Why oh Why Logistics!

Speaker A: Do you have a tough challenge with your supply chain or logistics? Loguru is the intelligent partner that works globally with manufacturers, retailers and logistics businesses. We help our customers define, buy and safely implement solutions across the supply chain. If you want a more sustainable future for your supply chain, visit loguru.co.uk complete end to end satisfaction guaranteed.

Speaker B: Coming up in.

Speaker C: In this episode, you've then got a requirement for an industry to decarbonize. So how do we actually get to that? And collaboration, even on looking at how do we decarbonize is really important. I mean, I know that trade associations are speaking certainly to UK government, uh, really about this. I think the pursuit of pure electrification is not potentially the best solution. I think it will take too long. It'll get there eventually.

Speaker B: The Logistics Collective podcast is a series focusing on the sustainable future of the logistics industry where discuss the industry's future challenges and interview thought leaders who can offer solutions. We're commencing our search for the higher level of intelligence needed to make the industry more sustainable and profitable. Here's your host, Malcolm Pope.

Speaker D: Hello and welcome to a new podcast from the Logistics Collective. Now this one is going to be a little bit different to podcasts that we've issued in the past in that we are syndicating with, uh, another podcast channel called Chain Reaction. Now you, you may ask, why are we doing that? Well, uh, for a change, it's me being interviewed and Michael Ustromov, who's CEO of ValueChain Labs and also Flocks, which is a logistics service orchestration platform powered by AI. He kindly invited me on to have a conversation and we explore the many challenges and opportunities now and in the future for the logistics industry. I do hope you enjoy it.

Speaker C: Welcome to Chain Reaction, the video podcast for the supply chain and logistics industry. In this podcast, we speak to industry leaders who share their ideas, thoughts and anecdotes from within the logistics world.

Speaker E: Uh, hello everybody. Uh, welcome to, uh, Chain Reaction podcast. Uh, today we have Malcolm Pope as a guest on our podcast. He's a founder of Loguru and has been in logistics and supply chain, uh, for a while, for decades. And this is one of the interesting questions that I typically ask my guest is, uh, was that by design or was that by, by, was that by choice or was that by accident that you ended up in logistics in that space? It's a fascinating space, but sometimes people just fall accidentally into, um, into the environment rather than kind of studying and deliberately wanting, uh, to join, um, the sector.

