Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
Happy Hump Day. In today's feature, we cover the rise and fall of Slync, charting its bankruptcy filing. Also on the radar: Freight tech's tumbling funding, a spicy $10.7 M drug bust, and West Coast ports making a comeback. On top of that, we have updates about plummeting Midwest fuel prices and the Chinese investments pouring into Mexico.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
💵 Freight Tech's Funding Flops. Between 2019 and 2023, FreightTech's startup funding saw dramatic highs and lows. Funding nearly doubled in 2021, propelled by a pandemic-driven 25% rise in e-commerce. However, by 2023, funding shrank significantly, down almost 70%. With geopolitical challenges impacting investments and the sustained rise of e-commerce, the future remains uncertain. Still, 77% of supply chain leaders emphasize investment in visibility tools to navigate disruption.
🌶️ Spicy Haul: Meth in Peppers. U.S. Customs and Border Protection officers at the Pharr International Bridge in Texas intercepted $10.7 million worth of methamphetamine hidden in a shipment of fresh jalapeño peppers. On October 14, a tractor-trailer from Mexico was flagged for inspection, revealing 9,426 packages of the drug, weighing in at 1,205 pounds. The narcotics and vehicle were seized, and a criminal investigation by Homeland Security Investigations has been launched.
⚓ West Coast Retakes Its Share. US imports from Asia are tilting back to the West Coast. Following a dip, the West Coast ports are nearing their 2019 stats with a recent 9% yearly boost. The resurgence is possibly driven by the ratification of the International Longshore and Warehouse Union contract, lifting retailer trust. While they're just 1% shy of 2019 figures, the East Coast still shines with an 18% ascent since 2019, despite a recent dip. It will be interesting to monitor the trends as we approach the September 2024 labor contract expiration for East and Gulf Coast ports.
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As the freight tech world grapples with Convoy's recent headlines, another name joins the fray. Slync.io, once a promising company in the logistics visibility platform arena, co-founded in 2017 by Chris Kirchner, battled financial and legal woes and has now filed for bankruptcy.
The company emerged in 2017 with a grand vision: revolutionizing the logistics visibility platform landscape. The startup aimed to streamline and innovate global supply chain processes using advanced AI. Its ascent in the Freight Tech space garnered investor attention.
Despite this funding boost, Slync's trajectory took a sharp turn starting in July 2022. Kirchner, CEO and chairman of the board of directors at the time, was fired.
The board of directors fired Kirchner after he ordered the suspensions of nearly a dozen current and former employees for speaking out about the company's failure to make payroll. Kirchner was also accused of making personal use of corporate assets and intermingling assets, liabilities, and obligations between himself and the corporation.
In May of this year, Kirchner was indicted on charges of swindling at least $25 million from investors and faces 20 years in prison if convicted. With his assets frozen, Kirchner sought Slync to advance his legal fee payments, which was initially agreed upon but later retracted due to Slync's alleged liquidity issues.
These developments added strain, compelling John Urban, advising Slync since 2018, to step in as CEO.
Urban's remark underscores the tension, “We could not afford to grow the company and pay those legal fees at the same time...” leaving the company unable to attract new investments.
Financial strains aside, allegations against Kirchner ranged from misappropriating funds for personal luxuries, like a $16 million jet. Kirchner also attempted to buy a U.K. football club.
While Slync's defense points to Kirchner's financial mismanagement as a key driver for their downfall, Kirchner challenged these claims in a now-hidden LinkedIn post.
“I’ve been silent for over a year and taken more than my share of abuse on a one-sided media narrative driven by incomplete facts and deliberate smear campaign orchestrated by the company that I founded and its board,” wrote Kirchner.
Regarding the company’s claims that Kirchner’s legal fees have been a cause for its downfall, Kirchner responds:
“The company blamed me and interestingly said that legal expenses related to me caused this situation…I say interestingly because, to date, Slync has not paid a penny of my legal fees (as required by our indemnification agreement and Delaware law) and for which I have had to sue them in Delaware.”
He also questioned Slync's rapid burn-through of a $24 million fund just months before his departure, stating, "Where did that money go in 10 months?”
Slync's founder isn't the only one facing legal issues. Nikola Corp secured $165 million in arbitration against its founder, Trevor Milton, who was convicted of fraud in 2022. This sum covers a $125 million SEC fine due to Milton's misleading statements about Nikola's technology capabilities. Milton awaits sentencing in November.
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AROUND THE FREIGHT WEB
⛽ Fuel Drop Alert. Midwest diesel prices are plummeting, with states like NE and OK leading the decrease.
🏗️ Made in Mexico. By China. Chinese construction giant LGMG pledges a whopping $5B investment in Nuevo León, expecting to create 7,000 jobs.
🪙 Dime Heist Thieves Caught. More than 2 million dimes were stolen from a U.S. Mint shipment in Philadelphia, leaving behind a scattered mess, and now four individuals face federal charges.
🚛 Trucking Overflow. Capacity is still excessive, as indicated by truckload volumes sitting 16% higher than in 2018 and authorities 47% higher than in 2018, pinning transportation providers in a waiting game.
💸 Convoy's Death by Overfunding. Convoy's tale offers a stark warning about overfunding, highlighting its rapid ascent and sudden demise, largely due to its aggressive blitzscaling approach.
❄️ Freight's Cold Winter. Amid a challenging market, Chicago-based Edge Logistics is innovating and fighting to grow. They aim to weather the freight brokerage winter with a unique approach and new tools.
FREIGHT CONFERENCES WE'RE ATTENDING
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FREIGHT MEME OF THE DAY
Also, check out:
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
The Supreme Court just heard arguments in the broker liability case we’ve been tracking. Plus: oil shipping costs explode, trucking insurance is stuck in 1980, regulators brace for a carrier crackdown, and more.
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