Dynamo Dispatch. A weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

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Weekly Commentary 💭

We hope everyone is enjoying their summer and opting to take a moment to relax with some time off. The summer slowdown will be over before you know it so be sure to take advantage while you can. ☀️

We Are Dynamo,

Clay, Santosh, Jon, and the rest of the Dynamo team

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Supply Chain 📦

Shipping Container Lines Set To Smash Year-Old Profit Record. Global carriers are en route to reporting record profits in 2022, beating last year’s record by a whopping 73%. In fact, based on 11 carriers monitored by industry experts Blue Alpha Capital and John McCown, container lines’ net income will likely reach $256B. Despite a 30% decline in spot shipping rates, McCown’s analysis states container-shipping pricing, average spot rates, and contract rates are up 2.84 times, 4.72 times, and 2.13 times respectively over the past two years. For more, consider reading Container Lines Are Set To Smash Year-Old Profit Record By 73%.

Lawmakers Seek To Ban Railroads From Raising Rates During Service Emergencies. A new legislative package, known as the Freight Rail Shipping Fair Market Act, introduced last week will now prohibit railroads from hiking prices during shipper service emergencies. The bill is meant to address rising delays and costs, particularly in the areas of agriculture and transportation, by requiring rail contracts to now include service delivery standards. Not everyone is thrilled with the bill, however, as the Association of American Railroads considers it a regulatory overreach while many significant shipper groups have all signed their support in the passage of the bill. For more on how the industry is reacting to the bill, consider reading Support For Freight Rail Shipping Fair Market Act Grows As Shippers Demand Relief and AAR Statement On The “Freight Rail Shipping Fair Market Act”.

FedEx Peak Season Surcharges Target Large Shippers’ Volume Surges. Shippers are set to face more issues as FedEx announced its 2022 peak season surcharges. Despite lower package volumes in comparison to 2021, FedEx claims these surcharges are necessary to maintain high service levels during its busiest time period of the year. Several surcharges are higher than last year, particularly for large shippers moving more packages during peak seasons and extra bulky/oversized packages. This comes in addition to already high fuel costs, as parcel transportation prices reached a record high of 27.7% in Q2 resulting in fuel charges doubling y/y. For more, consider reading Holiday Shipping Surcharges Start As Early As Next Month and USPS Proposes Peak Season Rate Hikes Amid Drop-In Package Demand.

Ports Push House To Pass Inflation Reduction Act Following Senate Win. In the latest iteration of the Biden Administration’s Build Back Better legislation, the Senate passed the Inflation Reduction Act this past weekend. The act will deliver a potential $3B of infrastructure funding for electrification projects in our nation’s ports over the next 5 years. Funding will be provided for electrified or alternative-fueled cargo equipment, microgrids, electric grid infrastructure, and shore power systems all meant to make the US supply chain in the ports more resilient. Want to read more? Check out The Market’s Biggest Winners And Losers In The Inflation Reduction Act And Senate Improves EV Tax Credit In Largest Climate Bill Ever.

Port Congestion Driving More Shippers To China-Europe Rail And Road Options. Demand for rail and road freight connections in central Asia has resulted in high China-Europe rail freight volumes during this past month. A reported ~1.5K Silk Road trains were up and running this past month, up 11% y/y resulting in volumes up 12% y/y. Shipping volumes have increased over the past few months as growth continues to be stifled following the Russian invasion of Ukraine. High demand for the China-Europe railway in comparison to sea freight is now causing potential delays of 5 to 8 days, as many forwarders continue to increase their haulage capacity. For more information on how this impacts global supply chains, consider reading The Missing Piece On The Russia-India Corridor Ready In 2023 and EU Ban On Russian Coal Set To Go Into Effect Overnight.

