Bringing Data Mastery to Shipping with Hannah Testani of Intelligent Audit

Hannah Testani 00:45

Thank you so much for having me, Jess, and I'm really excited to be a part of this.

Hannah Testani 00:55

You did a pretty good job. So we work with anyone who ships anything and we take their global transportation data. So you kind of key in on the war and that definitely impacts our customers. But at end of the day, our customers are companies that ship a lot of products around the world. And there's so much complexity with that, whether you're shipping from big movements like air, truckload, ocean to courier and parcel shipments. You know, similar to your world where your customers are looking for more warehouses, more capacity to be able to continue to expand to allow them to grow faster. We come in afterwards and we say, okay, well you have your network set up. Now, how do you make sure it's efficient and it's optimal? And as you mentioned before, there's a war today and there's a couple of wars today. There's this always disruption, which means that a lot of our customers are forced to be firefighters. not engineers, so they're just in survival mode. And the easiest way to think about that is imagine being in a warehouse and just having shipments out the wazoo. You have pallets everywhere. Can you survive? Sure. Is it going to be optimal and efficient? Never. So that's where we come in. It is that same exact methodology before transportation. You can survive. It's going to be cost. It's not going to be cost effective. So we really come in saying, OK. Here's what you're doing today. Here's what you should be doing. Here's how to ship smarter to your customers. So it's all about taking data and allowing data to create that story that allows them to truly be able to ship smarter. So shipping shipments to you and me faster, cheaper, and with less exceptions. So all three are important to us and to our customers.

Hannah Testani 03:02

You know, we all wish that it would be easy, but that's just not the jobs that we have. If you're in the supply chain space, you like pain. And I think we also like solving youth problems. So it's similar if you have kids, like you expect something was going to happen and then you got a kid sick, you got this happening. Like you just got to adapt and you want to do it as efficiently as possible because of the scale that we're all working in.

Hannah Testani 03:52

And know, most people have different problems. They all kind of come back to from my perspective for access to data. And I'll say the biggest opportunities that we usually see are that are the people coming to us had no idea those were pain points. So they think that their pain points are their teams are being inefficient. They're using the wrong carriers, the wrong packaging. We might get their data and say, yes, those are big issues. but you have much bigger opportunities to unlock. And by doing that, you'd be able to probably impact other issues, but just much more of a financial impact. examples that I would pop up. using the wrong services. We have a lot of customers think about California. They might be shipping second day air. Ground might be one day. So you're using a more expensive service and it's slower. And people don't realize this. If you telecarrier two days, They're going to wait two days to deliver it. They're not optimizing it because they think that you want it there in two days. And big tech companies before a launch will inject shipments into their networks knowing in two days it's going to be delivered. So that's a big opportunity. Another huge one is inventory management issues. So I think really to the same wheelhouse of your customers. When you don't have inventory in the right location, it means you're having to ship cross-country. And that is very costly. So don't grow linearly when you travel mileage, it grow exponentially. So when you have inventory issues, whether it's because they're in the wrong DCs, they're in a score, whatever it might be, the financial impact of that, as well as the customer experience is really damaged. So we really exist at scale to say, here's where you are today. Here's where you could be. And then from a data perspective with no emotion, just saying, how do we get there? And that's everyone's got tons of problems.

Hannah Testani 06:47

Yeah, there's just, there's so much inefficiency and waste all throughout supply chains and there's just opportunity everywhere to be more efficient. People are only just in survival mode or they think that they put in right business rules, but then they don't. And the inventory issue is always the big gotcha because you got to get to customers. But hopefully by now they've gotten a little bit better.

Hannah Testani 07:45

So how accurate are your customers at forecasting?

Hannah Testani 09:06

If it's working, why open that can of worms?

