@Slomo I am a great believer in this. (For over a decade I have included Goldratt's influencial work in my MBA teaching in Operations and Supply Chain Management, and I know that RW has thought deeply about this, and embedded system constraints thinking deeply in the $WTC culture.)

And while, like you, I believe $WTC is "looking to proactively adapt to the new reality" I have to balance this belief with a clear-eyed view of the risks.

I contine to hold what is now a diminished position in $WTC, now RL 6% (although I have reaped returns almost each year since 2016, but that is in the rearview). So, despite being a longstanding bull on $WTC (evidenced by my many gushing posts here over the years) I have not taken the opportunity to increase my $WTC holding in the latest SP downturn because it faces several significant risks as follows:

1. The SaaS-vs-AI re-rating, of which there are innumerable posts and some excellent thinking and views
2. RW and 3 senior managers remain subject to an ASIC/AFP investigation on insider trading
3. There remain some unanswered questions on governance relating to RW behaviour, such that I do not consider that risk fully-closed
4. Container Transport Optimisation rollout has been materially delayed, and there is a risk that delays continue, as it is an ambitious development. As at the latest investor day, the timeline was unclear to me
5. E2Open integration success and revenue synergy remain open questions - I think integration will succeed, but revenue synergy is a bigger open question
6. The rapid pivot to the New Commercial Model is creating significant noise among the FF community, with there is also some commentary form BCOs. It remains to be seen what the customer and BCO backlast will be, and if $WTC have judged this correctly. While it is forward leaning into the "new reality", will it trigger a backlash?

Even for a $WTC super-bull like me, these have caused me to pause, and I think they explain why the SP has struggled so badly - much more than you might consider on the basis of item 1. alone.

I hold all the above items as "risks" because I do not know how they will play out. Surely, I can hope the outcomes will be benign. But to be brutally honest, I have my doubts.

I will be listening with baited-breath at the next investor call on the half year results. Moreover, I have requested to Investor Relations that management give a comprehensive and candid report on the customer responses to the New Commercial Model (Although I have no expectation my email will influence anything. But I am confident that other larger investors will have requested the same.)

All good points and well made @mikebrisy, certainly cause for pause.

It’s quite a list, hopefully not a lollapalooza of risks but we will see how these play out.

I am likely weighing these risks differently to the market in light of their long track record of execution and the potential opportunity now that pessimism is reflected in the price.

The E2Open integration and New Commercial Model are the 2 big ones for me.

I could be underweighting the others but they seem less likely to cause lasting damage and will be sorted out one way or the other in the nearer term. Ditto the debt.

I expect RW will likely remain puppet master (and founder…) beyond insider trading resolution but governance issues will not be fully addressed until he departs for good given his substantial stake. He’s a man on a mission and indulged in some myth making at the AGM when he recalled that he started the business 30 years ago in a basement he dug with his bare hands! It’s an unconventional management structure and style for a business this size but their unorthodox approach and swagger is part of what has got them where they are today (and the source of so much recent controversy).

CTO rollout delays are not encouraging given they haven’t been able to hit their own deadlines bit this is an area where I am looking to the long history of execution in the past which suggests they will get this right before launching, even if delayed. And there have been plenty of distractions so hopefully timing on this was de-prioritised in light of more pressing issues.

E2Open is a big risk and opportunity it seems to me. The timing is not ideal given everything else that’s going on but these opportunities don’t come along very often. This is where a long track record of successful integrations is worth less given the size and shape of the acquisitions. Not sure if I like that consultants have been engaged to advise on integration – good that they got them if they need them, not ideal that they need them. Hopefully they look to sort the legacy issues in that business before trying to connect it to the mothership.

There’s a real chance the backlash from the New Commercial Model grows. Question for me is, do they stick it out or soften their approach? I guess that depends on the extent of any damage. They do seem to have rushed the rollout of this and have been a bit ham-fisted in its execution and explanation. My concern here is that they are overplaying their hand and this will be a big test of their pricing power. In any case would be much better to be seen as a trusted partner than a predatory supplier, especially with all the buzz around AI agents enabling a bypass of B2B software providers.

With 95% of customers on this new model, it’s the smaller customers who have been hit early. With approx 70% of WTC revenue generated by its top 300 (2% of 17,000) customers, their larger customers will not move until their existing contracts roll off. Non-renewal from these larger customers will be a big red flag if it occurs as that would be very difficult for these larger customers.

Another risk is that they open themselves up to is an Innovators Dilemma type problem where enough disgruntled smaller players might willingly switch to a lower spec, scrappy (AI agent) competitor to save money and get rid of their WTC overlords.

