Some parts of the global economy remain remarkably untouched by digital transformation. If you want to book a flight to another part of the world, countless websites and apps will help you find the best option. However, if you want to ship goods to another country, be prepared to do some old-fashioned shopping, with lots of phone calls to find the cheapest or fastest deal.
Enter Freight, which today announced the completion of a $12 million funding round. It believes its technology will transform the global freight industry in the same way neighboring industries have been digitally disrupted.
The Singapore-based company focuses on the freight forwarding industry – the hundreds of thousands of freight forwarders around the world who arrange shipments on behalf of their customers with the world’s largest freight companies. Think of freight forwarders as intermediaries who strive to get customers the best deal from the actual shipping companies, navigating complexities such as the cultural, linguistic and financial differences between markets around the world.
“Forwarders are the backbone of global trade,” said Raghavendran Viswanathan, the CEO and founder of Freightify. “It’s a fragmented and localized industry, but these companies are the glue that holds the entire trade ecosystem together.”
However, forwarding companies currently operate in a frustrating world. When a customer asks for advice on how to move cargo from one location to another, the freight forwarder should call all their contacts at leading freight companies to check prices and availability. It may take up to two days to get back to the customer with a quote for the shipment, with no guarantee that the customer will receive the order.
Freightify’s solution is a platform of tools that enable an experience much closer to what customers would expect from Expedia or Booking.com. It enables forwarders to offer their customers a digital solution. A customer seeking information on creating a shipment enters their requirements online; within seconds, the platform provides a list of quotes from freight companies that can accept the shipment.
To deliver that service, Freightify has partnered with the world’s largest shipping companies and interfaces its platform with them via APIs to enable real-time and automated monitoring of their prices. “Freight carriers have been limited to spreadsheets and outdated processes for doing business for too long,” says Viswanathan. “We set up Freightify to take the hassle out of manually submitting quotes.”
What the system can’t do yet is accept actual bookings – the shipping companies aren’t quite ready to work that way yet. But that’s coming in the coming months, along with additional functionality, such as the ability to track shipments in real time as soon as they’re shipped. “The industry is still catching up, but it is moving fast,” adds Viswanathan.
Nevertheless, so far Freightify has succeeded in enabling freight forwarders to offer instant quotes to customers who want to ship goods, instead of having to wait several days. That greatly reduces their costs and improves customer service. “Forwarders using Freightify save more than 70% of time spent on manual tasks and outdated processes, while cutting the operational costs of doing business in half,” says Viswanathan.
The freight giants are also eager to do their bit as Freightify’s platform provides them with a means to roll out new digital operating models and solutions. And in an industry that has moved to much more dynamic pricing due to the Covid-19 pandemic, the platform is ensuring that the industry can continue to operate that way.
It’s a value proposition with more than 200 freight forwarding companies in 45 markets worldwide signed up to use Freightify’s platform since the company was founded in 2018. Each pays an annual license fee to use the technology, with pricing differentiated according to the number of users and offices the freight forwarder has. The company’s turnover has tripled in the past year.
More than two-thirds of the company’s revenue currently comes from European and North American freight forwarders, although Freightify operates globally. The company is now planning a major expansion, particularly in Europe, deploying more staff in key markets such as Denmark, as well as investments in sales and marketing.
The extra financial strength that current fundraising entails will certainly help. Freightify has raised $12 million in debt and equity financing from investors led by Sequoia Capital India. Other investors include TMV and Alteria Capital, as well as existing investors Nordic Eye Venture Capital and Motion Ventures.
Mayank Porwal, vice president at Sequoia India, says Freightify is helping with a market problem no one else has been able to solve yet. “The freight forwarding industry is a cornerstone of the global trading economy, but despite its sheer size, much of the industry remains constrained by manual processes; it runs on paper, Excel sheets and phone calls,” says Porwal. “Freightify solves this problem by helping freight forwarders automate rate management and make day-to-day operational workflows fast and efficient.”
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