Speaker C: Hello, Michael, thank you ever so much for inviting me. Um, I Guess it was an evolution. Um, so I uh, probably started as the world's worst chemist. So my degree is in chemistry. I became an industrial chemist. And then actually I realized that whenever you study an academic discipline you study huge breadth. And then when you're working within an industrial environment you're only covering a tiny percentage of your actual knowledge. And so I felt like a short order cook in McDonald's or something like that. So I had enough time to wonder. And where I was working was actually in edible oils. And so we were supplying all of these amazing brand names in terms of a key ingredient and key product. Um, so Mars, uh, McDonald's, Kraft General Foods, Heinz, all of the, all of these brilliant brand names. And so you're sort of looking well, where is all of this going? And that sparked an interest. And of course if you're involved in uh, process chemistry you get to understand the process. And then from the process that led me to be moving into production planning. And from production planning I went into demand planning and inventory planning. And so I began to get my supply chain brain in place. Of course this was in the proto digital world or even the pre digital world whereby an awful lot of things were done manually. And so um, I was using biological intelligence, or I uh, like to call it now high H I human intelligence. And so what you actually had was knowledge that related back to the physical processes and you were incredibly close to those. And so strangely enough I invented my own bill of material system. I invented my own demand model. So really in terms of that it was utterly fascinating in order to be able to do that. But my career then led through a whole variety of stages. Had supply chain leadership of a paper mill and then I then spent um, probably about eight years working in the bulk intermodal chemical, uh, distribution sector. Then I joined uh, a wonderful three pl called Tourism Britain and spent uh, four years uh, looking after their relationships with the Unilever division, Colgate, Palmolive and also Duracell. I then joined Heinz and Heinz was always the making of me. It'll be the love of my life as a business in order to work for it gave me immense freedom to do what I believe to be a fantastic job, but also to innovate and also to think about how we do things in the future. And that led to my fascination with e sourcing and uh, my fascination with collaboration. And steadily through my career I upscaled in terms of the volume of both buying and managing of these relationships and probably spent long enough to perhaps perceive it slightly differently because when you go through this, it's like pulling focus. So you initially start and understanding the little details of things and how they actually work. But then as you grow in terms of your role you begin to see, or I believe you should begin to see. And there's a question, you begin to see uh, really the patterns and the weaknesses and how could you actually do this better? And I guess I've been um, a pita, a pain in the ass as far as the industry has concerned for a long time. And uh, the reason I am that pisser is I actually care about the industry and where it's going and where what it could be. And my fascination, collaboration. I was a director of an organization called lupeg, so European Logistics Users Providers and Enablers Group which was founded by the wonderful professor Alan Waller and also Brian Boland who put this together as an idea to say surely we can do this better. Because when we look at all the government figures, 25% vehicles are uh, operating empty. And if you then dig a little bit even deeper is that 50, 60% of vehicles are not fully loaded. So what could we do about this? So that led me running a group of really FMCG, uh, CPG organizations, so more than 20 and we were trying in the early 2000s to say could we work together better? And so it centered of course on data and it's centered on um, solutions. So it was nice to have the conversations but in reality you have to get into solutions that can solve. And um, during that time because of my work on the e sourcing side, I saw some wonderful analytical techniques that uh, we were using on combinatorial optimization to actually model and to find um, truth. And the truth really is how can you do this better? And the lab for me has always been a long term fascination. And so out of that, and even when you're looking at 20, 25 FMCGs, you're only seeing a tiny proportion of what the overall volume is. So I look at collaboration and say it is one occasion whereby you do have to boil the whole ocean to make a cup of tea. So the larger the sample size the more opportunities that you actually have in order to be able to drive to collaboration. And um, some examples were found. I mean Unilever and Kimberly Clark began to collaborate I believe, uh, in terms of Benelux at time they found that opportunity as a result of this and made some great savings. But my frustration was I was surrounded by these three PLs, these large scale three PLs who uh, I shan't name but we all know them and they were sat around as senior people and they were doing what a lot of three PLs can do on occasion, which is to observe and to see which way the flow is going and then react after. What I wanted them to do was to pick up the mantle and to actually understand that what are they, they are not winners of serial little contracts that they can put a flag in the map for what they are, are consolidators, they are optimizers, they are people that need to add value. And um, strangely enough in terms of my time in Luguru, Luguru we're a, we're an advisory, we're a small advisory and um, we work slightly differently perhaps to others that might regard them as competition. We want a whisper in the ear of those to say there's a better way of doing this. And so we do engage on project work in order to be able to um, help people improve the value creation of supply chain and logistics. We help people implement systems so erp, wms, tms, we help them define what those systems needs are, we help them source logistics solutions, we advise people on how to sell logistics solutions. We do a very broad variety of stuff within here but the core of it is this sort of intermargin between let's say logistics service providers and the customers of logistics service providers. And I think that ultimately leads to a disappointment and my disappointment is fundamentally this, that when I talk to the majority of them and I ran a study recently looking at in depth at five logistics service providers, the one thing that I found out from that is number one that the buying maturity of let's say carriage was quite low and there was immense opportunity for them to improve, to consolidate, spend and to become better at it. That when they are looking to win business there is no reflection back on the big data picture, say how is this win of new business going to actually improve my profitability as a business? And um, we look at these big LSPs and we say margin overall if you're looking the margin reported is in single figure percentages. Now I love my industry, I generally do and I think it deserves to make more money than it does. And so I'm looking at this and saying why oh uh, why oh uh, why have we not solved this problem? Why haven't we become more profitable by actually putting this together and thinking more smartly about the business that we want to target and when? Why in spite of all of the uh, advance in the way that we could buy logistics that I was involved with 25 years ago. Do I not believe that we've moved a single tick forward in terms of the way that we do it? And still people are using Microsoft applications in order to buy this. And to think about it, why, oh, why, oh, why haven't we applied some of the wonderful technology? I mean, people are getting excited about AI. You know, it's like, well, fine, put a suit on about AI and machine learning and whether it's agentic or large language models and all of that. Great. I was looking at the early stages of AI over 18 years ago. So why haven't we looked at this as a tremendously difficult process? It's this $10 trillion industry and above. Why haven't we begin to really engage and why are we still addicted to what I would call these legacy systems that have still got the, uh, thinking in the 1970s in terms of when started this first stage, this first stages of our digital journey. And um, to a large extent what seems to be in place isn't any more intelligent that than that. I just feel it's tremendously disappointing. I think the industry could do enormous things for its own profitability and needs to, because it has to invest, it has to invest in decarbonization. Whatever the political winds are blowing at the moment. The hard reality is that we're going to have to learn how to do this. And more than that, it needs to be able to make the profit to do it. But there is tremendous waste. I mean, we're looking now, I look at the UK figures in terms of empty truck running, uh, produced, uh, really from the industry, um, by the Department for Transport and that's running at 30%. It's got worse. And there is a fascinating trade off between. You know, I look at E Commerce as an example and I asked a question on LinkedIn recently. What is better from a sustainability perspective? Is it better for me to drive down in my electric car, down to my local, uh, supermarket or retailer, or is it better for me to get home delivery and, um, want any answers around that? And I actually think we need answers to things like that as well. So I get fascinated, um, probably the problems that most people would go, for heaven's sake, shut up, Malcolm. You know, we're just trying to, just trying to do our day job and we just want to keep things as they are. You know, we just need to win these contracts and to assemble them. And I just look at it as a tremendous missed opportunity to get more fundamental, fantastic growth within them. Uh, I also then look at trade associations and I know I'm talking too much. But if we look at the trade associations that we, you know, that we have within the UK and across Europe within the, they've got an opportunity to really begin to help some of the smaller and medium sized businesses to begin to work together and to work together better. And we should be looking at tools out there that can add value to them. Uh, I mean, I've engaged with the Road Haulage association and I've got so much respect for its leadership and so much respect for its members that what broke my heart over the past two years is that we've lost over a thousand small and medium haulage businesses in the uk. Now, there'll be multiple reasons in terms of, you know, why they lose, but to a large extent it will be, uh, really about, I think, not having optimal operations, not making every mile count. And this to me needs to have bigger brains. And I always look at AI in the sense of a lot of people are treating this about and they're asking very human questions. You know, create me a picture of this, write me a letter that says this. It's all very human and very basic in terms of it. And um, what you have, you've got an eight year old genius in the room and we're not asking it superhuman questions. We're not asking it really to stretch it and to say, well, okay, where can we take it? Where can it go? And that for me is the disappointment and also the opportunity. You know, there's a yin and yang of disappointments. You know, you have disappointment, but then you've got an opportunity then to solve and to be better. I'm an aged old relic that keeps on moaning all the time within the industry. Um, but I will continue moaning until I actually begin to see the tr. It probably is my life force, if anything, is, uh, to be that PITA that keeps on saying, well, okay, we can, you know, we can truly be better in terms of this. And I think to have a happier and better world. I mean, I also get frustrated about the idea of, okay, you've got all of this big data. And I'm imagining somewhere within some of the big logistics service providers there is an enormous amount of data that we're not doing anything with. So it'll be active data in terms of the stuff that we're doing today. It'll be passive data, which will be either the work that we used to have, what we no longer have, but remains as intelligence, and also the stuff that we don't win, which also is interesting data and what we could Build is something that is an awful lot smarter about how we actually balance networks and optimize networks within that, uh, um, and it doesn't appear that really we're doing much in terms of that. And perhaps I am making life too complicated, but on the other side of it is that that's where possibility comes from. That's where step change, improvement comes from. That's where we actually have something that is more effective. We moan about we don't have enough drivers to drive trucks. So what we then do is we put our AI brains on and we say, well, let's go for autonomous driving trucks. That'll solve the problem. Well, okay, I've got a, um, if you look at a bit of a social perspective to that, is that ultimately, you know, if you don't have some of these valuable jobs for people to do, how you, how are they going to earn the money to be able to survive? Where are they going to get that from? So perhaps it is better that we put the intelligence in the way that we plan and the way that we coordinate, and perhaps we don't need so many drivers. Next view would say, when we're looking at how we're managing this, how can we actually create jobs that drivers would want to do? So do drivers really want to drive all the way around the country, tramping all around the place, and then go to poor facilities with no hygiene facilities and they've got to park in the road, um, they've got to be abused and mistreated at pretty much every location that they're going into, and then they're away from their family. Now there's going to be a small percentage of people, I don't doubt that would love the idea of that, but I think in the modern world, but more people would like to be home with their families. So do we reflect that in the way that we're planning? Do we actually create, through our, uh, tmss, jobs that people want to do? Because when we look at the way most business systems seem to work, they work on three principles. First principle, there's some aspect of quality, whether that's on time, delivery or quality of product. Second aspect is cost. Third aspect is legal compliance. Uh, and that's it. So when you go and dig further for any algorithms that are saying happy employees, missing, at the core, it's missing. So therefore we sort of apply it on top as a layer. If we then talk about sustainability, it's missing. If we talk about waste, it's missing. And so I think there's a question to say, well, okay, should we go back to some base principles and actually do a reset in terms of that, that uh, notwithstanding. I mean my other soapbox moment is you have all of this incredible data. Intermodality becomes fascinating then in that circumstance because we suffer from uh, a log jam of uh, ideally you say if I build it they will come. But the truth of the matter is that if you build it, they won't come because they're stuck in the same behavioral patterns. That behavioral log jam that says I'm never going to move out of it, so what do you need to do to break out of it? Well, governments can intervene by all means. Um, but common sense should intervene to say, well okay, when I'm looking at data on mass, where can I see opportunity for modal shift? Where can I find the capacity to move trains? And my favorite view is that allegedly the UK is a maritime nation, yet when we're looking at GB, we move M very, very little by C intra GB, um, less than 0.1%. So you imagine all of these ports which are very, very close to the most of the population centers. Why on uh, earth are we not actually saying, well okay, let's build a load of ferries. So my example was how many ferries, high speed ferries, could we build for the cost of HS2? And um, the answer was approximately 500. So we could have rebuilt this nation and used the almost unlimited environment, revitalize our ports, do all of that. And actually all the information that would say whether or not that would work actually exists in most of our large scale logistics. So there' providers and we're not using our imagination to do anything with that information. So I'm having a moan, Michael.

