Maersk: What Innovating a 100 Year Old Company Looks Like
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Erez Agamoni, Senior Vice President of Innovation and Strategic Growth in North America at Maersk, the world’s largest shipping container company, is the guest of this episode of Everything is Logistics.

Maersk has 700 ships in its fleet and handles one out of every five containers shipped by sea. Erez talks about how he came to work for Maersk, his wide and varied career, including working for an airline, a forwarding company, and IT companies, and how Maersk is innovating and transforming its operations. He discusses how the Innovation Center is working on research, development, digital transformation, data innovation, and product innovation at the 100-year-old company.




At SPI Logistics they have industry-leading technology, systems, and back-office support to help you succeed. Learn more about SPI’s freight agent program here. Make sure to let them know we sent you!

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See full episode transcriptTranscript is autogenerated by AI

Blythe Brumleve: 0:05

Welcome into another episode of everything is logistics. I am your host, Blythe Brumleve. And this podcast is for the thinkers in freight. And we have a really, really good guest for you today the podcast sponsor at Maersk. And that is a res say your last name for a good morning agrimony. And you are the Senior Vice President of innovation and strategic growth in North America. So

Erez Agmoni: 0:28

thank you very much. Thank you for having me. Absolutely. Now,

Blythe Brumleve: 0:31

you, I wanted to read off a couple of stats because by the numbers Maersk is the world's largest shipping container company with a 2020 2021 number of 700 ships in their fleet, nearly one out of every five containers shipped by sea are handled by Maersk. And every six minutes at least one port around the world can be called upon by a Maersk ship. Do you pinch yourself at times that you get to work for a company like that?

Erez Agmoni: 0:57

Yes, yes or no? You know, because size. It's not the important part here. Size does matter in many things in life, but not I think here we care more about how can we give value to our customers on an end to end journey real rather than just on the ocean portion. So I'm pinching myself the Wow, great for a company that willing to change something that was for almost above 100 years, done in a certain way now. So you know what, that's not what we hear the customers are interested. Let's change it all over again. So that's what I'm excited about, actually.

Blythe Brumleve: 1:38

So you have a really lengthy career in different countries all over the globe, and logistics and supply chain. So how did you find yourself working from Ayers?

Erez Agmoni: 1:48

Interesting. Wait. So I am born in Israel, and I raised in Israel did my learning and my military service like everybody else. And after that, when I was 2521 years old, I basically decided to go for it three, but maybe stay a little bit in Japan, spend a year there. And then I like okay, I'll travel a bit in Asia. And I decided to stay in Thailand. So I took my bachelor degree, master's degree and PhD all in Thailand. But at the same time, I also worked so I started to work for L Israeli airline. And I worked in the passenger. But then I realized, you know what, I rather work with the boxes. It's, it's more interesting, challenging than the passenger side. So I moved to the cargo. Through that I moved to other freight forwarders, an IT company in the middle. And then I was basically approached by Merced, to run all the air freight for Asia Pacific and manage it for that. That's kind of how I joined the company about 13 years ago.

Blythe Brumleve: 2:54

And so with that, being the Senior Vice President of innovation and strategic growth, what involves in the day to day of innovation with a company that is more than 100 years old,

Erez Agmoni: 3:06

yes, more than 100 years old, more than 100,000 people. A innovation, for us is something that we would like in a drastic way to change the way we operate for the benefit of the customers, but also for the benefit of our own operations to improve things to change things, we do have the continuous improvement teams that doing the small, needed changes, to make things much better. But here in the Innovation Center, we thought to ourselves, how can we actually change in a big way in a fast way, radically the way we work. So that's kind of a lot of, of the things that we're concentrating myself, I'm also responsible for engineering. So I have the Innovation Center, I have the engineer, I have the maintenance teams. So everything that done with innovation, and we prove it goes now to the engineering team that they can design it as part of our new product offering us solutions. So it's not stuck anymore just in isolated Innovation Center, and also replace users please users, but nobody wants to do anything, which which was the case at the beginning, we kind of developed things, we improve things. And then like I know, we do things in a different way even internally. So we kind of having that flow of testing, proving a concept, moving into production and actually using it as part of our day to day operation.

Blythe Brumleve: 4:36

So what does your your role look like? When you wake up on a Monday morning? What are you tackling first thing?

