Your clothing, food, furnishings and electronics – nearly everything you buy – reaches you from the point of manufacture via the $4 trillion dollar freight industry. The process of getting a product from ship to shore ought to be no more complicated than getting a person from one destination to another.
However, the freight industry is as cumbersome and outdated as it is vital and growing.
Stepping in to improve the situation is the Israeli startup Freightos, which has created what it claims is the world’s first online, automated freight network. On March 25, Freightos announced a $4.6 million funding round to expand the customer base for its freight automated sales technology (FAST).
“Israel has been a global commerce hub for over 3,000 years, but parts of the logistics industry feel like they haven’t changed since then,” says Freightos marcom manager Eytan Buchman.
“For example, when you want to fly, you go online and buy a ticket from Expedia in seconds. When you want to ship three containers around the world, it takes an average of three days just to get a price quote – and the quote is not always accurate.”
Based in Jerusalem with offices in Hong Kong and Germany, Freightos began marketing its proprietary FAST software early last year, to help optimize pricing and routing processes.
CEO Zvi Schreiber says the technology is disruptive and unique in the freight sector. “There are other products to help in the pricing aspect, but not the door-to-door road, rail, ocean and air aspect,” he tells ISRAEL21c. “No one is doing fully what we do.”
Michael Glamoureux, editor of Sourcing Innovation, wrote: “SI believes that this tool could increase a carrier’s success rate by as much as 50%.”
Travel agents for freight
The Freightos system is intended for use by freight forwarders, companies that function like travel agents for merchandise. Among the better-known brands offering this service are UPS and DHL.
“There are tens of thousands of freight forwarders, including 30 big ones of over a billion dollars each,” says Schreiber, who is demonstrating the product at freight industry trade shows this spring in Atlanta, Brazil, Paris and Singapore. “We focus on the big and medium ones.”
Because each freight forwarder works with dozens of airlines, ocean-shipping lines, trucking firms, customs brokers, insurance companies and other vendors — each with its own complicated tariff regulations that change frequently – Freightos focuses on streamlining and organizing the various pieces of the puzzle.
“At the heart of the system is big data,” explains Schreiber. “We put it together, so each client can keep their own data up to date and put all their rates into the cloud. They use our big data analysis to look for all possible routes across the world.”
A freight forwarder using Freightos can provide customers with instant price quotes for myriad routes by air, land and sea. “We use Google Maps to show the origin and destination, the planes, trucks and boats, on our visually enhanced report,” says Schreiber.
Alessandra Fremura, CEO of Shipping Services Italia, said her freight-forwarding company “is always looking for top quality IT providers to continuously improve our service. We found in Freightos a great partner who enabled us to speed up quotes to promptly meet our customers’ and agents’ needs.”
Can transform the business
Understanding and managing all that data presents a challenge. But Schreiber says the bigger challenge is “breaking into the freight-forwarding industry to persuade them that we can transform how they do business.”
The cost of the industry’s chaos trickles down to you, the consumer. “Every time you buy a laptop or a pair of jeans, at least a few cents or dollars pay for the inefficiencies of the freight industry,” Schreiber says. “Remember that nearly everything is shipped, and 80-90 percent of it internationally.”
Schreiber went into Freightos with a background in B2B ecommerce and software startups. After his electronics company Lightech was acquired by GE Lighting in 2011, he turned his attention to a problem he had identified while helming Lightech.
“Like any company that manufactures in China, we needed to ship to the US and Europe. I was amazed how long it took to get a price quote for common routes.”
Clearly, software innovations hadn’t reached the world of logistics, so he applied his skills to this area. “The product took shape as we spoke with companies and got feedback,” Schreiber relates.
The new Series B financing from previous investors ICV, Aleph Ventures, and follow-on funding from OurCrowd (https://www.israel21c.org/news/ourcrowd-completes-20m-in-equity-crowdfunding-for-26-companies/), is earmarked to help Freightos expand its market reach.
“Freight is the backbone of the global economy but its technology has not scaled with the industry,” said Glen Schwaber of ICV. “The Freightos B2B networking and automation vision is one of connectivity and transparency that promises to make the freight world faster, more efficient and more eco-friendly than ever before.”
For more information, see www.freightos.com.