They track trucks on their way through Europe and, through optimization based on this data, can reduce CO2 and empty kilometers: the Vienna-based startup Sixfold around CEO and co-founder Wolfgang Wörner is an insider tip among logistics startups. Together with his four Estonian co-founders, Wörner has now managed to track goods worth 500 million euros per day.
This has now convinced the long-term partner Transporeon from Germany to take over Sifxold. The Viennese startup will remain an independent company and in future will track all 20 million transports that are assigned via Transporeon. With its 700 employees, the new German mother is one of the most important logistics software providers worldwide.
In an interview with Trending Topics, Wörner talks about the takeover of his startup, what you can do with the logistics data and how the company’s bridge to Estonia works.
Trending Topics: Sixfold started in 2017. What vision did you have then and what strategy did you use to get closer to it?
Wolfgang Wörner: Transport logistics is very fragmented and has a low degree of digitization, which results in a high degree of inefficiencies. For example, 25 to 30 percent of all truck kilometers traveled in Europe are driven empty. That means enormous unnecessary CO2 pollution for our environment and significant economic damage for society – after all, the transport costs incurred are passed on to the product costs that we all have to pay. At Sixfold we wanted to and want to counteract these inefficiencies through digitization and better transparency.
How can you specifically eliminate these inefficiencies?
Specifically, better networking helps those who have to transport goods and those who can transport goods to better coordinate supply and demand – similar to what Uber did for passenger transport.
In Europe alone there are almost a million companies that offer transport and logistics services. We knew from the start that the fragmentation and size of the transport sector meant that we had to take a highly scalable path. As a result, it was clear to us that we would have to use existing systems and data to collect data ourselves using our own hardware or a new proprietary system. For this reason we have set up a network that aggregates, cleans, standardized and interprets data from existing systems (ERP software, transport management software, fleet management software, telematics, etc.) using modern interfaces. The key to success lies in networking and in partnerships with a large number of other system providers.
In addition, it was and is part of our strategy to focus on global or pan-European major customers. In a sector that has seen little innovation in the last few decades, only they have the size, market power and innovative strength to bring about change. For this, too, it was essential for us to enter into partnerships with other system providers at an early stage in order to be able to win Fortune 500 companies as customers as a young company.
You recently announced a merger with Transporeon. Is this a merger or takeover, and what exactly does the partnership look like?
Transporeon – a platform on which over 1,200 shippers assign transports to over 100,000 transport companies – was the first and most important partner for us in order to be able to win global corporations as customers very early on. As a result, we’ve been working closely together for a long time. The merger – a takeover in which Sixfold remains an independent company – enables us to increasingly develop joint and integrated solutions, in line with our strategy outlined above.
In concrete terms, the partnership for us now means that we track all 20 million transports that are assigned via Transporeon. As a result, we jointly form the world’s most powerful transport network that enables end-to-end tracking and can develop a variety of other solutions in the future.
Sixfold tracks goods worth 500 million euros in real time every day. What is going on at the moment? Are there changes over time?
Since we have customers from different industries, we also track a range of these – whether transports of food, packaging material, insulation materials, chemicals or automotive parts. Our three core industries are consumer goods and trade (with customers such as Coca-Cola, Nestlé or Tesco), building materials and paper and packaging materials.
Due to our broad customer base, there are usually no major changes over a certain period of time. After all, it is a cross-section of the entire economy. However, COVID-19-19 and the associated challenges to the supply chain has led to massive changes here – at least in the short term. While consumer goods and retail carried out 20 to 30 percent more transports, especially at the beginning of the pandemic, in order to meet the changed demand, there were massive declines in many industries after many factories were temporarily closed due to the lockdown, e.g. in the automotive industry.
What can you do with this data? Which optimizations are possible?
You can roughly divide the whole thing into 3 categories:
Creating transparency: Today most shippers are blind as soon as a truck is on the move. They do not know where the cargo is and when it will arrive at its destination. Often shippers only find out about a late delivery when the customer calls to complain. This leads to dissatisfaction and a large number of manual efforts, e.g. “Check calls” at the transport service provider. We create automated, continuous transparency, thereby improving customer service and reducing manual effort.
More efficient operations: Many operational processes are directly linked to the transport logistics. We help our customers e.g. To reduce downtimes and waiting times at the warehouse by our predictions determining which goods should be provided at which ramp and at what time; or by enabling just-in-time production planning based on foreseeable flows of goods.
Reduction of CO2 and empty kilometers: With our data, we can guarantee a better match between transport supply and demand – e.g. Reduction of empty returns by arranging suitable orders.
Where do you get this real-time data from and who are you interested in? Who can you offer this data to?
We get the data from our customers, i.e. the loading industry as well as logistics and transport service providers or their system providers. Specifically, this involves order data on the one hand and truck movement data on the other. The key is the aggregation of data from hundreds of thousands of sources and the intelligent processing using AI and machine learning in order to generate insights and value from it.
Since our service relates to the transports of our customers, we offer our data exclusively to the respective parties involved in the transport: sender or recipient and transport service provider. After all, this is about highly sensitive data. For other stakeholders, we only use our data in a highly aggregated form, such as of our border waiting times that we make available to the general public as part of the Covid-19 pandemic.
Real-time monitoring of the flow of goods is certainly also very interesting for cyber criminals. How do you protect the network and the data from misuse?
Both data privacy and data security are of course extremely important issues for us due to the sensitivity of the data. Regarding data privacy, the legislation (GDPR) provides a, in my opinion, good and strict framework. We have firmly anchored this in our contractual conditions – with partners and customers – as well as in our internal processes (product development, support, etc.). With regard to security, we only work according to the latest standards and best practices – from our cloud-based infrastructure, which is hosted by Google, to the E2E-encrypted transmission of data.
You launched Sixfold in 2017 with four co-founders in Vienna. The HQ is still in Vienna, but there are a few other offices, especially in Estonia. Why there?
My four co-founders are all from Estonia. You had founded a supply chain tech startup in the past – and closed it again. After we got to know each other through our common network, we saw great potential in creating Sixfold together. And luckily we were right.
Estonia is the model country worldwide when it comes to e-government and is generally very progressive when it comes to IT and digitization. There is, therefore – despite the small size of the country – a large pool of talent in the IT sector. Another big driver for this was the success of Skype. Two of my co-founders are ex-Skyper, one of whom was employee number 7. The success of Skype has given the Estonian tech community a strong impetus and is considered the starting point of a startup boom that has seen unicorns like Transferwise, Bolt, or Starship in recent years has produced. This also includes a strong ecosystem of former Skype employees who founded themselves.