This article is from WeChat public account:China Merchants Ventures (ID: cmventure), author: Zhong Chen, the original title: “ no outlet of the times, the logistics industry pig to where to fly?” , title map from: Visual China
Full-text core point of view:
01. There are three driving forces for the transformation of the logistics industry: technological innovation, model innovation and organizational management innovation.
02. The driving force on the demand side is the upgrade of the goods, following two runners: channels and categories.
03. The evolution path of the logistics model can be summarized as the business flow (new channel, category upgrade) under change , node and capacity creation and integration history (new node, node integration, new capacity, capacity integration).
So what is the opportunity in the logistics industry?
The logistics track seems to have cooled down recently.
In 2018, there were 218 investment events in the entire logistics track, with a total financing of 85.1 billion; 80 investment events since 2019, total financing of 25.8 billion. By the end of the year, it is estimated that it will not exceed half of 18 years.
It’s really a lot cold.
Two factors behind “cold”:
One is that the organization has become more cautious and sees less investment.
The deeper reason is that there is no track on the market like the network express delivery network, the model is clear and can be copied, and the development mode of the new track has yet to be verified, which requires an observation period.
Take a step back, what is the logic of the birth of the logistics industry?
Simply two aspects: demand upgrade and supply transformation.
——Look at the supply side first
The driving force for supply transformation is roughly three: technological innovation, model innovation and organizational management innovation.
Technology innovation is a direct change in production materials and production methods, while model innovation and organizational innovation are more rational redistribution of people and resources on the existing productivity curve to more effectively serve a certain type of customer demand. Throughout these three driving forces is the marginal cost.
To put it bluntly, technology innovation considers how to replace variable costs with fixed costs (systems for people or machines), use systems to improve resource allocation efficiency, or use thin machine fixed costs or R&D costs. Model innovation and organizational innovation consider how to combine existing technological conditions to better stimulate people’s willingness to produce.And how to place assets closer to the demand or replace heavy assets with light assets to improve human efficiency and resource utilization.
The model innovation of the logistics industry is mainly the addition of nodes and capacity and the history of integration, which will be described in more detail later.
——Look at the demand side
New shipments will result in differentiated delivery requirements, while new shipments may be new or new. Every upgrade of the goods will bring about an upgrade of logistics needs.
The upgrade of the goods follows two runners: channels and categories.
——Speak first of the channel.
The history of the evolution of the terminal channel in the United States is a development path that is more and more precise. Behind this evolution is the growing per capita GDP and the corresponding need for more refined consumption. 95 years ago, the traditional format developed in a stable category expansion and category streamlined parallel, from Sears to sweeping the country’s Wal-Mart, to select SKU’s Costco and Coupon-Sales women’s retail JCP, to the high-end grocery supermarket Whole Foods and boutique retail stores of all categories. By the year of 1995, e-commerce has brought unlimited shelves, and the medium-low frequency long tail commodity channel was directly killed by the online platform (Toy R Us Bankruptcy ), while Whole Foods, which is under high frequency and heavy line, became Amazon’s acquisition target.
The middle-tier distribution channel has also undergone a similar process. The earliest business in the port city almost covered all functions of production materials to the sale and financing of daily necessities, because the production side is extremely scattered small workshop operations, the port’s business becomes logistics, information flow, business flow and capital flow. The only valid aggregation point. The industrial revolution brought about the process of concentration and urbanization at the production end, which led to the emergence of large retail terminals, the formerCentralization of the production side. Both sides are specialized, and the middle of the business can no longer carry the increasingly complex transaction process, so the circulation link has also begun to untie and differentiate professional trade institutions, financial institutions and logistics institutions. After further improvement of the communication and logistics infrastructure, the intermediate circulation is more transparent, and manufacturers can gradually sell directly to retailers. The role of traders has either evolved into a retailer or transformed into a more professional logistics delivery company, so many The logistics giants in the United States have the shadow of traders.
