DEEPER DIVES: How Was A Problem So Big So Easy To Cherry Pick?

Good Morning,

First, as always, thank you for joining.

I hope you all crushed your week. If you’ve had setbacks, take them in stride. The beautiful thing about operations and logistics is that it’s probably not going to be that long before you get another kick at the can.

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Ready?

Let’s get into it.

Here’s what this issue brings:

• Outpost (Semi-Stow) hit the news this week after announcing a $12.5M Series A raise. Brittain Ladd provided a solid overview of them on LinkedIn, based on some work he did with the company.
  
  While I agree with a good part of their strategy, there are some things I shared with Trent Cameron (CEO, Outpost) that they shouldn’t do. And what I thought they should.
  

• Airhouse blew through millions trying to be a modern 4PL. They shut down two weeks ago, leaving customers scrambling.
  

• The value of the SDR has been bouncing around a lot lately. The one thing everyone does agree on though? Connecting with content is a huge part of the new sales process. I’m sharing tips from my own 5 year journey.

Sexy Solutions Sell. Simple Ones Sustain. But Even Great Ideas Need Strong Operations.

Parking problems are nothing new.

You might be surprised by how often issues around assets have killed (or severely impacted) an optimization project.

When I was in the food industry, we had a split when it came to equipment. Carriers would often provide the power units, but we owned the trailers.

(For those who aren’t sure why, owning the trailers gave us a lot more efficiency at the plant to be able to load and prepare orders for our customer movements as well as intra-network inventory hauls).

When we redesigned our distribution model, part of that project meant opening up a new warehouse.

The FIRST comment that came back from the carriers was … “There’s no where to park out there”.

They were right.

• 9 out of 10 truckers struggle to find a safe place to park between 7:00PM and 12:00AM

• 75 percent of truckers have difficulties finding a secure spot to park when they needed sleep at least once a week, regardless of the time of day

• The United States currently has about 313,000 truck parking spots for a 3.5 million active driver base

If parking is such a huge opportunity, why has no one else jumped on it?

A few reasons.

First, infrastructure is a strategic advantage. The big carriers have terminals. Those terminals allow them to make different types of promises to their customers - promises they know people with less (or no) infrastructure can’t make.

With 95.8% of the US trucking industry built on companies with 10 trucks or less, those large carriers are happy to use their advantages to secure business for themselves.

Second, truck parking has been left to the private sector. The interest in drew was from companies looking to build truck stops, with the goal of selling their own interest (usually fuel). It wasn’t about addressing a concern for the industry, it was benefiting from the volume on the road to sell their product (in the same way retailers will partner with other services to drive more foot traffic to their own sales).

Lastly, infrastructure is a lower margin business and requires a lot of capital. These days, everyone wants to have SaaS like exponential growth opportunities so they can 10x their investment in 5 years or less (with heavy emphasis on less).

Outpost is currently charging about $25 per day per asset (power unit or trailer) per day at one of their own managed facilities.

What I Like And Don’t Like For Outpost’s Future

Brittain made a lot of strong points. I give him credit for often pushing the boundaries of what people think about for their business model.

• Carrier Agnostic Terminal
  Check. This is going to be the future when you see the stat above (as well as know that over 99% of fleets have 100 trucks or less). With continued carrier diversification in the market, shared infrastructure is too big of a need to not happen.
  

• Memberships
  Everyone is tired of unknown pricing. Have you ever met a CFO who didn’t like to be able to apply a direct linear correlation to the spend? Changing rates and transactional fees often catch companies off guard at month end. Being able to streamline operating costs with simple and straightforward math is always a win (provided the membership fees actually make sense).
  

• Parking
  The actual core of the product. It’s 100% needed. Anyone that wanted to get into the space would not have a significant advantage to do it faster (unless they were given billions to spend extremely quickly).
  

• Additional Services
  There’s an immediate opportunity to mix in value added services like restaurants, convenience stores, office / work space (truckers have emails, billing and customer service too!)

With respect to fuel and EV charging, I’m not a fan but unfortunately those are probably some necessary things that need to be added into their facilities in order to truly drive rapid adoption.

