What’s Hot? Digital Innovation Needs Physical Logistics

NewsFromThePlatform in collaboration with Milkman | June 22nd, 2016

There is great excitement in the world of logistics and transport. Amazon Fresh has recently landed in London with same-day fresh food delivery; the freight forwarding company Flexport has swept onto TechCrunch radar and a Facebook group has filled the void left by Uber in the city of Austin, USA.

This signals that logistics is quickly becoming a cornerstone of the digital revolution, proving once again that online commerce and offline means are not actually mutually exclusive – on the contrary, one supports the development of the other seamlessly.

Let’s consider Amazon’s expansion of over the years: from 7 days to same day delivery, than one hour delivery with Prime and finally crossing the line of perishable goods delivery thanks to Fresh. This escalation towards perfect timing wouldn’t have happened if it hadn’t been supported by an increasingly strategic logistic system operating locally. In Italy, indeed, Amazon has acquired RPost, a small, nimble and efficient startup born in Milan, that has won Amazon Prime Now delivery commission over giants such as the Dutch TNT, the German DHL, the American UPS the British Royal Mail, just to name a few.

The spotlight on logistics is increasingly intense, so much so that an industry such as freight forwarding – that in our collective imagination has little to do with digital innovation and cutting-edge technology – is having a strong appeal for investors in innovative startups. For example, in a recent article, significantly entitled “The unsexiest trillion-dollar startup“, TechCrunch has talked about Flexport, freight forwarding company that offers competitive prices and, most importantly, has indexed all the available carriers into a free searchable database in its free software for organizing and tracking shipments. With $26.9 million in funding, Flexport grew the volume of goods it ships by 16X this year.

After all, the fact that in the logistic industry online and offline means are inextricably bonded should no longer be a surprise: Uber, Blablacar, Enjoy and the many other startups for alternative means of transport have accustomed us to turn to the Internet for our most material travel needs. The case of the city of Austin is curiously meaningful in this sense: when, a month ago, Uber and Lyft suspended their activities in the city, a Facebook group called “Austin City Arcade / Request A Ride” (sponsored by the City Arcade startup) took their place, allowing riders to post their offers and requests, which are typically a pickup and drop-off destination as well as desired time.

However, a theme that is still rarely discussed but increasingly important – and dear to us at P101 – is that more and more often offline means rush to the aid of online businesses, even enable the very existence of the most innovative, seemingly intangible, digital services. As we often say, this “lack” is actually a point of strength for those who have an eye to the future: namely, it’s an opportunity to invest where only few, so far, have dared.