The development of Chinese channels is uneven. As can be seen from the above figures, first- and second-tier cities are basically the same as the United States. If you go to Shanghai’s gossip, basically all kinds of formats can be seen, the competition is fierce; and the fourth- and fifth-tier cities may still live well in hypermarkets. This has also led to the diversity of China’s underlying logistics formats: the express delivery of first-tier cities has been vying for the time limit of the minute, while the drivers of the fourth- and fifth-tier cities are still fighting the landlords. Although regional differences are relatively large, China has experienced similar channel changes in the United States. From the earliest large wholesale + deep distribution, to the rise of the hypermarket, to the selection of boutiques, to the independent category of single-category stores, more touches, and finally to the rise of e-commerce, online and offline Dish goods. In addition to the format similar to the United States, because of the high population density, the country has actually derived some more subdivided formats, such as the recent fire group and pre-position, which are closer to consumers at the traffic end and the compliance end.
——Look at the category.
If e-commerce creates online express delivery, then the category rotation on e-commerce drives the expansion of express delivery to other forms of logistics. The earliest 3C, clothing, maternal and child, small household appliances and other products have several things in common: high value, logistics standards; as the penetration rate of e-commerce increases and the cost of logistics networks decreases, some low-value goods slowly It can also be carried; later, with some large-scale logistics non-standard categories (such as home appliances) can also be sold online, and now some Low-value, fragile and fragile fresh is also gradually completing the process of going online. On the other line, the to B platform increases the information acquisition radius of manufacturing and distribution companies, and logistics companies have ushered in new “goods” to varying degrees.
Combining several factors together, the mobile Internet on the supply side, SaaS, and the Internet of Things have driven the launch and digitization of people, goods, fields, equipment, and processes, and the launch of goods has brought new demands to logistics. . With the continued push of both ends, a new model is created.
The evolution path of logistics model can be summarized as business flow (new channel, category upgrade) change, node and capacity creation and integration history (new node, node integration, new capacity, capacity Integration). Under this big framework, the evolution history of the entire logistics model can be summarized as follows:
[New business stream new node, new capacity] Since the rise of e-commerce, from the beginning is only a supplementary channel for offline retail, C2C is mainly (low Price), the early express company was established at the same time, the available infrastructure is only dedicated and regional network (point to point, region to region) , Operation extensive (site rigidity cost, low efficiency, no system, and marketing radius and its limited). Therefore, there are a lot of terminal stores that need to be laid out on the nodes. The players on the floor are basically individual teams. Therefore, the early express delivery companies chose to build their own floor and package. (Home Delivery Transfer Courier, SF: Although early joining, but quickly transferred to direct)
[Commercial flow upgrade node, capacity integration] The penetration rate of e-commerce is improved, the brand is stationed, and the growth rate of B2C is rapid. From the purchase data of the platform, the integration of the service and the city warehouse, such as Jingdong, will begin.
[Node integration, node, capacity outsourcing] At the same time, before 2015, B2C e-commerce grew at a rate of >70% per year, and a professional third-party warehouse company serving the entire warehouse industry rose. At the level of capacity, outsourcing of express trunks, outsourcing of terminal collections, and even some transit hubs have begun to join.
[New Business Flow New Capacity] Around 2014, the real-time distribution crowdsourcing capacity platform based on the take-out platform began to develop.
[Output Capacity Outsourcing] In 15 years or so, regional outsourcing platforms for the core battlefields of non-takeaway platforms have also emerged.
[Node integration, capacity integration, outsourcing] CR8 > 80% in the express delivery industry, the core city assembly parts terminal is basically laid, and the terminal structure tends to be stable. The cargo volume in the core cities is sufficient, and the line utilization efficiency is high, but the volume of the single express company in the non-core city is insufficient (the problem that it cannot be optimized internally), so the goods platform serving the network express and express company appears, and the goods are essentially goods.Secondary distribution of infrastructure. At present, it is the use of the volume of network logistics companies to do capacity integration, the next step is to continue to integrate the transit nodes of network logistics companies.
