Transcripts
Welcome back to Unboxing Logistics.
Speaker:Everyone, you know the drill.
Speaker:I'm your host, Lori Boyer from EasyPost, and I am really, you
Speaker:guys are in for a treat today 'cause we have a fantastic guest.
Speaker:Barely needs introduction from me, Benjamin Gordon.
Speaker:He has seen logistics, I feel like from every side, every angle.
Speaker:He's been operator, deal maker, investor now.
Speaker:He built and sold a logistics company to Maersk.
Speaker:He's advised big names like UPS, DHL, on billion dollar deals.
Speaker:Today he runs Cambridge Capital where he basically has to have all the knowledge
Speaker:to know what he thinks is gonna be the future in the logistics industry.
Speaker:And he also runs the BGSA Supply Chain conference.
Speaker:You know, that's basically the power summit conference of our
Speaker:industry where all the biggest CEOs, investors, innovators in supply chain
Speaker:meet, figure out what's going on.
Speaker:And I was just really excited to have Ben on today.
Speaker:I have to also throw in, you went to both Yale and Harvard, is that right, Ben?
Speaker:I did not, 'cause I got kicked outta one, but one was.
Speaker:Oh, okay.
Speaker:Yeah.
Speaker:You were the, you were the troublemaker, huh?
Speaker:So, Ben, tell us a little bit, anything I've missed, anything
Speaker:you'd want our audience to know about you and your background?
Speaker:Well, Lori, such a great introduction.
Speaker:Thank you.
Speaker:I, I think anything I say won't won't match up to the fantastic
Speaker:billing, but I, I appreciate it.
Speaker:So thank you.
Speaker:Great to be with you.
Speaker:Well, I'm excited.
Speaker:And you know, I really was thinking, I was telling him beforehand that I was
Speaker:really thinking through which topic we should discuss because he has incredible.
Speaker:Hanta and thought leadership out there that I've read.
Speaker:And so today we're gonna be talking a little bit about AI.
Speaker:I am really excited about that.
Speaker:Before we do Ben, why don't you go ahead.
Speaker:One thing we've been doing this season in our podcast is asking people to share
Speaker:a person in the industry that you just really admire and, and kind of why.
Speaker:So I would love to hear from you having been around for, for a hot minute.
Speaker:Well, thank you.
Speaker:And there are lots of amazing people that I've had the opportunity to work
Speaker:with including sadly, the late Fred Smith who just passed away very recently
Speaker:hundreds of CEOs that I've worked with either invested in in their companies
Speaker:or advised but I'm gonna go old school and, and, and tell you that one person
Speaker:in the transportation industry who I admire, who's the reason I got into
Speaker:this industry, it was my grandfather.
Speaker:And the reason is because my grandfather started a, actually, he started a car
Speaker:dealership business back in 1948.
Speaker:And, and the reason he got into the business was the job that he
Speaker:really wanted, he couldn't get.
Speaker:He wanted to go into the steel industry.
Speaker:And, and his dad had a small steel business.
Speaker:They did business with Bethlehem Steel.
Speaker:He couldn't get hired into the management training program at Bethlehem Steel.
Speaker:And so he said, okay, and this is the case with so many
Speaker:great entrepreneurial stories.
Speaker:He turned adversity into success.
Speaker:He went, actually, he went into another car business and then said
Speaker:to the owner, here's the deal.
Speaker:I'm gonna be the hardest working best employee you've ever had.
Speaker:And then in four years I would like your permission to let me buy you out.
Speaker:Which is a pretty let's just say a, I dunno, about a 21
Speaker:year olds that would say that.
Speaker:Ballsy.
Speaker:And, guess what, he did.
Speaker:Bought it, rebranded it, built it out his way, grew it and then, and then moved
Speaker:into truck leasing and started a, a dedicated contract carriage business that
Speaker:would ultimately evolve into logistics.
Speaker:And so the reason I got into this industry, I never, I didn't want
Speaker:to be the guy that had a job 'cause he was related to somebody else.
Speaker:So I went my own way.
Speaker:But I, I mean after, after Yale, I went into strategy consulting,
Speaker:worked at a Bain spinoff called CDI, then Harvard Business School.
Speaker:And while I was there, I wrote what I thought was gonna be the business
Speaker:plan for a technology division, an internet division that would
Speaker:help my grandfather automate part of his logistics company, AMI.
Speaker:'Cause they had in, in a room probably smaller than the room
Speaker:you're sitting in right now.
Speaker:They had a, a couple of guys on phones calling, trying to broker
Speaker:freight so they would have dedicated lanes so that lanes would be full
Speaker:going one way, empty coming back.
Speaker:The brokers would try to fill the lanes.
Speaker:And I said, Hey, there's this thing called the internet.
Speaker:I bet we could do this more efficiently.
Speaker:And and I, I pitched my grandfather on it.
Speaker:Of course, in true nerdy fashion, I wrote an 86 page business plan.
Speaker:And in true old school, focus on what matters fashion.
Speaker:My grandfather read the first four pages and then closed it
Speaker:and said, well, I've seen enough.
Speaker:So I said, well, what do you think?
Speaker:He said, it's a good plan.
Speaker:I said, well, do you wanna do it?
Speaker:He said, no, my plan's better.
Speaker:I said, well, what's your plan?
Speaker:He said, well, I'm selling my company.
Speaker:So and he did.
Speaker:So he sold his company.
Speaker:Today it's a part of Penske.
Speaker:But it gave me the catalyst 'cause I thought, okay, I spent
Speaker:all this time creating this idea, it's not gonna work here.
Speaker:Why didn't I just turn this a new startup?
Speaker:And so I did.
Speaker:And that company in 1999 became Threeplex, which would be one
Speaker:of the first SaaS TMS companies.
Speaker:So, you know, I learned a lot from my grandfather.