Erez Agmoni: 4:43

First thing all the emails from the weekend because this business never stops 24/7 So the night before I cleared the Now next, but we're trying to tackle multiple elements. Under the innovation center we're trying to look for Research and Development. So all the proof of concept about robotics, and about machine learnings and about different types of elements that we actually we can create proof of concepts. On the digital transformation, we have four elements, then the second one is digital transformation, where we tried to take all our systems where it's kind of something in a different level, one of the key projects we're working on right now is a digital twin for warehouses. So we're trying to how can we simulate the way we work inside the warehouse? How can we improve that? The third part of the innovation center is data innovation. So we using all the data, we have millions lines of data

Blythe Brumleve: 5:41

almost on a daily basis, Majan how much data you're working with

Erez Agmoni: 5:44

massive, massive amount of data, but it's still in silo systems, that it's very locked and difficult for us. So we are now pulling that and trying to give it access to all the people that needs it, and also for the innovation center itself. So they can start deal with certain elements of that. The last but not least, is a product innovation, where we create new products, new solution for our customers based on problems they like to solve. So that's kind of things that we are struggling or trying to solve on a regular basis. We okay, what problems we have what solution are there? How can we bridge the gap between the problem and different solutions?

Blythe Brumleve: 6:25

So on the innovation side, yeah, it sounds like you're really trying to optimize a company that has probably, you know, been used to what they've been doing for a very long time and a certain way that they do it, and you're trying to change and optimize, you know, in order to obviously get more revenue. That's what any business is trying to do. But for if we could back it up just a minute for the casual logistics fan. Yeah. How do you go about booking a car or booking a cargo ship or booking a container for

Erez Agmoni: 6:53

dinner with Merce? Yeah,

Blythe Brumleve: 6:54

how do you? What does that process look like?

Erez Agmoni: 6:57

You make a phone? Call? No, there's no phone calls,

Blythe Brumleve: 7:03

emails, Monday mornings,

Erez Agmoni: 7:04

no emails anymore, right. So if you, if you are small to medium sized customers that doesn't want to have a long term contract, you basically going to a portal, you add all the information, or you can upload the file with all the information, you create the booking you get, you get an immediate confirmation or suggestion for other trips that you can take. If you're a larger company, and you're having certain contracts on a regular basis, there is an EDI connectivity or API connectivity between your system and our system. And basically, you you click in your system, you want to book it with Mariska and automatically it's moved to our system and back to get basically, the days of making phone calls is basically so it's

Blythe Brumleve: 7:55

almost like you're you're buying something online and just choosing the shipping options. Yes, it's wild. But yeah, that's pretty cool. So for

Erez Agmoni: 8:03

by the way, it's not only ocean, right? You can book airframes, you can book other elements of services. So it's really an end to end, integration.

Blythe Brumleve: 8:12

And I love and I you guys are getting into warehousing and robotics and things like that. And I really want to hit on that and later on in the conversation. But first, I wanted to touch on you mentioned earlier that you were born and raised in Israel. So what does the what does that and you spent some time in Thailand, Japan, you know, Latin America as well? What does it logistics scene look like in each of these? Are they smore similar? Or do they have their own kind of their own nuances and things to fix? Or maybe is it a combination of the two?

Erez Agmoni: 8:43

You you have a combination of the two, there is nuances in each country and each part of the world you know, Asia is more for shipping, in a region for cargo, of course, it's some cargo moving internally within the region. But it's more of in a region. The US is more North America is more of a destination. So you have nuances. Definitely. From that perspective. There's also nuances from the power of the buying power. A country like I don't know what Israel doesn't have the buying power of the US. It's a different level different game that we're talking about. Latin America is coming from a different angle as well. But at the end of the day, when you talk to customers, when you see what's going on, more or less people have similar problems. So yes, it's different. It's slightly here slightly there. But people have the same problems. They have lack of visibility, they have inconsistency of supply chain, it's very difficult for them to understand when cargo will arrive in etc. So that there's multiple problems that basically you like, Wait, so if I solve it in one place, can I solve it in another place and and making it much faster growth on the solving

Blythe Brumleve: 10:00

same problems, just different languages being spoken to fix the problem or try to address the problem. Yep. So where do you think is the I guess, globally? Where do you think the most opportunity for supply chain optimization exists? Is it Latin America? Or is it Asia or, or the US,

Erez Agmoni: 10:17

I would say the US is definitely a place with a lot of opportunities. Just because of the massive amount of cargoes that comes into the US there's not as much more inbound and outbound, of course. So this is a big place that you can solve course, there is a lot of places that you need to go much to the basic to solve different problems like in Africa and certain places in Latin America, you need to basically solve how do I reach safely with my car go to a place in make sure that it's still there.

