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Peter: Rich, is there anything you'd like to add to your introduction?

Richard: No, Peter. That was a wonderful introduction. I appreciate that.

Peter: Okay. Excellent. Thanks. Then, okay, let's dive right in. Richard's background and motivation. So, Richard, what inspired you to found Adiona Tech, and how did your background in engineering lead you to focus on sustainable logistics?

Richard: Well, I have a background in electrical engineering. That's my training. I worked in the medical device space for about 15 years. So I really enjoyed translating research from academia and universities into practical products that were used in hospitals all over the world. So, from an early part of my career, I really just enjoyed practical problem-solving, but bringing in technology and techniques that come from deep research—which often are difficult to commercialize; they're tricky to commercialize. That's really what got me out of bed for the last 20 years, so to speak.

A few years ago, when I was finishing up with a cardiology company that I was managing here in Australia, I was at a point where I wanted to start my own venture, but I wasn't sure what it was going to look like. Any engineer usually has a list of problems in a notebook or a digital place somewhere that they're scrolling away for a future potential business. One of them was around optimizing the workforce location of people in services—hospitality, accommodation, real workers out in the real world that have to travel long distances to get to a physical place-based job. I won't go too deep into that story.

But basically, through that journey, I met my co-founder. Our first attempt at a business based on that failed. But along the journey of that failure, we met some people in logistics and supply chain who are really interested and compelled by the techniques that we were developing for those other types of optimization problems and thought that they had a potential application in logistics. It turns out that they did. And so we were able to do some early work with Coca-Cola and some other companies around optimizing their fleets that then led to our current logistics sustainability and efficiency platform.

Peter: Cool. Then there is the name Adiona. I hope I'm pronouncing that right. Adiona.

Richard: It's very good.

Peter: It's a Roman — I did some research. It's a Roman goddess, the goddess of return journey. I guess that links quite well into what you're doing. But how does that symbolize the meaning of your company's mission? How does that link in?

Richard: Well, in terms of pronunciation, Peter, I think you did a phenomenal job. So bravo. I also always recommend people to just pronounce it like they have a fake Italian accent. It usually gets people to have some fun with the name. Adiona, Adiona. Yes, we chose it because, at our core, when we started the business, we wanted to do something socially positive. It wasn't necessarily just related to sustainability. It was really around, again, commercializing research-based technology in our choice. It was the optimization field. But we wanted it to be, at its core, a social mission but a business, a for-profit business that's doing socially-positive technology work.

Adiona represents how we're approaching the three pillars of what we consider to be financial efficiency, sustainability that's driven by that financial efficiency and, always at its core, humanistic AI. Because we develop a lot of AI internally, and we're always guided by the principle that it should be from making the lives of people in the supply chain better. It's a net positive, then it's something that we want to pursue. So that's what Adiona really means to us.

Peter: Interesting. Okay. Well, it's not easy finding suitable company names.

Richard: It was a fierce debate internally, that's for sure.

Peter: I can imagine that, yes. Then talking about smarter, greener cities, apparently, Sydney is already a fantastic place—a green place, I'd call it. So what does building smarter, greener cities look like in practice? What kind of role does logistics play in that vision?

Richard: Well, a lot of cities, Sydney included, are very automobile-based cities, right? Sydney, like many other places around the world, was designed in its modern era to accommodate cars. That is something that we now struggle with. Because even when it comes to, say, low-emissions vehicles or converting from petrol cars to EV, you're still working within the confines of a car-based city. And so a lot of what smarter, greener cities means, especially in an IoT context, is: how do we leverage that automobile design of cities better to be more green and better for people to live in? From a logistics perspective, it's around: how do we reduce congestion? How do we reduce the burden that logistics plays on cities? That's a huge topic that we can talk about in depth, but simple things like being able to consolidate delivery vehicles and procurement offices for public buildings. There's many different ways to make a city better and more livable from a logistics lens.

Peter: Is there a concrete story you could share where both came together, community and technology, that solved a challenge?