I don’t love fuel (gas or diesel), it can be a nightmare with environmental regulations and requires a lot of overall space to make sure vehicles can properly (and safely) fuel, as well as an ability for the station itself to have it’s tanks refilled.

EVs just aren’t mature enough. The chargers are slow, the add to infrastructure is expensive and doing a lot of trucks simultaneously is a massive build out.

What I don’t like and would not touch if I were outpost?

Repairs and maintenance.

Absolutely a need for the vehicles, but complete chaos to staff and operate. In addition, way too much risk and liability associated with the work for the benefits it would bring in.

I hope Outpost never gets into this. If there’s one thing that could kill them, it’s getting into R&M.

What Would I Add To My Outpost

I would add open and agnostic repair bays. No staff, no equipment. Basically an open bay, possibly with a lift.

Those bays would be on a rental or membership basis - but to actual heavy equipment service providers. One of the biggest challenges with mobile service is trying to do the work outside in a yard. By having proper access to power, air, climate control and a lift, almost any repair that would need to be done, could be.

This then creates an open infrastructure where owner operators or smaller businesses can use their own mechanics or their own accounts without having to add new service providers to their vendor list. This makes Outpost stickier, while avoiding the liability and risk of actually doing the repairs themselves.

A nice secondary revenue stream still tied to R&M.

The next big thing I would do would be to install crossdock cages to support LTL services and parcel zone skipping.

This would allow no waste handoffs between different trucks or service providers and foster a much more collaborative approach to product movement across the US.

Think of it. You are a driver, you have a load brokered out through an LTL network. By being able to make arrangements to drop product to an access restricted cage, you get to make your “appointment” on time, and move onto your next service without having to worry if that next movement is happening on time or if you are going to get stuck waiting to be unloaded. Next driver comes by, picks up the product and away it goes.

Digital yard mapping technology. In the same way that Six River Systems maps a warehouse and can show you in real-time where the bots are picking, I would implement the same type of site map with asset tagging. This makes it easy and fast to support trailer swaps, equipment replacement or driver changeovers.

Tech Can’t Replace Operators (At Least Not Yet)

First off, there is nothing bold about being a 4PL.

That service isn’t changing the industry.

Second, Airhouse raised $16.5M dollars since June 2018 - $11.5M of that came in March 2022.

How do you blow through that much money when you don’t own even one warehouse?!?

Airhouse - An Overview

Airhouse was (is?) a fulfillment tech company that leveraged their own software to support high growth D2C eCommerce brands. In addition, their service offer was to become an extension (or replace) a brand’s operations department, making it easy for them to focus on sales, while Airhouse took care of the fulfillment strategy and execution.

They launched to the public in June 2020, after 2 years of building their product and offering. Their service operated through Shopify, Squarespace or a direct API for proprietary websites.

After operating for a couple of years in the US they partnered with SEKO logistics in June 2022 (announced Oct 2021) with a huge promise of dramatically reducing international shipping costs.

Closing out 2023, they announced new warehouse launches in both the UK and Canada (I can only assume the SEKO partnership didn’t have enough capacity in their network for what Airhouse wanted to use).

Having burned through most of their cash, the company was on the edge of another round of funding in April 2024. That funding fell through, and as a result, Airhouse immediately laid off 80% of their staff on April 12.

As a result of the rapid headcount reduction, Airhouse pushed their customers to the 3PLs that had been servicing them at the operations level (Founder Kevin Gibbon stated that brands had weeks of notice and were supported through the transition).

The 4PL Problem

I have mixed opinions on the 4PL business model.

There are usually two major issues for these relationships:

1. Your service is appealing to companies that often have no real understanding of operations. If they do have some understanding, they have little to no interest in day to day execution.
   
   To their credit, those brands freely admit that by sourcing a 4PL in the first place
   

2. You can never get away from the cost impact and discussions. Face it, 4PLs are in the middle. They stand between the 3PL and the client, perform services, and get paid. This will ALWAYS make the model more expensive for the brand.

Do I think a lot of brands are better off with a 4PL. Those in the type of category I mentioned, yes.

