Navis Sets Sail in New Direction

July 22, 2021


This month Cargotec completed the sale of its Navis business to US-based technology investment firm Accel-KKR. The financial details of the transaction have been reported previously. This month I had the chance to interview Navis President and CEO Benoit de la Tour on what the sale means for the future strategic direction of Navis.

Under Cargotec’s ownership Navis focused on several different strategic initiative. Its early attempts to combine Navis software with Kalmar equipment in an "integrated" automation offering were not a resounding success. However, five other strategies stand out as having a deeper and more lasting impact on the Navis business.

  • The first was a very deep dive into software to support different types of terminal automation, including fully automated terminals, with its core N4 TOS system.
  • The second was expanding Navis’s range of vessel-based software products by purchasing Interschalt Marine.
  • Thirdly, Navis developed and then launched the cloud-based planning platform XVELA which attempted to link vessel and terminal planning under the unified planning platform, XVELA.
  • Fourth, Navis made a three acquisitions of related terminal planning software companies (Octopi, Jade and Biarri Rail).
  • Finally and more recently Navis looked to embrace the Cloud for delivering both its core software and an expanded range of services.

Benoit de la Tour said prior to the sale Navis had developed a five-year strategic growth plan. Accel-KKR purchased the company on the strength of that plan and does not intend to take it in a radically different direction. The growth plan focuses on three main areas: delivering more operational systems to nodes across the supply chain; investment to accelerate the transition to cloud-based services; and new tools that leverage data in operational systems to provide more visibility, predictability and control across the supply chain.

It was notable that terminal automation is not a top priority. De la Tour said Cargotec was a “great partner to develop full automation”, but the journey was “very expensive and difficult”, and it took years to get fully automated terminals to the point where they were operating profitably.

Navis is not expecting to see a lot of fully automated greenfield terminals using new technology develop in the future. Smaller and more limited brownfield automation at marine, intermodal and inland terminals, de la Tour added, will be more common, and Navis has the capabilities today to support these projects with a much faster implementation period and a shorter time to value.

The bigger growth opportunity, however, is to extend the reach of Navis software to other nodes in the supply chain. Here Navis has developed the software it acquired with Biarri Rail into a wider Navis Rail offering, which also has synergies with other products owned by Accel-KKR.

Accel-KKR recently launched its “Kaleris” platform, which brings together products from three different acquisitions. These include the PINC yard management system, two shipper TMS products (ShipperConnect and ShipXpress) acquired from Wabtec last year and a rail car M&R system called RailcarRx. Kaleris has good synergies with the Navis and Navis Rail products to support an “inland strategy”, and de la Tour sees strong opportunities for Navis at inland nodes.

Another key opportunity is the “visibility platform” space where a growing number of companies are offering supply chain tracking and planning services to shippers. What most of the visibility platforms lack, however, is access to real time operational planning data on where containers are located at the vessel and yard planning level. They are attempting to fill that gap through a mix of carrier data shippers can obtain directly, scrapping public data sources and using AI and machine learning to build models of container logistics flows.

Navis software, however, processes and holds vast amounts of data for its customers on where containers are placed on vessels and in container yards and how they will be processed through those facilities. De La Tour stressed that this is a huge advantage: “There is no one else but Navis that can come back to the roots of the data to understand where it [a container] is and where it can be available,” he said. Navis does not own this data, but is in a position to help terminals leverage it to offer visibility services to a wide range of parties.

At the same time terminal-based planning applications like Navis’s traditional software are not connected to the planning tools cargo owners use to plan their own supply chains. To be really effective supply chain planning needs two-way communication; shippers need to know where and how a facility will handle their containers and those facilities need to know when shippers actually plan to collect containers, for example. It is notable that Kaleris has partnered with project44 (itself another acquisition story that recently purchased Ocean Insights and Clear Metal) to combine supply chain data with data driven planning tools for supply chain facilities.

The industry is only really getting started on this journey with how to connect the dots and share data on how containers will be moved throughout the supply chain. With its XVELA initiative Navis tried to create a platform for connecting shipping lines and terminals with a common set of planning data and tools, but de la Tour believes it was launched before the ocean carrier market was ready for it.

Things are different on the inland side, where “we are seeing a change in mindset” and there is a huge opportunity for planning tools that connect and control assets needed to move a container along the supply chain, de la Tour stressed. Furthermore, potential customers for visibility services include transport asset owners, BCOs and other shipper groups, a much larger pool than Navis’s core marine terminal and carrier market.

Cargo visibility is and planning also an area where there is a high level of M&A activity, and as part of Accel-KKR Navis is now better placed to take part in this than it was under Cargotec. When it comes to acquisitions Accel-KKR is a “well-oiled machine”, said de la Tour, with its own M&A department that is used to both market valuations in the IT sector and moving very quickly so as not to miss out on opportunities.

Finally, with regard to the core N4 TOS, the next move for Navis is to migrate to a new set of TOS applications designed specifically to deliver functionality as a service via the cloud. Terminal operators were once reluctant to embrace the cloud for their TOS, but that is changing rapidly, with some already making their first moves. De la Tour stressed that Accel-KKR has a depth of experience with cloud services to help Navis accelerate the pace of the journey.

In 2020 Navis signalled its move to cloud services with the launch of N4 3.8, which “lays the foundation for cloud deployments”, Navis said at the time. De la Tour said customers will be able to migrate from N4 3.8 to a next generation cloud-based TOS, details of which Navis will reveal at its Navis World event scheduled for November in San Francisco.

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