🌟Supply Chain Disruption Has Increased Costs And Complexity For Big Businesses. In a new industry-wide survey conducted by software company IFS, several supply chain decision-makers have reported increased risk and expenses. Apparently, over 66% of large enterprise companies are holding more inventory post-pandemic, with 185 holding a “significantly more” amount of inventory to lower the risk of a stock out. Similarly, 70% stated they have increased the number of suppliers being sourced with 72% of respondents claiming products are being sourced from domestic suppliers. The survey also showed the immense shortage of labor and talent, with 65% of respondents finding it difficult to fill vacancies. In related news, consider reading Supply Chains Must Change and Supply Chain Bottlenecks Beginning To Clear Up.

Shipping Is Staying Cool About Taiwan. After China conducted a live-fire exercise following Speaker Pelosi’s visit to Taiwan, shippers in the area continue to pay close attention. China’s exercises have continually become more dangerous, as its ships continue to approach Taiwan’s median line - an unofficial division of space that China does not recognize. However, these simulated attacks haven’t yet deterred shipping companies, as several container ships and bulk carriers such as the Spirit of Lisbon and Atlantic Tiger continued their journeys in the region. The Joint War Committee, a London-based organization that classifies the world’s waterways according to risk, has yet to elevate any waters surrounding Taiwan to its highest-risk category which comes as a surprise to many. For more information, consider reading Water Wars: Speaker Pelosi’s Taiwan Visit Ignites US-China Tensions.

Mobility 🚗

🌟Peak Vehicle Sales Could Be Just 14 Years Away. Despite a century of growth, a recent study projects that by 2036, American car sales will reach a peak at approximately 1.5B. BloombergNEF released the findings last week, citing urbanization and changes in the prime driving age population as a few of the major causes of the shift. In addition, the rise of shared and autonomous vehicles will play a key part in keeping new automobile sales low in the coming decades, as passenger preferences adopt new technologies. In related news, The Senate Has Reformed The EV Tax Credit Policy. Across the world, China’s July Vehicle Sales Jumped 30% As COVID Lockdowns Eased.

United Airlines Makes A Bet On Flying Taxis. Ever dreamed of hailing a flying cab? The prospect might not be as far in the future as you think. This week, United Airlines invested $10M in Archer Aviation, as the first part of a $1B deal to bring their prototypes to life. And United is not alone - American Airlines invested $25M in Vertical Aerospace last year, another producer of eVTOL’s (electric vertical and take-off landing). Despite this, the aircraft is still not approved to fly passengers. The FAA is currently working on aircraft examinations, developing pilot requirements, and new airspace procedures, and could grant some certifications by 2024. However, if you’re in the market for a flying car, The Samsom Sky Just Passed FAA Inspection. In related news, Hyundai Has Also Released It’s Flying Car Prototype. 

VC Investment In Mobility Tech Slowed In Q2. According to the latest Pitchbook data, VCs cooled the jets on mobility tech investment in Q2, with deal values declining by 31.9% q/q to $10.5B. Of all the subsegments, last-mile delivery led the pack, receiving approximately $2.8B in funding from venture capitalists looking to fund entrepreneurs who continue to build in the space. EVs also saw a notable amount of funding, as the race for sustainable transportation continues. For further reading, consider reading A New Type Of Motor That Could Be A Sustainable Alternative To Mining Rare Earths For EVs. In addition, A Strategy On How To Build A Talent Pool For eMobility. 

BMW And Toyota Strike A Partnership On Hydrogen. Starting in 2025, the two large automakers plan to team up on producing and selling hydrogen fuel cell vehicles. BMW and Toyota have worked together before, jointly developing the iX5 Hydrogen based on BMW’s X5 SUV, the BMW Z4, and the Toyota Supra sports cars in 2019. Fuel cell vehicles have an advantage over battery EVs, as they can travel longer distances, and refuel in a fraction of the time. Despite this, The EV Revolution Is In Full Swing, and Tesla is outperforming the pack on operating margins. In related news, Tesla Model 3s And Ys Are The Most Queried For Auto-Loans In The US.

