Wednesday, January 23, 2013

‘Out of the box’ logistics startups challenge traditional supply chains

Keychain Logistics, Vago Logistics, Medical Device LogisticsLLC, Bufferbox, Shipwire – perhaps not as well-known as DHL, CEVA or FedEx but these logistics startups may change the way we think of the supply chain soon.

Logistics is a big business. According to the CSCMP annual State of the Logistics report, 2011 logistics spend was estimated at 8.5% of US GDP or about $1.26 trillion. Technology advancements such as cloud-based computing, increasing adoption of mobile devices and escalating web-based B2C and B2B services are creating a strain on traditional supply chains.  As such, innovative startups have sprung up to take advantage of the evolving landscape.

To encourage this innovativeness as well as to promote Memphis as a leading logistics hub, LaunchYourCity Inc. and Memphis Bioworks under the Greater Memphis Accelerator Consortium recently announced plans to start one of the first logistics-focused accelerators in Memphis. This program is expected to begin later in 2013 and will provide seed funding to help get the companies started; provide technical assistance for building business models, testing and validating hypotheses around solutions and more.

Bufferbox and Shipwire are examples of the result of an accelerator – Y Combinator. Bufferbox, recently acquired by Google, provides alternative locations for the delivery of parcels. Shipwire, offers a global warehouse network and fulfillment services based on its cloud platform.

Another Y-Combinator startup is Keychain Logistics which connects businesses directly with truck carriers, track shipments and monitors the process online thus cutting out brokers and all via an iPhone app.

 Vago Logistics is an interesting startup in University City, PA. Currently it delivers food on behalf of restaurants. However, according to the founder, the company plans to expand delivery to other local establishments and eventually offer 24/7 delivery.

Finally, Medical Device Logistics LLC offers a web-based platform for the sale and purchase of new medical inventory between medical institutions.

While these are just a handful of current startups, the creative “out-of-the-box” thinking is evident.  Last mile delivery location options, the ability to manage global fulfillment via the cloud, the possibility of 24/7 delivery services and perhaps the end of the middleman as businesses gain more control over transportation and the sale of equipment are all included in a new mindset as more and more logistics startups are formed in order to meet needs that are not being met by traditional providers.