Speaker E: No, that's okay. There's a lot of passion is coming through and I clearly sympathize and I'm on the same page with you and uh, very much I went through a very, very similar journey. That's why I'm relating 100% to everything that you say. Um, what I would. You've touched on multiple points, but a couple of things that struck me, um, especially earlier in the conversation where I think there are two elements to the challenge that we're FAC or maybe three. Now since you mentioned the HS2 at the end, um, is the challenge, I would split it maybe into three categories and how can we make it? Because you've been asking like why are we doing the same way that we did it in the 80s or 70s? Why is Microsoft Excel and spreadsheets and emails are dominating the Industry uh, and the ways of working actually more than the industry, just the ways of working is uh, the three things. One, it's either the challenge of changing is either uh, people. So it's the kind of change I not particularly fond of consulting terms like change management, but it is changing the people's behavior and the way that people work people, the way the people think, the way the people's attitude towards how things need to be done. So it's that one. The second was technology. You did touch upon the AI. Um, this is the journey where I come through. That's why we built flocks and that's why we're doing. What we are doing from a platform point of view is that it's technological enablement which cannot work without the people's component but it is a technological enabled that allows you to actually connect networks of networks being able to have a very fast processing of lots of data and being able to extract the insight. And the third element, um, I would add environmental but not in the sense of kind of the green leaves and CO2 but environmental as in the political climate that we're living in. Uh, um, the compliance elements that we have to deal with the expectations and is something that is not necessarily kind of codified in um, but it still drives our behavior. So which are the elements that I think not necessarily in the ranked order but how can we address each one of those? Um, to actually kind of break through and get that step change, uh improvements

