Freightos’s mission is to bring a new level of visibility to the massive freight industry, which is important as e-commerce giants like Amazon and Alibaba soar
Jerusalem-based freight logistics disruptors Freightos announced today the launch of their online marketplace, providing businesses with a new and more efficient way to manage their shipping needs.
Founded in 2011 by CEO Zvi Schreiber, Freightos’s mission is to bring a new level of visibility to the massive freight industry. According to a World Trade Organization report from 2013, $18.3 trillion worth of goods were shipped in 2013. With the growth of the online economy, driven by giants like Amazon and Alibaba that grant easy access to cheaper purchases from far off lands with the ease of a click, this number can only be expected to climb.
However while buying an item has become exponentially easier, the way that your new purchase reaches you has made little progress in becoming more efficient. The freight forwarders that manage the shipping process for manufacturers continue to work with complicated spreadsheets, comprised of multiple factors that make it difficult to make heads or tails of, and unnecessarily inflate costs across the board.
Speaking with Freightos’ Marketing Director Eytan Buchman, he tells Geektime that, “It takes an average of 91 hours if you’re a small or medium business.” Moreover under the current system, the lack of transparency has created a situation where he says there can be as much as a 40% price spread on average for shipping costs.
Looking to bring order out of the chaos and build their new automated marketplace platform, Freightos picked up a $14 million Series B back in September from new investors Sadara Ventures and MSR Capital, as well as previous funders Aleph VC, Annox Capital, Our Crowd, and IVC.
On the platform, users can compare routes, pricing, transit times, and check out reviews from other businesses on their experiences with the different forwarders. Customers can access the service by signing up on their website. To get a quote, the user has to select what it is that they are shipping – pallet, container or large boxes – where it is being shipped from and to, and a few other specifics like if it is hazardous and needs extra care. The system will pull up prices from different forwarders, and let the user book and pay online. While the SaaS platform is fully automated, they offer a live support team around the clock to answer any questions that could come up.
By moving to this new platform, Buchtman says that, “At the end of the day it reduces logistics costs, makes shipping more approachable, and eliminates downtime.”
For the time being, Buchtman says that Freightos will direct their focus on shipments from Asia to the U.S., with an emphasis on routes originating from Hong Kong, Taiwan, Singapore and China. He says that in 2014, there were over $500 billion worth of goods that were sent along those routes, making it a very lucrative place to start from.
Not the only ones looking to bring hi-tech to the high seas, there are companies like Kontainers that offer a similar service. Haven is another one that is working on creating a marketplace but appear to be smaller at this point.
Buchtman says that Amazon is intending get into the international shipping game as well, and with their big data capabilities, could become a very big player on this scene.
Beyond the announcement of their platform, Freightos catches our eye for two reasons. While many other companies are looking to compete in the same narrow spaces of the future like cyber, e-commerce, etc, they took a wider perspective and looked for old school industries that were in need of radical change. Revolutionizing existing services that reach out beyond the tech community is one of the more interesting stories, and it has a wide appeal. Companies like Uber, Airbnb, and others have figured this out.
While their models may come with serious flaws – think about disruption running up against revolution – they have come to dominate and replace those who came before them. Think of Netflix killing Blockbuster. At their core, Freightos is a big data company (of which there are many) but in applying it to a massive “low tech space” like the shipping industry, they shine like a lighthouse. Hopefully they will inspire other Israeli startups to take on these untapped opportunities and lead to more exciting businesses.