California Becomes The First State To Roll Out Sub-Metering. This week, California regulators approved first-of-its-kind legislation around sub-metering, which would allow EV owners to measure their vehicle’s own energy consumption separately from their main utility meter. The policy is noteworthy because EVs are subject to special rate structures, which make it less costly to charge during off-peak hours. “Right now, you can charge your car for one-half to one-third the cost of filling up the gas tank, and that’s actually even before the run-up of gas prices over the last several months. But, the EV rates often don’t work for an entire home or business – so most EV drivers today aren’t choosing those EV-specific rates,” said CPUC Commissioner Clifford Rechtschaffen, in support of the vote. In other news, Illinois Is Gearing Up For Significant Highway Charging Infrastructure Investments.  In addition, this week, EVgo And Delta Electronics Announced Plans To Advance EV Charging Access Nationwide.

Electric School Buses Are Coming All Across The US. The push to electrify yellow school buses ferrying children back and forth continues, with 38 states now committing to procure more than 12K vehicles. Notably, New York has enacted a nation-leading commitment to achieve a fully zero-emission school bus fleet by 2035. On top of setting transition timelines, many states continue to dedicate funding for electric school buses, seeking to leverage the federal funds available through the new $5B EPA Clean School Bus Program. However, despite all the momentum, Deliveries For Buses Continue To Lag Orders. 

Nikola Motors Appoints A New CEO. Michael Lohscheller has been appointed new CEO of Nikola Motors, succeeding Mark Russell at the helm of the electric truck maker on January 1st, 2023. Lohscheller is a former President of Nikola and joined from Vauxhall, where he served as CEO. “In his six months since joining our company, Michael has continued to bring an increased sense of urgency, high level of accountability, improved lines of communication, and accelerated decision-making to Nikola Motor. We believe that same standard of excellence and operational and commercial expertise will benefit the company’s vehicle and energy infrastructure vision,” said Steve Girsky, Nikola’s Chairman of the Board. In other EV leader news, Elon Has Sold Another $7B In Tesla Stock Ahead Of The Twitter Trial. Meanwhile, Rivian’s Losses In Q2 Jumped To $1.7B.

Fundraises and M&A 💸

Stimulus Raises $2.5M In Seed Funding. The startup, which hails from Philadelphia, uses data & analytics to help companies make better purchasing decisions. The oversubscribed round was led by Black Ops Ventures and saw participation from notable investors such as Morgan Stanley, The BFM Fund, and Northwestern Mutual Futures Ventures. The use of funds will go towards expanding both the team and external partnerships.

Data Gumbo Raises $4M To Round Out Series C Funding. Data Gumbo provides smart contracts that enable industry participants to incorporate data to validate and automate transactions. The round was co-led by Saudi Aramco Energy Ventures and Equinor Technology Ventures. The funds will be used for R&D and expanding operations. 

ReturnLogic Raises $8.5M In Series A Funding. The Philadelphia-based startup is building a SaaS platform that organizes retail return workflows and operations. The round was led by Mercury with participation from Revolution’s Rise of the Rest Fund, York, White Rose Ventures, and Ben Franklin Technology Partners. The funds will be used for doubling its workforce, further product development, and expanding its API capabilities. 

OpenSpace Raises $9M To Round Out Series D Funding. The San Francisco-based start built an AI platform that is “the world leader in 360-degree worksite capture and AI-powered analytics.” The round was led by Taronga Ventures and GreenPoint Partners. The funding will be used to expand the company’s operations and create new AI-powered innovations.

Zap-Map Raises $9.2M In Series A Funding. Zap-Map is a UK-based electric vehicle charging app. The round was led by Good Energy and Fleetcor. The funds will be used for team development and international growth. 

Inrix Raises $10M In Undisclosed Fundraising Round. The Washington-based startup has been developing transportation software and data provider since 2004. The startup nearly went public but called off the SEC filing when Russia invaded Ukraine. The round participants and use of funds are currently unknown.

Expedock Raises $13.5M in Series A Funding. Expedock is an AI-based outsourcing services provider for logistics and freight providers. The round was led by Insight Partners, with participation from Motion Ventures as well as existing investors Pear and Neo and executives from Project 44, Salesforce, Meta, eBay, and Clearmetal. The funds will be used to hire new talent.