Speaker C: you've alluded to, you need to have a few ambassadors of determination wandering around in organizations that are brave enough to stand up, take a risk and make a change. Often I see some people that ah, within the industry are truly inspiring and yet I see others that are career managers and actually I like the ones that are truly inspiring and inspiring people for me take some risks. It is really difficult. So the earlier point that you made in terms of why are people still using Microsoft products to buy logistics? Which I just think is nuts, crazy. I genuinely do. I can speak of some procurement, uh, some, some procurement uh, projects that we've had. I can't mention names obviously within here, but I've spoken to clients where I already know that from a traceability of decision, from a safety, from a value creation that the use of some of the e sourcing platforms that we have specifically for the logistics industry will add value. And I generally target it as it'll do 7% better than anything else that you're using now the challenge comes is that you will find a CIO and CPO were worked out to say that they want to have a certain product, say Cooper, whatever it is within this market. And I would be very kind to Cooper, uh, um, I think it is a good solution, but you have to dig a little bit further to get to the really interesting stuff. Now, um, what you'll find is that one solution doesn't fit all and so sometimes that you actually need to have a degree of specialism. And so what these logistics e sourcing platforms give you is at least a template about how you actually design and how you actually run projects. Now if you then go and have a look at. All right, Cooper is probably a bad example, but if you're looking inside of SAP or Oracle and find, you know, I'm saying, well, okay, you, if you've bought some level of general sourcing platform within that, uh, you're going to have to build and construct, um, there's a deep need for questions on contract logistics. You know, because you're not actually buying a physical commodity. You're actually buying something that is about intelligence and systems and how it fits in. It's hard to describe. You can't just put it on a piece of paper and say, build me one of those. Um, and you need to have analytical ability within that because the tariff structures are interminable in some respects. If you go and have a look at parcel tariffs, there is an industry that I believe has designed its tariff structures to absolutely obfuscate, um, comparability. Yeah. Uh, similarly, when you're looking at air, uh, shipments or ocean freight, it's very, very similar within that. But then you go and have a look at even how, let's say a full truckload is bought. You know, there are varieties actually within that. Uh, you can buy a system in a process that helps you do this more easily and makes it quicker. Then great. But the next one comes to traceability. I mean, I had the great fortune, um, that I was told within Heinz is that I had the only e sourcing product in a project in Heinz in the early 2000s that passed Sarbanes Oxley with no comments other than well done. I was the only one in the whole organization globally that had that.