Hannah Testani 09:39

Yeah, I actually was just at a conference on Tuesday and Craig, Craig Fuller was the keynote. So we are not necessarily impacted by transportation costs. So it's been a pretty soft market. It's been very hard to be a trucker in the past several years. That will probably continue. Especially as the wave of autonomous trucks come in. They're just going to be so much disruption, but ultimately there's I think it'll probably be a natural progression between just less new truck drivers entering the market and then the autonomous vehicles that can just be a lot more efficient. So in terms of the actual pricing, it's definitely pretty impactful, especially to our customers. But what I'll say is, no, they go through procurement cycles, which is generally once a year on the trucking, basically anything but parcel. And it's been really tough to be a carrier. these past several years since, since 2021, so we don't expect that to actually get better. Well, I, what we are seeing is on the parcel side, the carriers are starting to increase their rates and there's a different shift and what the carriers want. So, UPS and FedEx have publicly said that they don't really want e-commerce anymore. So they're letting these new carriers.

Hannah Testani 11:07

No, it just, there's not a lot of margin there and Amazon is coming in and winning. so I think Amazon is about to come in and really just become the third huge national carrier that performs well, especially because a lot of companies are already using Amazon's network from a fulfillment perspective. So it just makes sense to just give them that last mile. So from a parcel perspective, I think that it's about to flip back to a carrier market. So you're going to have UPS and FedEx that can pretty much price as they want. It's not going to be COVID levels because there's enough supply from other carriers where they just can't increase prices the way they did in COVID, which about 20, 25%. But I do think we're about to see increases that customers have to be able to budget for. On the other side, know, all the other carriers, we're going to continue seeing them squeezed out because the pricing is just so competitive. So the small companies are gonna continue going bankrupt and the big ones are just not gonna be profitable. So all to say for a shipper, it'll be business as usual. They're pretty much expecting this. But where I think it's gonna impact warehousing is as parcel carriers start to increase rates, you're gonna have shippers diversify. So if they're using two to three carriers today,

Hannah Testani 12:36

they're going to be forced to become nimble. They're gonna look at a clear jet to figure out how to leverage air transit with ground pricing. They're gonna look at more regionals. And what that means is you're gonna have to have warehouses that can have more docks, more gay lords for sorting, just a lot more sophistication, which means it's gonna be expensive to set that up. You're gonna have to have some construction there. But once you achieve that, now you've got no one who has you hostage. and you'll be able to just be able to be much more efficient and run faster.

Hannah Testani 13:30

Yeah, I mean, the spend is important because you can't run a business if you're not profitable. I think that you're going to have to figure out more crafty ways to be more nimble. The beauty of that is, everyone's talking about AI, everyone's scared of AI, even in supply chain, which is very complex space. As you think about all of this complexity, as you create, these more sophisticated networks,

Hannah Testani 13:59

It requires people that understand it to be able to design it. So if anything, I would say that's a win. So you're going to have to learn to be more crafty to understand what you're doing. But those who can do that and perform will shine. Those who can't will have to figure it out. But there will be jobs. There will be a need for that kind of sophistication and levels of just network design.

Hannah Testani 14:31

Exactly.

Hannah Testani 16:22

There's other ways to solve that problem potentially, and that's where you really got to get creative. But if they just have one DC today and their customers truly are everywhere across the U.S., they could also just do a wine hall injection. So they could take all the shipments, pay the premium to have them come out of the beautiful West Coast, and then actually inject them somewhere closer to the middle of the U.S. And then they can all go out zone four at most. So yeah, that's where you have to get crafty. You have to really figure out how you're designing for the future because you can't just continue to absorb costs. So at some point you are forced to just stop and reflect and say, okay, what I did in the past should not influence what I'm doing in the future. Yes, there are some costs, but what else can I do? mean, you gotta, in part, it's painful, it is expensive, but...

Hannah Testani 17:19

you have to design for the future if you plan on moving in it. And it's hard for a lot of people to get that.

Hannah Testani 18:00

Was that a question?

Hannah Testani 18:05

Yeah. Yeah. Yeah, so it's actually really common and you would actually load it usually right into the carriers networks. So you would just say you use UPS or FedEx. You can ask them for their hubs or it's you can ask that GPT and it's available and then you could either do a multi stop hub injection or you could just do a one stop hub injection. Depending on the volume, you would run these either daily or just you know every few days so. There's two things that really matter and one is the most important is customer's expectations. So when does the customer expect the shipment? Because you need to be able to make right by them. But if you can plan for it, if you can buffer the on time promise information, then you can absolutely, you can do a multi hop or a single stop hub injection. You would label everything before you put it into the truck. And then once it's there,

Hannah Testani 19:10

They care if we just receive it and scan it. So that is a very common solution for huge shippers or smaller shippers.

