Let’s get phygital!

GEFCO has gone from strength to strength over the last few years, as a pan-European logistics provider that has set its sights on a more global footprint. Now, it is disrupting its own business model in a creative way, investing in and nurturing two exciting startups, combining its physical presence with two new digital platforms says Simon Duval Smith

GEFCO has invested in two startups, Chronotruck, and Moveecar, in a bold move that is certain to disrupt its own supply chain services from within and possibly take some transport business away from the company but in the long term the startups will engender growth in some new sectors too.

Chronotruck - the ultimate trucking ERP?

Chronotruck is a marketplace interface that acts as a digital broker and already has 7,000 carriers and 9,000 shippers signed up. It's powerful algorithms are designed to offer the best transport solution (using different modes if necessary) at the best market price.

One ancillary benefit of Chronotruck’s system will no doubt be for the environment; fewer empty miles covered by matching demand to available truck space from many different carriers.

Its intuitive platform allows users to offer or reserve transport in under two minutes and the digitalised fulfilment system will include price quotes, good drop-off, transport booking, tracking and e-invoicing. No modern system like this would be complete without a dedicated mobile app and Chronotruck’s app for carriers allows them to take reservations and it provides real-time tracking and tracing of shipments.

The key to its advanced capabilities are its four algorithms which use machine learning to update themselves constantly and match the best carrier, at the best price, for each shipping request.

Moveecar - the car as a service not a commodity

Moveecar is a digital platform designed to provide connected services throughout the vehicle life cycle. It offers a range of services, from domestic and cross-border transport, collection and last-mile delivery to digital inspections, storage, refurbishment and e-administration. A novel feature of the system is that it will be available to consumers as well as professionals, and will cover Europe through a network of established professional agencies.

Emmanuel Arnaud (above), Vice President of Sales and Marketing at GEFCO explains how Moveecar is particularly timely, “A recent survey showed that 51% of Europeans would consider buying a car online and 72% would consider car sharing or short term rental and basically give up the idea of owning a car.” Arnaud also says that Moveecar has the potential for global implementation: “We want to internationalise Moveecar movements, as the global consumer base moves towards seeing cars as a service and not a good, or commodity that they need to own and maintain themselves.”

Startups’ integration in GEFCO’s business model

Luc Nadal, the CEO of GEFCO speaks enthusiastically about the new initiatives and shows a refreshing frankness in describing how positively disruptive to GEFCO’s business the implementation of the startups will be. I ask Nadal what attracted him and his team to Chronotruck when they were looking for a digitalisation partner? He says that when the team met, in 2017, they realised that the company, “was not open enough to the start-up world. We thought we were innovative but our managers questioned if we were as innovative as we thought. We realised that we had to change, and change quite radically. We partnered with Techstars (an international accelerator) who gave us access to many startups. We screened many innovators, organised face to face meetings with them and we discovered Chronotruck. They impressed us as they appeared really knowledgeable about our business and who our customers are. We were in touch for almost a year before making the final decision to work with them. On the other hand, we also have helped to speed up Chronotruck’s growth.”

Development versus acquisition

I put it to Nadal that some companies in GEFCO’s position might have decided to develop a digital platform in house; he says that there was a need to cut the time to market and that there were company culture issues that would have got in the way of in-house development. “When you try to do this in-house, you can face an in-house resistance culture; you need to disrupt yourself to do a programme like incorporating Chronotruck. If you take the example of Moveecar; this is a case of GEFCO and a team partnering with them. When you start a project like this, you can see how slow GEFCO can be, Moveecar are much faster than us. We can describe Chronotruck as our own startup, independent of GEFCO; I am chairman of the board of directors of Chronotruck, which means that a €5 billion company CEO (me) is taking care of Chronotruck and Moveecar. I think this shows how important these projects are for GEFCO."

This directorship and mentoring that Nadal is doing could throw up some clashes; Nadal recognises this and says, "This work has to be separated from GEFCO but I can move people from GEFCO to the startups." As a mentor for, and also the primary customer for the two startup operations, Nadal is in an ideal position to both help to develop and benefit from their activities but he recognises their need for some autonomy, as he says, "I need to have the startups to stay independent and fast; my job as a CEO is, first of all, to check where they are going and also to help them as much as I can."

Winning business outside GEFCO

By their very nature, the two startups might win a lot of business outside of the GEFCO family and Nadal says this is to be expected and will be encouraged: "Chronotruck is totally free in its commercial policy; I can bring my customers to Chronotruck and the startup can develop its own customer base. Some of these customers may be from completely different industries, some companies whose names I do not even know! The turnover of Chronotruck will not be in competition with that of GEFCO, we add the two startups, they do not replace any part of GEFCO."