Speaker D: Why?

Speaker C: Because it engaged stakeholders, it tracked their opinion, it tracked their scores. Because these are never a single person decision when you're talking about the bigger logistics. You need to engage an organization and engage a team and the solutions that you're using to buy should reflect that. Now though, these are solutions that have been available for 25, 30 years now. What we should Be having now is something that uh, is a lot more intuitive, a lot more thinking forward, a lot more accepting that we need to address not the market, the market not on a batch level, but on a continuous and opportunistic level. And this is where my sort of infinite tendering ideas come into play that you need to create an environment under which you can actually go and search for that opportunity on a continuous basis because there is change that is involved within this. And um, here is where I go look at the larger logistics, service providers and say, wow, what tremendous opportunity. I was kindly invited into um, an innovation session for one of the very, very big three PLs and they were talking about AI and so really grateful to be invited in, but I sat through it and this was AI about getting the parcel to be the right size. Now my difficulty is that I've worked for long enough to know that we have machines that do that already. So what are the big questions that we want, we have in the industry that we want to find solutions and how can we actually engage properly with um, the digital world, the innovators within this? And how can we describe what the true questions are? Because if we look at it, you've got hundreds of tmss, you've got hundreds of wmss, you've got hundreds of SRN and CRM systems out there. Uh, well, to be honest, if we go and have a look at it in terms of the macro position, well, we're still burning too much fuel, we're still running too empty. We're not actually making some of the biggest strategic changes that would really add value and better working conditions, uh, within the industry and make it more interesting and attractive to work for. So yes, everybody within the industry works very hard and I thank you for it. But where can we actually raise our minds in order to be able to say, okay, what are the true big issues that we want to have solved and in the industry, what's an interesting

Speaker E: topic that you brought up and I think as you've actually touched upon earlier as well, it is uh, an ability to take kind of a holistic view across the network outside the perimeter of a single business. As you said, a single business will have a TMS and wms. They could be state of the art, but they are limited by the footprint of an organization. So a step change, that's where the collaboration comes from. It becomes an inter enterprise collaboration. The challenge though, uh, because you've said that it requires kind of a visionary within the organization. So what would be your thoughts? Either advice or if it were you, where would you begin within an organization? Whether that's an LSP or whether that's actually like Heinz, a large multinational, where would you begin to actually start moving the needle?