Hannah Testani 19:40

Yeah, everyone wins you win the carrier wins and hopefully your customers went to, but you just got to kind of spec it all out and make sure that you have the volumes for it to make sense. And it will be there when it needs to be there.

Hannah Testani 20:13

Yeah, most people have similar, most companies have similar problems, but they feel like it's very unique to them. But it's usually like 80, 85 % similarities. And then you work on the edges to make it make sense for them.

Hannah Testani 21:00

There's tons of problems and it's because although there are standards, no one uses them. So I think about it, you go shopping, you're to go shopping to 20 stores, you'll get 20 separate receipts. They might structurally look the same, but they're all different. That's the same with carrier invoicing. So every carrier invoices differently. There's no standards and shipwrecks are complex. So it's not always the carrier's fault. that they are invoicing accurately. Many times it's because the shippers don't give them proper information. They say, you know, deliver it to this address and that needs to be moved or they go to deliver and they're like, I need you to deliver inside. No one paid for that. Well, that's what you have to do. So it is not an easy role that we live in. There's always continuous demands that ship, that carriers have to adapt to and all of that creates complexity. And it almost always boils down to bad data and that's being, know, bill of waiting.

Hannah Testani 22:07

It's manual. There's not a lot of automation to at the inception of data to clean it up. know, it's still someone is writing in a piece of paper. So there's so much noise and then every everyone expects different things. And you might use a hundred carriers and get a hundred different invoice formats with inconsistencies. You know, there's misspelling, there's miskeen. You might just call things differently. I might call it ground, you may call it ground delayed. So there's just, there's always deltas and differences and that creates audit exceptions. So we don't love when carriers have exceptions. don't, our billing model is not for them to feel it for us to get paid. We work with the carriers to fix the issues, but it's tough. And even you work with a big carrier, expeditors, they're individual branches that all operate as separate entities. So even though it's a massive company, you're working with every single plant manager that's all separate. So it's just, it's complex and it's great for us. That's why we have a business to be able to take all that complexity and make it consumable, but it's hard. And it's hard because of the sophistication and the complexity that supply chain is.

Hannah Testani 23:48

Yeah. It's continuous and think about it from an inventory perspective. When you're working with a new customer, you probably, when you're signing that contract, you think everything is going to be perfect. You are using the data that you have to make the smartest decisions. But then they go and launch a crazy new SKU and then that SKU throws off everything or they buy someone or they divest someone. just, this is life. If it was simple, anyone can do it, but it's not.

Hannah Testani 24:18

We audit daily. mean, throughout the day, we're getting data and generally there's tons of issues consistently. So, whereas we might start with 20, 30 % issues, we want to get that down to less than 5%. We're rarely as successful because there's always new issues that continue to happen. But that's why our teams come in and we automate what we can. But what we can't, we will talk with the carriers and say, you have to fix this issue for these to stop occurring. We want the data to be invoiced accurately because it creates clean data. And when there's inconsistencies, it means that people who use data to make decisions are using bad data to make poor decisions. And you know what happens when that exists.

Hannah Testani 25:04

Bye. So we normally work with logistics, procurement and finance. Logistics are the people that run the data day. So they're the ones taking the data and saying, how do I run faster? Precurement using the data because they need to go source bids and they want to use better data to be able to talk to the right carriers. And then we run all the simulations for them. So if they're going to bid for hundred carriers, they say, okay, guy, the hundred carriers tell me what to do. And our system does all the calculations for them. And then financing is as for the cost allocation. So every single box, we are the ones that cost allocate. So we're saying here's what it actually was for, here's how to cost allocate it. We do the accruals for them. making sure that at no point there's any kind of fiscal questions on what needs to be budgeted for their fiscal closes. So we become very close to all three teams in terms of the levels. For smaller companies, we're gonna come in at the C-suite. For bigger companies, it's VPs, SVPs, directors, really depending on the org setup.

