Can I quote you on that?
One of the most obvious and urgent areas where these online startups are gaining traction in the airfreight industry is in the price-quote side of the business – the source of many complaints from shippers when dealing with freight forwarders. Zvi Schreiber, founder of Israeli online startup Freightos, said he first experienced his frustration with shipping when he took over his father’s electronics business in 2010 and did a lot of business shipping goods from Shenzhen, China.
“I saw that the world of airfreight had gotten very far behind other industries,” he said. “Just getting a rate quote from a forwarder would take up to three days. For air cargo that is insane! It’s an old industry, but the passenger business changed itself dramatically. Why not cargo?”
Having some experience in the software world, Schreiber saw that the industry needed software to speed up the quote process. So he set out to create Freightos, a system that could automatically scan thousands of rate quotes and provide the best options within seconds. “Buyers are human beings – they expect everything right now. Young people, especially, don’t want to wait.”
After obtaining some seed funding to get Freightos off the ground, Schreiber began looking for investors. Michael Eisenberg, founder of Tel Aviv-based, early-stage venture capital firm Aleph, has known Schreiber for 20 years and backed some of his earlier ventures. When he heard the idea for Freightos, he said it immediately made sense.
“The timing is right for an electronic revolution to take place in the cargo industry,” Eisenberg said. “We also thought Zvi had the right model – to make it look like a travel app, but one designed not to cut out forwarders. They should be able to participate in the market, not be replaced.”
With Freightos working together with forwarders and cargo handlers, Eisenberg said his company’s original round of investment has performed ahead of his expectations. “You never know what adaptive technology is going to be successful,” he says. “The idea behind Freightos makes all the sense in the world, since there’s all this overhead you can get rid of. Until now, it’s been very difficult to do.”
Currently, Freightos is working with data from CEVA Logistics, Hellmann Logistics and a few medium-sized forwarders. One of Freightos’ first clients, forwarder JSI Logistics, was at first reluctant to sign on with the company in 2013, said Sisi Kim, JSI’s manager, global strategic alliances. A year later, however, JSI, which does a lot of business in the high-tech industry, was finally sold when it saw Freightos’ mapping system that allowed clients to pin-point shipments via Google Maps. “The customer service was better,” Kim said. “We’re getting positive feedback from our clients about the automation of the process.”
In the early days, Freightos had the market to itself, but now the heat is on. Schreiber said that at least 10 more venture-backed companies have entered the forwarder price-quote space in the last year or so.