Speaker C: I used to say, if I can take the FMCG perspective, I would always say, um, collaboration is the final step on my maturity curve of uh, value creation. Because as soon as you begin to involve what is outside of your own control, you add complexity to that. Uh, and that was perhaps an older view because we didn't have standardized ways of actually being able to interact. And um, you can't necessarily store goods at one company in another warehouse. It's actually difficult. We sort of hard code it in to make it difficult to do. But m, the first thing that I would look at is how can I collaborate with myself. So if I look at inbound logistics, it's generally managed by separate team to outbound logistics. And so you will have loaded vehicles coming in and leaving empty. And um, that would be a good starting point in terms of that sort of vertical collaboration. The other view is that Most large scale FMCGs will have multiple divisions that don't talk to one another. And so if you've got linkage across in terms of, let's say category responsibility within the uh, get these organizations to talk to one another, get them in the same room. So I have one example uh, within um, really rhm whereby we had Hovis running a primary training network, Madda Bakeries operating another primary tracking network. And they were planned separately but there were opportunities for them to work together and millions of miles saved results. So you can even start it with what is within your own control. When you step beyond that, I think that you then need to have um, it becomes a little bit more like dating. You're then beginning to really look for the other people that may well be within your industry, might be your customer, might be your supplier who complete you, that actually have a profile that is interesting and you need to have that. And um, in fact we had that within early peg. Sadly it didn't go as quickly or as far as it should have at that time. But that gives you a view of saying, well okay, I've now got a series of companies that have something that is complementary. Now can we talk on the ideological and cultural level and the agreement level in order to be able to get something moving within that. Uh, now if you're talking to the logistics service providers, um, well here's my message. You should have been doing this 30 years ago. You know, this is Part of what you're about. If you, if you look at a small and medium, uh, logistics companies, they are all in control and they're all about, because it's at a human level. If you're looking, and I've worked for small, medium businesses, it is, you've got to keep those wheels rolling and when they're rolling you've got to have a load on the back that's paying you. And they do that reasonably well within the boundaries of they will try and keep the, if you like their payloads up, up. Um, if you're looking at the larger logistics service providers, this is about winning silos of business. And there is limited crossover in terms across contracts. Um, even if they sit on a single system, there is limited crossover within there. Uh, and the great shame to my mind is that is the lost opportunity, you know, if you're going to be a big multi billion multinational organization, should you not be focused on providing um, synergization of flow? Should you not have a clear global understanding of where your gaps are? Should you not be talking to people that well, okay, I've now got from my greater view about where these flows fit. Could we not even have our discussions between logistics service providers where there is an imbalance as to where you have uh, another organization with a complementary imbalance. Can we do, or do we just leave it for the market to fail to actually address? Because again within this, if we talk to the waste issue, we're allowing the market to address it. Ah, but then running tracks empty 30 to 25 to 30% of the time. And if you look at the UK it's 30%. If you look at Europe it's about 20, 25%. If you look at North America it's 20 25%. And um, you're running all of this burning fuel and um, how on earth can that be sensible? You've then got a requirement for an industry to decarbonize. So how do we actually get to that? And collaboration, even on looking at how do we decarbonize is really important. I mean I know that trade associations um, are speaking certainly to UK government, ah, really about this. I think the pursuit of pure electrification is not potentially the best solution. Um, I think it will take too long. It'll get there eventually. I love the idea of biogas, biomethane purely and simply with limited change. You can actually get a vehicle that performs and operates in the same way and can still be carbon neutral without increasing the cost of the truck by fourfold. And you keep its operability within that. But um, I just wonder really, I mean, I might sound like the old man ranting to some extent and maybe I am. Um, there are smarter approaches that can be taken out there. Um, and the frustration is how do we actually get the CEOs out there to begin to look at their businesses differently? Because I think if they can, they could double their ebitda, uh, within one to two years. I can see that happening.

Speaker E: Well, um, that's exactly the uh, as they say, million dollar question. Um, but what I would ask is, and I'm struggling with that question myself, is where the resistance is coming from? From where is it? Is that risk aversion or is that financial? Is that somebody is afraid to jump first and then happy, but happy to follow? Uh, and what would be the role of kind of a trade and governmental bodies potentially to maybe break some of