Blythe Brumleve: 10:52

Or just construction, really, I was in Belize last year, and the sheer amount of road construction crews, it was dominant, because they have one main road. And then all of this country, all of this development is extending off of that one main road that was built, which is

Erez Agmoni: 11:09

fast traffic, less traffic jams and issues and problems.

Blythe Brumleve: 11:13

It was road construction the entire way. And I thought that was fascinating. I said, wow, there's got to be so much opportunity for trucking here in the near future. So it just made me think of, you know, what other opportunities are weather? What other areas of the world? Do those opportunities exist? And where are they, you know, the sweet spots of maybe innovation that could come from that? Now, not from the business side of things, you know, shipping obviously went mainstream in 2020. With the shopping habits during COVID, we had that ever given that sort of, you know, made supply chain famous. We had locked down to China container shortages. But for the average consumer, how much do all of these things happening at once happen? Is there always a bunch of combination of things affecting your shipments? Or was it just the past two years of craziness? That's a

Erez Agmoni: 12:03

good question. And I before I answer that, I liked that you said COVID. Makes supply chain famous. That's absolutely true. Before that people used to ask, what are you doing? I'm like supply chain? What does it mean? It's like, okay, I'm working for a shipping line. Right? So what are you writing? Not really. So what you're driving in traffic? Not really. It was very difficult to explain that. But so I liked this point. Really. Finally, people realize what is supply chain and how much they're depending on supply chain. And there they are. Because of you, we don't get our car. I said, No, that's not the case. But I think COVID period was multiple things that happen at the same time. It's not really what we see on a regular basis. There are dramas and problems all the time. You know, before that you have issues with the ports. Before that you can have or during the same time actually, we have the sweats canal, a vessel stack, you know, it's ramped up on top of each other, so many things together. And on top of that, we have the bullwhip effect in supply chain where people get panic, and they start ordering too much. And then they get panic to the other side. And let's stop everything. And that's create much more problems in supply chain of the whole world. You know, if everybody stops moving, vessels will not keep moving around, they will they will stop and then if everybody turned it on back at the same time, you don't have the capacity to bring it back. You know, it takes time to bring the capacity. So those type of reaction of behaviors of people it's it's it's an issue also, that ramify this this problem that we saw,

Blythe Brumleve: 13:48

and I think it's also a really quick way to see what the pulse of the globe is going through. I was just reading the other day that there is a that the demand for cardboard box for cardboard has dramatically decreased. Whereas you know, in the middle of all these e commerce shipments in the middle of COVID it you have a insane demand for cardboard because everything you know gets from the port to the porch. It's getting shipped in a cardboard box so you could kind of see what the sentiment level is based on cardboard demand, which is crazy. I thought that was super fascinating. This episode is brought to you by SPI logistics the premier freight agent and logistics network in North America. Are you currently building your freight brokerages book a business and feel that your capabilities are being limited due to lack of support and access to adequate technology? At SPI logistics we have the technology, the systems and the back office support to help you succeed. If you're looking to take control of your financial future and build your own business with the backing of one of the most successful logistics firms in North America, visit SPI three to learn more. So from I guess from that perspective of cardboard declining and demand sort of declining? How long does it take for a system like Maersk to adjust to that demand? Is it a slow chug? Or is it something that you almost can react to immediately because you have access to this data.

Erez Agmoni: 15:18

So first of all, because we have that access to that, and because we are managing supply chains for very large customers, we can see a little bit before the impact really happen, you see the drop of orders, you see the drop of things that will but even then you cannot just immediately said, You know what, I'll will shrink capacity, I will reduce that, because it can amplify other problems later on. So you want to be cautious when you do that, it will increase the price, which is not ideal for anybody, because then we live in UP and DOWN volatile business. So even that we see sometimes the information in advance, and we know what's happening, we normally takes much more smaller steps to adjust just because of what it could impact in the bigger picture. So

Blythe Brumleve: 16:11

it's not like you're you're shutting down all the chips and calling them all back. It's it's something that you adjust slowly, which makes it tough.