Speaker:Learned a lot about the value of, of grit of tenacity, judgment, people
Speaker:judgment, situational judgment, willingness to know what, when it's
Speaker:time to you know, get, get outta the details and, and, and pull back.
Speaker:But I, I, I owe him the inspiration for starting my first company.
Speaker:So thanks to his not going with my idea gave me the catalyst to go start it.
Speaker:I love that.
Speaker:And what was his name?
Speaker:Is he still around?
Speaker:No, no.
Speaker:He passed away in 2010.
Speaker:His name was Gene Ribicoff.
Speaker:Gene.
Speaker:Okay.
Speaker:Love that story.
Speaker:I especially loved the fact that he said no.
Speaker:Because it is one of those life lessons as well for you as like, when are
Speaker:the times that you need to say no?
Speaker:Like this isn't the right move today.
Speaker:And I think especially as kind of an investor or whatnot, there's a
Speaker:lot of times where doesn't mean that the idea was bad, it just wasn't
Speaker:right for that time in that place.
Speaker:So totally, totally love that.
Speaker:That's amazing.
Speaker:Okay Ben, you've been around in logistics you know, since a long time
Speaker:before AI sort of became our buzzword.
Speaker:When you look at sort of today's AI boom, what kind of parallels do you see maybe to
Speaker:earlier waves of tech hype in logistics?
Speaker:Sometimes I hear people say, this is just another thing, you
Speaker:know, another big tech thing.
Speaker:I guess, why do you think it is such a huge topic in, I, you know, I
Speaker:can't go to a conference for like a second without seeing AI everywhere.
Speaker:What, what is your impression?
Speaker:What's the, what's the Ben Gordon take on it all?
Speaker:Well, look, my take is, on the one hand we are in a hype cycle.
Speaker:On the other hand, there is no doubt that AI has the capacity to totally transform,
Speaker:not just logistics, but everything.
Speaker:But particularly logistics because AI is outstanding in areas that, one,
Speaker:are process intensive and there are an awful lot of processes to automate.
Speaker:Two document intensive.
Speaker:And if you look at, you know, the various, the, the fact that you know,
Speaker:here we are all these years later and there's still a tremendous amount of EDI
Speaker:and there's still a tremendous amount of, of, you know, Excel based work.
Speaker:There's just, there, there's a lot of data workflow process
Speaker:and, and transaction intensity.
Speaker:AI is, is really a perfect tool to help automate all that.
Speaker:And then lastly it also addresses the thing that I think has been a
Speaker:hurdle for so many prior technologies, which is the natural language
Speaker:processing makes it easy to use.
Speaker:You don't have to be an engineer to use it.
Speaker:You know, they all just talk about vibe coding and the idea that you
Speaker:or I or somebody else that isn't a trained engineer can use AI to to
Speaker:do things that, that took much more technical training before.
Speaker:Now a natural language processing makes it possible.
Speaker:So I think all that's great.
Speaker:What does it remind me of?
Speaker:Well, it reminds me of what we were just talking about.
Speaker:It reminds me of 1999 right?
Speaker:Why?
Speaker:Because in 1999, what people said about the internet, in many respects,
Speaker:similar to what people say about AI now, they said, number one,
Speaker:it's gonna transform the industry.
Speaker:It did.
Speaker:Number two.
Speaker:Interestingly, they said, well, the internet's gonna cut out the middleman.
Speaker:So is logistics, you know, our truck brokers gonna go away.
Speaker:Well, obviously that proved not to be true.
Speaker:It, it turned out that it became a powerful tool to automate
Speaker:brokers, not to replace them.
Speaker:Number three you know, people assign tremendous valuations.
Speaker:So much so, I mean, it's interesting.
Speaker:I was, I was talking with Tom Sanderson recently.
Speaker:Tom was the CEO of Transplace.
Speaker:When Transplace was formed, it was the logistics arms of six
Speaker:different trucking companies.
Speaker:They formed it in 2000 and they thought, hey, if we call it Transplace, add a
Speaker:dot com at the end, and then go for a plan to try to take it public, we will
Speaker:instantly, massively increase the value of our trucking companies just by virtue
Speaker:of the share that we, we hold in this.
Speaker:Now of course, that was crazy, right?
Speaker:It didn't actually make sense.
Speaker:But the substance underneath all that was legitimate.
Speaker:internet powered businesses made a huge impact.
Speaker:And I think the same is true here.
Speaker:So is there lots of hype?
Speaker:Yes.
Speaker:Will a lot of companies fail?
Speaker:Yes.
Speaker:But in the end, will AI be a tremendous source of productivity
Speaker:gain for companies that use it well?
Speaker:Absolutely.
Speaker:Just like it was the case with the internet and those that were early
Speaker:adopters and companies that, that used Threeplex and others back in 99.
Speaker:I think the same is true today.
Speaker:I love that.
Speaker:I love because it's like, similarly with the internet, we don't know for
Speaker:sure exactly what changes it's going to implement, and sometimes maybe
Speaker:we'll think it's gonna, you know, spur a change here or there, and
Speaker:then it doesn't, but it does it in a different way, so that's super exciting.
Speaker:One of the articles I read of yours, you said AI should not
Speaker:be just a shiny dashboard.
Speaker:Sometimes I've seen that as well.
Speaker:Like people saying it, it just looks good in the sales deck sometimes, right?
Speaker:It has to actually get your data and turn it into action, so.
Speaker:We have a lot of shippers listening out there.
Speaker:If I'm that shipper, how can I tell the difference maybe between a, something
Speaker:that really is gonna work and something that is just sort of a shiny dashboard.
Speaker:It's just hype.
Speaker:I, I like to think you're saying right along this, you know, AI is sort of like
Speaker:the most overhyped, but kind of underused and taken advantage of tool because of
Speaker:these shiny dashboard sort of views.
Speaker:What is your advice for shippers?
Speaker:Number one is start with a clear definition of the business problem.