Encouraging competition

I put it to Nadal that the Chronotruck model will also bring in carriers competitive to GEFCO and how does he feel about this? He says that some competitor carriers in some situations, "I agree that on some routes and situations, Chronotruck could bring carriers who are more efficient than GEFCO. This could be because the margin that Chronotruck might make could be less than we would take from a deal. So we need to accept this and expect that potentially, Chronotruck will disrupt some of our business. By the same token, GEFCO forwarders will also be a good resource for Chronotruck. I prefer to be disrupted by myself than by another party!"

Chronotruck - streamlining and greening the supply chain

The truck startups aims are to optimise supply chains, improve profits and asset utilisation; this should bring reductions in the carbon footprint of trucking operations as Nadal tells me: "This is clearly a major goal of ours, and something I would add is the aim of having less paperwork and to concentrate everyone's minds on working smarter and more efficiently."

Electric vehicle transport challenges

Evs and their batteries and battery packs will doubtless become a major source of work for companies like GEFCO, on their very busy inbound automotive contracts. Issues such as safety, keeping cars charged and ready for moving under their own, and being delivered to dealers ready to go, are all becoming more pertinent for inbound and finished vehicle movers like GEFCO. Nadal says he expects a boom. "We see this as a rapidly growing business area; for us it is absolutely key to be able to manage the battery supply chain. We are already transporting batteries from China to Europe and we really need to be able to follow the needs of our customers in this area, as well as being able to efficiently handle finished EVs. I think that we will need to install superchargers in our compounds to top up EV batteries. We are expecting are EVs to be 20-30% of the market quite soon and getting prepared for this."

Inspecting vehicles - the electronic eye

Appraisal and evaluation of vehicles coming through the used and ex-rental/ex-lease etc supply chain, and new vehicles all need to be carefully examined for damage and this has traditionally been carried out manually. But wherever there is a human involved, there is the opportunity for mistakes. Vehicle scanning technology, such as the DeGould Auto-scan system, uses a series of high-resolution smart cameras in conjunction with intelligent lighting and rapidly moving doors to scan vehicles in around 5 seconds – a process that can take as much as five minutes with a manual inspection. Nadal says he is very interested in this technology and GEFCO is trialling one such 'portal'. "We have one portal for this purpose, implementing it on one of our compounds. We have told PSA that this technology could be useful at the end of the assembly line [as used by Jaguar Land Rover] and this could be very good for used vehicles to identify the smart repairs that will need to be carried out. This could be 'plugged into' a system that prices each damage repair.

Sub-contracting and sub-assembly expertise

GEFCO is already carrying out some sub-assembly and post-production operations for their OEM customers and I ask Nadal if he sees this as an area of growth. He says he does not want to be a fleet manager but, "Making smart repairs is a service that we want to provide. At the front end we are carrying out various post-production operations, PDI and smart repairs. On the inbound side we will continue to build sub-modules for OEMs; we had the first experience of this, with PSA which has been very successful. This is very volume-sensitive, the OEM often needs a level of flexibility that we sometimes cannot afford." Nadal says that GEFCO's expertise extends beyond just providing the labour for these sub-assembly operations, "We have also designed the assembly lines for the sub-modules and we are interested in moving forward in that direction. The only point is that we need to find balanced deals with our OEM customers. Production forecasts are very important; you cannot ask your sub-contractor to have 100% flexibility, one needs to provide them with as accurate a forecast as possible."

The human element - in danger of extinction through automation?

Chronotruck's sophisticated algorithms will no doubt remove many human operations in transport planning and I ask Nadal if he will be retraining people and redeploying them? He says that it is clear that Chronotruck will have an impact on the administration parts of the operation and, "Yes, we have to retrain people for different functions inside GEFCO and I am very clear with our staff that things will change, this will happen everywhere in our organisation and we need to be transparent and clear with our people."

Global expansion and customer habits

I ask Nadal if these startup models will help GEFCO's planned global expansion, he agrees and says that the transition to the digital models will be progressive and gradual. "I do not see all our customers moving to a digital platform, some of our customer base still have some conservative habits that we have to overcome. The bottom line is actually the bottom line - if a small carrier says they do not like the digital model, we can say that we can offer them the opportunity for more business, more return loads, actions that will improve their bottom line too. It can be a win-win situation for all parties" 

Photography by Bruno Des Gayets

Automotive Purchasing and Supply Chain Magazine - Issue 32

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