Richard: Yeah, absolutely. I mean, one of the projects we did in the first couple years of the company — keep in mind, Adiona, we've been around for five years now. So we've been on market for four and a half years. One of our early customers was a company here in Australia called Parcel Point. Now, they've since been acquired and merged into another bigger company. They had this really cool vision, where they wanted to take e-commerce parcels that were being ordered by consumers and consolidate them at a warehouse—a distribution center in the suburbs, far away from the city center—but then do truck runs to deliver parcels not to the end consumer, the end purchaser, but to delivery hubs that were based out of convenience stores. So they would rent space in a convenience store, like a locker space, and then use it as almost a pickup locker network. Then consumers could pay a lower price to go and pick this up at their local convenience store. For the convenience store, it drives foot traffic. It drives sales volume, so it gets people into the store, which is always good for them.

Peter: Okay.

Richard: And for anybody who didn't pick up their parcel, they would then dispatch carriers on cargo bikes, electric cargo bikes. That was a really cool thing for us to work on with them, was this really complicated multi-layer network of delivering parcels in a super sustainable way compared to a big network of vans.

Peter: Yeah, it sounds really logical actually to do it this way. Sometimes one wonders why don't companies not think about this earlier, right? But this really makes sense. It's actually an eye-opener indeed.

Richard: Yeah, when you see it in practice, the impact that it can make on the local area, it's really great to see people's response to it.

Peter: Yeah, I can imagine that. Then talking about electrification, what are the biggest hurdles for fleet operators looking at and transitioning to EVs, like EVs, cargo bikes, alternatives, anything that is more sustainable and agreeable with the environment?

Richard: Well, you're in China. China is the global leader in electric vehicles. It's been amazing to see the variety of excellent vehicles that are coming out. In other markets, there's less selection of EVs, so they tend to be more expensive than their petrol, or gasoline, or diesel counterparts. So the cost is a barrier already. Because of regulatory changes and things like that, that cost is starting to come down, but still a bit slowly.

The other big resistance or hurdle for EVs and alternative vehicles generally is simply that the software solutions aren't designed for them. They have a very different running profile than a diesel vehicle. Say, for instance, if you stick two tons of payload into a diesel van, the range of that diesel van is going to be lower than if it's empty. But it's actually not going to be that significantly lower compared to an EV where it's very sensitive to payload and the difference between if you drop off a couple of kilos of product at every stop along the way, you're burning range of that EV. So the solutions and ecosystem of software that is able to run those vehicles is very limited in these days. We're an early jumper onto that problem to solve it, to then, again, reduce one of those friction points so people can adopt more EVs.

Peter: That is quite interesting. Just a bit off the record. Because here, everything is electric in Shanghai indeed. All delivery cars are electric. Even the buses carrying around the people, they're all electric. But then it's all within the city limits, which is a big city. But still, it's within the city. EVs are crazy cheap here because they are simpler than combustion engine cars, right? So they are much simpler built. They should actually be cheaper. But in going to Europe, indeed, they get very expensive. I think, I don't know what is the reason for that. Okay. Interesting.

Richard: Yeah, I think there's only 17 moving parts in a typical EV or like a minimalist EV, like a Tesla with a touchscreen where it's a software-driven device. 17 moving parts compared to an internal combustion engine where there's hundreds.
Peter: That's crazy. Yes, and then basically no maintenance. You got to change to brakes, the tires, and that's probably it. Well, okay. I'm driving a 17-year-old BMW here.

Richard: You're the outlier now.

Peter: I am. Let's get back on track. You've mentioned off the wall sidewalk vehicles and e-bike trials in Paris. What are some of the most surprising or promising alternative delivery methods you have seen?

Richard: It's really interesting to see how different organizations are innovating. So I mentioned that one where it's that hybrid model delivering to kind of micro hubs. There's a similar startup in Los Angeles. It's doing a really cool thing, where they have shipping containers full of high turnover consumer products—we're talking things like cosmetics and toilet paper and toothbrushes and things like that—that they'll strategically locate around Los Angeles. Then you can order rapid delivery of all of those staple type items on demand, which is really cool. Then we see lots and lots of locker solutions. Amazon has invested heavily in lockers. Most postal organizations around the world are investing heavily in lockers. All of them with the intent of reducing the number of vehicles required, and large vehicles required.

