Episode 41:
Navigate, Zencargo's vision and mission with our co-founders

Welcome to another episode of Freight to The Point. Today, we have another throwback episode to Navigate where we featured a session on Zencargo’s vision and mission with our co-founders. Here, our co-founders, Alex Hersham and Richard Fattal, give audiences an insight on how they co-founded Zencargo, their vision and mission, and their aims of creating a world with smarter trade. Have a listen now.

Alex and Richard, welcome. Really looking forward to finding out a bit more about the vision and mission of Zencargo from you guys.

Thanks so much, Helena.

Thank you very much, Helena.

Alex, I’m going to start by asking you our first question. Tell us how it all began. What led you to find Zencargo back in 2017?

It was actually late 2016 or mid 2016 when Richard and I started speaking about this, which is six years ago, and I still remember that bench in the park. We started to think about this business and about the role that technology could play.

Richard and I both had our own separate backgrounds in global trade and we both had our own journeys, but those journeys led us to the same point, which was a huge appreciation for the complexities of international trade. A love for the fact that you wake up in the morning and you speak to Shanghai, and you go to bed and you speak to LA, and you really understand how the world works.

But I think deeper than that, a vision that the combination of technology and service could really transform this industry, and it was really what customers were screaming out for. It was calling out for this need to have more visibility, more data, more control, more agility within their supply chain.

It’s actually crazy when we look back six years ago and I think about the research that we were doing then and going to meet supply chain professionals. A lot’s happened in six years and really the people on this call, I think, mindsets have changed dramatically over that period. This understanding at the C-Suite, the importance of supply chains was really something that Richard and I felt passionately about back in 2016, 2017, and it’s been just amazing to see it come to life.

Ric, how do you think of that, those early days? What were they like?

I mean, one of the analogies that a lot of people like to use, so it’s not mine for startups, is it’s like building the boat and rowing the boat at the same time. I think it’s really an effective analogy because often means you don’t know really what you’re doing and you feel like you’re sinking, but as long as you’re going generally in the right direction, hopefully you get there.

I think it felt a lot like that. I mean, we literally started the business in a coffee shop, so one of the key things was making sure you got in on time so that you could find a seat, and then when you needed to nip to the bathroom, you made sure your laptop, so you had to organise yourself amongst each other.

The other thing was that we very much did all of the jobs, so obviously we started with a small team, but we really had to understand everything. Whether it was sales, product development, cold calls. So, sorry to anyone who’s on this call that got a cold call from me or Alex back in 2017, 2018.

I mean the sad news is that we didn’t get any free coffee, but it was good fun. I think that one of the key things when you’re at the very beginning of the business is you don’t know how to turn away business. Every client lead was an ideal client lead, so we would chase down absolutely everything, but lots of learning since those days.

Thank you Richard, and I’m sure we were thrilled to meet all of those client leads in the early days. All of them are very much beloved and all were ideal customers. Alex, I’m going to turn to you first for this next question. This world with a smarter trade, which is the Zencargo vision, what does that mean to you?

For me, it’s about decisions being able to be taken at people’s fingertips, data being available, and being able to harness the incredible amount of data that lives within supply chains to be much more predictive and proactive and less reactive, and also in silo as supply chains typically operate today.

I think about it in terms of if we’re able to really understand what’s happening both at a demand level and at a supply level, how can we use that to do things like never run out of inventory, which obviously people talk about a lot. How can we finance the supply chain more effectively? How can we take decisions leveraging algorithmic models, so that we aren’t waiting for things to go wrong or thinking things might go wrong, but rather acting in a really advanced way?

For me, that continues to come through how we build technology, how we build the digital twin, which I’m sure we’ll talk about more later, but also how we leverage that through strategic partnerships with our customers to help improve their supply chain, to help them feel like they’re in control on a daily basis, but also to work towards that ideal end state. That for me is the world that we’re trying to build and core to our vision of a world with smarter trade.

That makes a lot of sense. Thank you Alex, and Rick, what does a world of smarter trade mean to you?

I think for me the vision for smarter trade has never been more relevant than right now. Like smarter trade means economic growth, it means development and it means helping businesses and people around the world to be more efficient in what they do. I think in the current context, a context of rising inflation and cost of living crisis, rapid volatility in currencies around the world, and broader longer term challenges. Long-term supply chain challenges, but also long-term global environmental challenge that I care and we care at Zencargo deeply about.