Hannah Testani 26:33

Thank you.

Hannah Testani 27:14

Yeah. AI is definitely the buzzword. Um, and it's, it's really powerful. So when you started your AI journey about nine years ago now, so AI is only really new from a large language model perspective. It's been around the machine learning for about 20 years. So our biggest wins we've incorporated for the past several years and it's using machine learning. And I'll try and equate it just to layman's terms. So. The way this system works, it takes all of your transportation data, which is very complex. is global. There's lots of DCs, lot of inbound flows, outbound flows, and it has the intelligence to say, here is all of this customer's data set, let me group it into what I think are like patterns. And it does that without any kind of intelligence. So that's unsupervised.

Hannah Testani 28:13

And then within each data set, it becomes an expert at predicting future shipments, which means as you go and ship out a million shipments next week, at every single shipment level, if it couldn't predict it, it's anomalous. The easiest way to equate it is through credit card fraud detection. It uses the same type of machine learning where you never have to go in and say, tell me if someone's in a Home Depot in Idaho.

Hannah Testani 28:42

by 99 cents, it knows you and it says that is likely not going to be Justin. I'm going to call you a text to email you and that happens. So they want to protect you. So that has been a huge win for us. What I will say is we started the year off with this beautiful product roadmap of where we expected to grow. Mid February, the advancements in AI were far beyond what anyone could have expected. So my challenge to everyone here, if you are at any level, go and become an expert in every one of the AI companies. You need to be able one, once you start getting there, then you're like, I don't know what I'm doing. Day five, you're an expert and you almost get to the point where you're like, oh my God, what am I going to have to do because I can do so much. But I promise you by day 10, you're like, okay, it works. I'm automating a lot.

Hannah Testani 29:38

But I still need to do more or I can do a lot more. long as your mindset is what new problems can I solve? And I'm going to propel you. So when we think about AI innovation, which is what I mentioned before, then there's automation. And for most companies, for most people, instead of using the AI, they said, what can I automate? Cause that's what we've been doing for a hundred years. And then AI can solve a lot of those problems for you. And you know, we've been.

Hannah Testani 30:08

We've been leveraging it everywhere. So our engineers run so much faster, but it also has been working for us. Our audit, it actually will tell our audit team it's suggested reactions, but historical, historical responses. will dissect data as an analyst. And then it would say, well, here's what we should do. Let me test my thesis and then come back and say, yes, it worked and go suggest it. So besides for just the obvious opportunities to just. automate what people used to do. It's allowing us to do so much more, so much more proactively. So AI is here to stay. It is like a calculator. We all use them today. Almost no one does any mathematics by pen and paper. So you just need to push yourself to be comfortable so that it is no longer, I don't understand AI, but you understand it, your teams get it. And the one thing I'll say is start small. Don't start thinking,

Hannah Testani 31:06

How do I change my entire company, all of my work efficient of data to mark that you will fail because it's too hard to think about that. Start small, small projects, small wins for each one of your teams and then let them become the biggest advocates. But you need to understand because it is very expensive if it is not done properly and it's not going to be a win for you if you cannot run with your team together to go hit the AI wins.

Hannah Testani 32:20

Yeah, I mean, I, from our perspective, we don't necessarily look for ways for AI to replace our people, but we will absolutely replace people who are not comfortable using AI because we just, we're not going to, it's, you're too unproductive if you no longer have this massive tool working with you. So for everyone, I don't, there are not many professions that aren't going to get some win from an AI perspective and you will only

Hannah Testani 32:48

win individually more if you're an expert and it's free, know, anthropic classes, just take the time, learn it. It doesn't, it's not a lot of investment and then you can become that hero at your company. So yeah, I think it's, it's it's a huge win and I'm excited to see what happens. I don't think that I'm not, I'm not as smart as you might must obviously, but I don't see a world where next year, you know, people aren't doing anything and we're just sitting at home eating.

