Jake Hoffman:
0:05
You mentioned container operating system. Our CRO, michael, coined the term container lifecycle management is what he calls it and so now it's kind of a he says like we invented our own new category and now it's kind of caught on and we have really doubled down on that and we think that visibility is important in getting the data around where your shipments are, but what's even more important is the execution piece beyond that right. So visibility helps you understand what's happening and execution helps you actually do something about that.
Blythe Brumleve:
0:37
Welcome into another episode of Everything is Logistics, a podcast for the thinkers in freight. We are proudly presented by SPI Logistics and I am your host, Blythe Brumleve. Today we've got a great discussion to have. It's all centered around visibility, which I think is the buzzword that you hear at every conference. But we are going to be talking about and I think you guys coined this the container operating system within global trade. We are talking to Gnosis Freight CTO, Jake Hoffman. So, Jake, I know we've been trying to make this happen for a while, so glad to finally have you.
Jake Hoffman:
1:08
Yeah, blythe, happy to be here, and everything you said is totally correct and can't wait to dive more into it.
Blythe Brumleve:
1:15
Awesome. Well, first, before we get into, like, the serious side of things, you are based in Charleston, south Carolina. I have a very guilty pleasure of watching the show Southern Charm and I have to know do you watch the show? Do you see any of these folks around town being a hot mess?
Jake Hoffman:
1:31
Yeah, so my wife Aubrey is a huge Bravo person and she watches the Real Housewives and all these, and so Southern Charm is one of the ones that I do watch, because they go to the same restaurants and the bars and all this stuff that we do, and so I mean I watch that with her. And then it's I mean Charleston's so small where if you go to King Street, like right downtown, then you go to any of those restaurants or anything it's pretty likely at some point that you run into some of the people from the show. It's pretty funny.
Blythe Brumleve:
1:59
Are they as of a mess on a regular basis, as they are on the show?
Jake Hoffman:
2:06
Maybe I don't see them being too much of a mess. I think they've matured and they have their public persona done pretty well. They're all super nice though. So I think I've met them all and they're all great to meet and super nice in person, which is very refreshing.
Blythe Brumleve:
2:19
Okay, last Southern Charm question, because I'm sure people listening are probably going to be annoyed.
Jake Hoffman:
2:28
But who's your favorite uh character on the show? Uh, I have a lot of respect for craig. I think craig is uh super nice. I've met him in person in charleston a few times. He's super nice uh and uh, you know he's. He's on a couple of the other shows with my wife watches and all those things. But he's like I said, all of them are nice but craig is the most like. Anytime I've met him in person he's friends with some of my mutual friends in Charleston and everything. He's never stuck up or arrogant or anything about ever whatsoever.
Blythe Brumleve:
2:48
That's super cool and that's cool to hear too, because he's definitely had the most you know come up story for folks who I'm not going to explain the history actually. Let's move on to the you know the topic that people probably clicked play on on episode for and I hear this phrase. I've moderated a couple panels around visibility and I hear the phrase thrown around a lot. But can you define visibility for us in the freight world?
Jake Hoffman:
3:18
Sure, yeah. So I think Gn osis as a whole, you can lump us into the category of visibility, and visibility means a whole lot of different things to a lot of different people. For us we focus on international. We focus on the international journey of a container. So from the time a container is loaded at a factory, either overseas or here if it's an export going somewhere else to the time that container is empty, returned, and so visibility can be the milestones of it gets loaded, it gets you know truck, takes it to a port or a terminal, it gets loaded on a vessel and then it's in the middle of the ocean. So the visibility would just be the hey, I want to know the milestones when they happen, and then what's my ETA for when it's going to get to its destination, and so that's, you know, visibility as a whole.
Jake Hoffman:
4:00
We drill a little bit further down into that, into you know, visibility as a whole. We drill a little bit further down into that, into you know. You mentioned container operating system. Our CRO, michael, coined the term container lifecycle management is what he calls it. And so now we've it's kind of a. He says like we invented our own new category and now it's kind of caught on and we we have really doubled down on that and we think that you know visibility is important and getting the data around, where your shipments are, but what's even more important is the execution piece beyond that right. So visibility helps you understand what's happening and execution helps you actually do something about that.
Blythe Brumleve:
4:34
That is a perfect soundbite. I'm just going to go ahead and thank the post-production process for later on, because that is going to be the intro clip that we use for this episode, because it's always bothered me or maybe not bothered me is the right phrase but curiosity, when I check in Amazon and I can see the truck that's delivering my product is six blocks away and there are four stops for me and I can see that level of visibility down to the granular level of when a package is going to be dropped off at my porch. However, that doesn't seem to really exist or maybe I'm wrong. That doesn't seem to really exist in container shipping. Is that accurate?
Jake Hoffman:
5:17
It is accurate and that's accurate to say, and the reason it doesn't is because it's so difficult to achieve that. And the reason it's so difficult is because you think, like Amazon, for the most part, um or the USPS or UPS or FedEx or someone, all those companies are so big and the parcel network of you getting a package delivered to your house is those things are so small that they can control the entire infrastructure from end to end. So, like FedEx has an actual truck that's theirs, that's coming to your house and making a delivery Right, and so if they have the plane that has the FedEx logo on the side and they have the truck, then they have all their own assets and their own infrastructure to handle all this. But when you get into international freight, you see the giant ships that are in the ocean and in the harbor. You see all the trucks that are in and out of ports and picking up containers and doing all these things.
Jake Hoffman:
6:07
The infrastructure that's required to do that is so large that there's no way for one company to do it all. So I mean freight forwarders are like the best example of someone who attempts to do this, and they do it through contracting all the different players. They contract the ocean carrier, they contract a drayage the truck that picks up a container and then they even contract warehouses and do those things, but there's still all these actual individual asset owners that all have to work together to make it come to fruition. So the only way to get that end to end visibility that you know your Amazon experience for international freight is to tap into all of those individual sources and get the data from all those different places and put it in one kind of seamless data model that you can show to the end customer.
