JOC Inland 2022: We’re Only Just Getting Started

By Felipe Capella, CEO & co-Founder, Loadsmart

I had the pleasure of attending JOC’s #Inland22 on September 28th here in Chicago and the opportunity to share the stage with Burak Cendek, Santosh Sankar, and Eric Johnson.

The panel was titled: Venture Capital’s Honeymoon or Swan Song? The recent period of historic venture capital investment into freight and logistics has centered around technology aimed at the truckload industry. That’s no surprise given it’s the biggest single mode, in terms of freight spend, never mind the most fragmented part of the industry. But as 2021 transitioned to 2022, the nature of public and private investment markets changed. Some of that was due to external factors that have an influence on market confidence (the Russia-Ukraine war, COVID lockdowns in China) but some is directly tied to supply chains (inflation, fuel costs, and a shift back to spending on services over goods). We talked about what this all means for early-and growth-stage investment into trucking technology and whether we’ve reached a crescendo in venture’s fascination with trucking, or whether we’re only getting started.

The main message I tried to convey is that we need to decouple three different movements:

1) The macroeconomics of rate increases and its effect on growth company valuations in public (and private) markets
2) Freight cycle: this is a cyclical industry with an average of 3-year cycles (1 year upwards, 1 year downwards) – we are obviously in the downturn
3) Secular digitization trend in freight

One and two will move up and down in some predictable and unpredictable ways for the foreseeable future. The third one will move in one direction only, and it is where we need to focus: the transition of a trillion-dollar industry from analog to digital, from on-premise to the cloud, from fragmentation to consolidation of data and intelligence. We are just a few years in, only in the first third of the journey. In the next six years, we’ll see a substantial number of Fortune 500 companies migrating to a cloud TMS, many midsize companies adopting (good and new) technology for the first time, and small and medium size carriers finally starting to operate their business with a cloud software.

This allows for supply and demand to finally meet in the cloud. That’s when magic happens. And no one can reverse this trend. It took food delivery 12 years and travel bookings 15 years or so to go through this journey. In freight, ten years is my bet, and so, to get back to the original question of the panel, we’re only just getting started.