Hannah Testani 33:17

I think that people are going to be around for some time and there's a value to what we do.

Hannah Testani 33:35

Yeah.

Hannah Testani 34:03

You know, I wish that that was happening, but truly the companies that we work with, they're so big. Yeah, I think that like, you know, in 2025, everyone felt defeated. They tried it in a big way, it failed. then, you know, now they have no RY to show for it. So now they're starting small, smaller and trying to get wins. So I do think that there is a future world. I just don't know when.

Hannah Testani 34:30

systems are all going to be performing a little bit better and then a lot better, you know, using cleaner data. Someone's got to clean it. Someone has to think through how all of these data flows work together. But then, yeah, that will be great. And what that will allow is for what everyone is doing, just being elevated. Because I don't know about you, but the people who I've talked to, it's never a question of, you know, yeah, that's a great idea. When can I go implement? Can I go implement? That is always a question of timing, prioritization.

Hannah Testani 34:59

They wish they could go do X, Y, and Z, but they're resource constrained. And in this market, no one can hire anyone because everyone's saying AI, AI, AI. So use your people better. And I that that's what AI will elevate.

Hannah Testani 35:20

How are you seeing it on your end?

Hannah Testani 38:21

What's cool if you, um, if you use chat, you PT or Gemini, you can create prompt libraries for entire teams. So you can say, you know, I'm going to always use this prompt for this problem. And then it's continued to evolve that prompt as you learn more. So at least that is creating a consistent process that everyone follows and not everyone using AI in a separate way. But I just found that to be a great way to make sure teams are consistent in following processes.

Hannah Testani 39:46

Yeah, when you want to lock that, you can also just search it with a database that everyone can just call on. They can see other information. So that was one of the first unlocks we had. And we actually set up a weekly call with all of our team leads to have each of them talk through AI wins. This was Q2 of last year. So it's evolved a lot since then, but it allowed everyone, you know, if you're in the audit team versus if you're in the sales team, just you might think you're solving your own problem, but it's actually interesting to listen to everyone talk about how they're using it. another potential could win for you.

Hannah Testani 40:52

Nothing.

Hannah Testani 41:38

Yeah, there's no easy answer to this. It is just applying the best data that you have access to and then make the most informed decisions. So if you can avoid going to the US, especially because of the duties and taxes here, then don't ship into the US. You go direct to this to where you're going to. So the end of the day, focus on making sure you have data, getting it clean. And then once you have that, you'll make the right decisions. And hopefully you don't get burned by making the wrong ones before then. But inbound is a lot harder to predict than outbound, outbound, generally just the speed it takes to get there. So everyone, it's a hard problem for everyone to solve. No one does it perfectly. You might think you have perfect forecasts and then you don't. So be a good partner to your carriers and then they'll be a good partner to you. And so I would focus on that not being transactional, but really a partnership and then they'll give you leniency when you have issues and they want to continue partnering with you. So there's no silver bullet to answer that one, but hire smart people, use good data and then make the best decision that you can without emotion. People are very emotional. So they feel like they should be doing this. They want to, they don't like this carrier. Let the data speak for itself.

Hannah Testani 43:10

No, I really appreciate you having me on. It's been an absolute pleasure. I think that everyone listening knows that there's just so much complexity in this space. It's not gonna get better. It's only gonna become more opportunistic to be able to take advantage of the latest and greatest technologies. So I'm excited for the future, especially in your world where you're gonna have more robots and warehouses. You're gonna have autonomous trucks pulling up to warehouses and there's just gonna be so much more automation and efficiency. so I think that as we think about the future, we got to really put our brains think that we're not going to have the same constraints we have today in terms of anybody that we can move through our disease. It'll be different when there's not people that are time constraint, any breaks that need to go to bed. You can have robots doing it 24 hours a day trucks coming in at any time of the day. So I just think it's going to be a whole new world out there and you have to be ready to just. not let the historical information taint the way you solve future problems.

Hannah Testani 44:15

It's a pleasure. Thank you for having me. I really appreciate this. It's been an honor.

Hannah Testani 44:20

Yeah.