That said. If a business is going to invest in their own operations management (I don’t mean fulfillment), immediately drop the 4PL. In my past life, when the company I was working for made a new acquisition, eliminating the 4PL was the first thing we did, saving hundreds of thousands a year (but we had the internal team and structure to support that change and take over the management of the activity).

Airhouse - The 4PL That Built Merchant Tools

The whole point of providing 4PL service is so the customer doesn’t really have to worry about their operations and execution.

The decisions are supposed to be passed onto the service provider to manage.

One of the weirdest things to me then was that Airhouse was regularly developing and pumping out updates that put responsibility back to the merchant.

Case in point. The Airhouse Shipping Optimizer

… Isn’t this Airhouse’s job?

Another example here:

Without having to loop in their account manager … via email …

If your sales pitch to a customer is that you become their operations department, probably not the best strategy then to look to the client to make and execute the operational decisions.

Overall I think what started out as a specific idea and service that had some value, spun away from Airhouse. They then started to pivot into a transaction platform with merchant tools, hoping to some day transition the base operations back to brands (while possibly doing dome professional services work for large D2C brands).

It failed.

Logistics is simple to understand. Not easy to execute.

You can hire all kinds of people, but if they aren’t able to actually manage the activity, if they can’t handle the non stop grind that logistics is, it doesn’t matter. Sloppy decisions bankrupt businesses when it comes to operations. It’s far too easy to bleed.

Other fun facts:

• Airhouse’s Co-Founder Sarah Siwak hasn’t been with the company since June 2023 (even though she was still prominently featured on their website). This news only broke when the layoffs were announced

• Kevin Gibbon, the other founder of Airhouse, had previously launched a company called Shyp. They raised $62M in funding. It went out of business in 2018.

Social Commerce Is Changing The Rules. You Get 3 Seconds To Capture Someone’s Attention

Everyone stereotypes.

These days, we jump to conclusions as often as we rush to judgments.

I was like anyone else when it came to writing online.

I wasn’t doing it.

Hadn’t done it before.

Never had really thought that I wanted to get into it either.

And I certainly wasn’t thinking about thought leadership or driving sales.

That was about 5 years ago now.

Over the years, I have written more (yes, more than I do now) and written less, much less. At one point I would post 2-4 times a month at best.

These days I am back to writing daily for the most part.

Here is my best advice for anyone looking to use content writing to promote their business, their services, or to build their personal brand.

1. Start today. You don’t need to wait. And you don’t have to have some amazing polish to your writing. You absolutely don’t need life changing ideas. The feeds are fast, there’s tons of content, things die quickly. So don’t worry about something sucking.
   

2. Write about things you know. If you have to do all kinds of research and analysis every time you want to write a post, you’ll never be able to keep up.
   

3. Big vocabulary drives bad results. It’s not an essay. People don’t want to put a lot of effort into reading with a high level of effort (or a dictionary). The easier you make it to consume, the more people will eat.
   

4. The visual overwhelms the verbal. No matter how well something is written, if it looks like a mess, people will scroll by.
   

5. Have one message (I still struggle with this one 😂). Some topics leave you wanting to say a lot. If you want it hit on different messages, break them into different posts.
   

6. Don’t write for the algorithm. Everyone always asks for the “tricks”, it’s not worth it. These algorithms change all the time. I wrote a post last week that got 20k impressions. That exact same post to a group got less than 100. They were identical…
   

7. Headlines matter. A lot. Those first few words and that one line of text is what you are using to draw people in. To stop scrolling. Whenever you write anything, always ask if you would stop scroll and hit “read more” if all you saw was the headline
   

8. Your pictures or videos are a hook too. Boring pictures, uninspired stock photos or lazy AI generated images rarely make people want more of what they have already classified as “meh”.
   

9. Write for your audience, not yourself. Acronyms, inside jokes, fringe issues and topics. They might be interesting to you, but they only matter if they interest your target audience.
   

10. Be relevant and authentic. Don’t add things just to be popular. Give people your take, why it matters, and how you know it matters.

That’s it for this week. Thanks for being here.