Blythe Brumleve:
6:47
Which it sounds like, I mean in theory. It sounds like it should be just as simple as taking a little Apple AirTag or something very similar and just throwing it into a container why isn't it that easy? And then sharing that data with all parties involved.
Jake Hoffman:
7:02
Right and some people are getting better and better at it. You know that some of the ocean carriers have announced that they're going to like Hapag Lloyd announced they're equipping every single container with IOT devices. I know that CMA has some, marisk has some that they do for reefer specifically and they're planning to roll it out to all containers. But even if you get to where each container has like a GPS tag on it or something, we can kind of get there now at least when it's on the water and when it's in the terminal and things through like AIS satellite data telling you where the vessel is in the ocean. You know, you open up maps and you can see where it is on a map.
Jake Hoffman:
7:35
But even if you do all that, there's still these little operational quirks that happen where, even if you know exactly where it is, you don't know what's about to happen or what the status is of things. Perfect example is I know it's in the terminal but I don't know if it's actually available for pickup, because I don't know if it's stacked at the ground and there's three containers on top of it, or if it's at the top and I can just get a crane to pull it off and put it on top of a truck, or if maybe the container's there, but according to US Customs, my paperwork was messed up, so there's a hold and I'm not allowed to go pick it up. So there's all these other data sources that go into it. That's not just about where it is, but about all these other statuses that really matter, that help inform what you can do and then subsequently, when it's going to get to the place that it needs to go.
Blythe Brumleve:
8:16
So is this almost an issue at the port level, where they just have so many different moving parts per se, literally and figuratively? Is it because they have all of these moving pieces and all these individual players that everybody kind of acts as if they're in their own silo?
Jake Hoffman:
8:33
Yeah, that's a part of it and it's.
Jake Hoffman:
8:35
Everybody has their own part to play, and so the real ideal answer is there's some third party that is the source of truth, quote unquote that takes data from all these places and makes it because you know, the terminal themselves, where the container is going to be dropped off by a ship relies on the ocean carrier to tell them when the vessel is going to get there. But then, once it gets close, the ocean carrier, who's leasing the vessel or owns the vessel, relies on the terminal to tell them when the vessel actually docked and when the container got pulled off. And then they also rely on US Customs to tell them hey, are we allowed to give the container out? Because there's all these different people that are required to, like you know, give their different inputs at somewhere along the chain to where it all flows seamlessly. And that's why there's that weird kind of black box of what's the source of truth, because there isn't really one person that is a source of truth. There's all these different people that are interacting at different points in the journey.
Blythe Brumleve:
9:30
So how did you and I believe you're one of the co-founders is that right?
Jake Hoffman:
9:36
I think my title is not technically co-founder. I was like the first employee.
Blythe Brumleve:
9:40
That's from what I understand. I heard business started out with Post-it notes. Maybe you can explain just how did the business start out. I would imagine that you're looking at all of these different data points and it's like what the heck, how do you choose to start a business that centers around those different data points?
Jake Hoffman:
9:56
You heard the Post-it note story. That's funny. Austin, our CEO, he originally started Gnosis as consulting. We were working here in Charleston with a freight forwarder and the idea was basically to take his knowledge of supply chain and data science he studied at Auburn University, just like I did and just to take his knowledge of supply chain and data science to come in and help the freight forwarder automate processes. And it was literally the first product we built was hey, email is coming into an inbox and we're going to read the email with code and we're going to say, hey, this looks like it belongs to this account, so we're going to send it to this account manager and then they're going to take that invoice and pay it, or they're going to look at the invoice and see, or we're going to take this and send the invoice to accounting. There's all these kinds of things that we were doing, because all they were doing at the current point was they had an employee that was looking at the emails and be like, oh, this is so-and-so's responsibility and forwarding it off to them.
Jake Hoffman:
10:50
So it really started as that, and the post-it note story is the first time I came to Charleston. I was about to move to Chicago and go work in Chicago trading options. I was going to be a quant trader and Austin convinced me to come hang out with him in Charleston and I went in and he had like a fold up table, like one that you buy at Walmart, and just sticky notes all over the wall of like this is how you know customs gets clear. This is the different places that have where a container changes hands and all that kind of stuff, and it was just like trying to map out this entire global supply chain process and, for whatever reason, I was like oh, this looks awesome, I definitely want to be a part of that, and then the rest is kind of history from there.
Blythe Brumleve:
11:31
And so you guys, when was that timeline? How far along or how many years ago did all of this start?
Jake Hoffman:
11:37
Austin started the company in 2017. And I came and worked with him for an internship while I was in grad school. It was just me and him at the time, in 2018.
Blythe Brumleve:
11:48
And so how did it, how did how's the company evolved since then? Because obviously we've had, you know, a lot of things happen since 2017, you know, just a few Black Swan events, no big deal. How did the company evolve through all of those different, you know, I guess, Black Swan data points as well?
Jake Hoffman:
12:05
It was a. It's a lot. I try to try to explain to some people. It's like a lot of cases of imposter syndrome over and over and like imposter syndrome, like assuming that someone out there knows better than you like, if this, if this could be done, somebody would have done it. So it was a lot of oh well, we just want to build software that helps this one niche, because someone definitely has good data of container tracking data out there that we can just buy or source and do it, and so it was like we solved this problem. We all right, the customer's asking us for more. We try to find somebody that does it. If there's not somebody in the market that does it, right, okay, well, we can try to do it ourselves and a whole lot of iterations of doing that over and over, even to the just tracking data itself.
Jake Hoffman:
12:50
We had tried to source tracking data like the actual ocean carrier, milestones of like when it gets loaded on a vessel, and those things from the ocean carriers through EDI messages, and then that wasn't good enough. So we went to a couple of different data providers in the space and tried those people out, and then it was always like if the data is not good. Our software doesn't work because our software was so dependent on. We need to know exactly when a container discharges and is available for a truck to pick it up, or what the ETAs are going to be to a really granular level, to where I think this was like early 2020.