Speaker:Right.
Speaker:What is it that I'm trying to solve?
Speaker:I'll give you an example.
Speaker:GreenScreens, which is a company that I co-founded five years ago,
Speaker:and it was focused on AI powered predictive pricing for trucking
Speaker:focused on one very specific problem.
Speaker:There's no ambiguity about it.
Speaker:In fact, we wouldn't have even called it an AI company.
Speaker:We called it a predictive pricing company, 'cause the focus was the problem.
Speaker:What was the problem?
Speaker:Well, if you were a truck broker or shipper, or a carrier for that
Speaker:matter, it's tremendously important for you to know how should you price.
Speaker:If I've got a truckload of freight going from Salt Lake City to Miami,
Speaker:you know, and I get the price wrong, it makes a big difference.
Speaker:Now, if you're a carrier and you get the price wrong, it matters.
Speaker:If you're a truck broker, and right now average margins, gross revenue
Speaker:to net revenue are about 12% in the industry if you get that wrong,
Speaker:if you are off by 6%, right, that could be the difference between
Speaker:making you know, normal money versus, you know, making net of everything.
Speaker:Because at 6% margin, you're actually losing money when you fully
Speaker:load it with all of your costs.
Speaker:You know, that's a big difference.
Speaker:And it turned out that NFI, you know, major logistics company did a
Speaker:study and they found that using the other 60% market share company in
Speaker:pricing, they found a 20% error rate.
Speaker:In what in, in, in the pricing that they got.
Speaker:So if you have a 20% error rate and a 12% margin, you're pricing at a gross
Speaker:margin loss an awful lot of the time.
Speaker:So this was the big problem.
Speaker:The issue was not AI, the issue is solve the problem.
Speaker:Well, wait, wait, okay, I gotta pause that.
Speaker:That was so good, Ben.
Speaker:The issue is not AI.
Speaker:The issue is solve the problem.
Speaker:I mean, that's critical right there.
Speaker:Okay, go ahead.
Speaker:I just love that, that was genius.
Speaker:By the way.
Speaker:I mean, you, you see this whenever a company leads by
Speaker:saying, I am, fill in the blank.
Speaker:Something, you know, that sounds shiny.
Speaker:Usually that's a sign that, that they're not the, the best at the problem.
Speaker:You know, there's a, there's a saying in in law, which is if the facts
Speaker:are on your side, cite the facts.
Speaker:If the facts are not on your side, cite the law.
Speaker:And if the law's not on your side, pound the table.
Speaker:I come from a long line of, of lawyers, so I know what you're talking about.
Speaker:But you know that.
Speaker:Yeah.
Speaker:Mm-hmm.
Speaker:So to me, you know, people that start by saying, I'm an AI company, that's
Speaker:the equivalent of pounding the table.
Speaker:Whereas if the facts are on your side, you lead with with, with the facts, which
Speaker:in this case, it was solve the problem.
Speaker:And the problem was get the pricing right.
Speaker:So, so for GreenScreens it was focus on the problem and then
Speaker:communicate with truck brokers.
Speaker:Truck brokers were the ones that needed it the most because given
Speaker:that thin margin and wide dispersion based on getting the pricing wrong,
Speaker:if you're using DAT or somebody else, it really mattered to get it right.
Speaker:And guess what?
Speaker:The early adopters were all major truck brokerage companies and, and so within,
Speaker:I don't know, two years, something like 150 of the top 200 truck brokers,
Speaker:something like that, you know, all you know, signed on because it was such a
Speaker:clear, compelling value proposition.
Speaker:They weren't doing it because of AI.
Speaker:They were doing it because it helped them boost their margin because
Speaker:they're getting the pricing right.
Speaker:So I think lesson number one is look for companies that are laser focused
Speaker:on the problem that you care about.
Speaker:And that's, I think that's a, a big deal.
Speaker:Can I ask one question there?
Speaker:So I've talked about this a little bit before, where some of the best
Speaker:AI tools are kind of vertical.
Speaker:They go deep on one specific niche.
Speaker:You know, rather than really broad and horizontal.
Speaker:And then I've had a few people question me, when I go that way, my tech stack sort
Speaker:of starts to blow up with too many tools.
Speaker:Do you have advice for that?
Speaker:There's not always a great easy answer, but I'd love to hear what you say.
Speaker:Yeah.
Speaker:So a couple things.
Speaker:I mean, this, this also comes to the question of do you want a bundle or
Speaker:a series of great point solutions?
Speaker:And in the early stages of innovation, the point solutions are almost always better.
Speaker:Same was true with the internet.
Speaker:You looked at the best internet companies, 99, 2000, 2001.
Speaker:You know, you, you would have one company for one feature,
Speaker:another for another, et cetera.
Speaker:And then eventually, as the market matured and consolidated, some
Speaker:big platforms came out of it.
Speaker:And of course, those platforms included large TMS providers and then people
Speaker:that would aggregate other capabilities.
Speaker:You know, like, like you know, someone today like a, a
Speaker:BlueYonder would be an example.
Speaker:You know, or an Infor.
Speaker:So you know, you have that maturity cycle.
Speaker:Well, today because of the early stage of AI, you are usually better off picking
Speaker:individual point solutions that are great.
Speaker:But there will come a time in the next three to five years where that
Speaker:evolves and, and then you'll be better, you'll be able to find integrated
Speaker:platforms that could do it all.
Speaker:It is actually part of the reason why GreenScreens sold to Triumph,
Speaker:because GreenScreens' strategy was be the best at one thing.
Speaker:Predictive pricing.
Speaker:Then there were other individual companies that GreenScreens thought
Speaker:were great in different areas, whether it was in capacity or visibility
Speaker:or TMS or, or otherwise.
Speaker:So instead of doing all those things themselves, GreenScreens said, hey,
Speaker:we'll be like the it, it'll be like the, the open architecture platform, right?
