Sustainable Supply Chain

Data And Sustainability In Supply Chain Logistics - A Chat With Arrive Logistics Michael Senftleber

October 17, 2022 Tom Raftery / Michael Senftleber Season 1 Episode 263
Sustainable Supply Chain
Data And Sustainability In Supply Chain Logistics - A Chat With Arrive Logistics Michael Senftleber
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Show Notes Transcript

Supply chains have been slow to take up digital transformation, and logistics even more so.

One company making use of technology and data to transform is Arrive Logistics. They have an 250 person technology team so I invited their CTO Michael Senftleber to come on the podcast to tell me all about it. 

We had a fascinating conversation covering how data is transforming the logistics brokerage world, the sustainability advantages this unlocks, and what the future holds for the logistics industry.

I learned loads, I hope you do too...

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Thanks for listening.

Michael Senftleber:

We've cut miles driven empty by half or 60, 70% in a lot of cases. So, it's like 8-10% of miles are driven empty when with Arrive. And calculating that out with some fairly standard industry practices and ways to measure, has resulted in over a hundred million kilograms of CO2 not put into the air because of Arrive's capacity

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast the number one podcast focusing on the digitization of supply chain and I'm your host Tom Raftery Hi everyone. Welcome to the Digital Supply Chain podcast. My name is Tom Raftery and with me on the show today, I have my special guest, Michael. Michael, welcome to the podcast. Would you like to introduce yourself?

Michael Senftleber:

Absolutely. Thanks Tom. So I'm Michael Senftleber. I'm the Chief Technology Officer here at Arrive Logistics. And I know you cover the broad swath of the digitization of the supply chain, but maybe not all of your listeners are aware of exactly where Arrive Logistics or freight brokerage fits in. We're really a brokerage between shippers people with things to ship and carriers people with trucks, and so we work with thousands of different shippers and we work with tens of thousands of different carriers, enabling them to both smoothly, move their goods at high levels of service with predictable capacity.

Tom Raftery:

Okay. And why ? As, as, as in, what was it that made you wake up one morning and decide, or the co-founders or whoever wake up one morning and decide we should start a company to do this?

Michael Senftleber:

Absolutely. The co-founders are Matt Pyatt and Eric Gungan, and they had been working in the industry for a few years and they were learning that there's a lot of great techniques and, ways to really drive value in this space. You've got shippers who really just need to get their goods from A to B and there's hundreds of thousands of different carriers all the way from your giant enterprise carriers that have thousands of trucks down to owner operators that just have one truck. And it's really difficult for a shipper to work with that many partners and have consistent capacity when again, all they wanna do is get their goods from one place to another. And so, Even just if we look at the United States freight market. It's about a trillion dollar market and about 10% of that goes through brokerages because the value we provide is that consistent capacity and high levels of service, so that when a shipper wants to get their goods from A to B, they can give it to us and then we can work with our large group of carriers to ensure that we've got the right truck for that good to get them from a to b.

Tom Raftery:

Okay, and surely Arrive are not the only company providing this kind of service. What sets you apart?

Michael Senftleber:

