Dynamo Dispatch (2024/09/16)

Dynamo Dispatch (2024/09/16)Issue 301 | Bonx, Reshape Automation, Qualifyze
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Dynamo Dispatch (2024/09/16)
Issue 301 | Bonx, Reshape Automation, Qualifyze
Derrek Li and Madelyn O'Farrell
Sep 16

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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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🎙 Check out Dynamo's podcast series, The Future of Supply Chain.
🤝 Interested in meeting with Dynamo? Schedule here with Derrek and Madelyn.
Weekly Commentary 💭
💥 We’re beyond excited to announce our pre-seed investment in Bonx, a next-gen ERP for midmarket manufacturers. They’re thoughtfully leveraging AI to build a scalable yet flexible platform that allows manufacturers to customize to their specific needs easily. Read more about what the team is building here.
🔍 Advancements in AI present the opportunity to transform freight brokerage, and as a result we are working with AI Fund to build a once-in-a-generation startup. If you’re a passionate entrepreneur with a passion for freight brokerage and/or AI (or know any great folks who fit that profile!), check out the details here.
🥰 Love reading the Dispatch? Make sure you forward it to anyone looking to stay up to date with all things supply chain and mobility.
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Madelyn, Derrek, and the rest of the Dynamo team
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Supply Chain 📦
⭐ Biden-Harris Administration Takes Aim at De Minimis Exemption. The Biden-Harris administration plans to restrict the use of the de minimis exemption for certain goods, particularly those subject to tariffs, while requiring additional data collection for shipments. This proposal aims to prevent foreign companies, especially from China, from exploiting the exemption and undercutting US businesses. The administration is also pushing Congress to pass legislation to reform the de minimis exemption, including proposals to exclude import-sensitive products like textiles and apparel. Related, China’s Continuing Export Surge Likely to Invite More Pushback.
The Newest Threat to the Global Supply Chain? Hijackers. Mexico's booming nearshoring sector is facing increasing threats from organized crime, particularly truck hijackings. The country is now the highest-risk globally for cargo theft with around 50 truck hijackings occurring daily, affecting high-profile companies like Walmart and Amazon. Despite security concerns, foreign investment in Mexico's manufacturing sector is surging, with firms like Tesla and Ford setting up operations, albeit many prefer safer northern regions over central and southern areas plagued by hijackings. Without addressing this security issue, Mexico’s nearshoring potential, particularly in its underdeveloped southern regions, could be stifled. Another headwind, Shortage of Refrigerated Containers is Looming Over LatAm Perishables Exporters.
Potential Port Strike a Dilemma for Harris. A potential dockworker strike on the U. East and Gulf coasts poses a significant threat to Kamala Harris' presidential bid as the Biden-Harris administration works to avoid an economic crisis ahead of the election. Retail and transportation leaders are urging the administration to intervene before a strike happens as disruptions could harm the economy and cast doubt on Harris' ability to handle economic challenges. Some retailers are already diverting cargo to the West Coast to mitigate potential disruptions. A prolonged strike could have severe economic consequences and negatively impact voter perception of the administration's handling of the economy. Additionally, Chinese Cargo Cranes at US Ports Pose Espionage Risk, Probe Finds.
Online Returns Fraud Finds a Home on Telegram, Costing Retailers Billions. Retailers like PacSun have experienced a surge in fraudulent returns, including one customer who returned 250 orders worth $24K without sending back the actual merchandise. Criminals have exploited loose return policies, manipulating return labels and using fake or empty packages to trigger refunds, which has caused significant financial losses for retailers. The problem of organized return fraud is widespread, with tactics shared via websites and apps like Telegram, leading to more than $100B in fraudulent returns in 2023. Retailers like PacSun and Amazon are fighting back with technology to detect fraud and pursuing legal action against organized refunding schemes. Unrelated, Gartner Says GenAI is Rapidly Moving Toward Mainstream Adoption in Supply Chains.
DSV Buys DB Schenker for $15.9B, Creating Logistics Giant. Danish logistics company DSV has agreed to acquire logistics arm DB Schenker from Deutsche Bahn for $15.9B, making DSV one of the largest global freight forwarding and supply chain management firms. The all-cash deal will be financed through a combination of share sales and debt, and according to DSV makes it larger than both DHL Logistics and Kuehne+Nagel. The acquisition, which will create the world's largest freight forwarder, comes as the freight forwarding industry faces fluctuating demand post-pandemic. Downstream, Amazon Boosts Pay for Subcontracted Delivery Drivers Amid Union Pressure.
