The transportation visibility market has been generously funded by venture capital. In part, this is because this is seen as a high growth, winner take all market where the company with the largest network will garner outside rewards. Meanwhile smaller competitors operating in a smaller network ecosystem will wither and die or be acquired by the leaders.

The two leading suppliers of these solutions in this market are project44 and FourKites. The CEO of FourKites – Matt Elenjickal – believes both companies have roughly $100 million in revenue. “The difference,” Mr. Elenjickal growled, “is that they grew to $100 million with $750 million in investment. We raised $250 million to build a $100 million business.” Mr. Elenjickal implied that project44’s investors were not happy. Their top competitor has had C-level departures over the last year.

According to Crunchbase, the actual venture investments include $897.5 million in ten funding rounds by project44. project44 also had 5 acquisitions, one of which cost $225 million.

FourKites raised $241.5 million in eight rounds. FourKites also had 3 acquisitions, all of them small enough that the purchase price was not mentioned.

As far as revenues and C-level tenure, project44 reported to my inquiry that their revenues are “greater than $100 million” and that Jett McCandless is still their CEO, “no changes there.” A search of LinkedIn does show that project44 has a new chief financial officer, chief people officer, and their widely respected chief industry officer has transitioned to the role of strategic advisor to the company on a contract basis.

Benefits of Transportation Visibility

Transportation visibility solutions provide a wide variety of benefits. The solutions reduce fines. These fines include reduction of demurrage – late fees paid to a truckload carrier for not getting their trailer out of their yard quickly enough, or fees paid to an ocean carrier based on the failure to load or discharge the ship within the time agreed. FourKites estimates they reduced demurrage fines by $240 million last year for their customers. Real-time transportation visibility solutions also reduce the fines paid to customers for not delivering shipments on time. Retailers are particularly prone to fine their suppliers. Many retailers demand shipments be delivered on time and in full.

Customers of these solutions also mention improved customer satisfaction – presumably leading to higher revenues, improved agility, improved transportation procurement, better warehouse and yard operations, better store operations for retailers, and other benefits as well. According to Mr. Elenjickal the leading reason their solution is bought is to improve customer service. While it is difficult to attribute increased sales to having a higher percentage of on-time shipments, not shipping everything a customer ordered clearly impacts the top line revenue and this is an easy calculation.

The Network Effect and Transportation Visibility

Both FourKites and project44 started as providers of truckload carrier visibility in North America. Over the last few years, both have been on a frantic journey to increase visibility to other modes of transportation – less-than-truckload, parcel, air, rail/intermodal, and last mile – across all regions of the world. Most of the acquisitions these companies made were aimed at expanding the network to include new modes and/or visibility across new regions.

The more carriers and applications that the solution is connected to, the better the visibility. It is important to be connected to huge numbers of carriers. But it is also important to be integrated into large numbers of enterprise and supply chain applications and telematics solutions.

Project44’s bragging rights include tracking more than 1 billion unique shipments annually for over 1,300 of the world’s leading brands. project44 has built real-time connections to thousands of carriers worldwide as well as building direct APIs to over 1,000 telematics and electronic logging devices (ELDs) devices.

FourKites tracks more than 3 million shipments per day across the world, over 18 million estimated times of arrival (ETAs) per day, and more than 62 billion miles tracked per year for 1,200 customers.

Customers to both project44 and FourKites report that the ETAs provided by these two visibility solution providers are more accurate, timely and easier to access than those provided by most of the carriers.

But not all visibility is equally valuable. “The key is real-time decision making, not real-time visibility” Mr. Elenjickal said in a keynote at last week’s FourKites user conference. I attended this conference because FourKites is a customer of the ARC Advisory Group, where I work. FourKites believes they have the largest repository of supply chain data in the world because their solution collects more than 6,000 data points per shipment.

In a one-on-one interview, Mr. Elenjickal went on to explain that their solution has progressed far beyond tracking loads. FourKites can track order visibility. Visibility to a truck shipment involves accessing a truck’s telematics device to know where it is.

But order visibility involves a lot more. A sales order, for outbound tracking, or purchase order for inbound tracking becomes the unique identifier. Then the pallet trucking numbers are attached to that identifier, and then the transportation asset is attached once the pallets are loaded. This allows the amount ordered and the deadline to be compared to what was delivered and when that occurred. This kind of visibility is what is key to real-time decision making. Achieving this kind of visibility requires deeper integration into a wide variety of customer business applications.

Order visibility, including visibility into whether the shipment included everything that was ordered, is what makes the ROI associated with growing the top line an easy calculation. And it is this capability, Mr. Elenjickal believes, that has been one of the main contributors to FourKites robust growth and market share gains.