[Node integration, capacity integration] The integration of logistics is gradually moving toward heavier goods. Regional networks and special-line companies are gradually forming a group of low-cost ticket-less network and large-capacity network.
[Commercial flow upgrade node integration, capacity integration] E-commerce giants complete the new retail layout, fully integrate urban warehouses, pre-positions, floor-to-side distribution, and real-time logistics. The current pre-location layout is completed by borrowing the storage capacity of offline retail giants.
[Node upgrade] Recently, the unmanned micro-warehouse released by the US Mission uses smart shelves and packaging equipment, hoping to realize product recommendation, online ordering, smart shelf picking, robot transportation, automatic verification, packaging and distribution. Automate processes to complete the overall closed loop of merchant services.
[New node] As long as a certain new logistics demand (there are requirements that the current logistics node cannot handle) gradually increase, and the terminal Sufficiently dispersed, there are opportunities to create new collection nodes. For example, cold storage (new equipment), cross-border warehouse (new operation method ). The tandem of these nodes will ultimately optimize the delivery cost of the entire chain.
[New Capacity] A distribution network optimized based on machine learning or operations research algorithms.
Refining the logistics model:
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New and integrated logistics and outsourcing: terminal sites, regional sorting centers, CDC/RDC/FDC…
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Circulation paradigm between nodes: single point to single point, single point to multiple point, multiple points to multiple points
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Addition, consolidation and outsourcing of capacity
In addition, the many-to-many transportation mode naturally has network attributes, and people can do some local optimization at most, so an algorithm-driven global system optimization scheme is required.
In fact, the evolution of patterns also has a conceptual mapping in biology: co-evolution. For example, mollusc A chooses to give his soft body a hard shell to resist natural enemies, so mollusk B is likely to evolve a similar mechanism. In fact, the proliferation of patterns is a manifestation of co-evolution, especially now that a company’s model is borrowed by another company (mo) and it is also a round of financing (manually funny).
In short, a good model will spread out in a very short time.
If the model can learn, what is the competition logic of logistics companies?
The common purpose behind these patterns is to reduce marginal costs and improve user experience. The competition logic of the entire logistics industry also revolves around the two.
Who can provide a service that customers are willing to pay at a lower marginal cost, who can win. This difference will also be magnified in industries where scale effects and network effects are significant. As the cost center of various industries, to C faces fierce competition, and To B faces the pressure of Party A’s father, so the experience of upgrading this dimension is certainly possible, but the willingness to pay most of the time “hehe”.
There are mainly two aspects of node cost, including node efficiency and distribution efficiency.
The marginal cost of the distribution side mainly depends on the matching degree of the goods and the optimization degree of the route, such as bilateral separation, or the cost of the three sides is much lower than the cost of the one side. However, due to the asymmetry of China’s entire production and consumption, this match is actually more difficult.
For the best express network in the depth, the remote areas are basically the way to subsidize the payment of the headquarters. Of course, based on greater traffic and better routing planning, efficiency can be improved to some extent. There are severalDimensions:
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The bigger car (eg 9 meters 6 cars, 16 meters 5 cars) with more goods, get lower Single ticket cost;
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Line split, unitized transport for better mileage matching (reduce single-point volume) Mileage loss due to unevenness);
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The time elasticity of the goods and the time elasticity of the car are matched (temporary car, control of the proportion of the own car).
There are two prerequisites for supporting these optimizations: greater volume and better scheduling algorithms. Some are based on operations research (mathematical solver), some based on machine learning, the essence is still statistical and pattern recognition, relying heavily on the number of samples In the final analysis, it depends on the volume of goods. More precisely, the amount of digital goods. It is possible to see in real time where the demand is generated, when it is generated, what kind of vehicle it needs to be equipped, what special handling requirements are needed, and so on. Who can more efficiently aggregate these volumes, who will grasp the opportunity and benefits of order entry and all subsequent operational optimization.