Jake Hoffman:
13:16
I told Austin hey, I think we need to do this ourselves. I think it's a it's important enough to the software that we have. Have that we have our own container tracking data and we're in control of it. So we did it, iterated on it a whole bunch. We get feedback still to this day, every single day, about hey, we really think one of our customers, hey, I know that you guys are doing this and this, but it'd be really cool if you could add this data point because it's useful for this thing. And so our container data model is always changing and if we are relying on other people for that, we wouldn't be able to make those changes and continuously improve.
Blythe Brumleve:
13:47
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Jake Hoffman:
14:47
It's, I think, the most difficult part for any of the sources.
Jake Hoffman:
14:50
So we'll say, like ocean carriers, terminals, the class one rail carriers themselves, so like the BNSF, norfolk, southern, csx, the people and I'm just talking about North America for rail, of course, but the satellite data, the most difficult piece is understanding that each of them all has their own data model, their own what they call milestones. So, like what you know, the rail carrier calls a loaded on rail date or a discharge or whatever may not be what the ocean carrier is calling, because maybe the rail carrier is discharging it here and then putting it back on the rail and going to a different spot. And so the hardest thing is to between the getting the data from all the different places, putting it into one giant data model that makes sense for what our customers care about. And that's where we have really put a whole lot of effort into, because that's what our customers pay us for. That's what they want is for to get really, really good data, but also to get it in a way that they can use it.
Blythe Brumleve:
15:44
And so, when you're collecting this data, I'm curious how do you know if it's good data or you know just the data that sucks?
Jake Hoffman:
15:53
I mean, there's a whole lot of validation that goes into it, there's a whole lot of redundancy, and so people ask us about that and you know, one of the things that we do is you can get some redundancy from some of those sources. And the example I just gave on a rail carrier giving a milestone or when a container is getting unloaded from a vessel at a terminal you can get that data point from the terminal or you can get it from the ocean carrier, and most of the time what's happening behind the scenes is the terminal is sending that data point to the ocean carrier and then the ocean carrier is sending it to us, for example, right, and so if we get it directly from the terminal, then that kind of eliminates the middleman, eliminates the three or four hours of latency, whatever you want to call it that looks for the things that could be wrong, looks for the anomalies and flags it and tells us that there's something wrong there and then fixes it, hopefully on its own.
Blythe Brumleve:
16:52
And so how do you with, say, a typical customer? What does the onboarding experience look like for them? You know what are they looking at within the Gnosis platform that makes them be able to take action.
Jake Hoffman:
17:09
So we this is something we really pride ourselves on, and you know, you hear this. There's all these memes about oh, I have a database management system or I manage my supply chain, and then it's really just Excel, Like it's like people are just using Excel and emailing.
Blythe Brumleve:
17:21
Looking at you, f1.
Jake Hoffman:
17:23
People are just using Excel sheets and emailing them back and forth, right. And so we, you know, instead of being like, oh Excel is dead, like that's dumb for people to do that, excel is dead, like that's dumb for people to do that, we kind of tried to make our platform look like Excel and every single demo that that Michael does. Our our CRO, michael, rents every single demo he does. He says if you know how to use Excel, you know how to use Gnosis. And it's because we made the tables look like Excel. They're literally conditioned, formatted of it's red If your container's in danger of getting demurred, it's yellow if it's going to be a couple of days away. So you got to kind of watch it.
Jake Hoffman:
17:57
And so there's all these things that we've done to kind of mirror how we were talking to people that were running their supply chains so that there wouldn't be this huge change management.
Jake Hoffman:
18:05
Right, it's like, oh, I was doing this stuff in Excel and I had this cool pivot table that I use every day, and now I got to go into this weird system and click a bunch of different buttons and do it.
Jake Hoffman:
18:14
So that's the one piece of it is to kind of mirror what they're already doing.
Jake Hoffman:
18:22
And the second is to take the data from where they're at.
Jake Hoffman:
18:23
And then we have engineers every single person that's a customer of our, every single account that is a customer of ours has an engineer and Gnosis that is their account manager that writes code that takes like hey, they're like hey, we get this report every day from the ocean carrier that tells us what shipments have been booked, and so we write the code to take that report and turn it into Gnosis, like we write code that takes the container number and the bill of lading number or whatever it is, and puts it in their platform for them. Instead of going through the six weeks of an EDI implementation or figuring out whenever their IT resources are going to be ready six months from now, to do a full-on API integration with SAP or whatever it's going to be, we want to do it as easily and quickly as possible and make it look like what they're doing to foster that adoption, so that they don't have to wait for all these things to happen, so that they can get the value out of what we're doing.
Blythe Brumleve:
19:13
And so, as you, maybe the beforehand before someone becomes a customer, if they're used to sort of you know if it's not, you know if it ain't broke, don't fix it, type mindset, how do you as a shipper, as a customer, know that you're working inefficiently, that your data is probably inaccurate or it has some latency issues? How do you know, and what are maybe you kind of struggling with, before you reach out to say you know, sort of become a customer of Gnosis?
Jake Hoffman:
19:44
I think a common theme that we see is if people are spending all their time looking for the problems instead of solving them. That's the first red flag. We have so many of our customers that their job before Gnosis was hey, I got to figure out what might be costing us money. Like you know, there's. Oh, we had demurrage or per diem detention, whatever you want to call it, last year because containers got stuck at the port and they have these Excel spreadsheets where they're sorting by the last free day and understanding and doing all these things. If people are spending their time doing that instead of acting on it, like sending a trucker to go pick it up, or understand, telling the warehouse hey, this last free day is tomorrow, we need to get this unloaded and sent back ASAP. If that's what they're spending time on is understanding where that is. That's the red flag.
Jake Hoffman:
20:31
That's where we come in is instead, because we we think there's things that computers are good at solving and things that humans are good at doing. We're not trying to replace employees. Our, our marketing pitch is never hey, uh, you can. You know you had 10 people doing this, now you have five. You save money. It's take the people that were previously looking for all these things. Let Gnosis find it and then let them act on it. Let them be the hey, according to Gnosis, we got to do this and this call somebody send an email, do whatever it is, to act on it and then make their supply chain run better.