Erez Agmoni: 16:18

I think COVID was when COVID started and everything shut down in very fast. That was one of the first time we really start to pull the call it string. So moves of vessels, we kind of pulled them out and said, You know what, okay, let's cancel, cancel, cancel, there was no point to run an empty vessel back at forward.

Blythe Brumleve: 16:38

Real quick. Where do you start? So in the PICO COVID, when everything is locked down, and you're calling all your ships back? Or is there like one central port know that you're keeping all of the ships? Are they strategically placed around

Erez Agmoni: 16:50

strategically placed and they might be utilized for doing something else, rather than just then steel? So they're not just there's no big parking lot.

Blythe Brumleve: 17:02

Now the parking lot, which I mean, brings me to my next question, because there's kind of a in the height of COVID. You know, we had all these backlogs on the west coast with, you know, there's certain ports within the United States that can only handle these bigger ships. So there's an argument now that oh, well, you should make those smaller ships, because then they can go to more ports. With everything kind of relatively opened back up. Are you still How are you planning the ship construction process? Do you factor in the last two years? Or do you factor in the historical amount of time that your company has been?

Erez Agmoni: 17:36

No, we definitely factor the last few years changes in terms of how is the market developed how things change? But even more than that we are factoring. How do we want to be doing things in terms of impact on the environment? Right, so we trying to reduce co2 emissions, we definitely can deep dive into that as well. But it is impacting the size of a ship, you can't have yet a zero emission or neutral emission ship that moves 21,000 hotels, not yet you can have it and 8000 containers. So you can actually diversify your fleet and you have to diversify. And you have to think about different market different reasons to do things. But size in that case does matter. And at the end of the day, it's also the case of what price matters to our customers. Are they willing to pay slightly more and get it faster? And two more different boards? Or do they need a to be cheaper, so you have to bulk it all in a big vessel. So we definitely have boats elements that we're going to keep having both sides.

Blythe Brumleve: 18:50

And I believe you you guys are you plan to launch the first carbon neutral ship by this year. That was seven years ahead of schedule of when you originally absolutely correct how our you guys are, give us a little bit of a lay down or rundown of what a carbon neutral ship looks like. Because for folks who don't know, shipping is pretty carbon efficient. It's one of them compared to chocolate, of course. But explain to how you make an efficient process even more efficient.

Erez Agmoni: 19:20

So let's start let's start at the beginning we originally we decided that we want to be by 2050 100% Zero Net Oh wow. Carbon footprint for the show the whole company. In the bigger problem was for us how can we tackle the ships the vessels, because this is something that you don't just buy every day different vessel the vessel lifetime it's anywhere between 2025 30 years. So if you want to be by 2050 You need by 2030 the latest to have something that is already working so was a lot of different works, there was a a innovation thinking they tried to do it with sales doesn't really work for the large vessels. Of course, they thought about container size batteries, it takes too much space, it's too heavy, it's too unreal or not reliable. At the end of the day, what we found today is that the biofuels are basically the best way to approach it. So basically, you're using a fuel, that to produce it, you're absorbing more co2 than you are actually polluting back at the end of the day. So for example, a corn oil, you have to grow corn, when you grow up on you absorb co2, the amount of oil that you can produce will the same amount of corpse that you have will produce enough oil that we actually be able to be utilized for those things. Ammonia is another solutions that green ammonia, there is another solutions that is coming. So there are multiple things that came up. And when we started to see that, yes, it's coming up, and we order our first vessels that is coming this year, we basically decided to reduce it by 20. Instead of 2050. We are now putting our goal to 2040. So we reduced we shave 10 years of that goal and and now it's going across multiple things, not only the vessels.

