Freightos LogTech Review: 2016Q2 This quarterly review of disruptive technologies in logistics is brought to you by Freightos, the

internet marketplace of the trillion-dollar international freight industry

Industry Trends | Freightos Q2 Updates

Amazon | Alibaba | Drones | Logistics | On-Demand | Freightos

Industry Trends

The global freight market contracted in 2015 by 1.6%, while fragmentation continues, with the top

20 global forwarders controlling just 58% of the market1. 86% of logistic decision-makers see

technology as the best way to expand, enterprise and mid-size logistics providers increasing

cooperation with LogTech (logistics technology) companies.

“Disintermediation from cloud-based technology start-ups is unlikely, but the technology

itself will become increasingly important for freight forwarders.”

“…for SMEs to prosper … they must exploit the opportunities that the democratization of

technology has brought about…”

Global Freight Forwarding Report, 2016 | Transport Intelligence

Online freight platform growth has continued, with increased funding to some players and

growing interest from both freight buyers and large logistics providers.

On the ecommerce fulfillment side, despite strong fundraising, companies are struggling to make

the on-demand model profitable. The arms race of faster delivery is pushing corporations like

eBay and Walmart to offer faster delivery, while creating opportunities for fulfillment-as-a-service

companies like Postmates.

1 Transport Intelligence, The Global Freight Forwarding Report 2016

Freightos Q2 Updates

The Freightos MarketplaceB e t a

The Freightos Marketplace for international shipping at ship.freightos.com, while still in beta, has

seen user growth rate at a compounded quarterly rate of ~30%. A strong repeat usage dynamic

is emerging among user segments.

Leveraging the SaaS-Enabled Marketplace model, a few Top 20 logistics providers are either

already sellers in the Freightos Marketplace or in advance stages of preparing to offer services on

the marketplace. Some mid-size forwarders, including Asian forwarders that have struggled to

penetrate the US market, are leveraging Freightos as a new source of business:

Freightos AcceleRate™

Usage of the Freightos AcceleRate SaaS freight rate management tool is growing, adding ten

forwarders in Q2 and growing online quoting by 110% compared to the same period last year.

General Updates

Freightos is in final stages of releasing a free embeddable international freight rate calculator that

leverages unique global freight pricing data to estimate international freight shipping rates, with a

dedicated version for estimating freight costs to Amazon warehouses.

LogTech Industry Activity

Tech Giants

Amazon

Amazon expands same-day delivery to 11 more cities, bringing the number of same

day delivery regions to 27. About 25 regions now have 2-hour PrimeNow delivery.

Amazon is expanding into restaurant deliveries in New York and Dallas, with 350+ restaurants in

Manhattan. Prime members get the service for free, with deliveries taking place within an hour.

30,000 Amazon robots in 13 warehouses are saving the company ~20% in operating costs -

nearly $22 million dollars/warehouse/year, according to Deutsche Bank research.

A senior FedEx exec stressed the company doesn’t see Amazon’s logistics play as a direct threat

and that no FedEx customer represents more than 3% of FedEx’s total revenue. Bezos had

mentioned that he’s not trying to kill UPS, just “supplement’ shipping capabilities.

Alibaba

Cainiao, the Alibaba-backed logistics company, wants to lower logistics expenses in

China as a percentage of GDP from 16% to 5%. Alibaba’s chairman believes that in

ten years, 300 million parcels will be delivered per day in China. For reference, at the peak of the

2015 holiday shipping, UPS delivered just 36 million packages a day.

Cainiao says that its warehouse robot Cao Cao, named after a Chinese warlord, can move 50 kg

of goods at 2 meters/second, locating goods and bringing them to a packaging line.

Drones

Canada Post is starting to explore the possibility of using drones for parcel delivery…but plans are

still only on paper.

South African Drone Scan is creating an attachment for drones to help companies perform

inventory updates in warehouse automatically, with the potential to save large companies

millions of dollars every month in manpower.

Logistics

As part of the increased cooperation between tech and logistics companies, uShip and DB

Schenker closed a deal valued at “tens of millions of dollars” to bring trucking automation to

trucking carriers in Europe.

Kuehne + Nagel, the top global forwarder that has made a concentrated effort to bring its sales

online, partnered with Berlin’s Startupbootcamp to collaborate with LogTech companies.