Absolutely. Yeah. So what sets us apart really is the way we've approached the brokerage side with people. As I mentioned before, Matt and Eric started this and they were from the brokerage space, and so they started a brokerage and built up a different way of doing things, kind of the Arrive process, and it was all about really being front and center for our shippers, being able to deliver high levels of service and ensure that we had what they needed. And they hired aggressively and we grew with a strong sales force. But then once that Arrive, process was there, we were delivering value. How do we continue scaling the company? It was all about adding technology and it wasn't. Let's buy something off the shelf and then fit, Arrive to that cookie cutter model. It was always about how do we build technology to implement and instantiate the Arrive way of doing business? And so, there's a lot of different ways to approach technology in companies. You've got kind of the older model where you call up IT and they build out some technology. Oftentimes they're just taking processes that have grown up organically, way too many spreadsheets, and they start trying to automate those and make those little better. You've got other folks that come at it from the pure technology space, like, ah, we'll just solve this with technology. We don't need all those people. And they kind of come at it with that. We'll build it and they'll come model. We've actually come at it with, I think, a unique perspective that really is how I think things will be going forward in more and more enterprises. It's building technology like a technology company, but in partnership with the business. And so we call it the copilot model, and we've built a team of technologists. We have over 250 people in our technology organization, and we've built it as if you would build a SaaS startup. It's product management, UX design, engineering, data science, custom solutions. And we build out just as you would in any other modern tech company in product squads. And so you've got a pm, a ux five, six engineers and a QA person or two, and they really own their space. But owning that space and that domain allows them to work very closely with the stakeholders in the business to understand what are they trying to do? What are the business challenges, what are the business opportunities, and how are they solving it now. It's not just about digitizing how they're doing it now, but understanding that so we can learn from it and then go back to what are they trying to do. And then in collaboration between the business and the technology side, we come up with solutions to really drive that. And that enables us to have increases in productivity. It enables us to work with our external customers and partners, both the shippers and the carriers, but also a very large employee base here at Arrive. Those are all the customers of the technology group, and so we're working to deliver technology that helps them do their job better and helps our shippers and our carriers work with us easier. The price levels of service will always go into the mix, but being able to connect and work with someone in a streamlined easy way always helps that move forward and allows you to grow with them.

Tom Raftery:

Okay, so 250 tech employees in the organization. That's, that's impressive. Would you consider yourself a tech first logistics company?

Michael Senftleber:

I would consider us a transportation and technology company. We've got about 2000 people in the organization. And so, it is a large tech organization, but we're driving across a large employee base as well as a large set of customers and carriers. And so I wouldn't say we're technology first, I would say it is a partnership between technology and people. And if, if I think about it, it's about solutions driven by data, powered by technology, and delivered by people.

Tom Raftery:

Okay, let, let's dig into that a little. What do you mean by powered by data?

Michael Senftleber:

ah, data is the lifeblood of any industry, and that's one of the great things about logistics is. There's enough data for it to be meaningful, to do real data science across it. If you think about an organization like ours that actually handles almost 5,000 shipments a day. That's a transaction that's negotiated on both sides. Sometimes it's a one off spot, but oftentimes it's longer term contracts. But we work with partners on both sides. And then it's a real, real live good that's going through the world. And so a person driving a truck stops at a warehouse, picks it up, they take it somewhere else. Things happen all day every day. But because we have our proprietary system, we are able to collect data across every bit of that. The logistics industry also has been a long term industry. There's lots of other market players out there providing market data as to the overall economy, how shipments are going, where goods are moving, we can use all of that data to help power or to help drive our solutions. And those solutions can either help in automating, making sure that the things that are going smoothly through the system just go through the system and people are notified when they need to be notified. When things do go wrong, they're brought in and they can handle those exceptions. And so it enables people to do what people are good at, which is handling unique situations and building relationships with people and allows computers to do what they're good at, which is handling data and automating things. And with all that data, it allows us to automate, It also allows us to provide guidance. I know everybody, especially people who are experts in industries, think, Oh, well I, I know the right price. I know the right carrier to call, or the right truck to pick. But really people aren't good at looking at hundreds of thousands of lines of data or millions of lines of data, and actually seeing that pattern or seeing what is the right decision now. And that's where data actually helps. And we've got models that can help serve that guidance to our people who work here as to, Hey, this carrier actually has a truck that would be great for this load. We can automate and reach out to the carrier directly. We also can have our people internally, call them, work with them, and ensure we get that connection made.

Tom Raftery:

Okay, and are you just using your own internal data or are you bringing in data from outside as well to make your application run more smoothly?