I guess the big question is whether the potential reward compensates for these risks and managements ability to navigate them – market doesn’t think so at the moment with shares down a third in 2 months…

Disc: Held

I have a ChatGPT Task running in the background each week (you can have up to 10 such bots with the entry level paid subscription), scanning industry news and online forums for "sentiment" and evidence of the industry response to $WTC's changing commercial model.

Here's an interesting article which includes quotes from some of $WTC's small competitors.It is not definitive one way or the other, but it is an interesting set of perspectives from outside of the $WTC management and investment analyst bubble.

Link to article from the industry paper "The Loadstar" which is reproduced below.

News / Rivals to CargoWise? Pricing is when interest turns to action

By Alex Lennane 02/02/2026

As anger over CargoWise’s pricing changes continues to ripple through the forwarding market, rival transport management system (TMS) providers say they are seeing a sharp rise in interest – even if large-scale switching remains cautious. 

Interviews with Germany-based Riege Software, maker of Scope TMS and US-based Magaya, suggest that while CargoWise still dominates at the very top end of the market, forwarders are increasingly questioning complexity, cost volatility, and support – and reassessing what they actually need from a core system. 

For Riege, the central argument is not about matching CargoWise feature-for-feature, but about reducing complexity. 

“It’s hard to compare CargoWise with anybody else in this industry because they have so much – their zoo is so big,” said Benjamin Riege, CMO, pointing to decades of acquisitions that have created breadth, but also noise. 

Scope, he said, was built around a different philosophy: a single system, one data model, and a fixed digital standard that customers must adopt. 

“If a forwarder decides to use Scope, they have to adopt the standard which is in Scope,” he said. “We don’t produce a TMS for a specific forwarder. We produce a TMS for the whole community.” 

That approach, he added, reflects what many mid-sized forwarders are now asking for. 

“There is a trend to reduce noise,” he said. “So of course having ‘one system to rule them all’ helps everybody because they don’t have to swap systems. They have all data in one system.” 

Magaya’s Mark Buman agreed that forwarders were increasingly wary of overly complex platforms, but said his company was responding by making integration easier rather than enforcing a single standard. 

“We have made it very, very easy to integrate our solution with other products,” he said. “Whether that’s something you’ve written internally or a third-party product, we play nicely with others.” 

Both companies were clear about where CargoWise retains a decisive edge: global customs coverage. 

“When you are a big corporation like Schenker, DSV, Kühne + Nagel, there’s no way,” said Mr Riege. “Scope is not ready in each of the regions fully integrated… CargoWise can say, of course we can do Australia, of course we can do New Zealand.” 

Scope operates in 63 countries, but not with full local accounting and customs integration in all, he acknowledged. 

Magaya, meanwhile, is strong in US customs and expanding elsewhere, but does not yet claim global parity. 

“If you have a bunch of international customs compliance you’re doing… that’s a tougher one for us,” Mr Buman said. “We handle the United States. We partner in other countries, and we’re building more ourselves, but we’re not pretending we’re there yet.” 

However, both questioned whether full global customs coverage was necessary for most forwarders – particularly independents and regionally focused groups. 

Pricing emerged as the most sensitive issue. 

Mr Riege said CargoWise’s recent announcements had created “noise” across the market, but cautioned against assuming widespread defections. 

“We do see people coming to us – heavy CargoWise users,” he said, “but are they really cancelling the contracts? I’m not sure.” 

Still, he contrasted Scope’s approach with what many customers say they are experiencing elsewhere. 

“We try to keep it simple on the pricing so that customers can easily see what it will cost,” he said. “There are no real hidden costs.” 

Magaya was more direct, positioning pricing stability as a core differentiator. 

“Within that contract, it is specifically stated that we cannot touch your price until that contract is up for renewal,” said Mr Buman. “Whether it’s one year, three years or five years, you’re locked in.” 

He added that predictable monthly billing was critical for smaller forwarders. 

“A big fluctuation in pricing is very disruptive to their business,” he said. “You’re paying the same amount every month unless you actually grow or add users.” 

Both companies returned repeatedly to customer support and trust, areas where CargoWise has faced growing criticism. 

“One of our use cases is that you can speak with real people,” Mr Riege said. “You don’t end up in some call centre.” 

Magaya highlighted its 24/7 live support model. 

“If your system needs immediate help, we have someone to answer your call 365 days a year,” Mr Buman said. “You will always talk to someone.” 