Speaker C: the ice the fight is against? We've always done it this way and we know it works. Yeah. And when nobody then is responsible for picking up that waste so that the cost of that waste in reality goes back to the customer or is it extracted from lack of dividend from shareholders because they're not profitable enough? Or it's the environment that takes the hit. But at uh, what point do you turn around and say can we actually have some different thing? And I actually, I think the threat will be there on the horizon. You know, I look at what Amazon are doing and in reality I've always described Amazon as a logistics business business and it's a clever business, but it's a logistics business. And so the smarts there would be, um, there are going to be people operating in the digital world that are going to do. And I know it's been said before, I know Uber, you know, has been spoken about before and still is spoken about in terms of, in terms of rate. But there are going to be digitally enabled competition that is going to come into this market and the capacity, the capability, Iam am dead certain is there already to do this better. I am 100% certain. If I was 80% certain 25 years ago, you can absolutely bet I'm more than 100% certain today. Absolutely. And the view there is that by all means you can sit and say we want to do things in the old fashioned way, but challenge will come. It always does. It always does us. And um, perhaps by talking about this, um, we can, we can begin to make that, make that difference. I don't want to actually see our uh, existing logistics service providers do anything other than thrive but my belief is that they need to take a view to say, how can we actually change the way we're doing things? Yeah, there are some tight elements of stuff that they're doing, which I think is potentially good. But it's not enough.

Speaker E: Well, absolutely, 100%. And I think this is, uh, maybe the current kind of macroeconomic environment where things are tight kind of all around and people are really looking for various lateral moves. Maybe that's what, maybe the threat of, I don't know, bankruptcies or profitability going below any reasonable level will force people to think about something that is not traditional. Because there is. Because, I mean, we've been doing the same kind of optimizations for decades now, and I think we've pretty much exhausted all of the opportunities that, uh, within

Speaker C: the many individual silos, I would agree with you that within those silos we have optimized. What we have failed to do is to look within those silos and say, what is suboptimal? And then ask the question, what do I do about that?

Speaker E: And if we look across silos, yeah,

Speaker C: that's what needs to happen. And, um, how do you get people there? Um, I don't think you get there by shouting at them, which is probably my mistake. Um, I don't think you get it by being grumpy. I think you've always got to try and appeal to people's better nature and also to say, well, okay, this is actually for those that are brave enough to step into this first. It's going to be a competitive advantage. Because actually, without sitting, I don't know, without standing in front of, uh, an electric vehicle outside your distribution center with a load of solar panels and a windmill outside, you can actually say that you're doing everything within your power to make a positive difference as far as environments, as far as lack of waste, as far as efficiency, as far as profitability is concerned. I don't like virtue signaling, and I don't think the industry is about virtue signaling. I think it is about everyday grind to do a fantastic job for its customers. All I'm saying is that there is a better way of doing it.

Speaker E: I couldn't agree with you more. And I think this is exactly one of the main reasons why we've started this podcast series in addition to the tech that we are building on the platform from is to exactly, I don't know, raise awareness. Again, this is, uh, a well known, uh, kind of phrase that I don't particularly, uh, sympathize with, because raising awareness is not immediately delivering Results but hopefully will inspire someone to actually do something. And these conversations where they see that or they get it reposted or something like this, it will indeed will make people to start thinking what actually can I do? Because electric truck that is 40% empty in a traffic jam is still a

Speaker C: truck in a traffic jam.

Speaker B: Yeah.

Speaker C: And bear in mind that you know, you've got to have a look of the electric track as to where does the energy come from.

Speaker E: Well, exactly. And then yeah, some people have blinkers

Speaker C: and then they think is still a fossil fuel. Yeah, yeah. Um, nuclear M. Yes, it might be regarded in the future but that doesn't count. You know, it might be an easy decision to make but you've got to have a long term decision to actually know what you're going to do about the waste and the decommissioning and how you're casting that in really within that. I'm not, you know, for example I always think it is better to go for a um, really a multilateral approach in order to be able to actually where do our energy sources get from? I'm not somebody that is pious about um, let's say we can't do this or we can't do that. I actually think clever business decisions say well, okay, if we look at the cost of doing something, think let's actually have a look at the total cost of that rather than the individual part within that. But well you are entirely correct is to say whatever your vehicles are powered by, the truth of the matter is that efficiency is defined by really how little we waste and it's very common. There are a couple of things that you go and have a look at and uh, me being uh, an experienced old buyer of logistics. Um, there are two things that I generally go and look at. First is interesting is most people don't check their invoices well enough. So actually using technology to check your invoices will save you on a consistent basis 1 to 2% a year of your total spend in that area. And on first use may save you up to 7%. So that's easy money and I don't know why people don't go for it. The next one is well, actually have a look at your load first. Um, and have a look at actually how you're structuring your loads, how you're scheduling your loads, have those conversations with customers if you need to change. You know, really look and see whether or not you can actually get more onto that vehicle in terms of design. It was helpful for me to work within the intermodal industry, because all the time we were looking and trying to be clever about how light we could make a vehicle in order to be able to carry more loads. Because you're in a commodity market market. So you were looking at swap bodies, you were looking at light trailers, you were looking at alloy wheels, you were looking at the lightest specification of vehicle that you could actually make. So I think that we got to uh, I think the lightest option that we developed was actually, um, I think it was a Volvo FL10 and we were under, well under 7 tons say. And I go to a recent event and I'm looking at an electric Volvo that had a GVW of something like 12 and a half tons. And I'm thinking, my God, you know, you do realize that that's going to take some cost and energy in order to be able to drag that round as well as the load that's going to be on the back of it. So I'm um, thoughtful thinking that if as an island we could actually use ocean, um, freight an awful lot more that's a lot easier to electrify and make clean up than it is perhaps per half a million HGVs. Just a clue.

