The logistics industry is in the midst of a technological revolution. The tech uproar created a prime environment for startups to enter the space, providing innovative products and disrupting the status quo. On the flip side, the amped-up environment can also be a breeding ground for hype and unrealized goals.
During a discussion at FreightWaves LIVE Chicago on Wednesday, Ike Co-founder and CEO Alden Woodrow and Founding and Managing Partner of Evolv Ventures Bill Pescatello chatted about embracing new technology while remaining grounded enough to sidestep the pitfalls.
As an autonomous trucking company, San Francisco-based Ike has several years to go before it fully realizes its mission. Woodrow was realistic about the company’s time frame and said being aware of the long road ahead has helped the company avoid getting caught up in the excitement and producing a lower-quality product for the sake of speed.
Not all companies are as realistic about their timelines and capabilities, though. This can be a scary reality for investors like Pescatello.
“What concerns me at times is the hype cycle. We want to make sure people can deliver,” Pescatello said. “The last thing we want to do is lose our credibility. That is the one thing that scares me.”
Food giant Kraft Heinz Co (NASDAQ: KHC) launched Evolv Ventures. The $100 million venture fund invests in emerging tech companies working to help revolutionize the food supply chain.
While Pescatello estimates that cross-country trips in fully autonomous trucks could be as far as 10 years out, he is still interested in the technology. In the shorter term, he sees autonomous trucks doing more localized tasks, like moving trailers around warehouses.
“We’re not here just looking at what are we going to use next year,” Pescatello said. “We’re looking at five years and 10 years out. We have a forward-looking mindset.”
He said the fund is looking at businesses across the supply chain, not just autonomous trucking companies. He also has a strong interest in warehouse automation.
“[Warehouse] automation can really make a difference [at Kraft Heinz],” Pescatello said. “Probably half of our warehouse labor is dedicated to making mixed pallets. Automation can take some of the monotonous tasks and simple labor we do and make it more efficient.”
As tech companies continue to enter the logistics space, tools to more effectively autotomize every part of the supply chain are bound to emerge. Woodrow has noticed this influx of new companies forcing each business to create an identity and carve out a space for itself, even in places like Silicon Valley that are not known as logistics meccas.
“It has been interesting to see Silicon Valley wake up to logistics. It is becoming more competitive all the time from a recruiting standpoint,” Woodrow said. “It is important to be differentiated around the culture of your team and the mission you’re working toward. The way we try to do that is be honest about the work we are trying to do and our values as a company.”