I think I missed the chance to unpack why that's so important from a logistics context to electrify these vehicles. We did a big study here in Australia and looked into all of the vehicle data from the government and found that, from an emissions standpoint, from a sustainability and CO2 emissions standpoint, commercial vehicles only represent a smaller proportion of vehicles in any country, typically. But here in Australia, an articulated big rig truck is only 1% of the vehicle population but is responsible for 15% of the transport emissions. So there's this massive impetus that we should do better to electrify or decarbonize these types of vehicles because they have an outweighed impact compared to the rest. And so being able to leverage these types of hybrid concepts in different cities can actually drive a massive reduction in emissions for relatively little pain.

Peter: Okay. It makes sense. Then coming to tech that delivers, how does Adiona's AI-driven platform, how does it optimize the routes to reduce emissions? How the hell does that work? Of course, that's a very difficult question, I believe, because you're not going to walk me through the AI algorithm now. But in general, not on a high level maybe, if there is anything you could say about it.

Richard: Well, I'll add another data point to that, Peter, which is that the average vehicle utilization—how full a commercial delivery vehicle is—hovers around 60%. So imagine that any of these given vehicles on average is running around only 60% full, with 40% just air inside that vehicle. Right?

Peter: Yeah.

Richard: Now, imagine you can use AI to opportunistically look for opportunities to keep it full. You're out there delivering in your van. But as it's emptying out, you're picking stuff up. You're sweating that vehicle, sweating the asset as we call it in supply chain, as close to 100% as you possibly can. That's just a really simple way to illustrate how AI can be incredibly useful for taking those precious physical resources that we have, especially the high emitting ones, and at least doing the best with them that we can.

The other flip side of that is, now they can save money, they can improve their margins, they're reducing their missions. But with that money that they save, in theory, they can re-invest that in more sustainable-delivery vehicles. They can start investing in EV pilots and things like that. They have a little bit of extra cash on the bankroll to do that. Whereas logistics companies historically operate on really thin margins, so they don't have a lot of cash sitting around to think about sustainability. That's not top of their list. Now they can balance that a little bit. The AI insights can tell them not only where those opportunities for an EV pilot are but can actually plan it all out for them. Say, these drivers run in this area of the city are perfect candidates to swap in this particular model of EV van. That's the level of detail that we can get to with these insights. So that becomes really easy for these companies to progress with those experiments, if that makes sense.

Peter: Yeah, that makes absolute sense. Very insightful. So could you walk us through how your fleet simulator helps company to plan for the future, from right-sizing fleets to testing new delivery models?

Richard: Yeah, the first principle is simply not breaking the existing system. Coming from enterprise software world, right, they see young companies in disruptive platforms, and they think they're really interesting. But they're very rarely able to pursue them, because oftentimes those elements will break their existing system. And what I mean by that in a really simple context is: I can't go to a big company like a Coca-Cola and say, "We're going to implement this great new system. It's going to be really exciting. But it's going to disrupt your deliveries for a while. It's going to reduce your on-time fulfillment rate by a couple percent for a while until we get up and running." That's a hard no. It's an absolute hard no. So you have to come in with a way to show them that we're going to create a digital twin of what you do now. We're going to let the AI understand that really well. So it understands exactly what makes things tick for your specific organization.

Once we learn that, then we can iterate and start to experiment on top of it using the fleet simulation tools to then say, how do we improve in an iterative way? I think anybody from kind of the manufacturing world and the Six Sigma and lean kind of worlds knows that's the way that big enterprise works. You have to do iterative improvement one byte at a time, as oftentimes the saying goes. So we enable them to do that, to really migrate a lot of these processes that they do every day to keep the business stable into our digital twin, which we call fleet simulator, figure out then iterations that they can do to improve, and then take them on that journey over time. The cool thing is, once they get really comfortable and things are working well, then the experiments and the innovations can happen much faster than they ever expected. Because the platform allows them to really go quickly.

Peter: So once you can prove that the platform will bring efficiency, you're setting a live, basically, from simulation to live. Okay, very, very cool.

Peter: All right. Let's talk about sustainability and regulation now.

Richard: I really love the regulations, yeah.

Peter: So with new climate reporting requirements coming into effect, how are companies using emissions data as a competitive advantage? Is this becoming a competitive advantage?

Richard: Absolutely, absolutely. The best example I can give you is PepsiCo. So we do a little bit of work with PepsiCo. And if you look at the North American market, they have the biggest owned fleet of vehicles in North America, I think just ahead of Walmart. It's enormous. One of the things that they've done, they've been very clever about, is building sustainability into their company ethos. They've got what they call the Pep Positive program. They've set sustainability targets, net zero targets. That's all great. But when it comes to supply chain and logistics, it's very difficult to decarbonize transport. We know that.

