The more notable of these companies are forced to hide behind a lot of good PR and discussions about how much money they have raised. Others seem to be going after markets that are too broad or poorly defined. What’s common is a lack of relatable use cases to connect their marketing message to potential customers.
For these reasons Haven, a new TMS application, caught my attention a while back by directly going after the commodity trading market. To me, this is the exact right approach for a logistics technology to get traction.
To learn more, I spoke to Jeff Wehner, COO of Haven, to better understand their product and go to market approach.
Why the focus on commodity logistics?
“Commodity trading is unique in the sense the pricing of what’s being bought, or ‘traded’ is essentially fixed, or at least the same for everyone. Their main variable cost, which affects margins most, is logistics,” says Wehner.
“Managing this part of the cost equation is vital for their success. They have long understood how to forecast assets like factories and materials. However, because they’re heavily spot market dependent for freight, they can’t make volume commitments for shipping. This makes it difficult to fix logistics costs long term,” he adds.
This focus is helping Haven avoid a mistake almost every company makes with marketing – that is, trying to be everything to everyone. They are doing something different through an emphasis on a market that is unique but can appreciate the value.
They have a niche with a market need – that’s good. It’s almost a blue ocean approach which is hard to do because logistics, and logistics technology, tend to become easily commoditized. This has happened with web booking portals, there is little that’s special or unique about those.
Are you competing with freight forwarders or 3PL’s?
“No, not at all. Our platform is completely neutral and we have several of the largest forwarders already on the platform. The goal is to improve the connection points between parties – which there are many. My experience at Apple taught me that gaps in how data and information gets shared in the supply chain exist at all size companies. Until now, technology hasn’t kept up with how logistics networks have become global,” notes Wehner.
He continues, “The first step is to connect shippers with their carriers in an online platform. This involves helping them manage all of their rates and contracts, so that booking and managing shipments becomes not only easier, but data-driven. Shippers can also access a pool of dozens of other carriers to get spot quotes or help in other lanes. The interaction remains directly between the shipper and carrier at all times – Haven is never an intermediary.”
Haven’s neutrality is maintained through its subscription based pricing model. So, they are not brokering anything. Haven helps facilitate the transaction, but is not making decisions or recommendations on the behalf of the shipper.
The intent is to support the process and “let the logistics experts at our customers do their thing”. This is different than other logistics technology, which often (wrongly) assumes shippers have little experience or knowledge of how to run a logistics operation. This false assumption is borderline offensive to a lot of shippers and will prevent many logistics technologies from gaining broader adoption with shippers of any size. The reason is logistics professionals take pride in finding, negotiating with, and managing their carriers.
Is the idea that the logistics industry resistant to technology a concern?
“I feel that’s actually a false perception. Frankly, the real problem is software companies selling technology that’s too clunky, and doesn’t solve specific pain points. We started building Haven TMS with the user experience first. It’s all based on input from actual users,” says Wehner. “We are seeing the most growth with shippers operating in the Asia to N. America and Asia-Europe trade lanes, as well as intra-Asia.”
The strength of Haven’s competitors is domestic shipping, which Haven recognizes is not their market. Most major TMS systems were built to handle domestic U.S. shipping and international became an afterthought. I’d argue TMS technology even in Europe is just now catching up to the U.S. - global logistics is a very different animal than domestic.
Haven’s focus on the now – commodity traders – is not a long-term constraint for growth.
Their goals do include to make the technology available to other markets, like CPG companies, but ultimately it’s about improving trade in general.
“We are building a platform for trade,” concludes Wehner. “A simple analogy is how a CRM like Salesforce is designed to facilitate sales, or how Netsuite is used to run finance operations. We are working to become the platform that manages global logistics.”
Market focus is a powerful thing. Suppliers everywhere in the logistics industry struggle with differentiation but Haven seems to be one of the few who understand who they are right now. And, how leveraging that will get them to who they want to be.