Tech startup FreightBro’s target: revolutionising the trillion-dollar international freight industry
FreightBro leverages technology to enable freight forwarders to make data-driven decisions, predict changes in the market and provide better value to shippers.
The bustling industrial centre of Oragadam, Chennai, houses hundreds of SMBs exporting automotive parts to Turkey, South Africa, South Korea and Europe. But their precision is plagued by transport inefficiencies and port documentation delays.
The $200 billion logistics industry works with disparate technology, with little or no information flow between different stakeholders. Those in the industry know how tough it is to move goods from the point of production to the market. The complexities increase if one is supplying goods to multiple markets across India and the world.
Enter Vishwanathan Raghavendra, 28; Mohammed Zakkiria, 35; and Anand Babu, 46; the founders of FreightBro. The trio wants to solve this logistics problem from the freight forwarders’ perspective. The three of them were working in logistics, with Panalpina, when they discovered these grey areas in the market. They began to note problems from an SME’s perspective and the issues they faced in the port.
Today, companies have no way of knowing about the availability of transport resources at any given point of time; there is no real-time analysis of the logistics supply chain. While BlackBuck and Rivigo, the most funded trucking logistics technology companies, are solving the surface transport problem, there is still a grey area in the port when goods have to be unloaded.
In August 2016, they quit their well-paid jobs to set up FreightBro. Once the company was set up, the technology was built in two months as the architecture and flow was ready. The trio invested less than Rs 60 lakh, of their savings, and have over 25 large freight forwarding companies and customs brokers working on their platform.
IBEF predicts that the cargo traffic in Indian ports was 606.37 million metric tons in 2016-17 and is expected to reach 943 million metric tons by 2018.
Even if FreightBro captures 1 percent of the market, its business can reach a million dollars by 2019.
FreightBro’s revenues are Rs 50 lakh in a year and a major portion of the cost for them is to get 8,000 freight forwarders to move digital.
What is FreightBro?
FreightBro is a cloud based software-as-a-service (SaaS) solution that enables freight forwarders to potentially double sales and halve operational times by eliminating internal inefficiencies in sales and operations processes. Forwarders can manage and control their supply chain on the go, improve visibility of vendors and internal stakeholders. They can provide instant quotes for any type of freight request (Full Container Load, Less than Container Load, air freight, CHA), procure rates and tariffs from service providers, and track shipments.
A freight forwarder acts as an agent between the shipper and various transportation services such as ocean shipping, trucking, air freight, and moving goods by rail. The forwarder uses established relationships with these transportation services to negotiate the best possible price to move shippers’ goods along a route that best balances speed, cost effectiveness, and reliability.
Viswanthan Raghavendra, Co-Founder and CEO of FreightBro, says: “This is a formidable task to accomplish and is plagued by a lot of inefficiencies, even among leading freight forwarders in the market today.”
A freight forwarder’s ability to determine the best rates and times for shipping is often very limited and takes up to 48 hours to determine.
FreightBro’s module enables instant rate discovery and quote generation, which helps freight forwarders send a professional PDF quote to shippers, using just few clicks, within two minutes.
Mohammed says: “Forwarders can even automate their internal rates with this platform.”
In addition, FreightBro helps freight forwarders to digitally handle intelligent rate procurement from liners, airlines and other vendors, manage contracts, and provides a dashboard for internal rate negotiations. Forwarders can also use FreightBro’s Open Dashboard for e-document management, receiving shipment checkpoint notifications and proactively handle exceptions.
FreightBro products are internal software tools that freight forwarders can leverage to make data-driven decisions, predict changes in the market and provide better value to shippers using technology.
Anand says: “We provide forwarders a competitive edge by converting them from a physical paper-led business to a digital forwarder without investing a fortune in technology.”
The company says that the freight automation business is as big as $80 million. Their goal is to create a freight rate index for India where forwarders and shippers have relevant data metrics for every shipment.
The FreightBro business model
FreightBro is a cloud-based business and charges a per-user model. It can also work on a per-bill value model. There are companies in shipping that are trying to implement similar business models in the logistics industry, including Hip-Ship (for small parcels), LOBB (for trucking agents) and Shipping Exchange (freight forwarders in shipping) and are all looking for funding to scale up.
Naganand Doraswamy, CEO of IdeaSpring Capital, says, “There are several startups in this space. Not many have been able to scale up because of the fragmented nature of the industry and it takes time to scale up.”
Jayaram K of LOBB, a logistics company that works with agents in the trucking business and services over 200 brands, says, “The logistics industry needs transparency, dynamic pricing and real-time availability of services; it is an opportunity waiting to be disrupted by technology.”
Logistics is a very hard business to crack as several startups have either wound up or have just gone under the radar.
The three co-founders of FreightBro are going after the fragmented business with patience. Hopefully, in a few years they will be a company to reckon with.