Blythe Brumleve:
21:02
So how, I guess you know from a, from Gnosis's perspective how are you creating that single source of truth with all of these different moving parts within the silos of the supply chain, but then also all of these different tech stacks, that, all of these different moving parts within the silos of the supply chain, but then also all of these different tech stacks that all of these companies are using is? How does that work? How does that function?
Jake Hoffman:
21:23
We've done a I, I, our engineers are super smart, like I'll. I'll like say like we, but really like I'm the dumbest engineer. I just, I just know how to like talk to the guys and they're they're super smart and they tell me how to do things Right. I'm like, hey, I think we should do this, is this possible? But we've done a really good job, I think, of meeting everybody where they're at. You know I'm talking to you about we meet the customer where they're at, which is working in an Excel spreadsheet, and we try to mimic that.
Jake Hoffman:
21:49
But if a terminal and terminal examples off the top of my head if they have an API Awesome examples off the top of my head If they have an API awesome, it's like, hey, we know how to work with an API, we can make that work. If they can send us an Excel file once every couple hours with a CSV that comes through a FTP transfer or something, no problem, right? We've seen everything from sending us an email report every hour, sftp, edi, api, even to at the far end of the spectrum is like there's someone that is typing a message and it's text. We're like, okay, just send that to us and then we use AI to parse it and get the data out of it and then put it in the database, so like if someone sends an email and says hey, the last free day is tomorrow, you know April 18th or April 19th, I guess. Then we will take that out and put the last three days April 19th in the platform so that somebody can see that that's what's happening.
Blythe Brumleve:
22:40
Now, I've heard you mention, you know, demurrage and detention a few times. Maybe for folks who aren't completely familiar with those phrases, what are they? Why are they a problem, and do you think that they'll ever be fully eradicated from, I guess, a visibility standpoint?
Jake Hoffman:
22:58
So, demurrage being the time that a container is available for pickup, has been unloaded from a.
Jake Hoffman:
23:05
So if there's, maybe there's a part where it gets on a train and there's a rail lag at the end and that in that case demurrage will start when it's at the rail yard, after it gets off the train and it's ready to be picked up, if they at a rail yard sometimes they have 24 hours, 48 hours it's a shorter time slot where, if they don't send a truck to go pick up that container, they're going to start getting charged, basically for storage, you know, for the real estate, right, and so in that case, if they don't go pick it up at a certain time, then they start getting charged.
Jake Hoffman:
23:35
Sometimes it's $300 a day, sometimes it's 50 bucks a day, whatever it is, and if they don't go pick that container up, they're getting charged for leaving their container there. On the opposite end you know I said detention, some people call it per diem that's when you take the container away, so a truck picks it up and brings it out and then you keep it out for too long and that's the ocean carrier in that instance charging you for keeping their equipment out, because if you keep it out for 30 days. That's 30 days that they could have been using it to ship something from. You know they fill it full of something else and somebody else paying money to ship that container somewhere else in the world.
Blythe Brumleve:
24:07
So it's almost like container leasing. Yeah, that sounds like a whole, like separate business or probably a revenue line item, which is probably different incentives for maybe some of these companies.
Jake Hoffman:
24:17
Exactly and you asked the question about you know, will it ever be eradicated?
Jake Hoffman:
24:21
And there's times when it's worse than there's times when it's better.
Jake Hoffman:
24:24
I think right now, where we've seen across our book of business and talking to people and everything's, the problem still exists, but it's not near the levels of money and time and things that it was in the middle of the pandemic.
Jake Hoffman:
24:36
So whenever it was really hard to get trucks to go pick things up and you had no room in the warehouses because you're just picking containers up, unloading them and trying to ship out goods, all the time, the ports were used as storage, almost strategically to a certain point. So instead of going to pick up a container and bring it to your warehouse, you didn't have anywhere to put it. So you would leave it and be like what, $300 a day? That's fine, because we can afford that for now, because we're selling everything in our warehouse and we're going to wait until we have room to put it somewhere and then. So that's you know, I don't think it'll ever be fully eradicated. The penalties while sometimes they seem crazy, I think they're there for a reason to kind of keep things going and incentivize the movements of things in the supply chain.
Blythe Brumleve:
25:17
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Jake Hoffman:
26:28
That's right. And sometimes it's not avoiding them, sometimes it's optimizing them. And I'll use the same example of like, where you know we have, say, we have five containers at the port and I only have room to pick up three, and maybe it's like I know the way that my supply chain works, I'm going to use the time at the port of storage. This is a hopefully this is nobody's supply chain strategy is to incur demurrage all the time, but in cases where it happens, maybe we tell them hey, if you pick up these three, then the other two are going to cost you $50 a day, but if you would have picked up the wrong ones, they cost you $400 a day.
Jake Hoffman:
26:58
And so there is a little bit of optimization and method to the madness for not just like oh, we want to avoid it at all times, which is the ideal goal, right, but sometimes it's smarter to incur $50 here and there than it is to oh, I need to bobtail a container, so bobtails. I need to bobtail a container, so bobtails. I need to send a trucker with nothing one way to pick up a container and deliver it, because that's a bunch of empty miles. So maybe there's a better way to maybe pay 50 bucks to leave it at the port one day in order to ensure there's no empty miles.
Blythe Brumleve:
27:28
Is there any part of the shipment process? Because it feels like over the last handful of years that we have found a way to make data points of every part of the logistics process. But I'm curious if the, if there's any aspect of the shipment journey from source to porch, that is, will never have full visibility, or would be really challenging to get that full visibility or would be really challenging to get that full visibility.