Blythe Brumleve: 21:27

And so with your with your green initiatives, you also have the other aspect of all of these other lines of businesses that you guys are going into or have gone into. Yeah, so warehousing, robotics, trucking, is that in the works for you, so your acid base truck Ah, so what does that look like? Give us a I guess a scope of you know, the amount of warehouses you have is it globally or just in the United States, it's globally

Erez Agmoni: 21:52

we have a few 1000 warehouses globally. In the US alone, we had three years ago, we had about 20 warehouses, now we have slightly more than 200. So in three years, that's a big, big jump. Similar jump around the world, we we did both natural growth, but also acquisitions. So we bought in the last few years, few more few companies that help us because it takes a long time to build that capability. So instead of just trial and error, let's get people that are experts, and combine them with the expertise that we have in order to grow into that. So we have warehouses, trucks in the US, we have a few 1000s trucks. We just recently last year, we ordered 400 electric trucks to be deployed in the next two years. So we started to get some of those electric trucks, we already have some of them and it's gonna be growing even more than the amount of trucks that we have. So

Blythe Brumleve: 22:48

so it sounds like you're you're not just innovating and Going Green with the chips. It sounds like you're trying to do that on the warehousing and the trucking side, too.

Erez Agmoni: 22:55

Yes, 100% warehouses, we're trying to find ways to how can we reduce the energy consumptions we are looking into different solutions, right. And we're actually doing some capstone projects with MIT to see how can we find for the warehouse itself a much better innovative way to reduce not just by moving to sourcing from a different electric company, but also power solar wind meals, a batteries that can help to absorb from the grid, some energy and utilize that power during peak times. So you can flatten the curve. So instead of just creating peaks of usage, you are actually creating so there are multiple ideas that we are looking at, and definitely believe that we will be there. And the goal of 2014 is across all business. It's not just for the vessels of the warehouses. And by 2030, we're going to be 90% efficient and by 2014 is going to be 100%. So it's across every single business that we have.

Blythe Brumleve: 23:59

And it sounds like you're almost diversifying the sustainability and environmental approach to all of the different diversification of your business. Yes, how much of a task is that? I imagine it's a lot.

Erez Agmoni: 24:11

It's a lot. It's a lot and it's a big lot of teams, each focus on different elements in order to make it successful, because it's a big task. It's not easy to make it

Blythe Brumleve: 24:22

is there any I guess aspects of the diversification for environmental sustainability that is really interesting to you right now.

Erez Agmoni: 24:31

In the different alternative fuels is definitely interesting. We are considering to trial hydrogen right now. In certain cases where it's available. As I mentioned, the battery thing, it's something really beginning that we are really early stages. Can you tell? We saw that even cities now like Manhattan is about to use something similar. So if a city can do that, why a warehouse Can't you know how Let's try to bring those elements that otherwise does not exist today. And you just energy have been produced, no matter what the grid will keep producing the peak no matter if you use it or not. So we rather use it and absorb it and use utilize later. Much lower than that, so that we believe this is a good, good way for

Blythe Brumleve: 25:21

absolutely, because I think for a lot of folks that just think, Oh, you can just capture it and just have endless supply. And it's like, no, you have to have that storage solution as well, in order to make it truly efficient and truly green. Now on a little switching gears a little bit, you know, you said you're born and raised in Israel, you know, we're at manifests a future of logistics, there was a really great announcement that was made by the port of Ashdod. And I hope I said that right over Israel. Yeah. Can you give us a little insight on on that, that partnership with Maersk? Okay,

Erez Agmoni: 25:49

so the Innovation Center is, is not living in a bubble. We building an ecosystem around us. So it starts with different internal stakeholders, all the different products in operations that we have all the different enablers. So our IT folks, our HR legal, so we have to use all these internal stakeholders to be part of what we do. But then we have a very important external stakeholders that we working with. So the first product is our customers. So we work with a lot of customers to find problems to find what they care about and how to do things. We exchange a lot of ideas, and we share with them our proof of concept they share with us, then we work with academia, I mentioned MIT before we were working for them for many, many years. We're working with multiple other universities as well. We're working with different government entities to get access to different solving problems that otherwise you can't solve. You need the legislation part of it. And the last but not least, we working with venture capitals and startups, that's where the poor, the rich don't come into the picture. Israel is definitely a very innovative country, there's a lot of it's called the startup nation,

Blythe Brumleve: 27:04

the technology scene is incredible. To touch on that for a second.