That smarter trade very much means helping businesses to get the right things to the right place at the right time so that they can be more efficient, they can have less of an impact on the environment, and I think that’s a vision that everyone can get behind.

I think that’s so true, isn’t it? Just everything that’s going on in today’s climate forces us to think about how things could be better and what that might look like. I know that we talk a lot about this vision of a world with smarter trade, but the reality is on a day-to-day basis, we are trying to help make supply chain our customers competitive advantage, and we describe that internally as our mission. It’s what we’re really trying to work towards.

I’d love to hear some specific examples from both of you. And Alex, I’ll come to you first. What is it that Zencargo is doing on a day-to-day basis to work towards this vision and mission?

Yeah, so you’re right. Our mission is to make our customers supply chain their competitive advantage, and whenever I talk internally about competitive advantage, I talk about it as being two pillars. The first pillar really being about keeping our customers in control through great visibility, through communication, and through rapid escalation management and response.

I might talk about it as two pillars so it might feel like both of those have a vertical, but it’s almost like thinking about as a hierarchy of needs. I think the first thing that our customers really need is that sense of they’re in control and they know where to focus and they know that we are ourselves focusing on how do we keep lead times down? How do we respond to escalation management, and how do we give them information where they live rather than having to chase us where we live? I think that’s the first key foundational pillar of making our customer supply chain their competitive advantage.

Once you have that, once you have that trust and that confidence and that belief that it works and that your partner Zencargo is on top of everything, communicating, shortening dwell times, resolving escalations. You can then work with us to do things like reduce costs through better consolidation or air freight reduction. It’s these strategic initiatives. It might be around carbon footprint, it might be again about lead times, that we can then work together to help manage costs, manage inventory and manage a sort of ESG.

I think those two things really live in harmony. For me, I think those two things really live in harmony. For me, when we do something, look at the way that we deliver service and think about can we be delivering service in a slightly different way. We recently implemented this idea of a communication layer within the business to really make sure that our customers felt completely in control, understood what happened. That’s sort of on the service side.

Or when we think about new trade lanes we want to offer and how that can help our customers, or when we think about technology that we build and how does that technology, for example, order management or manufacturers on platform or escalation response times? How does that technology allow us to give our customers more comfort, more visibility and more control? That really builds the foundation to then work on those strategic initiatives that can unlock more and more value for their business. That’s how I think about our mission and how it drives towards what we’re trying to do at Zencargo.

Thank you. I think that’s such a very clear picture, isn’t it? Setting those foundations and then being able to build on and to work towards more strategy. That really ties into what Zach and so many of his CSM team were talking about earlier in their panel.

Rick, what do you see us doing on a day-to-day basis that’s building towards this world with smarter trade?

I would definitely echo Alex and I would say that, and I think that what you were saying about the CSM team is very relevant, Helena, because really for me, it’s about two things. It’s about culture, and the second is it’s about data. Culture means both our customers’ culture, so how do we work with our customers to help them to be more data oriented, KPI-led when it comes to driving value in their supply chain, and to look at the right things. Also, to help educate them on the right triggers and signals and things to watch out for.

On the other hand, also how do we work internally to make sure that our teams are really working as a partner to our customers? Where I see the CSM team, where I get a lot of my energy myself in my day-to-day is from really understanding customers’ needs and driving customer value because you really become an extension of the customer if you start to understand what their business requirements are.

The first thing is really cultural. We live the mission by culturally aligning with the business drivers of our customers. The second is about data. If we don’t have the right data, strategic decision-making is really very difficult. We have broad pillars that we work on with our customers. We work practically on how they should flow their cargo around the world, which mode of transport, how to reduce the carbon footprint, whether they should consolidate.

But all of those decisions ultimately they depend on good quality data and it being surfaced in a user-friendly way. Whether it’s our product teams, whether it’s the teams around the world operationally, having access to the right data from the customer and their global supply chain network, manufacturers around the world, etc. is basically crucial.

We put those two things together, great data surfaced in the right way, and a culture which cares about the customer, and hopefully we get a little bit closer to the vision every day.

I think we really can feel it. But what of the future? Can you guys give us any hints or a bit of a teaser into looking at what exciting projects we have coming up or developments that are going to lead us closer to this world with smarter trade? Alex, why don’t you go first?

Well, I was going to tell you, I’m going to let Richard jump in first because otherwise I’ll just say that was an excellent answer and I completely agree with it. Richard, over to you to jump in first.