Speaker:Like you could be Apple and you're the walled garden and
Speaker:everything has to happen inside.
Speaker:Or you could be the open architecture and you're like Android, and you've
Speaker:got all these other companies and partners and, and it turned out that
Speaker:at this stage of the game, the open architecture pick your best partners
Speaker:approach, I think made more sense.
Speaker:But we also knew that a time would come when this market would consolidate.
Speaker:And so one of the reasons why GreenScreens ultimately sold to Triumph was Triumph
Speaker:had lending, factoring, a whole series of intelligence capabilities,
Speaker:and predictive pricing fit into that strategy and fit into that bundle.
Speaker:So now Triumph plus GreenScreens, there's a bigger bundle.
Speaker:And so much in the same way that these point solutions from the internet
Speaker:days evolved into bigger platforms.
Speaker:I think that's what we're starting to see now with AI, and GreenScreens,
Speaker:Triumph is a good case study.
Speaker:So we're just on the cusp of moving from individual point
Speaker:solutions to maybe some more.
Speaker:So hang in there, is kind of what I'm hearing.
Speaker:We're still a little bit in early days, but eventually our
Speaker:tech stack isn't gonna blow up.
Speaker:So, okay.
Speaker:Getting us back on board.
Speaker:So our, our first thing that we need to look for is that, that
Speaker:you're actually solving a pain.
Speaker:So, one thing I kinda loved with that is sometimes I feel like I talk
Speaker:to shippers and I love you guys.
Speaker:You know, I talk with you all the time and, and sometimes though you're out
Speaker:looking for an AI solution just to see where can AI fit into my business
Speaker:instead of, love what Ben said, what, what problems are you having?
Speaker:It doesn't matter if it's AI or something else.
Speaker:You know, find solutions to your problems.
Speaker:Don't find ways to fit AI into your business.
Speaker:So, okay, first thing, start with the problem, then you had a second one.
Speaker:So then the, the second one is make sure that there are other
Speaker:adopters that look like you, that are getting tangible benefit.
Speaker:Now, this is, this is really important.
Speaker:And look, I'm, I'm.
Speaker:An investor.
Speaker:We, at Cambridge Capital, we invest in great supply chain companies.
Speaker:We have eight portfolio companies.
Speaker:And I've, you know, invested in dozens of others over the course of, of my career.
Speaker:And the number one thing that earlier stage companies that, that
Speaker:succeed tend to do really well.
Speaker:Well, I think there are two.
Speaker:One is focus on the problem, but, but the, the second is show the use case.
Speaker:In other words, give an example of somebody else that's using it.
Speaker:Show the case study.
Speaker:What was the problem they had before?
Speaker:What else did they consider?
Speaker:Why did they choose you?
Speaker:How easy was it to get started?
Speaker:And then lastly, what were the results?
Speaker:Now those, those five elements are super important.
Speaker:It's very logical, simple, and straightforward.
Speaker:But not a lot of people do a great job of systematically demonstrating that.
Speaker:If they do that, two great things happen.
Speaker:One is from a marketing standpoint, they do a better job of conveying the value.
Speaker:So if you're a shipper listening to this and you're looking at an a AI powered
Speaker:supply chain technology company, you ought to ask them, show me the case
Speaker:studies that, that take you through that.
Speaker:If they do a good job of that, then great.
Speaker:It's gonna be better for, you know, for you and better for them.
Speaker:But there's also a second benefit.
Speaker:The second benefit is it creates a feedback loop.
Speaker:And that's really important because the best AI powered company, the
Speaker:best companies period, tend to be really good at saying, okay, I'm
Speaker:gonna get this out to the market.
Speaker:I'm gonna listen to the customer's feedback and then I'm gonna make
Speaker:sure that that gets recycled into the next iteration.
Speaker:And so again, with GreenScreens, you know, NFI was a great early adopter because
Speaker:they were a terrific truck brokerage company demanding high standards, but
Speaker:also representative of what lots of other truck brokerage companies cared about.
Speaker:So you knew that if you did a great job for them, there would be 200 other
Speaker:companies with similar goals and needs.
Speaker:And so you gotta pick the right early adopter.
Speaker:But if you pick the right early adopter, you're gonna get a great
Speaker:virtuous circle of feedback loop.
Speaker:And so, you know, NFI used it and said, well this is great, but you're
Speaker:missing a few things and we get all this value in these lanes 'cause
Speaker:you've got high volume, you don't have as much volume in these other lanes.
Speaker:So what do you do?
Speaker:Well, guess what?
Speaker:GreenScreens then said, okay, let's take that back to the product side
Speaker:and create sort of a, a, a, a green, yellow, red rating system so that if
Speaker:the lane had high confidence, 'cause it had high volume, it would be denote,
Speaker:it would be marked differently.
Speaker:And on the other hand, if you didn't have as much data, you let 'em know
Speaker:so that maybe they don't put as much weight on what the system says.
Speaker:'Cause the system hasn't been trained as effectively as high volume.
Speaker:You wouldn't know that, or at least you wouldn't know that instantly
Speaker:unless it was out in the market and you had that tight feedback loop.
Speaker:So I think that that process is super important.
Speaker:Okay.
Speaker:You broke this down so well.
Speaker:So if you are looking at AI, step one, is it solving a problem?
Speaker:Is it, so maybe there's a great idea, we've got a problem,
Speaker:it's being solved, step two.
Speaker:Does it actually work?
Speaker:Because sometimes there's a lot of ideas and you get that through use cases.
Speaker:What can they share with you?
Speaker:Is it actually working.
Speaker:And then moving on, are they iterating upon that?
Speaker:Are they making changes and listening to customers and
Speaker:getting the feedback and growing.
Speaker:Fantastic advice there on how to find the right AI.
Speaker:I have a question.
Speaker:I'm wondering, you know, you mentioned the problems being solved.
