Over the past two years, the global supply chain has been hit with two major upheavals: the United States-China trade war and, more cataclysmically, COVID-19.
When Reefknot Investments launched its $50 million fund for logistics and supply chain startups last September, the industry was already dealing with the effects of the tariff war, says managing director Marc Dragon. Then a few months later, the COVID-19 crisis began in China before spreading to the rest of the world, disrupting the supply chain on an unprecedented scale.
Almost all industries have been impacted, from food, consumer goods and medical supplies to hardware.
Reefknot, a joint venture between Temasek, Singapore’s sovereign fund, and global logistics company Kuehne + Nagel, focuses on early-stage tech companies that use AI to solve some of the supply chain’s most pressing issues, including risk forecasting, financing and tracking goods around the world.
In March, around the time the World Health Organization declared the COVID-19 crisis a pandemic, Reefknot surveyed nine shippers about the challenges they face. While there are other macroeconomic factors at play, including Brexit and the oil price war, the survey’s main focus was on the combined effect of COVID-19 and the U.S.-China trade war on the supply chain and logistics industry.
According to the study, the main things shippers want is the ability to dynamically manage supply chain risks and operations and optimize cash flow between corporate buyers and their suppliers, who often struggle with working capital.
Many of the current solutions used in the supply chain involve a lot of manual tasks, including spreadsheets to predict demand, phone calls to confirm capacity on planes and ships and checking goods to make sure orders were fulfilled properly.