Jake Hoffman:
27:58
The hardest part, and the thing that we do our best to solve, is connecting the dots between what is inside the container and what the container is itself. And so you're bringing up the example of like getting it all the way to like the customer's door, like if I order a t-shirt right, or I order master's tickets or whatever we talked about the master's earlier. If I order something to my door a t-shirt right, or I order master's tickets or whatever we talked about the master's earlier, if I order something to my door, a t-shirt example works better for this one. If it came in a container from Asia to the US, I can track everything by that container. I know what container it's in and so therefore, I try the container.
Jake Hoffman:
28:29
But then when it gets to a distribution center and it gets unloaded, there's a separate database and a separate tracking identifier and all these things. That is important to track it from the time it's at that distribution center, maybe to a store or maybe to another distribution center, and then it gets picked up by United States Postal Service or FedEx or whatever it is to be delivered to my house. And so the hardest part of putting all of these things together is knowing how to organize this database with this one, with this one, in order to connect them all and give you that full, like it was at the factory, and then it went here, and then it went here, and then it went to this, just all the way to the end. We're getting there. We do that for a lot of our customers, but it is difficult to understand and index and do all the different database VLOOKUPs right? I mean, think of Excel. It's a bunch of VLOOKUPs from this one to this one to this one to get that full end-to-end picture.
Blythe Brumleve:
29:22
Is there any kind of effort within the industry just as a whole Maybe you guys are trying to do this, but any kind of like data standardization, you know, across the globe or across maybe just the United States, like starting very small, maybe moving outwards? Is there any kind of issues or not issues, but efforts being made in that regard?
Jake Hoffman:
29:37
There are, and I think you know I mentioned how everybody has their own systems earlier. Everybody has their own data model, their own way of doing things. So if there was standardization in the industry that everybody adhered to, that would be easier, and I think there are efforts being made. The DCSA, the Digital Container Shipping Association, has done a good job of working with the ocean carriers themselves of hey, you know, if we get all the ocean carriers to follow this data model and their APIs and their data exchange that they're participating in, that it makes it easier for both individual shippers, software companies like us freight forwarders and so on to digest that data and do things with it. Even and they're doing great work and I'm excited. I know the guys there and I've talked with them a bunch and hope to continue to give feedback and help them.
Jake Hoffman:
30:27
But for us, you know, we kind of take that data model and take what we get from all these places and mold it to what we think our customer cares about.
Jake Hoffman:
30:35
So I mentioned, we show our customers the things that are important.
Jake Hoffman:
30:40
So maybe the example that we always talk about is if a container is going to California and then it's getting on a rail and going to Chicago. We're not going to give you the last free day and all this stuff in California, because that doesn't matter to our customer. What they care about is when is it going to get to Chicago? And whenever it's in Chicago, when can I pick it up? When's the last like? How am I going to get charged for things? And so there's all this business logic that we put around the data points that we get from all these people to show our customers what they really care about, and so it's. You know, I mentioned how we were pretty naive and then we've gained more and more experience and iterated over time to where we add new data points and subtract and change the data model over time, because we're getting that continuous feedback from our customers on what they really care about and how they're going to use it that you're collecting a lot of their data as well.
Blythe Brumleve:
31:33
Is there any kind of sort of a a global spreadsheet that you're looking at with everybody's data that you can kind of notice trends that are happening, maybe before your, your customers do?
Jake Hoffman:
31:47
Definitely. And the the cool thing that that our engineers again not me, I'm the, I'm the dumb guy over there, but the engineers that have figured this out. It's super smart for taking you know there there's everybody's supply chain is different, right? So if you just throw every single container in a giant spreadsheet and be like I want to make predictions, it works, but there's a part of it that's unique to every person. So, trying to put an example, always use this.
Jake Hoffman:
32:11
Trying to predict someone who moves five containers a year because they ship them to directly to their store it's like a small furniture company and they do something like that.
Jake Hoffman:
32:21
Trying to use their data to predict how Amazon's containers are going to flow doesn't exactly match, because Amazon that does all these containers might have a totally different priority where they may leave. They have better contracts, they leave containers at the port for longer, they keep them away from the port for longer, and so their supply chain works differently. So what our engineers have done is kind of we have like a ubiquitous data model for everything. It's like every container that flows from Shanghai to Los Angeles is on these big vessels and we know the route that it's taking and the stops that the vessels making along the way. So we can make predictions. For you know, say 80% of it and then the last 20% is at the customer level. So that person that moves five containers as soon as we get some of their containers in our system and we understand how long they usually leave at the port and how long they're keeping it away and how their supply chain works, you can kind of take both models and add them together to get something that makes sense for them.
Blythe Brumleve:
33:16
That almost sounds very similar to you know what's going on with, like the large language models where they're probably going to reach a certain level of parity soon, and they have. You know, they're all pulling in their certain amount of data, but then what's really going to push it over the edge for the end user is using your own data in addition to that level of parity. I doubt we've reached a level of parity when it comes to logistics data, but that's what it kind of sounds like.
Jake Hoffman:
33:44
Right. Yeah, I mean giving it context right is like you can. The large language models that we're all used to was trained on so much, you know, YouTube data and publicly available information on the internet and so much text and languages, publicly available information on the internet and so much text and languages and all those kinds of things, right. And so, in order to make it super intelligent about, say, Gnosis for Eight, we give it hey, read our website or look at our API documentation and do those things. And then the second you give it more of that context, it gets better. It's the same idea for what we do with our customers, where, if we tell it the large language, for what we do with our customers, where, if we, you know, tell it the large language model that we have in Gnosis is equivalent to like tracking every container from port to port or port to rail or whatever it is right. And then the stuff that happens where it's delivering to a distribution and something is the context that it needs to make those predictions outside of the normal model.
Jake Hoffman:
34:31
How, speaking from like a, you know, a global scale, how, speaking from like a global scale, with all the data that you guys have access to, how does the US compare from port efficiency versus the rest of the world? And people ask me, like, what's my favorite port? And all those kind of things. I think there's some big strides being made at some places in the US. I think the Port of Virginia is a great example. They do a great job embracing some new technology and talking with technology companies and doing things and their efficiency and all these kind of things. And talking with technology companies and doing things and their efficiency and all these kind of things it shows.
