Cover Story
But it also means the visibility market as a whole is on somewhat unsteady ground ; it ’ s unclear whether acquisitions can or will occur , or whether some providers will go under , leaving customers to find alternative data sources . Nearly every vendor in the sector has undertaken layoffs , executive reshuffles or both in the last two years , but they ’ re all still standing . That begs the question : is the current market structure sustainable , or will the category be reshaped by mergers , acquisitions or closures .
“ The world does not need 100-plus visibility platforms , but it instead needs a few large , networked platforms per region and mode ,” said Bart de Muynck , a strategic advisor to logistics technology companies , including project44 , and a former analyst with Gartner who focused on the visibility market . “ Just as we don ’ t need hundreds of telecommunications providers , but a handful of large vendors with global coverage .”
A difficult M & A market
De Muynck , who spent 18 months as an executive with project44 until 2023 , said he expects the market will consolidate , not due to acquisitions , “ but smaller vendors running out of funds and leaving the market or changing their focus .”
There are a few challenges facing the market in terms of consolidation . One major hurdle is the massive funding rounds that some of the largest providers took before and during the COVID-19 pandemic , investments that resulted in sky-high company valuations .
“ The world does not need 100-plus visibility platforms .”
As the pandemic-induced surge in freight demand — and resulting supply chain disruption — receded in the second half of 2022 and the first half of 2023 , so did the market for real-time visibility . And although the market has recovered , some of those large valuations are proving difficult to justify , a dynamic made more difficult by the continued presence of multiple vendors in the market .
The multitude of options for shippers also fosters competition among venders , forcing them to invest in product engineering and marketing to differentiate and putting downward pressure on pricing and contract lengths .
Companies with once-large valuations that are currently lower are naturally more difficult to sell because investors want a return based on the valuation in which they invested . But potential buyers are aware that other options exist in the market . Further , a potential buyer might decide that using a given visibility product makes more sense than purchasing the company that owns it , or that it could build a similar product in-house for less .
All these factors lead to market stasis . project44 is the largest provider and has the largest geographic footprint , with FourKites close behind . Paris-based Shippeo is trying to expand into North America , building on its solid customer base in Europe . The others tend to be focused more narrowly on international transportation .
Best-in-breed vs . one-stop shop
The market is further clouded by the existence of other types of vendors . There are hardware-focused providers that deploy devices on containers , pallets or individual products , such as Tive , Roambee , Traxens and Nexxiot , as well as logistics software providers like Infor Nexus , E2open , Transporeon and Gnosis Freight that offer visibility as part of a broader suite of products . Gnosis , for example , provides visibility data to a number of other software vendors , including some real-time visibility providers .
One theory for the lack of consolidation is that there actually is enough demand for all the standalone visibility providers to prosper because the pandemic recalibrated shippers ’ needs for such data .
“ Each mode of transportation has deep specificities , so today there is no ‘ one size fits all ,’” said Julien Cote , CEO of Wakeo . “ And global organizations have different buying teams — one for intercontinental , one for local road transport in North America and one for European road transport — so the one-stop-shop approach has limitations both from a buyer and product perspective .”
Cote said the reality that most shippers take a patchwork approach to visibility based on mode and geography is part of what ’ s keeping many vendors in the game .
12 Journal of Commerce | December 2 , 2024 www . joc . com