Alex kind of hinted at it a little bit and he called it the digital twin. This is a word that gets thrown around a lot, but one of the things that we’re really focused on at Zencargo is how we can make sure that our technology is a mirror of our customer’s supply chain. Whether that’s better understanding their products, their business logic, or how their supply chain works. Or it’s about better representing the workflows that need to happen around the world to make their supply chain move, digitally.

We’re really very focused on the development of our supply chain trend. I would say it’s no one single release. We won’t say we’re there, we’ve made it. We have supply chain digital twin. It’s an evolution I would say. But over the coming months, I think you’ll hear more about that from what we do. As we do that, what you’ll start to see is more inbuilt recommendation, intelligence and analytics on the Zencargo platform. I would very much say that as a business, the technology that we’re building is becoming an enabler of the value that we can drive for our customers.

Everyone, you heard it here first. Keep your eyes peeled and your ears to the ground from more about the digital twin. Alex, is there anything else you want to share?

An inch to time, I’m going to say let’s move on because I think Richard answered that…

He did pretty well, didn’t he? I’ve got one last question for you guys before we start wrapping up Navigate this time, and it’s looking back at the six years really since you started thinking about this concept of a world with smarter trade. I’m going to go to you first. Rick. If there’s any piece of advice you could have given yourself back in those early days, back in that coffee shop, what would that have been?

I think it’s a very hard question to answer. One piece of advice, I’m not sure, but I would say that one quality that’s really needed when you’re building a startup is resilience. It’s an incredibly tough thing to do, and especially in supply chain, there’s always problems and everyone on the call will recognise that from the last couple of years. What I will say is that the ideal thing would be to have been given a video of the last five years since we started the business and to have seen this disaster happens or this thing goes wrong or there’s that problem. Actually it turns out okay.

Obviously there are some mistakes that we made along the way and things that we could have done better that would also be in that video. But I would grab that video and then I would make sure that I sent it out to everyone who worked at Zencargo, and basically gave them that kind of headstart on all of the experience and sweat and tears that we’ve had over the last year. I don’t know if that’s cheating on the piece of advice, but I think it would’ve been very helpful.

I’m now imagining a sort of eighties video montage with the background music, so if we can try and get that together for the next Navigate, we’ll see what we can do. Alex, is there a piece of advice that you would’ve wanted to have given your past self?

Aside for buying a shipping line for the past couple of years, which maybe wasn’t even applicable. I think that there’s two. Number one is, and we learned this along the way and I think we did a really good job at it, but every opportunity that you have to either stay connected to your customers, or stay connected to your team, especially over the past couple of years, just jump on that opportunity. I think as a business, we’ve been pretty good at that culturally to try and stay customer obsessed and stay really close with our customers and with our team.

I think that’s something that’s easy to read in a book, but hard to actualise. I think every time we leaned into that, that’s been really successful and I’m really glad. `For example, we had a customer success part of this and it really speaks to that and the customer centricity that we can build.

The second thing I would say is that especially in logistics, when you’re building a business over time, a lot of things small or big can go wrong. Actually, within logistics, sometimes it’s about predicting and solving those problems in advance structurally, and sometimes it’s about resolving those. Actually, as I mentioned a moment ago, we built a lot of technology that monitors dwell times by mode, origin, destination and escalates things very, very quickly to try and be the best at responding to issues because issues happen.

But the advice I would give myself is whilst those issues do happen, try to celebrate the small wins within the business because I look back on our business, and Richard spoke about how we were in a coffee shop and there’s so many different parts of that journey, ups and downs and so many of them, Whilst at the time they were difficult, I look back on them with really a warm heart and very fond memories and I’m sure there’ll be many more of these memories to be created. Just to enjoy them in the moment, even though I now have the benefit of looking back and enjoying them, enjoy them in the moment.

Love that, and I think that’s so important, isn’t it, in an industry where we do all go through trials and tribulations, but actually everyone who’s on this session, we’ve all got through so much of it and we’ve got more to come.

I think as we start to wrap up this Navigate session, something I’ve really noticed in all of the fantastic conversations that we’ve had today is there’s definitely a change in tone. While we’ve all seen volatility and we’ve seen challenge and the market’s gone up and now it’s coming back down, is there’s a much clearer sense of positivity from everyone that’s speaking today. Actually, we’re talking much more around partnerships, around being strategic rather than reactive, about building our resilience rather than having to be agile.

It does feel like even if the normalised market will take a bit longer, we’re really bearing the fruits of the lessons we’ve learned through all of the craziness of the last few years.