Jake Hoffman:
35:17
You know, there's these the global, like port efficiency rankings and things. You know there's like 353 ports in the world or something like that, and some of our larger ports in the US are at the very bottom. And then you look at Port of Virginia and they're, like you know, not at the top 10 or top 20, but pretty far up there and they're continuing to gain strides in that because they're embracing technology and doing some cool things. Um, you know, I don't. I don't want to speak to any of the negatives. There's a lot of the regulatory stuff and all that that comes with with why maybe we're not at some certain places in the U S, but uh, overall there's there's some people that are doing some great things and I hope it continues.
Blythe Brumleve:
35:54
Yeah, I think I was listening to your interview with Mike Lombard with his show? Yes, it was a great interview with him and you were telling a story about how you went to Spain and you hiked up to the top of this mountain and then you looked over at the port and it was almost a little eerie because there was nobody working and it was all automated.
Jake Hoffman:
36:15
That was. My wife loved that. We were in Spain and I found a way to incorporate containers and I was like, oh my God, that's APM Barcelona.
Blythe Brumleve:
36:23
There's blah, blah, blah.
Jake Hoffman:
36:24
She's like great we had done this cute hike and I topped it off. I'm like, oh, look at that terminal. So yeah, but it is. I think there's a lot of opportunity for improving that and I you know the whole idea that people talk about around ai and automation and things. It's like I said about gnosis the goal is not to replace people's jobs. Right is, and I know that that's the fear and a lot of these things. That's never the goal. The goal is to replace the stuff that people don't really want to do, right? It? It's the monotonous, like moving a container from you know spot A to spot D or doing things like that. That's where I feel like we can take advantage of AI and automation and those kinds of things so that they can do more creative work and do cooler things and make decisions and do that. That's, I feel, like the goal, and I think that, for all the things that the US is good at, I think that's one that we're a little bit behind.
Blythe Brumleve:
37:19
Yeah, I would agree Because I, you know, I've had conversations with people who work at ports, you know, all across the globe, and it's one of those things where it's you have to balance the technology with the human element and even though it's really cool to see like a fully automated port, you know that's. You know there's a lot of job loss there too, and you know how do you balance what that looks like and I definitely see the efficiency gains, but I do wonder how we can still keep the human involved at that high level, like you were talking about. And so I think there's definitely a balance to strike. I think there's definitely a balance to strike and I don't know that the US has sort of reached that balance. But I would probably counter that own point with each port kind of has their own decision to make in that regard. So I think that that's a little bit cooler of a feature for US based ports is that they can choose their destiny. They can choose to embrace jobs or technology, and maybe a little bit of both.
Jake Hoffman:
38:14
That's right, and I'll make the parallel of whenever the notice examples we come in. Our goal is to help people not have to go check 100 different websites to understand what's going on with their containers. The idea is then not to fire that person, but it's to let them think about what's next, maybe the fact that they didn't have to spend four hours figuring out where all their stuff was. That means they can call their customer and ask how they could do more. You know it's like hey, like all your stuff's ready. But you know, I saw that you're struggling in Vietnam and we have the supplier. We know that there's all kinds of different things that could just be. It's better suited for their time. They could bring more value to the business than them just doing them a non-diswork of day to day when is this? And putting it into their system.
Blythe Brumleve:
38:59
Now we talked a little bit about the the Spain story. Do you have any other stories that you've kind of learned from being involved in the data so heavily for you know a handful of years now? You mentioned Vietnam just now. Is there anything kind of surprising that stands out to you data-wise from just global trade in general?
Jake Hoffman:
39:17
I mean just at a holistic level. It continues to surprise me every day that, like the imposter syndrome I talked about is like there really isn't like some behind the scenes, like all seeing data source that we just don't have access to and they're not telling us about. And I'll say that from the perspective of of you know, it's not like the big bad ocean carrier has a bunch of data that we don't and therefore they're charging us money and that's that like they're just taking advantage of people. It's really that the data just doesn't exist. There's not like a some place that's figured it all out and then they're just hiding it from everybody because they want to make money off of it. It's just that everybody's kind of in this together and Talking to all different parties, and you know we work at Gnosis.
Jake Hoffman:
40:02
We work with the ocean carriers, we work with the terminals and ports themselves, we talk to the rail carriers, we talk to the shippers, the drayage carriers, the freight forwarders. We've talked to every single person that's somewhere along the way and they all kind of have similar questions and it's all asking about where does this data point come from, how can we do this better? Come from, how can we do this better. It's different data points because you know everybody relies on somebody else to get certain ones, but no one has a perfect answer. There's not like some place that has it behind the scenes that we wish we could all grab it. They're all trying to coordinate together and figure it out, which has been super cool for us to start to gain a little confidence. When we're talking to the ocean carriers or talking to the ports, or talking to shippers and people, it's like we've talked to everybody. We feel like and we keep improving our data model based on all the different people that are telling us about it.
Blythe Brumleve:
40:50
Within the models, does it exist to sort of omit some of these black swan events? Is that maybe a thing I would imagine? Removing Amazon from your data set? Obviously, you're going to see some different fluctuations in that regard. You're going to remove a lot, of, a lot of shipments from that regard, but I'm almost curious if, like if it's more valuable to remove some of the bigger players or the bigger black swan events in order to make that data a little bit more actionable for customers, or do they find it's better to look at it for more of a holistic view?
Jake Hoffman:
41:25
I think you know we're in order to make predictions and do things. We're eliminating the outliers all the time.
Jake Hoffman:
41:31
You know, in order to get to that like best estimation, we're taking stuff out and making predictions based on whatever we have best available. I was talking to somebody yesterday and we were talking about hey, this ETA was pushed back by 40 days. You know why was Gnosis wrong? And I have this conversation and I'm sitting there and we're looking at it and it's like man, we made this ETA prediction because we thought it was going to follow this path. And then we go dig into the data and the container had gotten unloaded in Panama at a terminal and it was supposed to get on another ship like three days later, but it didn't and it just sat in Panama for 40 days or whatever it was.