Speaker:Are there certain problems that you feel like right now, kinda the stage we're
Speaker:at in AI, in the logistics and supply chain industry that are, most likely
Speaker:to be solved by AI, you know, what kind of areas, what problems are the
Speaker:biggest pain points that it's solving?
Speaker:Well, I'll give you a couple.
Speaker:One is in the realm of post purchase tracking and visibility.
Speaker:So you buy something online, then what?
Speaker:Okay.
Speaker:So.
Speaker:And everybody besides Amazon is struggling with this question
Speaker:because everybody wants to be able to give their customer an experience
Speaker:that's equal to or better than that.
Speaker:'Cause otherwise, why, why would a consumer buy on
Speaker:any site other than Amazon?
Speaker:And a big part of that is the post-purchase experience.
Speaker:You could think of that as several elements.
Speaker:One is tracking, you know, where's my stuff?
Speaker:And, and visibility and, and the analytics around that.
Speaker:Which is massive.
Speaker:Which is super important as you know, and of course, you know,
Speaker:relevant to EasyPost as well.
Speaker:And, and then, then there's the issue of, of the customer communication, right?
Speaker:So a consumer wants to know when they write to you and say, where's my stuff?
Speaker:Or whatever, and.
Speaker:Do they get some sort of automated bot that doesn't really tell them
Speaker:anything and just makes them frustrated?
Speaker:Or does it say, we'll get back to you in two business days, you know,
Speaker:which is not the answer that you want.
Speaker:Or, or, or does it give them A, an a direct answer and B, a positive tone and
Speaker:level of, of constructive engagement that makes 'em feel good about you?
Speaker:Because what brands, I think often underappreciate is, the supply chain
Speaker:is the weak link in the brand process.
Speaker:Supply chain is the weak link in the brand.
Speaker:That is incredible.
Speaker:Right there.
Speaker:You could take that and go with it.
Speaker:So anyway, yeah, go ahead.
Speaker:I mean, I'm a, I'm a, a runner and I'm, I'm gonna be in, in the Catskill Mountains
Speaker:for my half brother's wedding next week.
Speaker:So I bought some Salomon you know, trail running shoes and, you know,
Speaker:the shoes weren't the right size.
Speaker:So I wrote back, you know, tell me about the, you know, returns process
Speaker:and, and when you get an automated email that says, well, we'll get
Speaker:back to you in two business days.
Speaker:You know, no matter how great I might feel about that shoe or that brand boom,
Speaker:I, they, they, they just lose customers when something like that happens.
Speaker:So the supply chain is the weak link in the consumer brand experience.
Speaker:And if you're a brand and you're listening and you're, or you know, CPG company,
Speaker:you're thinking about that, what you should be thinking is not how much am I
Speaker:spending on post-purchase tracking and visibility in the customer communication
Speaker:side, what you should be thinking is, how much does it cost me to acquire a
Speaker:new customer, and if I lose them because of this, how much does it cost to have
Speaker:to go replace and, and do another?
Speaker:There's an interesting study on, on customer loyalty by Bain a few years
Speaker:ago that showed that that the cost of people usually underestimate how much
Speaker:it costs to win a new customer and.
Speaker:The cheapest new customer is always keeping the one that you already have.
Speaker:And so when you think about it that way, number one, it means that you
Speaker:should be thinking more about investing in that post-purchase experience
Speaker:to make sure that you keep your customers, your future customers,
Speaker:keep 'em happy, keep 'em engaged.
Speaker:And then, and this is to come back to your AI question, how can you use AI to
Speaker:do a better job of customer engagement?
Speaker:There's no excuse in, in the, in the world of AI today to not have an instant
Speaker:answer to a customer question like that.
Speaker:Where's my stuff should never be, you know, we'll get back
Speaker:to you in two business days.
Speaker:Or, or any variation to that.
Speaker:So, turns out that in that post-purchase arena there's a company called
Speaker:Parcel Perform which of course, I think so highly of them that, that
Speaker:I invested in the company and so, so put my money where my mouth is.
Speaker:And what they do is specialize in exactly that, and they power marketplaces
Speaker:and brands and companies like Shopify and Espresso and a variety of others.
Speaker:So they're really good at it.
Speaker:What they're increasingly doing is using AI to look for patterns.
Speaker:And, for example, wouldn't it be good to know that if you're
Speaker:an ecommerce marketplace that, that whatever ships out on Tuesdays
Speaker:tends to be, you know, faster than what ships out on Fridays.
Speaker:Maybe because you know, there's a, there's a lull over the weekend.
Speaker:And does that maybe influence, do you wanna do more to push promotions on
Speaker:a Tuesday than a Friday, because that way the customer gets it faster, then
Speaker:they're happier, then they have a better experience, and there's a whole
Speaker:virtuous cycle that comes outta that.
Speaker:Or maybe it turns out that there's AI powered analytical work that you
Speaker:could do to figure out that some carriers do a better job for you in
Speaker:certain situations, and maybe you wanna allocate the, the right orders to
Speaker:the right carriers at the right time.
Speaker:There's just all kinds of interesting analytical stuff that you can do.
Speaker:So I think, look, post-purchase is one great example of where I
Speaker:think AI has media application.
Speaker:I love that.
Speaker:And I am so on board with you.
Speaker:I am, of course, it's interesting to be in this industry because we're
Speaker:the consumer ourself as well, right?
Speaker:So we all have our, our shipping experience, and I'm
Speaker:a mom and I have seven kids.
Speaker:And let me tell you.
Speaker:We do a lot of shipping and yeah, it, it can be just a horrible experience for
Speaker:me where, you know, I, I'd like to tell people I don't blame the carrier, which
Speaker:I should, when something gets lost or something, you know, I'm looking at the
Speaker:brand and I'm saying, this didn't show up.
Speaker:And you know, I also don't care which carrier's bringing it.
Speaker:I just want it to come and I want, so, yeah.
