Supply Chain 2020: The Year in Review

The COVID-19 pandemic put the supply chain under severe scrutiny and posed some serious challenges for it to tackle. Let’s look back at 2020.

Table of Contents

• 2020’s Biggest Acquisitions
• Biggest Fundings of 2020
• Supply Chain Partnerships That Made an Impact
• Products That Helped Supply Chain Survive
• Drone Delivery Gained Steam
• Ending 2020 on a High Note
• The Joe Biden Effect

2020 was dominated by COVID-19 and the unpredictability it posed to the global landscape. We saw a drastic change in the consumption of services and goods globally due to stay-at-home orders issued by states and local authorities as part of their efforts to prevent the spread of the disease. Businesses continued their operations remotely, and its effect was reflected evidently within the global supply chain and freight markets.

The year started with U.S. importers adjusting to the 25% Section 301 tariffs that affected approximately 250 billion dollars’ worth of Chinese goods. The adjusted tariffs went into effect in March 2018, and the import community had been trying to adapt to the new costs since then. This raised a question — will importers absorb these costs or pass them along to the end buyers? 

However, it was quickly learned that the impact of the tariffs would squeeze margins considerably. This resulted in supply chains shifting their production to Southeast Asia, the Indian subcontinent, and other parts of the globe to get away from a single-source model out of China. But the supply chain concluded that even if such a shift in production happens, it may take many years for it to be a sustainable shift. 

As we headed into February, a six-week shutdown was imposed in China, which meant that the United States got the lowest level of imports during this period. Virtually nothing was being produced and shipped after the shutdown. The steamship companies faced a tough challenge of controlling the capacity and sailings into the U.S. 

Fortunately, the carriers could successfully control the supply by canceling sailings and working within their respective alliances (Ocean Alliance, The Alliance, 2M) by sharing vessels and scaling down capacity. Traditionally, the rates would fall during less demand. However, this did not happen in 2020. Instead, 2020 saw a surge in rates. As the country opened, the steamship lines were back on track as they controlled and managed capacity until the problem of space availability was identified. The spot market started to increase, and fixed rates were negotiated at contract season.

The trend continued in Q3 and Q4, constituted by huge demand in PPE goods, seasonal items, and inventory replenishment into the U.S. This period witnessed a record surge in the imports and led to delays at the ports and trucker availability that continues to be the issue as we approach 2021. As 2020 nears its end, the large trade imbalance still exists. To add to it, a lack of equipment in China will be an additional obstacle to overcome in 2021.

Let’s look at some of the major mergers & acquisitions, fundings, and partnerships that unfolded in 2020.

2020’s Biggest Acquisitions

Lineage Logistics Announced Ten Acquisitions in 2020
Source: Lineage LogisticsOpens a new window

2020 saw a string of acquisitions. In May 2020, a leading fleet management solutions provider, Omnitracs, acquired VisTracks, SaaS-based compliance solutions provider, to extend its reach into the SMB market. The acquisition aimed to bring around 60,000 vehicles under Omnitracs and enhance their hardware-agnostic strategy for supporting over 30 telematics devices. Later that month, Expeditors International, a leading global logistics solutions provider, announced the acquisition of Fleet Logistics’ Digital Platform.

In June 2020, the online marketplace DATOpens a new window  solutions acquired the Freight Market Intelligence Consortium (FMIC) from Chainalytics. This was followed by a couple more acquisitions. The U.K.-headquartered digital freight execution platform, Kontainers, was acquired by Descartes, an on-demand software-as-a-service solution provider, for a total consideration of up to $12 million along with up-front consideration of $6 million. And supply chain planning software provider, Kinaxis, announced its plans to acquire AI solutions provider, Rubikloud, which delivered solutions for automation of supply chain prescriptive analytics and decision-making in the retail and consumer packaged goods (CPG) industries.

July 2020 saw A.P. Moller-Maersk strengthen its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions by acquiring KGH, a specialist in trade and customs management services in Europe. Later that month, Blue Yonder acquired Yantriks, a SaaS provider of commerce and fulfillment microservices, to integrate real-time transactional systems with supply chain planning, forecasting, and fulfillment solutions.