Michael Senftleber:

We are using every piece of data that we can get our hands on. So yes lots of internal data. But there's also data that's publicly available. Some of it from the government. There's data that we get on individual carriers their records. There's platforms in the space that actually sell aggregated data. So we do buy and gather all of those, but our data science is actually driven by our internal group where we've got a group of data scientists who look at that data and, and it's data science in the true form of the word. It's not just grabbing a model off the shelf at Amazon, Google, or Microsoft's Azure. They're looking at it with the eyes through statisticians and probability, and learning what people think matters on a particular decision is valuable and important. But the data often tells you that what people think is important may or may not be, and other things they thought weren't important are important. And really, data scientists can build out those models with features that look at those different attributes. And then we productionize that and build that back into the system. So the information not only is learning from the new data that's fed in real time every minute, but it served out in a usable form for people who can actually use that guidance to better their everyday performance.

Tom Raftery:

Nice, Nice. If I am a shipper, why do I go to Arrive as opposed to one of the other, I think you said thousands of other brokerages that are out there?

Michael Senftleber:

Absolutely. Shippers want somebody that has capacity where they need to go. So, you could have a large national shipper who is shipping things all over the place. You can have shippers who just need to move between particular distribution centers. And so they want somebody who has reliable capacity in those spaces and the smaller brokerages usually focus in smaller areas or in niche spaces. The larger brokerages like Arrive, have a full network across North America, so we can service any part of that. So we've got the capacity, we've got enough volume to ensure that we can beat market rates and we can deliver those rates to our shippers. But we also have a lot of technology that enables us to provide shippers the visibility they need every day. There's lots of different technologies out there, and then some people aren't even using technologies and so we have to fall back to manual means. But we can provide shippers updates on their, on their shipments every 15 minutes as to where they are. We can work with shippers in the way that they want to work. Large shippers have often a lot of legacy ERP type systems, or they've invested in newer systems. We connect through a lot of those older technologies, EDI and that sort of thing. But we also connect directly to most of the major platforms out there. And then we can also build custom integrations. And so I think I mentioned earlier, a lot of times it's about who is easiest to work with, who is consistent, always delivers a quality product at a good price and at that point, As long as you're continuing to have good prices and deliver high levels of service, they'll keep coming back to you and expanding with you. And so we continue to work with customers. A lot of times we get into these large shippers through small one off shipments and we deliver consistently on those and then we're invited into their process where they're doing their quarterly or their annual contracts and we can start bidding on them and growing that partnership.

Tom Raftery:

Okay. Very good. And same question, I guess if I'm a carrier.

Michael Senftleber:

If you're a carrier, you're looking for the same thing. You're looking for consistency. Carriers don't wanna spend all day trying to find loads to move. They've got trucks that they want to keep moving and profitable, so they're concerned with utilization and how do you continue to get freight? And so, sometimes they work with a shipper directly, and maybe they're going from A to B because that's where that particular shipper always wants to get. But then they've got all their trucks at B and they need to get back to. How can they consistently fill that? And so they come to a brokerage like Arrive that has enough freight for them to consistently move their trucks. And we work with them in several different ways. If we have consistent freight on a particular lane, in that example, going from B to a. We can actually set them up on a committed capacity routing guide where whenever we get one of those shipments, we go ahead and tender it directly to that carrier so they have that constant flow of freight and they can focus on their service and keeping their trucks fully utilized.

Tom Raftery:

Excellent. Okay. Shifting gears, for a second to to mix that metaphor. What are the biggest trends that you're seeing in the logistics space today?

Michael Senftleber:

The trends that we're seeing there's increased automation and, and just a constant drive for productivity, as I'd mentioned before. But there's also increased visibility. People need, need and want to know, are things gonna happen on time? When are they gonna happen? There's tracking and reliability, but there's also looking towards sustainability and newer modes of transportation. Another area where Arrive can deliver value is because of the size of our network of capacity. We have the right carrier and the right truck where the loads are. In our industry, I think across all non taker shipments in the US about 17% of the miles driven on roads. They're actually empty trucks and private fleets where a large shipper has their own fleet. They're driving about 26% of those miles empty because they need to go, as I mentioned before, from A to B, but B to A isn't their concern. And so, so many of those trucks are driving empty. Arrive can actually help with that because of the size of our network, we often have the right carrier in the right truck in the right place. And so we've looked through this and we've cut miles driven, empty by half or 60, 70% in a lot of cases. So, it's like 8-10% of miles are driven empty when with Arrive. And calculating that out with some fairly standard industry practices and ways to measure has resulted in over a hundred million kilograms of co2 not put into the air because of Arrive's capacity. And that's something that we can offer shippers who are as, they should be concerned about the impact that their business has on the world.