More about node efficiency. In fact, the evolution of the logistics model is basically driven by the addition and integration of nodes. In particular, some core nodes, if controlled, can harvest the value of the connected lines. Express delivery is a model of the marginal cost of a node. Because the new node (business department, transfer center, distribution center) has been created, the standardized sorting system gives the courier a reliable margin. Channels with diminishing costs: replace large people with large sorters, replace fixed costs with variable costs, and then dilute fixed costs. Most of the courier companies are outsourced and the end of the package is outsourced, the head office only retains the part that can best play the scale effect. The franchisee here is essentially the transshipment system of the procurement courier company. The courier company only charges the transit fee, the trunk transportation fee (excluding some franchisees running business) and face-to-face fees.
Taking rhyme as an example: From 16 years to 19 years 1H, the single ticket cost of rhyme continued to decline. By 19 years, 1H basically reached the level of 1.4 yuan per ticket.
This is mainly from several aspects: first, continuous investment in sorting equipment, and second, through network optimization, reducing transit points and increasing bicycle efficiency Rhyme reduced the transshipment center from the original 80 to 54; the number of transportation lines was reduced from 4,500 to 3,900, with less transit and lines, which is close to twice the amount of business).
The node of the express delivery is a hub-and-spoke distribution network designed according to the country’s relatively discrete and uniform supply. And a larger part of the goods have not yet touched the net, and the volume of the express delivery is more uneven. In the future, new nodes will also appear for these goods. For example, the previous auto parts city also carries the functions of trading, warehousing and circulation. If the transaction touches the net, then the auto parts city node is not necessarily the optimal solution for the warehousing and circulation functions.
In summary, the birth of the logistics track depends on new goods, new technology, new models and new organizational management methods, but in the end it is the minimum marginal cost under the premise of certain service quality. . The attention of capital will also decrease as the marginal cost of the cost track enterprises increases.
This is why courier is the first large-scale login to the capital market, followed by network express. Then there is the city-level, regional network integration and dedicated line integration platform for the primary market. Finally, to some vertical industry capacity networks, such as bulk and container. Up to now, the dividends brought by the new “goods” have basically been divided up. After several rounds of knockouts, CR8 has reached more than 80%. The head effect is obvious, and Ali’s continued shareholding also indicates that the business flow controllers are correct. Logistics companies are about to undergo more in-depth transformation. In addition to the continuous investment in technology and buying a car on the line that determines the volume, the courier company basically has toThere are profits in the teeth, such as business point transfers and fines. The several levels of express transportation are also relatively clear, and the high-value small ticket, the cheap ticket, and the network integrated with the stock resources have also completed a considerable amount of financing.
What are the opportunities in the logistics industry in the “No-winds era”?
There is no title party for “no-wind”. More precisely, “what is the opportunity after the completion of the backbone network capacity?”
First of all, opportunities for technological innovation are always there. In the fulfillment of logistics, the scene of machine replacement is widespread. The AGV of the goods is the product of the demand of the electric warehouse. The AGV or unmanned forklift suitable for the standard warehouse is also a good general technical standard. In addition to “replacement”, there are actually a lot of gradual innovations that can make people’s performance greatly improved, not listed here. In addition to the more subversive innovations that are visible, some technological innovations are less obvious, but new ones can be created.
Early, without adding chemicals, milk can only be stored for 20-36 hours in an environment of 4 degrees or less. This limits the circulation radius of milk to the farm range; later pasteurization offers the possibility of short-distance transport of milk, glass bottled milk, and suburban economy with milk production as the core. Tetra Pak’s ultra-high temperature sterilization technology allows milk to be stored at room temperature for 6 months, allowing milk to flow throughout the country and directly contributing to the two giants of milk. Tetra Pak also benefited a lot from the entire industry chain. New goods appear on vertical tracks, such as cross-border and fresh (cold chains).