Mobility 🚗
⭐ Biden Finalizes China Tariff Hikes. The US Trade Representative finalized its plan to raise tariffs on Chinese goods, targeting key strategic sectors like EVs, batteries, semiconductors, and solar cells. The tariff hikes include a 100% tariff on EVs, a 25% tariff on lithium-ion batteries, and a 50% tariff on solar cells, with increases rolling out in 2024, 2025, and 2026. Relief was provided for ship-to-shore cranes, with exclusions for orders placed before May 2024, while tariffs on medical supplies like face masks and gloves will increase significantly over the coming years. The final structure also reduced tariff exclusions for solar manufacturing equipment, cutting five from the initial proposal.
EU Rejects Chinese EV Makers’ Bid to Avert Hefty Tariffs. The European Commission has rejected offers from Chinese EV makers to lower their prices to avoid potential tariffs. The tariffs are a result of an EU investigation into whether Chinese EVs, allegedly subsidized by Beijing, harm European manufacturers by undercutting prices. Despite China’s negotiation efforts, the EU determined that the offers did not sufficiently address the impact of subsidies. Meanwhile, internal EU divisions are growing, with countries like Spain and Germany reconsidering their stance on the proposed tariffs, which have led to heightened trade tensions between the EU and China.
UAW, US Dealers Increase Criticism of Stellantis CEO Over Cuts, Sales Declines. Stellantis’ US dealer network and the United Auto Workers (UAW) have criticized CEO Tavares for prioritizing profits over sales, market share, and the reputations of its American brands, leading to production cuts and declining sales. In an open letter, US dealer council head Kevin Farrish accused Tavares of reckless decision-making, resulting in plant closures, layoffs, and a weakened dealer network. The UAW is also rallying against Stellantis, condemning "gross mismanagement" and accusing the company of failing to meet labor contract obligations. Despite a record profit in 2023, Stellantis' first-half 2024 profit fell 48%, and its stock has dropped 36% this year. Also, Stellantis Pauses Fiat 500 EV Production on Poor Demand and Stellantis Recalls over 1.2M Ram 1500 Pickup Trucks in the US.
Tracking US Auto Sales by Month. Throughout 2024, auto sales have faced challenges due to inflation and affordability concerns. In August, automakers reported growth in hybrid and EVs sales, though these still represent a small portion of overall sales and do not significantly impact profitability. Subaru, Mazda, Kia, Hyundai, and Honda posted strong August sales, with notable increases in hybrid and electric categories. However, Volvo saw a slight decline in overall sales despite a 48% increase in electrified models, while Ford experienced a 13% rebound in sales, with significant growth in hybrid and EV sales.
Why Lyft’s CEO Says ‘It Would be Insane’ Not to Go All In On Bikeshare. In 2023, Lyft decided to retain and enhance its micromobility business, particularly focusing on docked eBikes and scooters after strong growth in the sector. The company is restructuring its operations, consolidating its bike and scooter programs under the new division, Lyft Urban Solutions, while laying off about 1% of its workforce and incurring restructuring charges. Lyft aims to prioritize docked solutions for urban transportation which offer better integration with city infrastructure, moving away from dockless scooters and bikes. Despite challenges, Lyft's micromobility rides grew significantly, accounting for 8% of the company’s total rides in 2023. Also in micromobility, EV Startup Ather Seeks to Raise $530M in India IPO.
The Future of Supply Chain 🎙️
Check out our podcast series that’s been running since 2018. On each episode of the Future of Supply Chain, we sit down with a different entrepreneur, investor, or industry veteran to discuss innovation, technology, and the most exciting opportunities in supply chain as we build the future of the industry together.
Fundraises and M&A 💸
💥 Bonx Raises €1.1M in Pre-Seed Funding. Bonx is a next-gen ERP for SMB and MM manufacturers. The funding will be used to accelerate growth of its flexible and scalable platform leveraging LLMs. Dynamo Ventures led the round, with participation from Lakestar, Prequel Ventures, and OSS Ventures.
Cavela Raises $2M in Funding. Cavela automates product sourcing for eCommerce. The capital will be used to enahce the platform’s capabilities and expand its footprint. The round led by XYZ Venture Capital, with additional support from Propel Ventures and Go Global Ventures.
Warehow Raises £2M in Series A Funding. Warehow is a eComm fulfillment copmany catering to fashion and homeware retailers. The funding will be used to further develop its tech, create additional storage capacity in one of its existing warehouses, and increase sales and marketing activities. Mercia Ventures led the round, with participation from MENA Moonshots.
DC Connected Raises $2.29M in Seed Funding. DC Connected Car offers AI-powered remote auto diagnostics for roadside assistance, warranty, and repair. VENPACE led the round.
Reshape Automation Raises $5M in Seed Funding. Reshape Automation is an industrial automation platform from discovery to deployment of equipment and services. The funding will be used to accelerate the development and deployment of its product suite. Ironspring Ventures led the round, with participation from Haystack, Supply Chain Ventures, Remus Capital, and Expansion VC.
Clean Electric Raises $6M in Series A Funding