Carbonstop Raises ~$14.8M In Series B Funding. Carbon stop is China's first carbon emissions management software and consulting solutions provider. The round was led by Sequoia China with participation from existing investors GL Ventures and Matrix Partners. The fresh funds will be used for R&D and business expansion.

KatKin Raises $22M In Series A Funding. KatKin is a London-based online cat food ordering and delivery start-up. The Series A round was led by Verlinvest and Perwyn with participation from Octopus Ventures. The funds will be used for expanding manufacturing capability, R&D, and marketing.

Utility Global Raises $25M In Series B Funding. Utility Global is a Houston-based sustainable hydrogen company. The round was led by Ara Partners with participation from Samsung Ventures, NOVA, and Aramco. The funds will be used for product development and team expansion. 

Shopic Raises $35M In Series B Funding. The Tel Aviv-based start developed an AI-powered solution for frictionless, personalized retail shopping that blends the best parts of online and brick-and-mortar shopping. The round was led by Qualcomm Ventures, which also saw participation from Vintage Investment Partners, Clal Insurance, and existing investors such as IBI Tech Fund, Tal Ventures, Claridge Israel, and Shufersal. The funds will be used for global expansion.

Geek+ Raises $100M In Series E Funding. Geek+ develops autonomous mobile robots for warehouse, factory, and supply chain management. The round was led by Intel Capital, Vertex Growth, and Qingyue Capital Investment. The funds will be used for expansion and technology development.

Edge Autonomy Acquires Adaptive Energy For Undisclosed Amount. Adaptive Energy designs and manufactures solid oxide fuel cells (SOFC) for backup and portable power applications which Edge Autonomy intends to use to for systems development. "Adaptive Energy has done an impressive job investing in R&D, and we plan to leverage the Company's technology and research as we look to find new ways to further extend the duration and improve the performance of our autonomous systems. I look forward to working with the Adaptive Energy team as we continue to innovate together," said John Purvis, CEO of Edge Autonomy, in a post-acquisition interview.

Amazon Acquires iRobot For $1.7B. Last week, Amazon announced its acquisition of iRobot, which is known for producing the infamous Roomba vacuum (fun fact: the first prototype cost $10K). We’ve been digesting the news this week and while the mainstream relevance people discuss is Roomba’s ability to map homes, we believe that there is relevance in warehouse robotics. Reading between the lines, Amazon is vigilant in maintaining its leadership in warehouse automation and the Roomba brings meaningful strengths in vision and routing. The “robot [does] use cameras, sensors, artificial intelligence and machine learning” to collect large amounts of data which would be very beneficial in a warehouse setting. 

Business Building 🛠️

BVP’s B2B Pricing Course. A free six-part series from BVP to help enterprise businesses improve their pricing strategy.

Why Now’s the Perfect Time to Retool Your Hiring Process. “If you start with bad hiring habits, those will get multiplied as you get bigger. It’s like trying to steer the Titanic in a different direction.”

Learning from Regret. Not every decision leads to success and at times, we might face regret. “regret is a clarifying emotion that is also instructive about how to lead a better life. [This conversation explores] two themes -- taking time to pause and the big opportunity in reviewing regrets. In many ways, they go hand in hand. When we slow down to a halt, we give ourselves a chance to reel through what went well, what didn’t, and what we’ve gained.”

Who's Hiring? 👩‍💻

Customer Success Manager at Stord in Atlanta, GA (remote ok).

Business Development Representative at Rouvia in Berlin, Germany. 

Senior Software Engineer at Token Transit in San Francisco, CA (remote ok). 

💥 Have you seen any interesting startups recently? Introduce us.❤️ We would love your support. Please forward this to friends and share it on social media.🗞️ If you were forwarded this and found it interesting, please sign up.🎙 Check out Dynamo's podcast series, The Future of Supply Chain.