Speaker:That's fantastic.
Speaker:Well, I want us to pivot just a tiny bit 'cause I've heard you
Speaker:talk about that you feel like we're going into kind of the fourth wave
Speaker:of supply chain transformation.
Speaker:I would love to hear a little bit about what that means, what you think that
Speaker:means and, and maybe kind of where AI fits in since that's our conversation today.
Speaker:If we zoom super high level, 50,000 feet, waves of innovation in, in supply chain.
Speaker:You could argue that a first wave in, in the US supply chain was in
Speaker:1869, because that was the year of the golden spike in Promontory Utah, that
Speaker:connected East Coast and West Coast.
Speaker:Of course in, in, in Utah to create the, the first Transcontinental Railroad.
Speaker:Why was that important?
Speaker:Well, it finally meant that you could ship something coast to coast
Speaker:in an efficient manner, right?
Speaker:I mean, what, what were your alternatives back then?
Speaker:Horse than buggy?
Speaker:I mean, it was there were not great alternatives.
Speaker:It wasn't like today.
Speaker:You didn't have airplanes and a highway system and everything else.
Speaker:So, so guess what?
Speaker:Not only did that create multi-billion dollar fortunes for the, the
Speaker:railroad owners, but also for people that could use those railroads
Speaker:to ship things more efficiently.
Speaker:And so yes, you had people like here I am in our, our, our offices in West Palm
Speaker:Beach, Florida was built by Henry Flagler.
Speaker:Henry Flagler of course built the Florida East Coast Railroad.
Speaker:But he also was partners with John Rockefeller in Standard Oil.
Speaker:Well, Standard Oil in part made a fortune by virtue of being able
Speaker:to do low cost shipping of oil that the railroads facilitated.
Speaker:So, you know, again, the, the, the immediate winners were those that built
Speaker:it, but then you also had the people that, that were able to benefit from it.
Speaker:So I would say that's, that was a first wave.
Speaker:Second wave came when a man named Malcolm McClain figured out that
Speaker:he could take containers from railroads again, that, you know,
Speaker:we're, there's a, there's a theme here that, and put them in steamships.
Speaker:And he took an old oil tanker and put, put these containers in it and said,
Speaker:hey, it'd be a lot cheaper and faster if instead of packing ships item by item.
Speaker:I mean, think about how inefficient that is, you know, to put you know, a, a, a
Speaker:box here, you know, a little, you know, parcel one at a time into an entire ship.
Speaker:A, it costs a lot.
Speaker:B, there was all kinds of theft.
Speaker:C, there's all kinds of inefficiency with the loading and unloading.
Speaker:Malcolm McClain figures out the 1950s that he could do
Speaker:something called containerization.
Speaker:So he invents containerized shipping.
Speaker:And interestingly, the port in the Northeast that had the most volume at
Speaker:the time was New York, port of New York.
Speaker:The, the gangs of New York tells you something about what it,
Speaker:what it was like back then.
Speaker:There was a lot of theft and a lot of a lot of inefficiency.
Speaker:He said, no, we're gonna do a deep water port in Newark.
Speaker:And, and the first route was Newark to Houston that carried
Speaker:that containerized ship.
Speaker:And by virtue of figuring this out, first of all, Malcolm McClain
Speaker:made a fortune building sea land and then selling it to Maersk.
Speaker:And so of course that was great for the steam ships, but it was also great for
Speaker:the people that could take advantage of high volume, low cost shipping.
Speaker:And so if you think about it Walmart, Costco, Target, like these retail
Speaker:powerhouses today exist in their current form, only because of
Speaker:Malcolm McClain containerization.
Speaker:Because without containerization, you would not be able to buy, you know, the
Speaker:shirt that you're wearing or sit on the chair that you're sitting on for anywhere
Speaker:close to the price that you paid for it.
Speaker:Now we all benefited from that because low cost manufacturing offshore, you
Speaker:know, whether in China or elsewhere, low cost shipping to bring it here.
Speaker:I mean, in the end, the reason why supply chain as a percent of GDP is dropped by
Speaker:about 10 points from 1980 to the present.
Speaker:Which if you think about a $20 trillion economy, that's $2
Speaker:trillion of annual savings.
Speaker:It's because of this supply chain innovation.
Speaker:So, massive.
Speaker:Well now we move to the third wave.
Speaker:Third wave is the internet.
Speaker:Gonna say, I'm thinking it's the internet.
Speaker:Okay.
Speaker:Exactly.
Speaker:So here we are back, back to the internet.
Speaker:So in the nineties, and you could, you could say that.
Speaker:The launch of, of Amazon Prime, you know, a a couple years thereafter.
Speaker:I think 2003 is, is a good milestone for that.
Speaker:What did that do?
Speaker:It made it possible if the first two innovations were about low
Speaker:cost, high volume shipping.
Speaker:The third was about personalized shipping, you could get things delivered to you
Speaker:faster, cheaper, better than ever before.
Speaker:But it also created all kinds of other ripple effects.
Speaker:It was great for Amazon, but it was also great for all these
Speaker:ecommerce logistics companies.
Speaker:I mean, look, EasyPost is a participant in that ecosystem too, just as so many other
Speaker:great supply chain technology companies.
Speaker:So that's, we're all living through that one.
Speaker:I won't say more about it.
Speaker:So now the question you've asked is what's the fourth wave?
Speaker:And, and, and the fourth wave in my view, is possibly about how people
Speaker:can use AI to make better decisions.
Speaker:The, the big transformations I think are one, being able to take all this
Speaker:data to make much better decisions, whether GreenScreens with predictive
Speaker:pricing or or, or or Parcel Perform with, with, you know, the post purchase.
Speaker:You could look at someone like Autoscheduler.ai, which is really a
Speaker:layer that sits on top of a WMS that it creates much easier to use analytics,
Speaker:tools, labor management, et cetera, or dozens of other AI powered applications.
