Global technology firm Trimble is buying Kuebix, a US transportation management system (TMS) software vendor, in a bid to bridge the “chasms” between shippers, trucking companies, and third-party intermediaries and optimize supply chains through a single TMS platform.
The deal, announced Thursday, will combine the for-hire and private fleet technologies of Trimble Transportation and the shipper-oriented TMS platform and tools of Kuebix, eventually giving shippers access to data on available truck capacity and motor carrier capabilities from several products and systems.
For Trimble, a public company with $3.1 billion in revenue in 2018, the big attraction is that more than 21,000 shippers are using Kuebix’s TMS, which is offered free to shippers. Kuebix is a private company founded in 2008.
Trimble Transportation products, from a carrier TMS platform to geospatial tracking systems, help manage approximately 1.3 million trucks in North America.
The companies said they will work together, in a phased approach, to build a common TMS with applications for motor carriers, shippers, and third-party intermediaries. The acquisition is expected to be completed in the first quarter. Terms were not disclosed.
Connecting those assets and shippers on a single, if segmented, platform will give much greater opportunity to optimize transactions from end to end, from the building of a pallet or truckload shipment through final payment, executives from both companies said Thursday.
“We have the opportunity to optimize down to that pallet and SKU across the supply chain,” said James Langley, senior vice president of Trimble Transportation. By sharing data across a common platform, “you’re crossing the chasms” separating “silos” of data, he said.
“If we can connect them, the carrier and the shipper can be more efficient, and everyone is going to win,” Dave Lemont, CEO of Kuebix, said during a press conference. Through that connection, “there will be ways to improve asset utilization as never seen before.”
A key challenge will be not just making connections, but getting the oft-times warring shipper, carrier, and third-party camps to share a platform. The chasms Trimble and Kuebix want to bridge are also trenches or boundary lines in the transactional battle that is shipping.
“The biggest challenge is establishing value and trust,” Langley said. “We have to show shippers we are good stewards of their data and provide value in return.” That’s a bigger challenge than any technological hurdles the companies may face, he said.
Blurring lines across loading docks
The Trimble-Kuebix deal unfolds against a backdrop of acquisitions and partnerships blurring the lines between freight brokerage, TMS, and freight visibility as providers in each of those spaces try to broaden their reach and the capabilities they offer US domestic shippers.
Recent examples include E2open’s acquisition of TMS provider Cloud Logistics and the partnership between the brokerage arm of J.B. Hunt Transport Services and JDA Software. Loadsmart, Convoy, and Uber Freight also have announced TMS partnerships.
Integration between systems is a real amplifier of growth in freight technology in an environment where systems are built and connected more easily. In this environment, cloud-based software-as-a-service TMS applications lend themselves to integration and expansion.
Kuebix has grown rapidly under the “freemium” business model — adding thousands of shippers to its community through free software, rapidly building scale. Kuebix also has a premium paid model that has more features and robustness for larger shippers with more needs.
The software firm has also grown through partnerships with companies such as less-than-truckload (LTL) carrier Estes Express Lines, which offers Kuebix’s free TMS to customers. That relationship “will continue to move forward,” said Kuebix president Dan Clark.
This isn’t Trimble’s first foray into the shipper side of the transportation market. Many of its enterprise TMS customers are shippers with private truck fleets. In 2017, the company acquired 10-4 Systems, a supply chain visibility company now known as Trimble Visibility.
But Kuebix adds a new dimension to its service portfolio, which includes TMW Systems’ TMW.Suite, a carrier and broker TMS product; PeopleNet electronic logging and mobile computing devices; and Trimble MAPS, from the merged ALK Technologies and TMW Appian Final Mile.
The companies might argue their proposed solution is larger than its cumulative parts. The true value of the acquisition, they believe, is in the opportunity to take disparate systems and data and combine them in new ways to create value. They’re not the only ones trying to do this.
A shift from solo applications to platforms
At the JOC Inland Distribution Conference in Chicago last October, J.B. Hunt's president of highway services, Shelley Simpson, said the future of transportation is in access to data and the ability to build technology platforms that provide access to data that people need.
“The problem is access to information,” Simpson said in an Oct. 22 keynote address. “We actually don't believe people will be able to hide what the capacity looks like, or hide what price looks like over the next 10 years because that information will come to market.”
Langley agrees that platforms, such as the one Trimble and Kuebix intend to build, are where shippers and their suppliers will transact business. “There are so many opportunities to bring more data to each party in the ecosystem to support better decisions,” he said.
There may be battles ahead over what data companies are willing to share, but shippers and carriers will be driven to share data. “Decisions have to be made faster, because the velocity of the supply chain is faster,” said Langley. “The only way to do that is collect and collaborate.”