In August 2020, Lineage Logistics, a temperature-controlled logistics solutions provider, announced ten acquisitions, including Southern Cold Storage, Allied Frozen Storage, and Professional Freezing Services, among others, in the U.S. A series of acquisitions were made in response to the growing demand for cold storage and changing consumer food preferences.

September 2020 was also packed with a quantum of acquisitions starting with USPack that acquired pool distribution and store replenishment solutions provider, Gumro & Associates, and white-glove delivery and in-home installations company, Freight Rite. This was followed by the strategic acquisition of an end-to-end supply chain solutions company, LeanCor, by logistics technology provider, Transplace. 

Omnitracs acquired video-based safety and transportation intelligence company, SmartDrive, to deliver an industry-first converged, end-to-end platform to optimize safety and enhance driver productivity and workflow. 

Later that month, Accenture announced another major acquisition. The company acquired SALT Solutions AG, a technology consultancy company that implements IT systems for better logistics. The acquisition was aimed at enabling Accenture to build cloud-based industrial internet of things (IoT) platforms that speed up and optimize clients’ production and logistics and allow them to reduce quality and waste issues along the entire supply chain. After Accenture, surface transportation company, Forward Air, announced the acquisition of the assets of CLW Delivery, a final mile provider. 

The final major drive of acquisitions was seen in October, where fleet management software developer, Fleetonomy, was acquired by Via, a digital infrastructure provider for public mobility systems. Later, Accenture announced the acquisition of Houston-headquartered consulting firm Myrtle Consulting Group to expand its manufacturing and supply chain capabilities. Transflo, a mobile, telematics, and business process automation provider for the transportation industry, entered the Canadian Market by acquiring Microdea, a document management and workflow automation solution provider.

Biggest Fundings of 2020

ShipBob Announced a $68 Million Investment in October 2020
Source: ShipBobOpens a new window

2020 saw supply chain startups gain traction as most garnered a good chunk of funding as the demand for next-generation supply chains echoed amid the pandemic.

In May 2020, California-based logistics startup DispatchTrack (SaaS) closed $144 million growth funding led by Spectrum Equity, which clocks 60 million deliveries per year. 

Talking of next-generation supply chain, in June 2020, Locus Robotics, the provider of autonomous mobile robots (AMR) for fulfillment warehouses, raised $40 million in Series D funding led by Zebra Ventures. Similarly, in July, last-mile delivery automation and execution platform Liftit raised $22.5 million in series B funding.

In August 2020, Axle, a cash flow management solution for freight and logistics, raised $27.7 million in debt and equity financing. Later, Attabotics, the 3D robotics supply chain company, announced a $50 million Series C funding.  

The trend continued in September, as Lineage LogisticsOpens a new window raised $1.6 billion in equity from new and existing partners, where one of the investors, Oxford Properties Group’s president Michael Turner, is expected to join the company’s board.

In October, Uber Freight, the logistics arm of Uber, announced that an investor group led by Greenbriar Equity Group had agreed to invest $500 million in a Series A preferred stock financing. The funding is expected to fuel the company’s objective to scale its logistics platform and enhance its product innovation to equip shippers with technology and power their supply chains. 

Later, logistics company ShipBob revealed its plans to expand its fulfillment center footprint across the United States and the rest of the world, as it announcedOpens a new window a $68 million investment in a Series D funding round led by SoftBank Vision Fund 2. The month ended with news from Locus Robotics, a leader in autonomous mobile robots (AMR) for fulfillment warehouses, announcing it had successfully passed the milestone of 200 million units picked.

Supply Chain Partnerships That Made an Impact

Oracle Integrated with Uber Freight API in May 2020

As the supply chain technology adapted to the new normal, the brick-and-mortar retailers had to take the online route. As the pandemic further progressed through 2020, the year saw plenty of partnerships among supply chain players to adapt to the newer supply chain technologies that would pave the way for user satisfaction. 

In May 2020, Oracle integrated with Uber Freight API for Oracle Transportation Management Cloud to deliver real-time visibility for shippers. Through this partnership, Oracle aimed to enable shippers to gain real-time pricing and tendering capabilities and manage fluctuating demands such as over-capacity, seasonal overflow, new lanes, and more. This was followed by FedEx and Microsoft joining hands to lend near real-time analytics into shipment tracking and build new commerce experiences — that enable businesses near-real-time analytics into shipment tracking to drive precise logistics and inventory management. 

