There are no shortages of startups in the supply chain and logistics industry, but there is none bigger than Google at the moment.
I wrote that back in March 2022 in a post titled, “Google Making Inroads Into Supply Chain And Logistics.” Here’s more of what I wrote at the time:
The company is placing bets on multiple fronts: as a hosting/AI/analytics technology partner to existing supply chain software vendors and logistics service providers; as a competitor in the market with its own software solutions, such as its digital twin and fleet management offerings; and via its emerging technologies such as autonomous driving (although Waymo is no longer part of Google, it is still under the Alphabet umbrella).
And here are some of the examples I referenced:
You can now add one more example to the list.
Last week, “CMA CGM, a global leader in sea, land, air and logistics solutions, and Google announced a strategic partnership to accelerate the integration of artificial intelligence (AI) across CMA CGM’s operations worldwide.” Here are some details from the press release:
As part of the partnership, CMA CGM will actively seek to optimize vessel routes, container handling, and inventory management to ensure efficient and timely delivery of goods while minimizing costs and carbon footprints.
CEVA Logistics, the logistics arm of CMA CGM, will pioneer the data-driven future of logistics, focusing first on warehouse smart management aimed at better operating its 10.3 million square meters of warehouse space. The smart management tool, built on Google technology, will allow CEVA Logistics to better anticipate and plan its operations thanks to an enhanced volume & demand forecasting.
This collaboration is part of CMA CGM’s overall strategy to transform its business through AI innovation. It follows key moves such as CMA CGM’s investment in Mistral AI, PoolSide, and Dataiku, as well as the launch of open science lab, Kyutai.
Historically, the logistics industry has received a bad rap for being behind the technology curve. There has always been a subset of logistics service providers, however, that have viewed technology as a strategic asset and competitive differentiator. In fact, some logistics service providers actually have more IT people and spend more in R&D than many software companies!
Why are technology companies like Google focused on the logistics industry? Because, putting questions of cost and energy use aside, AI is a great fit for the industry when you consider the amount of data generated by logistics processes each day; the number of variables, constraints, and complexities involved (e.g., labor, transportation, inventory, lead times, throughput, tariffs, regulations); and the fact that huge inefficiencies and waste still exist due to manual processing.
Will Google ultimately acquire a leading supply chain software company or 3PL? I predicted they would way back in 2014, but they haven’t yet. At this point, it doesn’t really matter. Google is already well entrenched in the industry and there’s still plenty of room for them to grow in it.