Emerging companies in Wisconsin are stabilizing supply chains with new technologies that are shaping how companies view transportation ecosystems now and in the post-COVID-19 pandemic world.
Products offered by these companies involve advanced transportation network mapping, end-to-end visibility on shipments and an e-commerce platform that digitizes supply and demand.
The frequency at which supply chains are now disrupted has companies searching for agile transportation and logistics solutions. The fragile and complex nature of global supply chains was also exposed during the pandemic, underscoring the value that companies place on supply chain visibility and transparency.
One company leading innovation in the logistics space is Breakthrough, a transportation and energy management company based in Green Bay. Breakthrough was named one of the “10 Most Innovative Logistics Companies of 2021” by Fast Company for its technology that migrates old trucking contracts onto a new digital and data-driven platform.
The needs of transportation professionals are evolving, and products that allow businesses to keep pace with how quickly transportation ecosystems are changing must be tech-enabled, said Heather Mueller, chief operating officer at Breakthrough.
Events that were previously expected to occur once in a career are now happening with more frequency, said Mueller, who pointed to the Colonial Pipeline hack and the coronavirus pandemic as examples. These events created volatility in freight rates and also brought uncertainty to fuel prices, she added.
“The need for solutions that really can be nimble has increased dramatically and that’s created some focus on our solution,” Mueller said.
In 2020, Breakthrough launched its Network Intelligence system, which allows shippers to engage their contract carriers to add or drop partners as needed. During the pandemic, Breakthrough’s solution helped shift trucks from slowed businesses to carriers that experienced a pandemic demand surge.
The company’s FELIX platform contains thousands of data points about trucking companies, enabling clients to choose potential partners based on cost, speed and quantity. Network Intelligence also provides carriers with artificial intelligence recommendations based on their priorities.
“This data can be aggregated to show shippers what supply and demand patterns of trucks look like and where freight is having peaks and valleys,” Mueller said.
Shippers are familiar with large carriers like Schneider National and Werner Enterprise. But shippers don’t have insight on the thousands of carriers in the country with much smaller fleets, Mueller said.
“The FELIX platform is able to understand where those regional carrier partners are, what their operations look like and serve them up as potential partners and good solutions for shippers,” Mueller said.
Unlike other platforms, FELIX connects shippers and carriers to make their own direct relationship rather than serving as the “middleman,” providing a level of transparency that shippers haven’t experienced before, Mueller said.
“It creates more sustainable relationships between shipper and carrier partners, leverages data of the overall transportation ecosystem both around capacity and price to make these solutions possible,” Mueller said.
How consumers have behaved during the pandemic has also impacted the transportation ecosystem. Online grocery shopping, for example, is a trend that requires a different strategy for transportation, particularly for the last mile.
Consumers have enjoyed the convenience of online shopping, so Mueller expects this trend to remain. However, big-box retail seasonal patterns for goods like paper, food or back-to-school products have changed, and it is not clear how they will look post-pandemic, Mueller said.
Regardless of how consumer behavior evolves, Mueller expects elevated levels of transportation for the foreseeable future and that companies will need innovative solutions to keep up.
“We’re still not in a period of what I would consider ‘new normal,’ we’re still having some impact from what the pandemic lifestyle looked like,” Mueller said. “Certainly, I think there will be a settling out.”
Breakthrough isn’t the only company in northern Wisconsin bringing stability to supply chains. Los Angeles-based e-commerce startup ChemDirect recently moved its headquarters to Green Bay following an investment from Titletown Tech, a venture fund and tech hub in Green Bay.
ChemDirect is an early-stage company that developed an online marketplace for the chemical industry. The platform enables companies to buy and sell chemicals like methanol and acetonitrile and other products including hand sanitizer, disinfectant wipes and personal protective equipment.
ChemDirect offers valuable information about its products including the purity, grade, form and information about suppliers so buyers can make more informed decisions.
The startup also manages transactions by collecting payment from buyers and paying suppliers after product delivery, ensuring security and transparency for all parties.
ChemDirect chief executive officer and founder Tyler Ellison launched the company in 2019 to solve supply chain problems in the specialty chemical industry.
Ellison, the former CEO of specialty chemical manufacturer Nova Molecular Technologies, says the industry had two major issues – manufacturers did not own their customer data and customers were forced to buy chemicals blindly from distributors.
Ellison says he developed ChemDirect because the $5 trillion specialty chemical industry lacked transparency, impacting both supply and demand. The company says a once 20-week supply chain is now reduced to one week with ChemDirect’s e-commerce platform.
“Solving big problems leads to large value creation,” Ellison said in a statement. “Digitizing supply and demand will usher in a new era of transparency, resulting in informed decisions, better economics and optionality for both manufacturers and buyers.”
In Milwaukee, smart packaging startup PAXAFE is gaining momentum and recently raised $2.25 million in a seed funding round led by Palo Alto-based VC firm Ubiquity Ventures.
PAXAFE offers a software and hardware platform that enables predictive routing, time of arrival and adverse event prediction for B2B shipments. The company said it will use the capital to accelerate the rollout of its commercial platform to more customers and strengthen its AI-driven prediction models.
Using the platform, a shipper locks its high-value item into its package, and an online portal linked to a barcode on the package includes the shipment information. The receiver can track the package location and see whether it has been dropped using the portal.
Although other solutions on the market alert stakeholders when something goes wrong with their shipment, PAXEFE’s platform informs parties of the “how” and why” of the problem.
“Without a precise and automated diagnosis, B2B shippers find it virtually impossible to build accurate and consistent prediction models that enable supply chain risk mitigation across future shipments,” the company said.
PAXAFE co-founders Ilya Preston and Ashok Seetharam combined their experience – Preston’s in supply chain and Seetharam’s in hardware – to launch the company in 2018. They moved the company headquarters from Minnesota to Milwaukee in 2019 after completing gener8tor’s accelerator program.
Over the past six months, PAXAFE said it has launched a series of paid pilots with enterprises in various industries, including health care, perishables, oil and gas, logistics, manufacturing, jewelry and insurance. The company has also recently launched its commercial version of its platform, converting some of its pilot customers to commercial partners.
“Supply chain visibility brought us here today, but contextualization is the future,” Preston said in a statement. “This new funding will allow us to expand our team with people who are passionate about our mission to redefine supply chain risk management.”