Erez Agmoni: 27:09

So there is a lot of different technologies. There's different talks about why Israel became a startup nation and became kind of like a very innovative, I think it's, you know, the surrounding of Israel, where the situation well, Israel is part of, is always under pressure. So people if you want to be different, you have to, if you want to people to be noticed, you have to be different, and kind of create and also, people don't work by the book. They like to cut corners, it's the nature of people. So it also helps to become a new innovation in create an innovation. So the port of us DoD is basically an incubator for startups in Israel that are related to supply chain into the maritime industries. So when we learn about what they doing over there, I started the discussions that we agree that why don't we start to exchange you share with us some some of the knowledge that the startups doing, we can help them to try the some of those things for things that are interesting for us to solve. And we can kind of basically, exchange work on that. So So today, we sign up that agreement, it tooks a few months to work on it. So both of us are very happy with that.

Blythe Brumleve: 28:24

Do you have a favorite startup concept or business in that's going on in Israel, Israel right now?

Erez Agmoni: 28:31

There are many startups that we are actually working with Israel right now the robotics companies that we work, there are a machine learning companies that we work with their cybersecurity. There's multiple things that currently we actually probably more than 10 startups that we working with Israel right now. It's USA, Israel, Europe. That's the amount of startups that we have

Blythe Brumleve: 28:56

seen intend to know that that those programs are going on all across the globe right now. Yeah. And so from you mentioned earlier, I want to switch gears again a little bit to the digital twin side of things. Now, for folks who may not know what is a digital twin.

Erez Agmoni: 29:13

A digital twin is basically a replica of a real environment, that you bring it into the digital world. And you do something with it, you know, you just look at this and you say, oh, okay, this is what's happening right now. Or you can actually take it to the next level and you create some simulation of real case environment based on real case data. A lot of the simulation in the past was done based on theoretical data or certain elements that you take into account. You can also take the information that come from real live data through machine learning and start to create some simulation. So I'll give you an example. We're talking about warehousing, digital train, so what does it mean, today you have a warehouse management system or WMS, where you have certain amount of information that if you scan something, you get information. If you place it somewhere, you have that information, but you have some productivity information, but you don't really have all the nitty gritty, it's it stays relatively in highlight. If you want to know what exactly happening and what will happen, if you change something, the WMS cannot answer that. So what we want to take is the information in the WMS. And then cross reference it with a potentially video analytics, and IoT devices, that giving you certain information on what happened with the automation with your robotics, with the people around and start to really learn on the spot. What's going on right now in the warehouse? How is the performance of this warehouse? Why is it's better or worse than what you planned for? And then start asking yourself, What if cases, so if I change this, what will happen? So you can start to change things in the digital twin environment and see how it's going to respond? And what type of thing and what type of results you're gonna get from that. So instead of go and change your warehouse setting, and install this and or disaster happen, you do all that in a digital twin environment, and you basically be able to get your results in very high accuracy. Without it change anything yet.

Blythe Brumleve: 31:31

Okay, because every time I've heard about digital twins, it's been mostly in respect to web three, you know, the, there's a lot of things that could be said about web three, but ultimately, you know, AI, artificial intelligence VR, is that how you guys are using the digital twin technology.

Erez Agmoni: 31:48

So we were going to use some of it, but not only right, the way we think about this will be first of all, let's let's understand it much better way, what's really happening today. So of course, we need the AI machine learning, if you utilizing video cameras and shooting video analytics there, because otherwise, it's just get picture. Nobody wants to look into those. It's not the point you want to understand what's really happening. And from that perspective, but then you need all the machine learning power and the simulation power to basically bring it to, to those worries cases that we talked about. So that's kind of the direction so it's industry 4.0. Web three, you know, it's kind of a combination of multiples.

Blythe Brumleve: 32:31

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Erez Agmoni: 34:09

don't get me wrong. It's not easy. For us as well, you say it's, it's difficult for us? Yeah, it's difficult for everyone. It's difficult for us, it's difficult to change. Because if something works, you say why would I so broken? Why should I change that right? But, but the more you talk to customer the more you listen to them and you understand they have different problems that you can't solve unless you change you cannot offer that and you become a commodity. And commodity the markets plays with you up and down and nobody wants to be a commodity we want to be value added to our customers. We want to be like your partners to them that we can actually help them to manage their supply chain and run that in a better way. There is a very good example that I will share soon about a out there Does it work in the end to end supply chain, but we started the journey probably five, six years ago that we said, You know what, this is the time to really shift it takes time, right? The Innovation Center always, we always try to do certain things, it was not exist. So we did it on the side, okay? Take somebody from doing this job and do it to double head here and another person here. But then we realize that it doesn't work this way, you can't do it, you need to dedicate the time, resources and money into that. And about a little bit more than a year and a half ago for the Innovation Center, we decided, okay, this is the approach we want to do. This is the money that we're going to put around it. And we went all the way forward. But as a company, it's probably about five to six years that we are constantly looking to innovate and change.