Jake Hoffman:
42:14
And so there's these things that happen where it's just operational, I don't know, and there's maybe a way we could have predicted that it would have been delayed a little bit, but there's no way for us to. There's all these outlier things that happen. There's no way to really predict that it would have just sat there for 40 days. It's just like an operational thing. Maybe they just forgot about it, right? It's like there's stuff that happens that if you try to predict everything, then you'll predict nothing, right? And so, trying to get the good data model that I can talk to our customers and say, hey, we can tell you with 90, 95% certainty that it's going to get there by this date. That's hopefully good enough. And then we continue to try to get that better and better all the time. But then, in the situation that happens, all we did is we made it red at the top. We're like, hey, something's happening here, and that's where they started to drill into it. And they go to their provider and say what's happening?
Blythe Brumleve:
43:07
Why, why did you leave my container at a trans shipment terminal for 40 days? Yeah, I imagine it probably falls into some of those examples, like you were talking about earlier, where you want to manage the exceptions instead of the rule of the. You know I would imagine that most shipments are error-free or hassle-free. Is that a safe assumption? Is the majority of our shipments?
Jake Hoffman:
43:25
hassle-free. Yeah, and especially now. You know that like there's the craziness that happened with the Suez Canal, the stuff that happened in the Panama Canal with droughts, but it, and then you know, go back to COVID whenever ships were hanging outside LA for a month or longer. You know that stuff kind of has subsided a little bit. I know that the Suez Canal still is an issue, but the ships that are going around the Cape and they have their normal transit times and stuff. There's not a whole lot of craziness happening, right, and so in that case you know you can get to. We have this ETA prediction and maybe there's a day that slips here or there, based on how long it stays at any individual terminal or stop along the way, but for the most part things are working pretty well at any individual terminal or stop along the way, but for the most part, things are working pretty well.
Blythe Brumleve:
44:04
What about? This is going to be a completely random comment. What about like piracy? Is that still? You know? Obviously you know there's things going on there. There's issues going on within the Suez Canal, you know, as Somali pirates were one of those things that you heard about for a long time. You don't really hear a lot about them anymore. But what about finding those kinds of outliers? I was watching a YouTube video last night and it made me think of this. But all the pirates of the 1700s 1800s that were in the Caribbean? Does piracy still exist in modern ocean shipping?
Jake Hoffman:
44:39
I'm sure it does. I'm sure that there are instances of piracy. I think going around the Cape of Good Hope that was one of the concerns is that there would be more of the piracy and things that happened down there. I'll say the thing that we've seen more is theft on the domestic level, so containers in rail yards either in LA, long Beach or somewhere between LA and Memphis or Chicago getting broken into. That we've had a lot more questions about than the piracy on the ocean side which is yeah so, and people ask us about that.
Jake Hoffman:
45:13
You know how can you help us prevent it? And or do you know how can you help us know when this happens? And it's? It's a super interesting conversation to have to understand and people are telling us yeah, it's, you know, x percent of their shipments get broken into when it's sitting in a rail yard. It's crazy, yeah.
Blythe Brumleve:
45:29
So how are you advising them to sort of get around that? Just, you know, move their shipments from, you know these, I guess, high crime areas?
Jake Hoffman:
45:35
We collect all the data of when it happens and we give them the insight to hey, well, whenever you move it on X route between these two places with this carrier, whatever it is, it seems like it's more likely to be broken into. And then you know, there's I don't know, short of us putting a security guard out there. I don't know what else we could do Right. So we're continuously evaluating that. That's always a super interesting conversation to have.
Blythe Brumleve:
46:01
Yeah, I've had conversations with the insurance folks who provide insurance to the industry and they have software that just tracks those high crime areas, tries to help them avoid it, and geofencing, and there's all kinds of technology that's come into logistics. That is really fascinating with some of these problems that they're trying to solve. And I guess, in that similar vein, where do you see this tech adoption going? It feels like all companies now know the importance of technology adopting, evolving, using AI, machine learning, however you want to phrase it. Where do you see things evolving in? I don't want to say five years, because I feel like that's impossible to determine, but maybe the next couple of years.
Jake Hoffman:
46:47
Sure, and I'll double down on what I was kind of saying at the beginning, and I know we've talked a ton about data and ETAs and predictions and those kinds of things and Gnosis does that. I feel like we feel like we're the best at it. We do it a whole lot, but the stuff that gets us super excited, the stuff that our customers get really excited about, is all the execution stuff that's in parallel to that. So if you get the data right, then you can start to do the cool things. And, like a couple of examples, is like the financial piece. So auditing invoices, making sure that you're getting charged the ocean freight rate that you should, the drayage rate that you should, the contracts that you've agreed on that if we have all the data, then what are the things that you can do with that data? You can make sure that everything else matches right.
Jake Hoffman:
47:32
So the auditing piece, the actual execution of you know, I mentioned like if you figure out something is in danger to send an email to somebody, well, that's something we can automate, right. It's like to make sure that every container that is coming in has somebody that's responsible for it, to send a delivery order right To a drayage carrier or so on. We've built and we continue to build the tools to allow people to do their job in Gnosis, instead of just using it as, like a business intelligence tool like where's my stuff? But actually, okay, I know where all my stuff is and I know I have to do these things, but I can get Gnosis to help me do those things.
Blythe Brumleve:
48:10
Yeah, that's such a that's another soundbite that we'll probably use in a future clip, you know to to promote this episode. Last couple questions here, and you know this is just a curiosity one because I, you know, I live in Jacksonville, very close range to Savannah's port. You know we have Jack's port here. Of course there's a little rivalry between Jack's port and Savannah and I was curious, you know, is that a similar feeling on the Charleston side of things, that there's a little rivalry with Savannah?
