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CNS

startups seek to shake-up the international freight market

by:CNS     2019-12-16
There has been a lot of discussion about whether the Uber model can change the freight industry.
But tech start-ups that focus on international freight-ocean or Airlines-are faster than other big tech platforms like Priceline, Orbitz, or Expedia.
Max Lock, CEO of Fleet Logistics, said we don\'t offer Uber-style markets because Uber deals happen very quickly and they come out very quickly.
\"Fleet offers an online marketplace that connects shippers to shipping and air freight forwarders.
\"The complexity of international shipping makes it all impossible.
\"On the fleet website, when the customer asks for a quote, the top 5 responding freight forwarders are presented to the potential customer.
It may take a while.
The customer then selects the freight forwarder to work with by looking at the rating and price of the freight forwarder.
So it\'s not the Uber model, it\'s a rating and review platform that\'s more similar to TripAdvisor.
Zvi Schreiber, CEO of Freightos, is another market that connects air and marine freight forwarders to shippers, and he agrees that a better analogy is Priceline, Orbitz, or Expedia.
\"Uber is a shared economy market.
They attract new drivers into the market.
We do not attract new freight forwarders to the market. ” Dr.
Schreiber also agreed that compared to Uber, passengers can receive almost immediate notifications that drivers can pick them up in a few minutes, which is not possible in international shipments.
Freightos does provide the shipper with quotations within 20 seconds, but they are not binding until the freight forwarder determines that they can capture a vacancy on board or on an aircraft.
The freight forwarder canceled the order one day.
However, \"more than 90% of the time quotes are cashed.
\"In the case of an airline, if a freight forwarder cannot find a vacancy on a carrier\'s aircraft, a 3 or 4 day shipping time is quoted and they can usually be on a different carrier.
At Freightos, about half of the 50,000 offers they offer in one quarter were by air.
People usually think of new technologies --
Based on the market, create value by eliminating inefficient middlemen.
At Fleet or Freightos, this is clearly not the case, and they are looking for freight forwarders-intermediaries that link carriers to shippers-to be at the heart of providing shipping services.
The same is true of CoLoadX, a startup that focuses on connecting shipping agents to shippers.
Peter Miner, one of the founders, was HP\'s director of global logistics procurement. Packard .
\"The freight forwarder is necessary because the shipper needs services.
The mistake many startups make is to look at freight forwarders like they do with travel agencies. They aren’t. They add value.
Shippers do not want to negotiate customs in Indonesia, nor do they want to negotiate trucking in Ukraine.
Freight Forwarders can\'t take off! ”Mr.
Lock of Fleet provides different examples of how freight forwarders can deliver value.
\"The largest air freight forwarder is actively working to consolidate the less-than-
Container loading (LCLs)to full-
Container loading (FCLs).
They integrate themselves.
These integrated services save the shipper money.
\"In the ocean, some of the largest freight forwarders will do the same, but they usually have pioneer companies or shipping companies do the integration for them.
\"Other start-ups do not want to provide more efficient connections between shippers and freight forwarders.
They are freight forwarders!
Caitlin Meaden, director of marketing, director of freight, also described the director of freight as a freight brokerage company, but was the first broker of technology.
\"We are a traditional broker, but we have decided to create advanced Silicon Valley technology (
Actually, our headquarters is near Google headquarters)
Solve these problems.
\"Flexport is another example of the launch of the freight forwarding company.
Flexport CEO Ryan Petersen rejected Uber\'s analogy for different reasons.
\"When it comes to international freight, it can\'t be a completely automated process like Uber.
\"The freight forwarding company acknowledges that it is a service business and is staffed accordingly.
According to Ryan Petersen, CEO of Flexport, \"If there are exceptions, freight forwarders are full of exceptions, and these issues are usually handled by phone.
In this sense, it needs to be a highly engaged business.
\"There are three revenue models associated with startups trying to reshape the freight industry.
One model is that freight forwarders buy solutions in software as a Service (SaaS)
The Model tos Model has always been the Freightos Model in history.
The second model is based on transaction fees.
Companies like Fleet and CoLoadX focus on the trading model, which Freightos began to turn.
Transaction fees can be charged to buyers, sellers or both. Dr.
Schreiber points out that most markets, both consumer and industrial, charge sellers, which is also the job of Freightos.
The final model is the brokerage model.
A broker is an intermediary connecting buyers and sellers.
They make money based on the difference they buy a product or service from a seller and the difference they sell a product or service to a buyer.
In short, the money they make is based on their profits.
Freight Forwarding is a broker specializing in international shipping.
Startups based on trading models believe that trading models can be seen as a more neutral approach.
Renee director, one of the founders of Haven
, Pointed out that in the trading mode, \"the incentive of the platform and participants is always the same --
The shipper can see all the options and there is no risk for the forwarder to recommend a bad partner.
\"For brokers, it is always suspected that brokers connect shippers with carriers they can make the most money.
Haven is a startup that focuses on shipping and air freight to large shippers.
IContainers provides another example of a technology start-up in freight forwarding style.
Jamie Jiminez, CEO of iContainers, pointed out that the economic model believes the evaluation function can be solved.
Just like on TripAdviser, Airbnb or Uber, buyers can rate their suppliers, and shippers can also rate their business partners on the iContainer website.
But most tech startups with trading models also offer ratings.
In the ocean, the shipping time that the forwarder quoted to the shipper is usually very unrealistic.
The ratings of freight forwarders who provide unrealistic time will be affected. Dr.
Schrieber of Freigtos says they are directing their freight forwarder participants to provide more realistic time.
\"They often just quote the sailing schedule.
\"They need to consider the time it takes for the goods to arrive at the port, sailing departures on specific routes may only occur once a week, customs delays, and other similar shipping times.
\"It is best for a forwarder to quote 30 to 40 days\" and then provide an inaccurate service commitment. Ms.
Meaden, director of freight, believes that in addition to ratings, inaccurate shipping times should be addressed by using predictive analysis.
\"We collect data from sources such as loading boards, shippers, carriers or Amazon or weather (feeds).
By combining this data with machine learning, we are able to identify patterns and problems (that are)surfacing.
Also, as Sir
Lock pointed out that it is not only important for shippers to be able to rate freight forwarders, but also for freight forwarders to be able to rate shippers.
Fleet is developing their shipper rating feature and doing more to ensure the financial integrity of shippers in the network.
\"In the market, all parties to the transaction need to be assured that they are working with reputable partners.
Will these startups change international shipping?
To a certain extent, it depends on how fast they are, and it\'s not an easy thing to do.
But it also depends on how the two mature marine markets-INTRRA and GT Nexus-react to startups.
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