Blythe Brumleve: 35:50

We were mentioned earlier, we're here at manifest a future of logistics, you spoke at last year's events, I think you have a couple of colleagues that are speaking at this year's event. Have you had time to sort of have you know, conversations and catch panels and hear any kind of interesting ideas? Do you have it? If so, favorite?

Erez Agmoni: 36:07

First of all, I did a lot of spin dating meetings. You know, it's it's a, it's a great place to have that I think manifest is a great event started last year, I was surprised. I came to it. And I was speaking and I was like, Okay, let's see, I saw so many events. But all of them are kind of more generic less to the focus point. So I was super surprise. Last year, it was like okay, we definitely needs to be here this year. And I think this year, they definitely overdo it even better than what before. So great job for PAM and currently and the rest of the team. It's really incredible

Blythe Brumleve: 36:44

to see. Yeah, I think it was 1000 people at last year's event this year, I think it's close to 4000 registrations.

Erez Agmoni: 36:50

Unbelievable. Unbelievable. This is they do a great job. And really, that different events out there, right. But they're not really of innovation technology for supply chain. Yeah, maybe innovation, maybe technology, maybe supply chain, maybe on the side, there is the intersection of these things. But this is really a great place for that. A, so a lot of spin the dating here, a lot of meetings, companies that we know, and we don't know and kind of let's, I have to admit, I didn't have a lot of time to be in the rooms to listen to people. But I have a relatively large team here. And we have more than 10 people here that basically many of them are going to different section and collaborate, we're going to have this kind of download from each other and learn at the end of this

Blythe Brumleve: 37:42

to innovate after, after you talk to everybody collaborate on together. Alright, or as any any last remarks, anything you guys are working on that you want the audience to know about?

Erez Agmoni: 37:53

There is something that we're working on that I think it's interesting in terms of innovation. So I was talking about all the technology that we working on and all the robotics etc. I think one other important piece that we work in I mentioned before is the product innovation. So one of the things that we learned from our customers is that their supply chain is very reliable. What does it mean? We actually before COVID happened, we talked to a few customers they kept complaining about they can't trust the supply chain, they can't build a plane on that. So help us What do you mean supply chain? If the carrier tell you is from Shanghai to release takes 15 days, maybe 14, maybe 16? Or that's, that's it, or to New Jersey takes 27 days, so it's plus minus few days, and everything is the same? It's not that it's the big picture. Okay, let's look at that I took about a million data points for my system. And I kind of like just Let's check what is the lead time or the transit time from the moment that shipment entered the port in Asia, or in that one was China specifically, until it leaves the port here in the US? The finding was shocking to me. We found out that is 34 days to 74 days, only between the easiest pair of countries in the world. China and the US there's nothing to stop you along the way. It's not that it's Indonesia, or Thailand or Vietnam that you probably stopped somewhere before that, or 34 days to 74 days. I was like what?

Blythe Brumleve: 39:33

What's the difference between the 30 to 70?

Erez Agmoni: 39:36

So it's, it's happened for multiple reasons. One, the whole supply chain is in silos. You give the work for this person to do first there and then the second one to do that. And there's the third person's doing this. Nobody cares what's happened with the shipment. They care about their only side. Right so if something goes wrong, nope. is trying to fix it. This is a big problem. To start with. Then there is so many handovers of data of physical goods of of knowledge of what's happened in those handovers takes time and delays. Basically that happens all the time

Blythe Brumleve: 40:19

because of that. Yeah, because of so many people focusing in on their own responsibility

