Descartes Acquires MacroPoint
Why This Acquisition?
Our global outsourced world! Though new markets, new capabilities, and new partnerships have opened up for us, we have lost ‘control’ of our supply chains. Of course good partnerships — where processes and information are shared — close the gap to some degree. However, once the shipment leaves the dock, even with the best carriers, we lose control and reliability.
Lack of precision to create reliable outcomes plagues the logistics process. Why is that? Logistics takes you outside the relatively orderly realm of the factory and into the wild and unpredictable world at large, which is subject to weather, traffic, political events, man-made, and natural disasters. A large part of the logistician’s day is consumed dealing with all manner of hard-to-predict-and-control events.
Descartes has been chipping away at the issue for a number of years by developing and acquiring the technology and applications to provide visibility — data along with the methods to do something about what you see! Thus, their acquisition of MacroPoint, which, today, is probably the biggest source of data in ground transportation.
The logistics market has been witness to a new breed of technology during the last few years: the visibility companies, who spend a good deal of their lives acquiring data, data, data — carrier/vehicle and driver location, shipment condition/IoT, traffic, weather. Big and little data add up to a clearer picture.
In the U.S., examples of visibility companies are MacroPoint, TransVoyant, the new FourKites, and, let’s not forget the load boards like Truckstop.com, rating solutions such as SMC³ (or telematics companies to keep track of your own fleet). They have become a trusted source to the major supply chain application providers who spend their lives writing and integrating code and making end-customers successful. We need both types of elements to really manage our supply chain today. (Many companies labor on their own to amass all these types of data from multiple sources to get clarity — with predictability — of their supply chain.)
Descartes has been focused on both these issues with their many applications, telematics, and most significantly the Descartes GLN™ . Logistics networks have become the big players in supply chain in the last few years with huge investments in cloud solutions and these new types of data1 (more to come on that topic in our new report, which we will publish soon). Descartes’ GLN, the largest in the industry, has over 200,000 members in the network. MacroPoint will add an ecosystem of 1,000,000 drivers and over 2 Million ELD/GPS connections. Add that to the GLN and Descartes wGLN™ (wireless GLN) which provides connectivity to all manner of devices — smart phone, on-board electronics and sensors, and GPS — and you have a hyper-scale network of people, vehicles, goods/containers and their conditions, across all modes. That hyper-scale visibility will be achieved by only a few players in the market.
The utility of this is significant. Today, companies have — or need to have — moved beyond EDI. Real-time tracking along with geo-fencing puts the user at the real point of activity — not just at a guess. Gone are the days when we can wait a day or more for information.
Although many companies have their own TM applications in house, Descartes has advanced, real-time applications to leverage all this data to provide up-to-the-minute routing guidance to carriers/drivers. For shippers, knowing where the shipment is and when it will arrive allows them to schedule resources at the yard, dock, and accurately promise delivery to their end-customers.
Conclusion: Good Deal?
Ouch! A bit pricey. But to gobble up today’s leader is good for both entities. Descartes has the muscle and the money to expand on what MacroPoint has done. Of course, MacroPoint’s competitors have taken note. Valuations for them have just inched up a few points — and not micro-points!
1 On-premise supply chain players like Logility and JDA have significant big data and analytics solutions to resolve glitches in the chain. — Return to article text above
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