Digital freight technology company, Loadsmart, then partnered with Opendock, a centralized dock scheduling software for shippers and carriers, in June 2020. Later that month, One Network Enterprises, a global provider of multi-party business networks for autonomous supply chain management, and TruckerCloud, a pioneer in trucking solutions and supply chain management, partnered and deployed a joint TMS platform solution for enabling One Network customers to gain real-time visibility into their entire supply chain. 

In July 2020, Hitachi and Microsoft announced a multilayer strategic partnershipOpens a new window  for the digital transformation of the manufacturing and logistics industry across Southeast Asia, North America, and Japan to address the growing demand for predictive maintenance and process automation in remote areas and support enterprises as they tackle the challenges infused by the COVID-19 pandemic. 

Later, U.S. technology company TuSimple launchedOpens a new window a self-driving freight network with UPS and Berkshire Hathaway Inc. supply chain unit McLane. The same month, digital fulfillment platform Blue Yonder and delivery company Uber Freight signed a partnership to help businesses build an efficient and transparent global supply chain during the pandemic and deliver real-time services to shippers, along with a reliable capacity network.

Later that month, digital freight forwarder Shipwave joined the Maersk-IBM developed TradeLends platform. The companies aimed to allow end-to-end supply chain visibility, secured sharing of digital shipping documents and data directly from partners, thereby enhancing efficiency and decreasing operational costs by a significant margin. 

This was followed by a partnership between logistics service provider Schneider and Mastery Logistics Systems, provider of SaaS technology solutions. The collaboration is expected to deliver MasterMind’s modern connectivity to Schneider’s supply chain and its supply chain partners, providing better management and better decision-making. 

Moving ahead, logistics solutions provider C.H. Robinson allied with tech giant Microsoft, where the two companies are expected to combine C.H. Robinson’s Navisphere, Microsoft Azure, and Azure IoT capabilities to meet the changing demands of evolving global supply chains to deliver real-time visibility for C.H. Robinson customers.

In August, Walmart announced its partnership with Instacart to compete with Amazon’s whole food delivery division. The companies partnered to offer a quick delivery option to users across California and Oklahoma. Later that month, Geek+, a global autonomous mobile robot (AMR) company, partnered with Körber, the supply chain software, and material handling automation provider, to deliver autonomous mobile robots (AMRs) efficient, flexible, and smart logistics solutions.

In October, DHL Supply Chain and Manheim Logistics announced a collaboration to transform the logistics experience for developing a more holistic transportation management system to deliver an efficient and transparent transportation experience.

Mid-October, global container carriers, CMA CGM, and the Mediterranean Shipping Company (MSC), announced their integration with TradeLens, a digital platform for shipping data, to deliver a fully integrated, timely, and consistent view of logistics data for their containerized freight worldwide. In October, DHL Freight committed to reducing greenhouse gas emissions and pollutants to zero by 2050 in its effort for green logistic measures.

Products That Helped Supply Chain Survive

C.H. Robinson Unveiled Procure IQ in September 2020
Source: Blue Book ServicesOpens a new window

In June, IBM launched the advanced Sterling Business Transaction Intelligence (BTI) platform for AI-powered supply chains. Later, Ivanti announced the addition of Enterprise Mobility Management (EMM) capabilities to Ivanti® Avalanche Enterprise Enabler, enabling organizations in the supply chain domain to provision several fully managed Android devices leveraging a Near-Field Communications (NFC) bump or QR code deployment.

In July, the delivery company Uber Freight added new functionalities like finding reliable capacity, budgeting for shipping costs, tracking to its shipper platform to help small businesses during the pandemic.

In August 2020, logistics giants A.P Moller and Maersk launched Maersk Flow to help manage complex supply chains powered by better data. The newly launched feature is expected to ensure transparency in the flow of goods and documents and planned execution while reducing manual work and errors. 

This was followed by another release of data-driven enterprise software and services company CoEnterprise, where it released Syncrofy for Supply Chain (SSC), a real-time platform that helps companies achieve full product order visibility from purchase order to shipment, eliminate costly fines and fees, and correct late payments and late deliveries before they happen. 