But what they've done is they got really innovative about how to use it as a brand differentiator. And so being able to claim that the way that they can sell their products—but then from our context, how they transport their products is more sustainable than their competition, actually does drive sales for them and drives differentiation in their market. Which, hey, look, if that's something that they tactically want to do, we're here to support them to do it. Because they're going to be shipping all those products anyway; we might as well make it as efficient and cost-effective as possible and with the minimum emissions.

An example of that is, in the US, the EPA has a voluntary system where fleets and carriers can voluntarily report their emissions. They also can report the types of vehicles that they run, the age of those vehicles, the fuel efficiency. There's lots of data that they can submit to the EPA. The EPA then holds all that data in a big database. Any company that wants to see it can go and access it. So Pepsi will use that data when they're negotiating with their carriers and their fleet partners to say that, on a dollar-for-dollar cost basis, maybe fleet A is a little bit more cost effective than fleet B. But if fleet B is running more modern vehicles with a lower emissions profile and will drive Pepsi towards their sustainability targets more, they may consider paying a little bit more. That's something that I think we'll see more of in the market over time. But it's great to see leaders putting their money where their mouth is, to do that.
Ikea, I think is a great example of that too. Ikea globally has committed to some net zero targets that are pretty aggressive. What we see in Australia here is that they've already hit 98% of their goals to getting to net zero transport and delivery. That's by helping their fleets invest in low-emissions vehicles and EVs. They work with a company called ANC Delivers here in Australia, and they've truly partnered with them to help provide them the support, the capital, and connections to government programs and things like that to get that fleet, the money that they need to electrify. That's something that, again, I don't think we see a whole lot of it. But as you mentioned, regulations are changing, and it's becoming a mandate in some markets to do these things. I think we'll see more of it.

Peter: Very good. I wasn't really aware of this actually. So there is a lot going on. Okay. So what kind of advice would you give to such logistics leaders if they want to hit sustainability targets without actually sacrificing their efficiency or profitability, at least to a certain degree?

Richard: You know, that's where I tell them to get started immediately analyzing and simulating. Whether you're using our tools or whether you're using some other methodology, get started immediately to understand your network and where you can make significant differences, where there's low hanging fruit you can look at. Because in any network that we've seen, efficiency is there and the ability to improve profits and save money. But the sooner they get started analyzing that, the sooner they can start to plan out on a 5, 10, 20-year horizon, which they really need to start doing now.

Peter: Okay. Good. Well, let's hope the message goes out there. I think it's scalability, scaling real-world impact. You've been working with some very large companies, like — well, let's name Australian Post first. But I think there was also Coca-Cola, right? You talked about PepsiCo. So what are some of the measurable outcomes or lessons learned from those partnerships with those major companies? I guess there's also information flowing back, right? It's a partnership, really.

Richard: Yeah, absolutely. Australia Post is a great example. They've been an amazing partner for us. We just released a series of case studies that are on our website. So if anybody's really interested in the details, they're welcome to go and check those out. But some of the highlights were around the ability for them to rapidly address issues in their own network that were affecting their downstream customers and then fix them—simulate them, fix them, and prove that they were working very, very rapidly in a platform like ours. The example that they like to talk about is how they were under threat with a customer that was going to leave and go to a competitor, because they didn't feel like the delivery routing and the efficiency of the fleet was really up to what they thought it could be. This competitor seemingly was going to be able to do a better job. Very rapidly, they were able to work with us and get up and running.

Australia is the 12th largest economy in the world. Australia Post is very, very large for a postal operator. They're very tech-forward globally, considered to be a leader in technology. They did a global search for optimization technology. They evaluated 12 or 13 different solutions from around the world and found us to be the best. And it just so happened, coincidentally, that we were right in their backyard here in Australia. So that worked out very well for us. They were able to fix those issues that their customers felt were problematic and then retain those customers and, in some cases, win them back from accounts that they'd lost to their competitors. It was really exciting for us. Because when you see at scale the zeros in the dollar figures and the zeros in the kilotons of emissions that they can save, they really get excited about it. There's nothing more, of course, validating for a technologist and a solution provider than when they get smiling faces from their customers that are actually making a big difference in the real world.

