Waterloo, Ontario-based Descartes, a provider of logistics based on-demand, software-as-a-service offerings, recently announced it acquired ShipTrack, a Plantagenet, Ontario-based provider of cloud-based mobile resource management and shipment tracking solutions that help shippers with automate dispatch, updates on shipment status and estimated time of arrival (ETA), and eliminate paper-based delivery processes.
Descartes said that the purchase price, for ShipTrack, was an up-front cash consideration of $25.0 million CAD (approximately $USD 19.0 million), plus potential performance-based consideration. The acquisition was made official on November 6.
“We believe there is a permanent shift in buying preferences underway that will continue to see an increasing number of goods being bought online,” said Edward J. Ryan, Descartes’ CEO, in a statement. “Descartes continues to invest in our e-commerce capabilities to make sure that our customers, large and small, can fulfil orders and meet delivery commitments efficiently. ShipTrack complements this strategy, and, when combined with our advanced Routing, Mobile and Telematics suite of solutions, fills a gap in the market. We’re looking forward to working with the ShipTrack customers, partners and team of domain experts to help the final-mile carrier community capitalize on these changing market dynamics.”
And ShipTrack Co-Founder Shawn Winter observed in the same statement that the challenge for today’s final-mile carriers is how to handle increasing volumes alongside rising consumer expectations for delivery choice and real-time information.
“Our platform helps final-mile carriers meet that challenge head-on with powerful workflows across delivery processes and the ability to expose information to consumers in real-time,” said Winter. “By joining forces with Descartes, we see an opportunity to create a truly differentiated product that combines our advanced final-mile solutions with Descartes route optimization and reservations capabilities.”
In an interview, Chris Jones, Descartes EVP, Marketing and Services, noted that Descartes has been a leader in providing solutions for last-mile delivery for a number of years and has made considerable investments in e-commerce.
“This year has accelerated a shift in customer buying preferences and we see an increasing number of goods being bought online and delivered to homes,” Jones explained. “We’re always looking for opportunities to expand our ability to serve the greater e-commerce ecosystem. The benefits of the acquisition go beyond our shipper customers, as the ShipTrack solutions help logistics companies as well. Many logistics companies actually work with other logistics companies to serve broader markets, handle spikes in demand and provide a broad array of services. ShipTrack excels at integrating these organizations together so they can act as one for their shipper customers.”
When asked what ShipTrack brings to the table that Descartes may have been previously missing, Jones said that the last-mile delivery market is quite complex, as there are many types of business models, carriers and delivery relationships with ecommerce companies.
“ShipTrack expands our ability to serve a more diverse set of last-mile delivery requirements,” he said. “Equally, Descartes has advanced optimization technologies that will help ShipTrack’s customers and markets be more productive and offer advanced delivery services.”
And, as for the competitive advantages of this deal, from a Descartes perspective, Jones highlighted how world class logistics solutions require deep domain expertise and an architecture that reflects the unique requirements of the business.
“The people of ShipTrack are experts in what they do and have built a strong solution that address the specific requirements of the last mile delivery carriers, logistics services providers and their customers,” he said.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman