You Could Clean Up on the One Thing Keeping Jeff Bezos Up at Night

When we talk about the "last mile" in technology, we're usually discussing that final stretch of cable, wire, or air that connects a cable firm, Internet provider, or satellite company with its customers.

This final leg - for instance, the cable that runs from a telephone pole to your set-top box - is a well-known "bottleneck" and a stiff expense for service providers.

The nearly $2 trillion-dollar global e-commerce business is even more dependent on that last-mile delivery, particularly massive outfits like Alibaba and Amazon.

They can build expensive, elegant global supply and logistics chains and track inventory with the latest bleeding-edge technology. They can know what customers want before they know they want it.

But if they can't get that physical package into customers' hands... it's all been for nothing.

These companies are shelling out top dollar for help in tackling this difficult problem...

The Perilous, Expensive Path to Your Front Door

The last-mile problem is one of the most complicated dilemmas in business today.

Just like in telecom, the e-commerce last mile requires countless individual connections - every package needs to be carried by an individual worker and hand-delivered to its final destination.

That physical nature of the last-mile process makes it one of the most costly, inefficient, and uncertain parts of the e-commerce business.

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In fact, SupplyChain magazine reports that as much as 28% of the total cost of delivery is incurred over that last mile.

That's because the vans that deliver - let's face it - just about everything imaginable to folks' front doors and mailboxes can't carry as much "stuff" as the global armada of planes, container ships, trains, and tractor-trailers that move that same stuff from factories to those fulfillment warehouses.

No matter how you play it, the last-mile connections are going to be more costly.

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amazon buildingAnd so I know all these businesses must be doing absolutely everything they can to slash any portion of their last-mile costs.

We've discovered a company that's helping its clients - these e-commerce and delivery companies, specifically - manage and maximize every last fraction of a penny.

It's doing so with a remarkable, on-demand "software as a service" (SaaS) buffet of fleet-management solutions. Indeed, it was one of the first logistics technology companies to even do that, back in 2001.

This Company Has Been a Player for 16 Years

The company I mean is one that, just like Amazon.com Inc., actually survived and turned around in the dot-com bust of the early 2000: Waterloo, Ont.-based Descartes Systems Group Inc. (Nasdaq: DSGX).

This company can help fleet owners manage everything from fuel costs, to customs clearance, to route optimization and dispatching to ensure the last-mile process is as smooth, cheap, and well-managed as it can possibly be.

And because of Descartes' use of SaaS, customers large and small can get the precise management solutions they need, rather than some clumsy (and expensive) one-size-fits-all arrangement. No one has to buy hardware from Descartes; customers can get exactly what they need through the cloud.

last mileAnd just look at a little of what those customers can get...

  • Interoperable web and wireless logistics networks, so inventory can be managed on the fly from all over the warehouse...
  • GPS-driven "intelligent" dispatch and automated vehicle location that keeps tabs on delivery vehicles 27/7...
  • "Driver behavior tracking" that can detect speeding, unsafe driving, gas mileage, and excess idling...
  • Optimized delivery route planning for maximized fuel economy...
  • Descartes can even help fleet managers with the new U.S. Department of Transportation requirements for onboard electronic recording and reporting.

The cream of Descartes' customer list - more than 10,000 transportation- and logistics-related businesses in 160 countries - reads like a "who's who" of global transportation: American Airlines, Delta Airlines, Air Canada, and British Airways.

Descartes works closely with worldwide shipping and logistics juggernauts like Maersk Group, Hapag-Lloyd, and DHL, too.

Descartes' stock is just as impressive...

One of the Greatest Turnaround Stocks of All Time

As I mentioned, Descartes has been around for a long time. The company was founded in 1981 and first went public on the Toronto Stock Exchange in 1998, and then on the U.S. Nasdaq exchange the next year, right as investors were buying up anything and everything tech- or dot-com-related.

We know what happened next: The bubble burst. Visionary CEO and former Gartner analyst Art Mesher stepped into the breach at a time when Descartes was "days away from folding."

Gartner famously fired every single person on the troubled company's sales staff and turned its engineers toward client-facing positions.

Rather than go under, as so very, very many other companies did in the dot-com crash, Descartes pivoted to the then-new concept of software as a service (SaaS).

Under Mesher's leadership, the Canadian company was profitable again by 2005. Canadian tech blog Cantech called it "one of the most dramatic turnarounds in Canada's corporate history."

The changes Mesher put in effect set the stage for a winning streak that hasn't really ever ended. Shareholders have been rewarded with more than 46 straight quarters of profitability.

U.S. GAAP revenue has soared more than 244% since 2008 and the financial crisis, from U.S. $59.1 million to U.S. $203.8 million in 2016. Revenue is up 28% this year.

The stock trading in the eminently reasonable $27.20 range, off its 52-week high of $31.23. It recently crossed below its 50-day moving average and has stayed there, but given the massive potential here, I think this "event" and further dips as low as $24 have to be seen as "accumulate" opportunities at this point.

Descartes is well-positioned to be a dominant figure in the never-ending quest to make that last mile as cheap and smooth as possible.

It's a meaty, lucrative problem... for those in position to help.

Like I said, global e-commerce is on track to hit $2 trillion any day now, and, according to MarketsandMarkets, by 2022 e-commerce players will shell out close to $30 billion on fleet management alone, and all in the context of an eye-watering $15 trillion logistics market.

With that 10,000-strong customer base, Descartes is - literally - all over this.

This Is a Killer Logistics Problem

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About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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