rajagopalan, the chief product officer, demonstrated the dramatic improvements in usability that result from the ability to ask the solution difficult questions and get an answer.
The solution has also grown in the breadth of their modal coverage. I attended my first Visibility conference in 2020. In 2020, the company had expanded beyond providing over the road visibility to providing end-to-end visibility across multiple modes and regions. Modal visibility has continued to expand and today it also includes last mile and parcel.
But in my mind, it is the growing granularity of the visibility that FourKites provides that is most noteworthy. In 2020, the visibility had just expanded beyond tracking shipments to providing yard visibility. But the message is now much bigger.
There are Different Types of Supply Chain Visibility
But Mr. Elenjickal points out that there is a difference between transportation visibility – where the truck or plane or ship is, inventory visibility – visibility to where stock keeping units are located across the end-to-end network, and order visibility.
Today, FourKites can track order visibility. Shipment/inventory tracking can tell you whether a shipment will be on time, but not whether everything that was supposed to be on that shipment is there. Calling the FourKites platform a real-time transportation visibility solution is a misnomer; This is a real-time supply chain visibility solution.
Ever since I first met Mr. Elenjickal, he has always believed that the value from a real-time visibility solution is not visibility, the key is real-time decision making. Deeper forms of visibility, he now argues, allow for better decision making.
To get visibility to whether a load will be on time and in full, a lot more data is required. A sales order, for outbound tracking, or purchase order for inbound tracking, becomes the unique identifier. Then the pallet numbers and stock keeping units associated with the pallets are attached to that identifier. Finally, the transportation asset is attached once the pallets are loaded. This allows the amount ordered and the deadline to be compared to what was actually delivered and whether the shipment arrived on time. Achieving these kinds of granular visibility requires deeper integration into a wide variety of customer business applications. This in large part is what accounts for the huge amounts of data collected by the FourKites solution.
How Do You Spell ROI?
Transportation visibility solutions provide a wide variety of benefits. The solutions reduce fines. These fines include reduction of demurrage – late fees paid to a truckload carrier for not getting their trailer out of their yard quickly enough, or fees paid to an ocean carrier based for the failure to load or discharge the ship within the time agreed, or fines paid to cities because too many trucks are idling outside a company warehouse, or the fines paid for not delivering shipments on time. Large retailers demand shipments be delivered on time in full.
Customers of these solutions also mention improved improved agility, improved transportation procurement, better warehouse and yard operations, better store operations for retailers, and other benefits as well.
But, according to Mr. Elenjickal the leading reason their solution is now bought is to improve customer service. While it is difficult to attribute increased sales to having a higher percentage of on-time shipments, not shipping everything a customer ordered clearly impacts top line revenue. The reduced revenue from short shipments is an easy calculation. In short, the value proposition from being able to provide deeper forms of visibility has expanded from just cost reduction to what many CEO’s find much more valuable, increased revenue.