New goods must require a new node (new logistics assets and operating methods) and network to service, but the network path It’s different.
In addition, in addition to the “new goods”, if you can integrate the scattered stock supply on the market, create a new node (such as warehouse) By changing the logistics link and bringing the goods together to a node, the scale effect can also be obtained. Even without operational efficiency gains, you can earn some profit from asset collection, consumables collection and gradient utilization, and finance. In the end, it is due to the reduction in transaction costs across the industry due to aggregation. As for how to aggregate, it depends on the pain points and trends of specific industries..
For example, some industry pain points are financial (this is more common), then who can solve the capital needs of the owner, the entire chain of goods to do Controllable, traceable, and disposable, it naturally has the right to move goods and change logistics links. Of course, this also requires that the goods have certain financial attributes (liquidity).
Another example is contract logistics. In fact, traditional contract logistics also plays a role in resource aggregation and trust intermediary. However, due to restrictions such as customized services, resource regionalization, and long account periods, companies are also difficult to grow. Before, there were a lot of big essays about the breaking of contract logistics, so I won’t go into details here. From the perspective of marginal cost, one is the time cost of the customer, which corresponds to the sales person; the other is the ability of the program, which corresponds to how long it takes for a company to make a plan that is satisfactory to Party A, and then the ability to perform, corresponding It is the following customized service requirements for various types of customers. So who can significantly improve the sales force of contract logistics (sale agentization), scheme generation (Industry Solution Modularization) and Performance Capabilities (In-chamber operation management, merger of large-scale logistics, etc.) Who can achieve the aggregation of contract logistics goods.
A lot of digital contract logistics here emphasizes the “visibility” of digitalization. However, in fact, “visual” does not produce the premium of Party A, nor can it become the key to a contract logistics company to take orders. The core is still fulfilling. How to make SaaS or the system efficiently guide and control the behavior of the end operators, and not increase the management level is the key to the digitalization of compliance. There will also be organizational changes here. Digitization goes deeper into the compliance phase, digitizing the incentives and penalties for the operator to motivate and punish him for each action, and can release a lot of sleepy productivity, thus lowering the price. (After all, the price is the lasting measure to retain Party D’s father). CH Robinson of the United States, average customer signWith a period of more than ten years, there is still a lot of room for this development in terms of stickiness and scale.
Finally, some new capacity network models are also emerging. For example, a city-based network or a trunk vehicle network based on algorithmic system scheduling. If the whole vehicle of the non-network trunk is to be networked, it must not be a hub-and-spoke bilateral network based on rules. It may take three or four cities to realize dynamic series connection. Similar in the city’s distribution, the trunk has also become a dynamic franchise team, and the end is the most suitable electric three-wheel for the road, the transit is a virtual connection point. The integration of goods is starting from the demand side. I hope to find the global optimal solution by digitizing the “goods” of the whole network. These new capacity are starting from the demand side, and I hope to find the goods suitable for my own capacity pool in the whole network. Pool local optimal solution and give pricing. This is somewhat similar to early image recognition. When the data is limited, the algorithm is supreme. When the data is saturated, a general team can also achieve 80-90 points. In addition, the car and the management are also a challenge for the algorithm-driven team: whether the cost of scheduling the province can effectively cover the management cost and miscellaneous fees after the increase in complexity is still a real problem.
Conclusion
The tuyere is always there. However, compared with disruptive technological innovations, the logistics industry relies more on deep-growing scenarios to unsuccessfully meet the needs of rapid growth, or better contracting models and organization. There are a lot of pits in it, and you need to cross the river by feeling the stones. The last few directions have not yet been verified, but there are many excellent entrepreneurs in this industry who are constantly thinking about iterations and looking for ways to break.
I think of a sentence in “Chang’an Twelve Hours”:
“When you choose your own path, if you don’t know what’s right or wrong, just remember two words, don’t retire.”
This way, altogether.
This article is from WeChat public account:China Merchants Ventures (ID: cmventure)