Peter: Yeah, indeed. Yeah, this is a real tangible impact indeed. Well, I guess my next question would have been, would you have an example where it really made an impact, where Adiona's solution really made an impact? But I think this is already a very good example. I mean, what you just said.

Richard: Well, I should add, too, just because it would probably be interesting for your listeners. There's such a big intersection with the Internet of Things ecosystem, with the devices that are in all of these vehicles that we work with. That's been a really interesting challenge to use the platform to consolidate and streamline a lot of those data sources into stuff that's really usable. They're used to looking at GPS breadcrumb trails on screens and not finding them particularly useful, but they need them anyway for legal requirements and things like that. So being able to see when the fleet managers and drivers actually get excited too about how this impacts their day-to-day life and the vehicles that they're in is really, always really exciting.
Peter: Excellent. Very, very good input. Now, talking a bit about soft facts like leadership culture, future vision, leadership and culture, you're known for bringing humor and energy to technical conversations. That's what I figured researching you. How do you keep the team creative and motivated in your environment? I know the Sydney tech scene is pretty hot—not just weather-wise. It is at a very high pace. How do you keep the people going?

Richard: Yeah, I think it's really important in any company to just understand what makes your people tick, understand everybody's motivations as much as you can, especially in leadership roles. Because if you want a certain type of company culture, you need to make sure that those leaders are invested in the same things that you are. What motivates you in your mission for the company is aligned with what motivates them.

People are motivated in different ways. So I have people on my team that are more motivated by cash in hand than they are by long-term IP. And so when I'm looking at stock options and things like that in our compensation packages, I have to be really mindful that some people are motivated differently than others. Likewise, some people get a lot of satisfaction about solving a problem that a customer has, versus other people get more satisfaction in not having to deal with a customer or ever talk to them. Therefore, if they can solve a problem proactively, which means they're never going to hear back from that customer, that's how they're motivated. Both of those people have a place in Adiona. But it's up to me and the leadership team to make sure that they feel valued at the level that they want to feel valued, if that makes sense. I don't think enough companies do that at an individual level. They do it still with these wide brushstrokes of how to motivate people, but I think it does need to be personalized to get the best results.

Peter: Yeah, definitely. Individualism that drives people. I do agree fully. Yeah, that's how it works. Standardized bonus structures are not really appreciated by everybody in the same way. It's true.

Richard: It's hard to do because it can be a communication overload to keep track of all that. But I think, again, the modern AI tool ecosystem is making it a lot easier to start to individualize human teams too.

Peter: Yeah, that's correct. Then you're growing at the right age, right? Those companies who have grown up for the past decades, it's still using old ways of working, of doing. For them, it's challenging to make the change. That's always a difference. 

So you probably have also a creative approach to work-life balance, having a young family and a global business. How does that work? In and out in Australia, it's an important thing—work-life balance. It's similar to Europe. It's very important. It differs from China, for example. It also differs from the US, I would say, very much.

Richard: Definitely, yeah. It's nice in Australian culture to be supported to have more balance. But of course, growing up in America, I have an inbuilt American ambition and drive and probably do like to run things pretty hard and pretty hot. That said, I think there's the founder of Culture Amp, HR company here in Australia, that I saw in an event once. He said people told him he was crazy for starting a startup when he had young kids. But the benefit of doing so is that you're starting at rock bottom. I've really always kept that in the back of my mind, that what he meant by that is you know exactly how much time and attention your family requires when you're doing it, right? Then when you take a company and add that into the mix, you know exactly what the commitment to the company is going to be allowed to be. I think in the modern age, success at all costs is just not something that culturally is required, at least in Australia and Europe and stuff. So you do have the option to be a bit more deliberate about how to carve up time.

I just use my calendar as that tactical weapon. Everything, if it's not on my calendar, it doesn't exist. I have time carved out for family. I have time carved out for exercise. I have time carved out for work. Yes, that occasionally causes conflicts, and it doesn't need to be managed. But the overall benefit of blocking things out in advance rather than being reactive is that you end up with a lot more consistency. Everybody is happier because of it. Is that similar to how you balance it? How do you balance your kind of work-life?

