Consumers and businesses worldwide today can book flights online and make reservations at the restaurants with a tap of their fingers. But if, as a company, you need to ship your products to foreign markets, or import them into yours, then you have to do everything manually, as this field has been untouched by technology.
Into this virgin land steps Jerusalem-based Freightos, which said on Tuesday it has set up the world’s first online market place for international freight: a web platform that allows businesses to get instant comparisons, booking, and management of freight services from multiple logistics providers.
“The freight industry is the most manual industry in the world,” Eytan Buchman, the marketing director of Freightos, said in a phone interview. “We found it takes on average three days just to get a price quote. There is a 40 percent difference in prices between the various freight companies and zero transparency. This is a real problem for small businesses.”
The logistics industry is a silent partner of global trade, and at $4 trillion it accounts for about 10% of the world’s GDP. For small and mid-sized businesses, which make up 97% of US importers, these long waiting periods for price quotes and inflated prices can significantly limit growth potential.
By tackling the challenge, Freightos is putting itself at the heart of a sector that has seen a surge of interest by investors worldwide. Global investment in logistics and supply chain companies surged to $378 million in 2015, from just $43 million in 2013 and $83 million in 2012, according to data compiled by CB Insights, an New York-based data company, and provided by Freightos.
Zvi Schreiber, CEO and founder of Freightos, stumbled across this shipping headache when he worked at a company that had to deliver its electronic components to the US, and found that the process was “slow, opaque and offline.” The information is siloed and the freight companies use obsolete analog documentation.
Freightos’ online marketplace “will make shipping goods as easy as booking a flight online,” Schreiber said.
Over a period of four years Freightos worked with some of the world’s largest logistics providers, including Nippon Express, Hellmann Worldwide Logistics, and CEVA Logistics, and supplied them with the necessary software to allow them to offer services online and automate millions of freight price quotes. Now, with the launch of the Freightos Marketplace, importers and retailers will be able to log on for free, get a list of different price quotes for a variety of delivery options via air sea or land, and book the service they prefer online.
The Freightos Marketplace launched in closed beta in January 2016 and the company has since updated the platform with increased functionality and added more freight forwarders selling more routes, air, ocean, and land.
“We have co-operations with dozens of freight companies selling their services via our platform,” said Buchman. Initially the routes will focus on US imports from China, Singapore, Taiwan and Hong Kong, by air and sea, said Buchman. “Over the course of the month we are looking to launch more routes, with the same freight companies and new ones.”
Freightos has raised $23.3 million to date from funds including venture capital fund Aleph and Jerusalem-based OurCrowd.
“Growing global trade, e-commerce B2B sales, and sprawling dynamic supply chains demand the transparency and efficiency of online freight,” said Robert Mylod, an investor and director of Freightos, and former chief financial officer of the more than $60 billion online travel marketplace Priceline Group. “Just like passenger travel went online to accommodate the demands of a growing market, Freightos is finally ushering in a much needed digital marketplace for freight.”