A start-up’s 21st-century upgrade to a $4-trillion business

Today, travelers can get quotes for airline travel online; taxi passengers can order rides with an app; and drivers can get up-to-the-second data on what routes to take and which ones to avoid. But in the international shipping industry — a business worth about $4 trillion — things are done today as they were decades, even centuries, ago.

“It’s totally inefficient,” said Zvi Schreiber, CEO of Israeli start-up Freightos. “Unlike with air travel, for example, where passengers can get quotes on multiple airlines and order tickets in a matter of minutes, it takes days to get a price quote on shipping cargo. Agents are the go-between to locate ships, determine routes, figure out pricing, etc.”

There’s no reason why shipping, like so many other things, can’t be automated, Schreiber believes — so he started Freightos, a company that is determined to bring shipping into the 21st century.

By utilizing big data, advanced software routines, and cloud technology, Schreiber believes he can modernize shipping to the point where companies or individuals that need to send cargo overseas will be able to track down the ship set to sail from the port where their cargo is located, and its destination port, with automated price quotes for shipping, insurance, lading, and anything else involved in moving goods from point A to point B.

Schreiber, a serial entrepreneur, has a number of very successful tech exits under his belt, including Tradeum (acquired by VerticalNet), Lightech (acquired by General Electric), and Unicorn Solutions (acquired by IBM). He was also the brains behind G.ho.st, a cloud-based operating system and computing environment that has a lot of similarities with Google’s Chrome OS. But he preceded Chrome by about five years, “before the world was ready for such a virtual system,” claimed Schreiber.

But the world is most definitely ready for a better way to do shipping, according to Schreiber. Until now, the furthest that most shipping agents have forayed into the digital age is to use Excel spreadsheets that need to be updated manually to reflect changes in scheduling and space availability on container ships. Besides taking a great deal of time to issue the quotes, the fact that the data is updated by the agents themselves means that the information is often inaccurate. Eventually, the mistakes are discovered and corrected, but that usually only comes after a great deal of time has been wasted in making incorrect calculations, distorting budgets and causing much inconvenience to exporters and their customers.

Using cloud technology and big data automation techniques, Freightos provides a “Software as a Service” platform for freight forwarders to manage their rates and automate their routing and pricing. Data on ship location and availability comes from an online source called Linescape, and the system adds weather data, price schedules, and other information that are components of a shipping quote. The system is also compatible with the Excel files and PDFs currently in use, enabling them to be accurately updated to provide accurate quotes as needed.

One reason no one has come up with this system before is that there is a lot more data to crunch in freight shipping than in passenger air travel: There are more databases to access and more legacy data that need to be factored in (contracts, memorandums of understanding, numerous methods of computing weight/distance/storage costs, etc.). But with the powerful databases, fast communications, and advanced big data algorithms available today, it’s time for the shipping business to upgrade its performance — saving money and time for shippers, customers, and ship operators.

Established in 2013, Freightos saw its business jump 600% in 2014, making it a significant-enough player in the shipping industry to attract Robert Mylod, the man credited with turning Priceline, the online travel service, into a billion-dollar company. Indeed, Mylod believes that Freightos has the potential to do for the shipping industry what his former company did for air travel.

“Freightos is poised to revolutionize the trillion-dollar freight industry, introducing the same efficiency and transparency that Priceline brought to consumer travel,” said Mylod. “While the freight industry is inherently complex, Freightos’s innovative platform can vastly improve the global freight quoting process and introduce significant savings to global supply chains.”

Shreiber adds: “Almost $19 trillion of goods were imported/exported in 2013. That’s a growth of five times compared to 1990. But the technology of the cargo industry hasn’t changed at the same pace.

“Freightos is automating freight sales and bringing it online. Importers and exporters are people who buy clothing, electronics and food online in seconds — they shouldn’t wait days for freight price quotes, with inaccuracies that drive up shipping costs.”