We’re going to ask a couple more questions, and one is to each of you, and I would just like to reflect on the positivity we’re hearing and how much opportunity there is over the next year, and in terms of the role of the shipper, what we’re going to see from the market.

Richard, your final question for today is, as we come to the end of Navigate, I’d love to hear your reflections on 2022 as the year that’s been, and I’d love to hear from you what you think the key learnings we ought to take from this year and into next.

I think like 2021, 2022 has continued to be a year of black swan events from a supply chain perspective, and the irony of these continuous problems across the supply chain is not really lost on anyone, but no one would’ve really said that we would still be experiencing such disruption. I think as we’ve gone through the COVID-19 period, everyone’s been calling the end of supply chain disruption and no one’s been calling the continuity of supply chain disruption.

But I do think that the data is starting to show improvement now, and whether that’s the freight rate market as a reflection of a rebalancing of demand and supply, or it’s lead times, or port congestion around the world, there is certainly still disruption and there are certainly still events that seem to be coming out of nowhere, but there is a general trend towards repair.

What I would say is to look forward with positivity, but to look backwards with thought and reflection, and to make sure that your strategy for next year reflects both of those things. What we call at Zencargo is a diversified strategy when it comes to rate, when it comes to space, when it comes to approaching the market. That really means thinking about what are your freight requirements in 2023? What are your business requirements in terms of continuity, stability, different types of stock and the requirements of that stock, and how can you work most effectively with your freight partner to have better visibility of the stock you’re moving, but also to make the right decision around contracting for your business.

That’s the question I would ask you to pose to your partner and to engage in dialogue on. I think that would be my message for 2023, which is to strike the right balance on space and rates that fits your business for next year.

Thank you, Richard, and Alex, as you look to the future, what are you envisaging for next year, for 2023? What would your closing recommendations be?

I think there’s two things, but firstly and probably most importantly, the past few years have been crazy. We all know that, and next year probably will be in its own way crazy. I think a smart one, Richard was saying, the evergreen nature of craziness in supply chain management. I think that’s going to go away even if the market normalises, something will change.

I think that there’s been an opportunity that has been created over the past few years for supply chain professionals and that opportunity is clear. It’s how do you create strategic relationships across your supply chain? How do you create partnerships that give you leverage, you as an individual, or as a team within an organisation, to drive the business outcomes that your business needs?

That might be, if you are an apparel business, it might be that you need much more collaboration between your supply chain team and your merchandising team. If you are a business in a different vertical, it might be around your environmental footprint and how you can make a material change in the outlook for your environmental footprint.

Whatever it might be, I think that next year we have an opportunity as an industry to really take that step forward. This year’s obviously been hard because people might have wanted to, but then rates are high, now they’re moving low. How do you stay agile? All those questions will come up, but I think next year it’s going to be a real opportunity to take that step, build that partnership, deliver for your business and progress as a business, as an industry, as a society. That’s the first thing that I would say.

The second thing I would say is, and I mentioned this before, I’m not an economist. I don’t necessarily have a firm view on what’s going to happen next year, but looking back at prior cycles. At different points in the cycle, it becomes de-stocking, and then at other points, it becomes re-stocking. Whether that will happen or not, we don’t know. There’s a saying about those who predict the forecasts and create the future, you know more about the person than about the future by listening to them.

But the reality is I think these two points tie together, which is the more agile you can be in your supply chain, the more responsive you can be. It means that if it does go into an environment where there’s been an overshooting and you need to restart, you can take those decisions in an appropriate agile way, rather than rushing and doing things in a way that might not be best for your supply chain.

Build that partnership, try to deliver value for the business. There’s huge receptivity within businesses now to see that value come, and don’t think everything is necessarily going to move in one direction. I’m not referring to rates, but maybe the broader picture because there still will be things that will catch all of us off guard, and it’s how we respond to them that’ll be the most important.

Very poignant words of wisdom there. It was really, really interesting to hear from both of you how you’re thinking about things. Alex and Richard, thank you so much for that closing session. It’s been really great to hear a little bit more about your story and a little bit more about the history of the business, but to lean on that wisdom that you have and how you think about the future. Thank you both so much.

We’ll be talking about a wide range of topics, including how the economy has affected demand in retail, to investing in change management and sustainability right now. Come join us by signing up via our website, navigate.zencargo.com That’s navigate.zencargo.com. Thank you.