Fresh after the launch of its online freight price marketplace, Freightos has moved to boost its reach with the acquisition of WebCargoNet for an undisclosed sum. The takeover creates the world’s largest freight rate database and reflects Freightos’ management’s conviction that the cargo market is ripe for online pricing and booking.
Freightos CEO and founder Zvi Schreiber has described the logistics industry as “slow, opaque and offline,” and calls it the final industry that has yet to move out of the analog stage when it comes to pricing and booking. He found the industry characterized by siloed information, lack of pricing transparency, and obsolete analog documentation, resulting in importers often having to wait days for a single freight quote and overpaying by as much as 40%.
For evidence of the momentum that is changing this situation, he can point to the work that his company did in recent years, when it automated freight price quotes for some large forwarders such as Nippon Express, Hellmann and CEVA. FreightNet, the online quote and booking mechanism introduced by Kuehne + Nagel in 2014, has also helped build momentum, he noted.
After the beta launch back in January, Freightos formally went live with its Marketplace in late July. The platform compares freight services from multiple logistics providers, taking into account global pricing for multiple routings, and allows shippers to book the shipment directly.
Initially the platform covers shipments by air and ocean from China to the US, but Freightos wants to spread it quickly to other trade lanes.
Not surprisingly forwarders have been sceptical about this development, noting that moving cargo is a complex business with a lot more parameters than price. Earlier efforts to automate pricing and booking during the dot-com era failed to gain traction in cargo.
For his part, Schreiber has argued that conditions have changed. Supply chains have become more dynamic, and shippers cannot wait for a forwarder to check out various routings and call them back later. For e-tailers, who incorporate delivery into their website, pricing and routing decisions have to be made within seconds, he pointed out.
According to Schreiber, long waiting periods and inflated prices stemming from opaque pricing seriously hamper growth efforts of shippers and consignees, particularly small- and mid-sized firms. SMEs play a key role for Freightos, constituting a significant part of the shipping and importing clientele but, at the same time, they are often too small for forwarders to reach.
“We aggregate small shippers for forwarders – it’s a pot of gold. They can’t approach SMEs to sell to,” he stated.
The acquisition of WebCargoNet boosts Freightos’ reach considerably. Together the pair cover 200 price data points with hundreds of millions of international and domestic rates and routes, according to Freightos.
WebCargoNet, which is headquartered in Spain, boasts a client list of more than 800 forwarders that use its platform. It offers several apps, including tracking, maps and a volume converter – as well as instant, up-to-date air cargo rates.
For the time being WebCargoNet will continue to operate under its own brand.
“Over time, strategic synergies will be leveraged to provide more comprehensive and innovative online solutions to carriers, forwarders, and shippers,” Freightos stated in its announcement of the takeover.
By Ian Putzger
Air Freight Correspondent | Toronto