Speaker E: Well, that's the thing. I mean the whole picture needs to be looked at holistically as you said. The total cost of ownership and the total um, the use of all of the available resources. And I absolutely firm believer that we have enough infrastructure to be underutilized for us to make a meaningful impact. Just simply working not harder but smarter to begin with.

Speaker C: With. I think you've got to look differently and you've got to pull the focus back and say, well, okay, what is it that we do have that we could actually use differently? Because yeah, I think there are always going to be some pinch points. Do I argue against, let's say, investing in more rail? No, I don't. I think that we should, but it doesn't need to operate at 220 miles an hour. You know, we're a relatively small country. Yeah. Whether or not I save 10 or 15 minutes on my journey from Birmingham to London, I mean that's just going to make eating a sandwich more uncomfortable. I think we need a reality check in terms of some of this. I don't like vanity projects. You know, I don't want to have a member of our government saying we've got the fastest railway in Europe. Um, honestly, as a consumer, I don't care. What I want is something that is reliable, cost effective and efficient.

Speaker E: Exactly, exactly. Exactly. And I think on that wonderful note, I think, uh, I would like to thank you, Malcolm, for, ah, coming on a podcast. Uh, we've definitely touched on a very, very important set of subjects on one subject, but it's so multidimensional, uh, extensive. So I think we had a, uh, great opportunity for us maybe to talk again and to see maybe we will, uh, start making any program. So thanks again, Marga, for coming over to podcast. And it's indeed a very fascinating subject that is kind of close to our hearts.

Speaker C: Michael, you're most welcome. Um, your challenge, if you choose to take it, uh, is to take my series of moans and rants in terms of the industry and actually create digital solutions that actually answer those problems. That's the hardest challenge. I think you're on your way with it.

Speaker E: That's what we're trying to do. The challenge is it's way too complex and multi dimensional and the big challenge is where to begin. So we have begun at the warehousing end. Uh, we are tapping on the transportation end. So we're doing that and there's definitely a lot of effort. So there's a lot of things that need to fall into place, especially with people and people's perceptions and the way that they, they comfortable with doing things and they um, being afraid of changing, challenging the status quo. So as you said, you need to have visionaries, you need to have uh, active colleagues that are very happy and keen to push the industry forward and hopefully we'll have enough of those to get the ball rolling, hopefully.

Speaker C: So thank you so much.

Speaker E: Thanks a lot. Speak soon.

Speaker D: Thank you so much for listening to this podcast. I hope you enjoyed listening to the podcast as much as, uh, I enjoyed making it. Do remember that if you've got any questions, submit them to us on our, ah, LinkedIn page or you can message us or send us a voice message, uh, from logisticscollective.com don't forget to follow us on your preferred podcast channel. Then you can get an update. Whenever we are releasing a new podcast and we continue our exciting theme that is looking at sustainability.

Speaker C: Thanks a lot By.

Speaker B: For now, you can contact us by email@podcastogisticscollective.com or by leaving a voice message on our website, logisticscollective.com the podcast is a production by Luguru, who are part of Tompkins Ventures, a global collaboration of advisory, matchmaking and investment partners. Solving global logistics and supply chain challenges more quickly and cost effectively than our competition.