Later that month, DHL joined the race as it announced that it was deploying an AI-based software called IDEA to improve pick routing and staff utilization, where the software will use technology intelligence, IT-based forecasting, and analysis tools to optimize warehousing and processing of the online orders.

In August, supply chain risk management platform, Interos, announced the availability of a new suite of supply chain risk detection and sharing features for detection and sharing of supply chain risk.

In September, Uber unveiled two enterprise software solutions — Uber Freight Enterprise and Uber Freight Link, to enable large shippers to leverage a central point of control for logistic operations. Global logistics company, C.H. Robinson, unveiled Procure IQ, a tool for leveraging shippers and carriers’ data, at the end of September. The tool is expected to deliver personalized data visualization of an individual customer’s shipping lanes or routes, integrated with C.H. Robinson’s vast freight marketplace data, unlocking the optimal way to purchase transportation.

In October, Oracle unveiled cloud SCM capabilities to address supply chain challenges to enable customers to increase collaboration across supply networks. The same month, advanced visibility platform, project44, unveiled new capabilities to provide enhanced performance, productivity, and customer experience to provide supply chain organizations the elasticity to meet increasing customer demands despite uncertain and unpredictable market conditions.

Drone Delivery Gained Steam

Amazon Prime Air Secured Approval to Use Drones for Delivery in September 2020

As a consequence of COVID-19, contactless supply chain gained steam in 2020. As a result, many logistic players brainstormed over possible solutions, such as drones.

In September, Amazon Prime Air, an Amazon delivery service, secured approval from the Federal Aviation Administration (FAA) to use drones for delivery. Although the approval did not entitle the company to start drone delivery far and wide, however Amazon’s drone delivery took a step towards reality. 

This was further taken forward by Walmart as it piloted drone delivery with Flytrex and Zipline in the U.S. The company is expected to make on-demand deliveries of health and wellness products and may even expand it to general merchandise. Towards the end of September, Walmart, Quest Diagnostics, and DroneUp announced a pilot program to deliver COVID-19 at-home, self-collection kits to single-family homes in the North Las Vegas area through drones.

As the year progressed, Amazon revealed its first custom electric vehicle, designed and built in partnership with the electric vehicle manufacturer, Rivian. The vehicle is equipped with various safety, navigation, and design features, optimizing it for package delivery.

Ending 2020 on a High Note

As we entered the fag end of 2020, the season of Thanksgiving took over. As the pandemic had forced the purchases to shift to the online platforms, the surging ecommerce demand reaped the rewards for supply chain companies like Amazon, DHL, FedEx, UPS, DHL, and ten others as they gained huge profits around Thanksgiving. Soon after, the focus now shifted to Cyber Monday and Black Friday, which witnessed record-breaking online sales.

Although ecommerce helped the supply chain stay afloat, it was still battling challenges to deliver rising demands of the Pfizer drug. In December, Pfizer Inc. released a statement regarding the shipment of COVID-19 vaccines for 2020 and 2021 based on its production estimates, where it expected to ship only half of the COVID-19 vaccines it had initially planned after facing several supply chain challenges.

The Joe Biden Effect

Biden Could Encourage Supply Chain Companies to Employ More Americans

Now that the U.S. President-elect Joe Biden has come into force, supply chains are expected to undergo a rejig, where the focus will be on encouraging domestic manufacturing and reducing the dependency on foreign suppliers like China for essential supplies by reducing imports of products critical for national security. Besides, Biden is also expected to encourage supply chain corporations to employ Americans to produce vital supplies and equipment as this will secure critical U.S. supply chains for future times of crisis. 

In Conclusion

All the above factors like pandemic adaptive supply chains, drone delivery, advanced supply chain platform launches, to name a few, have ruled the supply chain arena in 2020. The skyrocketing ecommerce demand resulted in record profits for a majority of carriers and a new discipline of capacity management that will be carried into 2021. 

Although 2020 was a year of uncertainty, supply chain players adapted well to the changing market. Owing to this resilience and adaptation, SCM can already see a tight Q1 for 2021. The upcoming initial months will depend on what type of stimulus packages are passed by the government authorities and how consumer and business confidence grows with time.

Do you think COVID-19 has reshaped supply chain management principally? Comment below or let us know on LinkedIn, Twitter, or Facebook. We’d love to hear from you!