Speaker:But basically this is gonna change all kinds of workflows.
Speaker:Fundamentally if companies can build businesses I mean the, like, one
Speaker:of the things that, that people talk about in Silicon Valley today
Speaker:are the rise of tiny companies.
Speaker:The idea that you could have 1, 2, 3, 4 people that you know, builds a
Speaker:multi-hundred million dollar business.
Speaker:And there's a a wager right now who, who will be the first one employee company
Speaker:to build a a billion dollar business.
Speaker:These things all sound crazy, but the reality is technology and AI in
Speaker:particular makes it possible to do so many things in an automated way that
Speaker:wouldn't otherwise have been the case.
Speaker:So will, will AI powered supply chain be the fourth big wave?
Speaker:Maybe.
Speaker:We'll, we'll see.
Speaker:This would be a good topic to look back on and say three years from now.
Speaker:I know.
Speaker:I'll have to have you back and we can like, review everything.
Speaker:AI is super fun and exciting for me.
Speaker:I'm just that nerd brain who loves to see fundamental shifts in how
Speaker:society's working and, and everything.
Speaker:So I love this.
Speaker:Okay, we're kind of running out of time wrapping up here.
Speaker:What excites you for the next like five years?
Speaker:You know what, what kind of, maybe some Ben Gordon predictions.
Speaker:What do you think is gonna be exciting?
Speaker:And I'd love you to end with any sort of piece of advice for all
Speaker:of those who are listening today.
Speaker:You know, one thing they can do maybe to kind of get started
Speaker:or, or something from you.
Speaker:Three things that I'm excited about and, and that I expect will happen.
Speaker:One is that maturation that we talked about from these point solutions
Speaker:to platforms, that's happening now.
Speaker:GreenScreens' triumph is one example.
Speaker:What DET has tried to do with convoys and other, you know, Truck
Speaker:Stop, you know, with, with their acquisition of Denim a couple days ago.
Speaker:Another like ... platforms looking to take on more.
Speaker:So I think one, one clear theme is you're, you're going to see the
Speaker:big get bigger, you're gonna see a, a handful of major platforms emerge,
Speaker:and it'll be an interesting battle.
Speaker:We'll see who the winners are.
Speaker:The three companies that I named are all combining supply chain and
Speaker:finance in different ways, right?
Speaker:So if you think about it Triumph started on the finance side as a bank,
Speaker:you know, lending and factoring, but now going aggressively into the, you
Speaker:know, intelligence and analytics side.
Speaker:On the other hand, DET and Truck Stop have both made acquisitions to
Speaker:go from their roots on the freight side, you know, marketplaces and, and
Speaker:other capabilities into factoring and, and, and related fields.
Speaker:And so, you know, two giants approaching the same opportunity
Speaker:in the middle from opposite sides.
Speaker:Who will win?
Speaker:I dunno who will win.
Speaker:But certainly that battle as, as you see this evolution from point
Speaker:solution to platform is, is going to be very very interesting to watch.
Speaker:And, and certainly I think will produce some multi-billion dollar winners.
Speaker:So I think that's one.
Speaker:I think two is yeah, the, the, the AI powered applications, we've talked about
Speaker:some, I'll mention a couple of others.
Speaker:Returns is another big one.
Speaker:We, we spend 800 billion a year.
Speaker:You alluded to that, you know, with seven kids I, I, I shudder
Speaker:to think how much gets returned in the, in the Boyer household.
Speaker:I think I'm just like fueling the entire industry at this point.
Speaker:Yeah.
Speaker:Well, it, it, that can't be because you haven't seen what, what happens in my
Speaker:house, but, but maybe the two of us, so.
Speaker:I'm not alone.
Speaker:So with 800 billion being returned annually, there's, there's a massive
Speaker:pain point, massive problem, and that, that needs to be better solved.
Speaker:And, and so and there are multiple candidates, companies
Speaker:that do different things.
Speaker:Genco is a pioneer in this realm.
Speaker:My friend, Herb Sheer built Genco, grew it, sold it to FedEx for 1.4 billion.
Speaker:And, and since then a host of other companies.
Speaker:We invested in a company called Reverse Logics, which using software to.
Speaker:Basically think of it as like a WMS for automating the returns process.
Speaker:And, you know, wonderful.
Speaker:And again, powers a number of majors, including FedEx and others, and that's
Speaker:that, that's great, but they're not alone.
Speaker:There are others in that realm.
Speaker:Optoro just sold to BlueYonder a couple of days ago and, and there various others.
Speaker:So there's, look, there's a huge need to solve that.
Speaker:Similarly, I think there are a handful of other big supply chain
Speaker:problems that are out there.
Speaker:So whether it's post-purchase, last mile, fulfillment, returns I think
Speaker:you're going to see some multi-billion dollar companies emerge in those realms.
Speaker:So I think that's second and then third you know.
Speaker:It's, it's very trite when, you know, people love to quote the
Speaker:Wayne Gretzky line about skating and where the puck is going.
Speaker:But, but, but not that many people actually do it.
Speaker:And, and what does that actually mean here?
Speaker:Well, I'll give you an example.
Speaker:And it's a little bit of inside baseball and something that we're you know,
Speaker:pursuing our ourselves right now.
Speaker:But if, think about it, where is their huge supply chain spend?
Speaker:Well, I mean, look.
Speaker:You could look at cross border, you could look at things where there's
Speaker:strong underlying demand like healthcare spend that you know, never goes down
Speaker:even regardless of what the government does, regardless of recession.
Speaker:So fine.
Speaker:There's another one.
Speaker:Data centers, the massive demand for data centers because of
Speaker:the massive energy needs ofAI.
Speaker:Again, think about those second, third, fourth order ripple
Speaker:effects, just like we were talking about with railroads and ships.