Tom Raftery:

Nice. Nice, nice. Where to next for Arrive? What? What are your plans for the next. 5, 10, 15 years?

Michael Senftleber:

Well, a company that's focused on growth wants to grow and so, While we focus a lot right now in full truckload freight in the US it's all about how can we offer more services and more modes to our customers. And so extending that out we do a healthy amount of business in partial truckloads and less than truckload. Moving to other modes like intermodal or drayage where you're moving from mode to mode. How can we continue our portfolio of services so that these larger shippers who actually need to operate in all these modes can continue to come to Arrive for those services. And it's another technology opportunity because a lot of those modes and services have grown up in industry silo. So how do we build a platform that again, connects all those and makes it seem like one simple service, a good going from an origination all the way to a consumer with just one streamlined service? Under the covers, there is lots of different industries and processes and connection points going on through that process.

Tom Raftery:

Nice. Nice. We are coming towards the end of the podcast now, Michael. Is any question that I haven't asked that you wish I had, or any aspect of this we've not touched on that you think it's important for people to be aware of?

Michael Senftleber:

Absolutely. I, I think, and we touched on it a little bit earlier, I, I think it's about coming to business problems with a unique perspective, but not trying to change the industry entirely overnight. Industries can move slowly, especially when you have lots of players in those and you have to respect that investments have been made over time and these businesses need to gain benefit from those industries or from those investments that they've made. And so you've got to work in the older way while continuing to push forward and borrow from other industries. There have been other industries that have gone through. Digitization transformations in the past, and how can you learn from those and bring in people? You definitely need people from the industry who know the industry, know how it works, and know why it is the way it is, but bring in people from other industries as well who could bring learnings for how it worked or how it transformed in another industry so you can bring those together to go through this journey. It seem, you know, it might seem like things aren't moving very much each day as you're changing, but if you look back five years later, 10 years later, it'll look like a completely different world because of that movement every day. And it's, it really is a, how do you improve things a little bit every single day so that at the end of the journey, everybody is more productive and better off for it?

Tom Raftery:

Lovely. Okay, Michael, if people want to know more about yourself, Or about arrive or any of the things we discussed in the podcast today, where would you have me direct them?

Michael Senftleber:

Absolutely. I mean, the first place is our website, arrive logistics.com. You can go there to learn more about, Arrive a bit about our history, our products and services for shippers and carriers. But the other great thing that's there is our careers page. In a fast growing company, we're always hiring both on the technology side as well as the non-technology side. And there's a lot of great opportunities there that I invite your listeners to check out and join us.

Tom Raftery:

and for people who might be interested in that. Where are you based?

Michael Senftleber:

Well, we are based in the United States. Our headquarters is in Austin, Texas. But we have large sites in other cities, including Chicago and Tampa and San Antonio. But we're continuing to add sites and so we will be adding sites across the country over the coming years.

Tom Raftery:

Okay. And are you are you open to remote working opportunities for people?

Michael Senftleber:

We are, for the right person in the right role.

Tom Raftery:

Right. Fair enough, fair enough. Said I'd ask great. That's been fantastic. Thanks a million for coming in the podcast today, Michael.

Michael Senftleber:

Of course. Thank you so much, Tom. I enjoyed it. Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, simply drop me an email to Tom raftery@outlook.com. If you'd like to show, please, don't forget to click follow on it in your podcast. Application of choice, to be sure to get new episodes. As soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.

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