Tech company strives to cure pricing problems
Victor Ofstein is COO of Freightos, a technology company that markets itself at the Expedia for shipping.
Zvi Schreiber realized there had to be a better way.
About four years ago, Schreiber was managing an electronics company and shipping electronic components around the world. For this task, he dealt with a group of 10-15 freight forwarders.
Schreiber found that after the forwarders gave a quote, if he wanted to change the parameters of the deal, it could take up to a week to receive a follow-up quote. So he founded Freightos.
“The experiences actually led us to believe that this wasn’t a specific problem to the freight forwarders that we were dealing with,” says Victor Ofstein, COO of Freightos, a technology company that is trying to solve this forwarder problem.
Schreiber and Ofstein learned more about freight pricing and spoke with hundreds of freight forwarding companies – all who suffered from the same issue, Ofstein says.
“The forwarders are drowning in this swamp of pricing and contract data from the carriers, and all suffer from the same fate, which is the inability to convert that data into meaningful quote information and pass it on to their customers as quickly and as flexibly and as transparently as possible,” he says. “All the while, the customers are getting more and more impatient because customers, let’s say as consumers, we’re buying everything online and everything is instant.”
Freightos markets itself as the Expedia for shipping, which includes air cargo. The Jerusalem, Israel-based company wants to address the flow of data from the carriers to the forwarders and then ultimately, to the forwarders’ customers.
Freightos has been in operation for two years and in active sales for about a year.
“We should all really be able to quote to our customers quickly, flexibly and accurately far more so than we can at the moment,” Ofstein says.
He says 25 companies, including CEVA Logistics, use Freightos’ service. A year ago, Freightos had only 3-4 companies. Though 60 percent of customers are in the U.S., Freightos also has a handful in Asia and Europe.
The service costs US$50 (36.20 euros) per user per month. Each company using Freightos could have multiple users.
The tech company has also caught the attention of investors. In March, during Series B funding, Freightos raised US$4.6 million (3.3 million euros) from three Israeli venture capitalists.
Ofstein says the air cargo industry is conservative when it comes to technology, though “the potential for impact of technology is huge, particularly in the flow of information between parties.”
“Most of my time has been spent outside of the air cargo industry,” he says. “I’ve observed in other industries how the flow of information between parties in a process has become smoother and more efficient, and I think that that’s going to happen in a big way in the air cargo industry.”
Right now, Ofstein says he sees carriers still emailing PDF files for pricing and contracts to their customers.
“We see that that’s certainly a rather inefficient way of communicating pricing updates and amendments, etc.,” he says. “We think that companies are going to start leveraging the web in a much larger way…I think that the air cargo industry is crying out for change driven by technology.”