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Babbler feasibility study in adjacent market segments.

Periodic Reporting for period 1 - Babbler (Babbler feasibility study in adjacent market segments.)

Reporting period: 2017-05-08 to 2017-10-07

Theft and loss in supply chains affect almost all organisations.
The loss to society surpasses the value of the cargo. Cargo that is expected, but does not arrive causes opportunity costs, such as missed sales, missed medical treatments and the like.
The overall objectives of Babbler are to provide visibility into the integrity of last-mile delivery, so that organisations lose less and spend less time following up on late/stolen cargo.
Babbler was conceived as a smart seal for shipping containers.
We assumed that improved visibility of container integrity would have sufficient value for shippers and carriers to buy Babbler. We had initial success with a number of large companies, but it has become clear that they will not move beyond studies / pilot projects unless they are compelled to by customs organisations or new laws. Although they are convinced that Babbler works,
we have not managed to find a compelling value proposition for an easily identifiable customer segment. Forwarders and truckers have extremely low margins and no interest in technological innovation until it is proven in large deployments. This is confirmed by the strategy of competing IoT vendors who are busy educating the container industry about the benefits of IoT. There are no success stories of large implementations of similar products yet.
We were also inspired by the trade finance innovation group of a major bank. After several interviews with the bank, a container leasing company and a major shipping company, we came to the conclusion that we do not have a compelling value proposition for an easily identifiable customer segment. Our initial assumptions were just plain wrong.
Air cargo truckers expressed interest in Babbler for air security; preventing bombs getting into air cargo. Our initial value proposition was not compelling to them (time saving), our second value proposition is somewhat compelling (prevent x-ray scans at €600 a pop), but is difficult for major companies to test properly because of low driver literacy. We therefore decided to leave this theme for later because as IoT networks become better in 2018-2019, we will be able to remove manual steps in the Babbler solution.
We also explored business ideas in the last-mile delivery markets of e-groceries and pharma. E-groceries and the companies in that ecosystem (commercial vehicle sellers, supermarkets) have low margins and there are many competing solutions for temperature monitoring, which is their main interest.
However last-mile delivery of high value electronics (phones, car parts etc) turns out to be a promising business idea. So is last-mile delivery of medicine in hospital complexes. Both domains currently have low-tech last mile logistics. Therefore they are prone to error and theft resulting in high costs. The outcome of this feasibility study is that we will change our focus to last-mile delivery of high-value goods.
There are currently no solutions that provide sufficient insight into cargo visibility without many manual actions, such as repetitive barcode scanning. Other solutions require complicated RFID scanning equipment. Babbler promises to provide visibility automatically in a package that does not require complicated network infrastructure in a companies logistic centers. Potential impacts are:
- fewer thefts
- fewer lost shipments
- insight into dwell times and how last-mile delivery can be carried out more efficiently.