Erez Agmoni: 40:24

then. Absolutely right then we basically say, Okay, let's look at the end to end now. So we looked at the Potapov, because I said that's probably reliable. And we looked at the end to end and it's about 30 days, 220 days for cargo to arrive from China to the US, from the factory to the DC, not even to the final customer to the DC. Now, went back to the customers, what do you do with that? They say, so we put in our ERP systems, about 90 Something percentile of this time. So if it's 120 for them, they'll put 110 105. So they based it all on that, like, What do you mean, but most of the cargo come way before that is okay, so we have it right before, of course, we are not happy because it's money tied into inventory. Is his warehouse full of goods that we maybe don't need? How can you help us? They came to us? How can you help us? So just before COVID started, we did a proof of concept with one of the large retailers in the US and we said, Okay, let's take your shipments from Vietnam, they had the problem for Vietnam to tax us. So let's isolate only to that. What's your transit time? If I'm not mistaken, it was like 34 days plus minus 15? More or less, said we'll bring it in a plus minus three. Let's see if we can do that. So how are you going to do that? What are you going to do? I said, we're going to decide how to route the goods for you. Instead of you telling us prescribe the route, you move it from A to B for weeks, you give it to me at origin, you tell me when you need it, let us worry like you send a courier. You don't tell the courier company routed via displays of a true just like fun, find a way and make sure that it comes up my problem. So my problem so we manually sit down with a predicting models on Excel that at that time we created, it's okay, what happened if it goes down this route that route in and we manage 94% of the time COVID kicked in, and it's kind of threw us off almost crazy. But we still managed to bring 94% of the time within that plus minus three days, which was amazing. But it was crazy work behind the scenes, because it was all done manually with prediction on Excel. And in kind of modeling of things like you cannot really ramp up and do those things in a bigger scale. So right now we are basically working to build a COVID came a little bit priority shift. But now about six months ago still exists, problems still exist and actually amplify during COVID. And people like Oh, help us to solve it. Because it's it's crazy. We don't want all these goods to come before. We don't also want you to come after because otherwise we pay for it right. So we are now working together with MIT to create a nice predictive models that check all the different routes and start to give you a score of what we'll bring it the writing, we build an internal system that also gives us the right visibility where the cargo is so you can actually easily started to decide on different so this is something that we kind of innovate through new product to our customer, ensuring that they can actually get their supply chain in a much better shape and reduce a lot of the cost they're spending even with us to do something much better to their customers.

Blythe Brumleve: 43:53

And so it really sounds like you're it's it's shining a light on a problem that has always existed but no one really maybe thought about bringing it to your attention and now that it's brought to your attention there's a lot of maybe I would imagine a lot of money that can be saved a lot of time that can be saved when you can combine both of those

Erez Agmoni: 44:10

and a lot of good that otherwise can be thrown away or you know go to Sales that nobody can I think it

Blythe Brumleve: 44:15

was just a year ago that we had all you know Halloween merchandise that was still on ships, you know out in January.

Erez Agmoni: 44:22

Okay, maybe for next year. What do you do all these months now?

Blythe Brumleve: 44:26

They need it for Halloween. Alright, or as where can folks follow more of your work? Where can they follow Maris call this the cool stuff you guys are innovating and doing? Where can they call them where you work?

Erez Agmoni: 44:37

Hey, we have a website actually about the innovations called www Okay, forget about the W innovation which we can actually support and show what we're doing about innovation but of course, on LinkedIn and every other social media We have a lot of information out there as

Blythe Brumleve: 45:03

your social is is pretty fun to watch. So I love watching. So I will make sure that I linked to all of that in the show notes. But thank you so much.

Erez Agmoni: 45:12

Thank you very much. Thank you for having absolutely

Blythe Brumleve: 45:20

I hope you enjoy this episode of everything is logistics, a podcast for the thinkers in freight, telling the stories behind how your favorite stuff and people get from point A to B. If you liked this episode, do me a favor and sign up for our newsletter. I know what you're probably thinking, oh God, another newsletter, but it's the easiest way to stay updated when new episodes are released. Plus, we drop a lot of gems in that email to help the one person marketing team and folks like yourself who are probably wearing a lot of hats at work in order to help you navigate this digital world a little bit easier. You could find that email signup link along with our socials and past episodes. Over at everything is And until next time, I'm Blythe and go Jags

About the Author

Blythe Brumleve
Blythe Brumleve
Creative entrepreneur in freight. Founder of Digital Dispatch and host of Everything is Logistics. Co-Founder at Jax Podcasters Unite. Board member of Transportation Marketing and Sales Association. Freightwaves on-air personality. Annoying Jaguars fan. test

To read more about Blythe, check out her full bio here.