And both were sceptical about replacing human support with AI. 

“AI will not help in the same way as a human being,” Mr Riege said. “Maybe for first-level questions, but after that, someone has to answer the phone.” 

On the question hanging over the industry – whether forwarders can realistically leave CargoWise – neither company overplayed its hand. 

“There is really no alternative to CargoWise for the biggest global forwarders,” Mr Riege said. “But when you’re a medium-sized forwarder, of course we are a choice.” 

Magaya struck a similar tone. 

“Replacing a TMS is like brain surgery,” Mr Buman said. “You only do it when you absolutely have to.” 

But both said the pricing backlash had pushed many forwarders from passive frustration into active evaluation – even if final decisions remained some way off. 

“People were interested when the pricing was announced,” Mr Buman said. “Now they’re getting the bills – and that’s when interest turns into action.” 

Disc: I hold WTC

Thanks for sharing the article @mikebrisy .

What would be interesting is to understand what these mid-tier competitors to Wisetech are doing to address the SAAS/AI issue and if they currently have a seat based pricing model and are looking to help improve customer efficiency (aka reduce seats), do they expect to just make less profit (a loss) or will they increase prices per seat to pay for all the “human touch” value add they provide.

It’s good to hear from competitors and test assumptions, I just want to understand to have as critical eye on their story as I do for Wisetech management.

Cheers.

Disc: I own RL+SM so am obviously bias!

@Tom73 I totally agree. In my view, on the one hand, the small players will be easier to disrupt, as their moats aren't as wide, and their customers haven't embedded as many of their processes and enterprise data into their products (so switching costs are lower). On the other hand, they might be more agile, and if leveraging AI capability presents an opportunity to cross the larger incumbents' moats, then perhaps agility counts.

But $WTC appear to have been pretty agile in exploiting AI capabilities, and definitely remarkably agile in pivoting their commercial model. Clearly evidence of a business that retains strong founder control. Might a more conventionally-governed business have been able to make such moves? Likely not. (I've had my own experience earlier in my career seeing how assurance and governance can suck the life-blood out of an agile, strategic response to market opportunities!) So will it turn out to be a positive for $WTC, ... I don't know, there are arguments for and against. But for one thing, it is going to be an interesting ride.

Whenever reading anything, it is important to understand the author's bias. And that's one reason I try to read widely, across different kinds of sources and stakeholder views. And then ulimately, I have to form my view.

I thought the article was worth sharing as it is a bit more toned down than some of the sensationalist writing online following the recent changes, ... we live in an age where anyone with access to a platform can grab their megaphone and shout their perspective, for likes or attention or whatever.

This also applies to the piece I posted earlier about $CAR by the management consultancies. Their motivation is also obvious - to sell consulting projects. So when reading their research the bias is " ... there are many possible strategies, you need to hire smart people to figure out which one is best, and then to develop good execution plans, because execution matters, and we stand ready with expertise to help you for a modest fee ..."

"Point of view" or "bias" is everywhere.

Coming back to the $WTC piece, clearly, the "speakers" for competing platforms to Cargowise are taking the opportunity of their moment of attention to communicate their key marketing messages. I take that as understood, given the affiliation of the commentators is clear.

@mikebrisy excellent logic and analysis on the reason for changing from seat to transaction pricing.

A real 'a-ha!' moment!

@lankypom totally agree with your point about CTO.

Some of the analysts have this badly wrong for FY26, and so while 1H is covered (undemanding overall) there is scope for disappointment for the FY. E2Open cost out will beat soft guidance, but I can’t see there being a material CTO contribution. (I recall reading one analyst has $20m (dreaming) although some others are more realistic.)

I was also impressed with the depth and range demonstrated by Zubin. Of course, he has the legacy knowledge, and he also is a great communicator.

More generally, I was really impressed with most of the speakers. I wonder if RW/ZA will appoint CP as permanent CFO? She’s done quite a bit over the last year, and comes across as super competent IMO.

I also agree with you in that you have to take a long term view on $WTC. I have ever since 2016!

The AFP/ASIC investigation will remain a cloud, potentially for a year or two, before resolution one way or other. Most investigations don’t lead to charges and fewer still lead to conviction. Given RW’s stated sell-down strategy, I’d have thought it almost impossible to prove beyond reasonable doubt, without some very clear email “smoking gun” or similar. Insider trading is hard enough to prove at best of times. But the others might not have such clear, well-publicised cover. So there is room for more disruption. Another reason why you have to be prepared to take the long term view here.

$WTC remains one of my largest positions in RL.