Jake Hoffman:
48:38
Yeah, yeah, of course I think. So you know, savannah has been crushing it the past couple of years. They're a lot bigger than Charleston and Jacksonville and they've been doing a great job. We have relationships in both places and kind of you know they're there.
Jake Hoffman:
48:54
So I'll speak to the port piece. There's definitely the city robbery. You know, we think Charleston's way better than Savannah and we'll we'll argue that they are a little brother, a little sister or whatever all the time. But anyway, on the port side, I think that the port leadership works super well together and although they have like slightly different philosophies and there is a little bit of that rivalry, they do a great job of coordinating and talking with each other and sharing strategy and those kinds of things. Good example is that was funny whenever all the congestion hit and COVID and Savannah got super backed up, a lot of people diverted and went to Charleston. Well, the problem was everybody decided to divert and go to Charleston. So there was like a like we have a chart that was, like you know, delays in Savannah, delays in Charleston, and it like crossed and it was like delays in Charleston went up and delays in Savannah went down, because they did such a good job of coordinating that. Everybody switched and then it just happened here.
Blythe Brumleve:
49:44
Well, I such a good job of coordinating that everybody switched and then it just happened here. Well, I think that's. Uh, we're gonna bring this episode full circle, because we started off by talking about southern charm. The charleston series lasted, is still going on. The savannah one, however, it only lasted a couple of seasons, maybe even one season. So I I think we have we have another comparison there too the city, the port and, uh, editions of Charm. So, jake, this is a really fun conversation. Anything that you feel is important to mention that we haven't already talked about?
Jake Hoffman:
50:11
I think whenever I talk on a podcast or anything, I'm always super self-conscious that I give credit to the employees at Gnosis. I think that you know I mentioned a couple of times on this podcast like hey, I'm the dumb guy, but I really mean it that we are super unique in a software company where everybody that works in Gnosis is in this building and so, like I'm in my office right now and everybody that works here is right outside. So they're in their offices and they all you know cubicles and all those kind of things. The people that work here come to the office every day. They open their laptop and they're solving engineering problems for our customers and they're doing that on a global scale, you know, from 8 am to 6 pm Eastern time, but then also answering emails at 11 pm and 3 am for all of our customers that are all over the world. So I'd be remiss if I didn't take a chance to thank them and just like give a shout out to the guys that work here that they're all doing a really incredible job.
Blythe Brumleve:
51:08
That's super interesting to hear because a lot of folks are like oh, we want hybrid, we want work from home. But I mean, obviously you guys are doing some great things with an employee base that's all in-house.
Jake Hoffman:
51:20
Yeah, I say we, austin and myself, really have doubled down on that since the beginning. It definitely hurts us sometimes where we can't hire some of the talent we want that maybe lives in San Francisco or New York or wherever it is, but we there's a siren going by. I'm sorry.
Jake Hoffman:
51:40
You're dropping me facts, but we think that it hurts sometimes in the short term, but in the long term we feel very strongly in the culture and everybody being here and being able to collaborate and those things has given us a huge advantage when we've been building products and making changes and doing things.
Blythe Brumleve:
51:58
That's awesome to hear. You don't hear that perspective often now, but I think you know a little bit of the tide is turning for a lot of these companies that are requiring folks to come back into the office that there is some synergy, there is some you know, brainstorming that you can take advantage of if you're working together as a unit, versus kind of feeling like you're working in your own individual silo, which is, you know, has its own challenges.
Jake Hoffman:
52:21
And I think it kind of happened where, like COVID, like going remote and doing those things we were. We went, you know, remote whenever everything first happened and at that time it was probably seven of us that were working at Gnosis at the time like 2020, when it was really, really bad. And then we looked up one day and we had all like been in the same pod and we were like eating lunch at someone's house and Austin called me. He was like are you kidding me? You guys are all together. And we were like went remote so that nobody would be together and like cause like spread anything. So we were like, oh well, we were all like together all the time. Anyway, we might as well just keep working together. So it was a weird like realization that we were small enough at the time and we were all hanging out anyway. That man, we could have just been doing this the whole time.
Blythe Brumleve:
53:08
Right, exactly, and I think that's the mindset that a lot of companies took is they would rather be with their people and be within the group that they're always around anyway. So why not get some work done and make some money at the same time? Exactly, all right, cool. Well, jake, this was an awesome conversation. Where can I send folks who want to learn more, who want to upgrade their visibility options? Connect with you on LinkedIn.
Jake Hoffman:
53:35
Where can I?
Blythe Brumleve:
53:36
send them.
Jake Hoffman:
53:37
Yeah, linkedin. Of course I'm always on LinkedIn and posting dumb things on there all the time, following Reid Lucilleau's example to try to post stuff on there all the time. Yeah, linkedin. Gnosisfreightcom, our website. I think we have a form that you can go and fill out there and somebody will be in touch with you, but anybody can reach out to me directly. You know my title is CTO and that's like a technical title, but I do a whole lot of sales and talking to customers and I just love nerding out on all this stuff, so I'm happy to talk to anybody.
Blythe Brumleve:
54:07
Awesome. Well, we will make sure to put all of that in the show notes to make it easy for folks. But again, thank you for the conversation and the insight that this was a fun one.
Jake Hoffman:
54:15
Thanks, Blythe.
Blythe Brumleve:
54:20
I hope you enjoyed 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. Subscribe to the show, sign up for our newsletter and follow our socials over at everythingislogisticscom. And in addition to the podcast, I also wanted to let y'all know about another company I operate, and that's Digital Dispatch, where we help you build a better website. Now, a lot of the times, we hand this task of building a new website or refreshing a current one off to a coworker's child, a neighbor down the street or a stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website. Well, that doesn't happen at Digital Dispatch.
Blythe Brumleve:
55:03
We've been building online since 2009, but we're also early adopters of AI, automation and other website tactics that help your company to be a central place to pull in all of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as $1,500, along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus, freight marketing and sales content similar to what you hear on the podcast. You can watch a quick explainer video over on digitaldispatchio. Just check out the pricing page once you arrive and you can see how we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go Jags Bye.