Peter: Yeah, well, you have to block ahead of time. Although, at the moment, it's 12-hour days. But yeah, things will get better eventually. When there is a lot of business, you got to take it on. At least that's how I do it at the moment, yeah.

Richard: Yeah, you don't stop picking up the phone just because you're you busy.

Peter: No, not really. No. But yeah, indeed, you have to make sure everybody and also one’s self gets served, right? It doesn't make sense to miss out on sleep and exercise and healthy diet for a company and then have a short life in return. So this is very important. In terms of future vision, what trends in tech are you most excited about for the next few years, five years, in terms of smart cities and urban logistics? What are you looking for?

Richard: Well, that's a great question. One of the things that I think, Tesla has proposed with their Robotaxi and the robotic solutions for the last meter delivery is something I'm really excited about. Because I do see that that's the way the world is going, whether it's five years or whether it's more like 15 or 20. I'm not quite sure yet, but we are setting up everything we do with the expectation that autonomous vehicles will be more available and pervasive in the next few years.

I'm not sure how you're seeing that going in China. But I mean in North America, Waymo is getting a lot more ability to deploy at scale. It's becoming more well adopted. We just see that extrapolating out over time, that it addresses the kind of human resource crisis that we have right now in those markets too—which is that despite truck driving being biggest employment for high school-educated men in the US, that share is rapidly declining. There's less people that want to get into really difficult physical work like truck driving, warehouse work, and stuff like that. So as people are less interested in doing that, we do need to invest in automation to pick up the gap. That's where I see the ability to blend this real geospatial platform, digital twin type stuff that we do with other types of AI that other companies are working on and start to create really holistic, fully autonomous delivery networks. It's going to be cool.

Peter: Okay. A piece of advice you would give to city leaders? What would you tell them? What would it be if you want to advise them on sustainable delivery?

Richard: Definitely, my advice when we engage with government and city leaders is to meet the companies where they're at. Because oftentimes, they think a few steps too far ahead, and we go back to what I said earlier about building things that will break the day-to-day for a logistics company. It could look good on paper, but they just won't do it. City leaders often do that. They're thinking on a 10, 20-year horizon. But it's not meeting the supply chain companies where they're at today, and they need to really think about filling that gap, creating a bridge.

Likewise, for fleet managers, for the future sustainability in their delivery, it's about start thinking about that now and how you can actually use it to your advantage. Because there are ways that you can use it to with the examples that I've given you, you know. There are these companies that are thinking about it in different ways, that make them better, stronger, more competitive. And I think if everybody starts to figure out what that means to their own company—because there are no universal rules—if they think about how that potentially benefits them, then it's a win-win for all of us.

Peter: Excellent. Very good. Maybe to conclude the whole thing, we have this fun question I added here. What's the most unusual delivery vehicle you've ever seen or wanted to try maybe, apart from a Tesla, or is it a Tesla?

Richard: I think it's got to be the air taxis. It's basically like a quadcopter drone, and you can ride in it. I mean, come on, how fun would that be? It'd be so cool to be scooping around with that thing. Do I think it's an efficient solution for tomorrow's deliveries? No, absolutely not. But it'd be so much fun.

Peter: Yeah, well, we will have air congestion and all if everybody would try such a thing.

Richard: Do you know what a t-shirt cannon is? Do you know, if you go to a music festival or something like that, they've got t-shirts in a pneumatic cannon and they shoot them into the audience?

Peter: Oh, yeah. Yeah, uh-huh.

Richard: I want to see fast fashion quadcopter drones that literally just go around. You ordered a t-shirt from Uniqlo. It just comes around and then fires the t-shirt cannon at your door.

Peter: Good one. Okay. Yeah, maybe. Maybe, yeah.

Richard: Maybe. Maybe not.

Peter: Maybe not. Very good. Well, Richard Savoie, very, very interesting talking to you. I really appreciate it. Very good chat. I believe that was a very valuable interview for our listeners as well. So thanks from my end.

Richard: Thanks Peter. I really appreciate you having me on and the thoughtfulness of this. Because I do realize it's out of scope for how most people think of their day-to-day life. We love showing people that what's happening in supply chain logistics does affect their day-to-day life, and there's a really cool future for it.

Peter: Yes, some very good insights about what's happening behind the scenes, actually, to make our world more sustainable. Yeah, thank you. Appreciate it.

Richard: Thank you, Peter.