Commentary: Newark is a hub for logistics – and logistics startups

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. 

As one of the largest world-class logistic hubs, Newark, New Jersey is strategically situated between the Port of Newark and the Port of Elizabeth and Newark Liberty International Airport, efficiently moving millions of tons of freight each year. Together, Port Newark and Port Elizabeth comprise the second-largest port in the U.S. and can handle north of 2 million containers per year, and three mega-ships simultaneously.  The combined ports are also home to hundreds of trucking companies, numerous warehouses, and unparalleled rail capacity. As the ports of entry for cars manufactured all over the world, with a storage capacity of nearly 25,000 cars spread across hundreds of acres, they are the ports of choice for international auto companies. Add to that mix Newark Airport, which consistently ranks in the top 10 of U.S. freight airports, moving slightly less than one million tons in 2019, and it becomes clear why Newark is the go-to logistic hub for the entire Northeast. 

A FedEx airplane on a Newark Liberty International Airport runway.
(Photo: Newark Liberty International Airport)

Being located in Newark has given Newark Venture Partners (NVP) a key strategic advantage as it invests in the variety of components driving next-generation logistics. NVP’s core thesis is similar to others who have embraced the logistics and the broader supply chain innovation markets: The interconnected and complex movement of goods to 7.6 billion people across the planet, and the enterprises that supply them, is ready for next-generation technologies.  Through that lens, investors are beginning to drill down on which market trends are here to stay.  There is an increased need and desire for stronger connectivity, transparency and digitization – all of which have been largely absent from the industry until recent years. Now, solutions based on cloud, mobile and artificial intelligence (AI) are being deployed at a speed without precedent and transforming all sectors of the logistics matrix. Within this vast landscape, new forms of advanced software provide greater visibility, resilience, efficiency and real-time accuracy – redefining and strengthening the global web of transportation and the storage of goods.

SensorTransport is a good example of a burgeoning success story in this market with a focus on transparency. SensorTransport is a platform that provides real-time cargo location, estimated arrival time, and digital proof-of-delivery (POD) across the intermodal fabric of global logistics.   Its industry-leading “last-mile delivery” technologies track packages from the final warehouse to destination using integrated technology within existing systems. Last-mile innovations, like SensorTransport’s, will be key in the continued growth of e-commerce and increasing demands for transparent, tracked shipping.

A last-mile delivery being made to a private home.
(Photo: Jim Allen/FreightWaves)

Right now, last-mile delivery expenses represent approximately 28% of overall logistics expenses and some estimate it is a $417 billion market in the U.S. Estimates for annual growth rates for last-mile delivery technologies are greater than 12% and project significant growth past 20251.  Industry executives and observers predict the market, which is led by third-party logistics (3PL) companies outsourcing elements of distribution, warehousing, and fulfillment services, will use the best technology to beat out competitors. NVP expects those using SensorTransport – including many of today’s top 20 3PLs – will be in a position to lead that charge. 

Another logistics-based opportunity is specifically within trucking. Trucking is a traditional industry and that relies largely on first-generation information technology. Optimal Dynamics, which was founded in Princeton, New Jersey – about an hour’s drive from Newark – has developed a new proprietary technology to change how logistics providers plan and operate their companies. Its main product,, leverages High Dimensional AI to capture significantly more detail around load planning and allows management to better flex with today’s uncertainty. Uncertainty is the word of the year in 2020, as we continue to grapple with COVID-19, which disrupted supply chains in a big way. Optimal Dynamics allows for truck drivers and logistics managers not only to plan for disturbances but work around them in real-time. 

A driver stands in front of several big rigs.
(Photo: Shutterstock)

Access to available and vetted drivers is also an issue for fleets. While there are companies that compete with brokers for on-demand needs – there are also startups working with brokers to create efficiency and transparency within the existing system. FleetOps is an early-stage business that uses telematics data to access drivers around the U.S. and Canada and then connects them with broker clients; creating location and pricing transparency. FleetOps produces AI insights to match supply with demand and uses the power of market liquidity to fill partially full trucks and identify backhaul opportunities. By creating more efficiencies in trucking  more business opportunities and stronger bottom lines are created.

An Amazon Prime delivery van on a delivery run.
(Photo: Jim Allen/FreightWaves)

These three companies have wildly different solutions, and yet they all address transparency, connectivity and automation for logistics. Market trends, like the digitization of paper records and the need for stronger communication about shipments, are only going to grow. This is driven by the need from shippers and receivers – both commercial and consumer – for greater visibility into the entire supply chain. Purchase and arrival aren’t the only touchpoints anymore.  Some shippers now seek to track everything from the time their shipment was loaded, to how it was handled, to the temperature at which it was transported. Soon, NVP expects that supply chain visibility will reach back through manufacturing, and the need for information and constant communication will only be satisfied by tech that can operate in real-time with real data – all the way to the top of the design and creation process. 

During the first half of 2020, COVID-19 verified many of the suspected vulnerabilities within logistics and global supply chains. During the second half of the year, NVP expects to see startups in that space gain greater traction among clients and greater support among venture capitalists. With partners like Panasonic and Amazon here in Newark, the future of this industry is likely to be built just outside NVP’s window.