Online freight marketplaces continue to raise funds, with Fleet (née Shipstr) raising $4 million in

funding after shifting its business model from cutting out forwarders to working with them, while

another platform, Haven, raised $14 million. Operating as an online freight forwarder, Spanish

iContainers raised $6.7 million. With its unique SaaS-Enabled Marketplace model, Freightos has

raised $23.3 million to date.

France-based Convergo joins the trucking automation fray, seeking to cut out brokers from

trucking-shipper interactions. A former CEO of DHL Forwarding is one of the investors.

OpenPort aims to improve logistics in developing countries, with a three-pronged approach - a

mobile app for trucking companies, a marketplace connecting shippers and transport companies,

and an online platform where shippers can manage shipments.

On-Demand Delivery and Last Mile

Roadie, a crowd-sourced domestic fulfillment startup, attracted 20K drivers in its first year.

Competing with Amazon Prime, Walmart announced that its ShippingPass program will move

from three-day shipping to two-day shipping for a flat $49/year fee, an improvement driven by its

unique fulfillment network. About 15% of Walmart’s inventory is available in the program.

Building on $1m in seed funding, ShipBob, which helps ecommerce companies store and fulfill

inventory raises $4m dollars. The company claims to save companies 20-25% in overhead.

Hong Kong based Lalamove (also know as EasyVan) raised another $10 million in funding,

bringing its total funds raised to $30 million. While it has a consumer app, Lalamove’s core

business is providing businesses with on-demand fulfillment capabilities in 20 Chinese cities,

Hong Kong, Bangkok and Tapei.

eBay says it won’t compete on speedy delivery, opting to differentiate from rivals with larger

inventory and better pricing. Confusingly enough, the company also said it was working on a

“Fast and Free” program that would encourage free shipping and three-day delivery.

Postmates has started an ambitious $9.99/month program for unlimited deliveries. The program

is partially subsidized by Postmates’ retailers. Leaked corporate financials show the company is

succeeding in a crowded space, with gross profit margins exceeding 20%.

Starship Technologies is building a last-mile delivery robot to combat the 30-40% of delivery

expenses that add up in the last mile. Investors include Skype cofounder Janus Friss. The

company’s robots have already travelled over 1,900 miles in Western Europe and the US.

A French fulfillment company, Stuart, has executed hundreds of thousands of deliveries in Paris

and London. Stuart operates a website, mobile app and API to provide last-mile B2B delivery.

On-Demand Delivery: Food and Beverages

The NY Times is delivering meal kits with the ingredients for recipes from its cooking website.

The paper chose meal delivery company Chef’d, which will ensure 48-hour delivery.

Alibaba invested $1.25 billion dollars in Ele.me, a popular food delivery service in China that

controls 1/3 of the market.

Finnish Wolt raised $11 million to expand its food fulfillment services in Nordic and Baltic regions.

Freightos in the News: Q2 2016

Freightos’ survey of logistics executives featured in major logistics magazines, including WSJ,

Journal of Commerce, American Shipper, Lloyd’s Loading List, Air Cargo World and Loadstar.

Read about Freightos’ SaaS-Enabled Marketplace business model in VentureBeat (“Using SaaS

to crack the marketplace chicken-and-egg barrier to entry”).

Freightos selected as 2016 Gartner Cool Vendor for supply chain services.

Freightos op-ed about the logistics industry moving online in Inbound Logistics.

Transport Intelligence’s annual industry report highlights how data technology stands to change

the industry, noting Freightos as a major company involved in the effort.

Freightos® makes international trade frictionless, by bringing the trillion-dollar global freight

industry online. The Freightos Marketplace (beta), gives importers and exporters instant

transparent access to the best global freight services, making shipping cargo as easy as booking

a passenger flight. Behind the scenes, Freightos AcceleRate™ software-as-a-service automates

complex tasks of freight rate management, routing and pricing, and business intelligence.

Notable customers of Freightos include top twenty global 3PLs like Hellmann Worldwide

Logistics, CEVA Logistics, and Nippon Express, and Fortune 100 companies, such as Sysco. To

support its customers, Freightos collects a “Big Data” asset of millions of price points per month.

Ventured-backed, Freightos is registered in Hong Kong with a highly experienced team of over

one hundred software and technology experts across the Middle East, Asia, Europe and the US.