Speaker:One of the third or fourth order ripple effects of the growth of AI is what are
Speaker:the supply chains needed to support it?
Speaker:Well, it turns out that building these massive data centers to, to
Speaker:be able to, to fulfill the energy demands of AI is a huge opportunity.
Speaker:Interestingly, we worked with a company there's a tombstone, you
Speaker:can't see it right here in my office for a company called IT Renew.
Speaker:And what they did was what's called ITAD, IT asset disposition for data centers.
Speaker:So think about it like this, your you know Apple or Microsoft or
Speaker:Facebook or whomever, you've got these, you know, huge data centers.
Speaker:You've got row after row, after row of, of servers.
Speaker:Think of it as like being on a football field and it's like,
Speaker:okay, well if it's Monday.
Speaker:We're replacing everything on the five yard line, and if it's
Speaker:Wednesday, it's the six yard line.
Speaker:And so, so there's this cycle for replacing these.
Speaker:And what I, what IT Renew did was they managed that reverse logistics
Speaker:process for the networking equipment.
Speaker:So there's a whole series of opportunity in supply chain around data centers, and
Speaker:that's certainly something that we're actively looking for and investing in,
Speaker:and I would would welcome any ideas from, from anybody listening if, if you know
Speaker:great companies anywhere in supply chain.
Speaker:But particularly in areas where the puck is going, of which data
Speaker:center logistics is an example.
Speaker:Please reach out to me because who knows?
Speaker:Maybe, maybe you and we will team up on our next investment.
Speaker:So, so smart.
Speaker:There are just articles recently about these big data centers and, and that need.
Speaker:It's really cool.
Speaker:I love with AI how many additional ideas and just industries and just
Speaker:everything that can splinter off from it.
Speaker:Really neat.
Speaker:Okay, so.
Speaker:Thank you so much for being here.
Speaker:Do you have a final piece of advice for shippers, 3PLs, anyone that you have
Speaker:out there for riding this AI wave?
Speaker:Yeah, I think the, the biggest thing if you're a shipper is just make sure
Speaker:you're talking to a company that, for which this is the main thing.
Speaker:This is, this is worth noting if, if I went back to the early internet
Speaker:days, there were a lot of people that tried to dress up with it.
Speaker:The transplace adding a.com at the end was a really good example.
Speaker:Just 'cause you added .com at the end of your name doesn't make you a.com company.
Speaker:Just as if you added a. AI to your name or put AI in your tagline
Speaker:doesn't make you an AI company.
Speaker:Look for companies where, where your problem is their main thing.
Speaker:Because if it's their main thing, they're a lot more likely to focus on
Speaker:it, focus on you, and do a great job.
Speaker:So I think that's, that's one for shippers.
Speaker:For you know, for logistics companies I think A similar point, you know, with,
Speaker:with respect to partners, but also B, if you are looking to add capabilities, I
Speaker:would think seriously about either buying or partnering with, you know, other true
Speaker:supply chain AI, pure play companies that could be the best in a particular realm.
Speaker:I'll just, I'll give you an example.
Speaker:As we were talking about, I'll use one of the companies we talked
Speaker:about earlier, Parcel Perform.
Speaker:Parcel Perform can go direct to all kinds of these major brands.
Speaker:But one of the things that that they figured out was, why go
Speaker:build a giant sales force when you could partner with great logistics
Speaker:companies that already have a giant sales force and their own customers?
Speaker:So it makes a lot of sense if you're a logistics company and
Speaker:something in the post-purchase experience is relevant for you.
Speaker:Why not partner with somebody else like a Parcel Perform that has all that?
Speaker:A, it doesn't cost you much upfront because fundamentally it
Speaker:means that you win when they win.
Speaker:It's more like a, a joint selling arrangement to, to your customers.
Speaker:B, because they're a pure play, it's their main thing, so you're
Speaker:gonna get something better.
Speaker:Right.
Speaker:Jack Welch famously said, your back office is somebody else's front office,
Speaker:and that's why you should outsource.
Speaker:Work with someone where their, their business is the number one thing, and it
Speaker:might not be the number one thing for you.
Speaker:And then look, lastly, it also does give you the ability to say your customers
Speaker:that you're giving them true, outstanding, best of breed, AI powered technology.
Speaker:So it would be my advice for logistics companies.
Speaker:Look for those pure play partners.
Speaker:And then third, look, if you're a supply chain software company I
Speaker:think, the biggest thing that I would say as an investor, I hear
Speaker:all the time from people that say, oh, well we don't talk about that.
Speaker:It's confidential, or we're in stealth, or you need an NDA
Speaker:for this or an NDA for that.
Speaker:Look, when I started my first company, you know I did and
Speaker:said all those things as well.
Speaker:And, and what I realized was what I thought was
Speaker:important turned out not to be.
Speaker:'Cause in the end, it's all about execution.
Speaker:So if you're a supply chain technology company and you're building the business,
Speaker:just remember the thing that's gonna matter for you most is how do I scale up?
Speaker:It's a lot less likely that Lori or Ben or hundreds of other people
Speaker:that are out there are gonna somehow steal your idea and make it theirs.
Speaker:Mainly A, because they're busy doing their own thing and, but also
Speaker:because it's really hard to do that.
Speaker:Like it's all about execution.
Speaker:And so if you focus more on how do I go fast and less on, how do I prevent
Speaker:anybody from knowing about this thing that I think is really special, the,
Speaker:the people that focus on getting there faster are usually the ones that win.
Speaker:Interesting.
Speaker:Okay.
Speaker:Love that.
Speaker:That's totally a hot take there from Ben Gordon.
Speaker:So thank you so much again for being here.
Speaker:Totally gonna have to have you back in three years and we're gonna see how all
Speaker:these predictions went out to play.
Speaker:But thank you again so much.
Speaker:Lori.
Speaker:Thank you.
Speaker:Great to be with you.
Speaker:We'll see you all next time.
