Unicorn Flexport is revolution in the world of logistics, which serves as a freight forwarder with software that helps customers manage their shipments. But there are still thousands of smaller freight forwarders, many with outdated ERP software or spreadsheets. A startup called GoFreight wants to help them compete by providing the “Shopify of freight forwarding” with backend software that makes their operations run smoother, and a frontend that allows them to set up a storefront and provide quotes in minutes.
The Los Angeles and Taipei-based startup has raised $23 million in Series A funding, co-led by Flex Capital and Headline. The round included participation from LFX Venture Partners, Palm Drive Capital and recurring investors Mucker Capital, Cornerstone Ventures and Red Building Capital.
GoFreight, which currently has approximately 1,000 customers, helps manage the transportation of goods via sea, air and land routes. It also allows them to set up online storefronts in a few clicks. Potential customers can contact freight forwarders by sending them an inquiry through storefront and get a quote in minutes, instead of the 24 to 48 hours it usually takes.
Once a shipping job is underway, shipments can be tracked with an EDI-integrated, real-time tool, so shippers and customers know exactly where their shipment containers are. Tracking software also integrates with accounting tools on GoFreight’s platform, so users know how shipment performance affects their revenue.
Co-founder and CEO Trenton Chen obtained his Masters and PhD in the United States before returning to Taiwan to join TSMC. At the time, AppWorks and other startup programs were getting a lot of attention and Chen decided he wanted to be an entrepreneur. He left TSMC (“it was a tough decision because nobody agreed,” he told australiabusinessblog.com), giving himself six months to find a viable idea. At the time, one of his co-founders lived in Los Angeles and worked as an importer for a family business.
“When I was in the United States, I also knew a lot of people in this industry. So many of our good friends asked us to go there and see how bad the software is. So in the last month of my six month term I decided to give it a shot, bought a three month ticket to go to LA and spend time with the first 10 freight forwarders learning how to do business with software. We started GoFreight after the first week we were there,” Chen said.
While Chen says the global freight forwarding market is worth about $280 billion dollars, nearly all of the software it runs on is outdated. The goal of GoFreight is to enable traditional freight forwarders to stay competitive with the same quality of technology that Flexport has.
“A freight forwarding company is all about moving cargo from point A to point B. Software can really help, but that’s not their main business. The service itself is the main business and software cannot help minimize the shipping cost or get it faster. But it can certainly help to provide additional valuable information to customers, importers and exporters,” said Chen, adding: “We are trying to enable incumbent operators to compete with Flexport. That is an approach to make this entire industry better and faster.”
Chen says GoFreight is different from other shipping software startups because most of them try to create a new ERP system or integrate with existing ones. This is a challenge because many freight forwarders use outdated ERP systems and it is a fragmented market. Some don’t even use ERP systems; instead, they work on spreadsheets or pen-and-paper systems.
On the back, GoFreight’s software has sales, operations, and accounting tools, so if customers have a question, freight forwarders can enter it into their system and then come back with a quote. Once an order is confirmed, GoFreight manages bookings, real-time shipments and all necessary electronic records. They can also generate and send invoices through GoFreight.
“Very important, we are trying to become the Shopify of the space so that they can open an online store with one click and their importers can use the online web portal to send an inquiry and it just appears in the system, automatically with prices and they can book their tickets online,” Chen said. “So the front-end application is so important and we also provide visibility solutions.”
A major challenge that GoFreight wants to solve is the quote generation process, which can take a few days because freight forwarding orders are complex. For example, if a customer wants to ship three containers from Shanghai to Los Angeles, freight forwarders must contact foreign agents who are also freight forwarders. They also need to arrange freight transportation and warehouses. Another thing to consider is spot rates versus contract rates as the spot rates can be much lower.
Most of this work is done via emails, phone calls, and text messages, but a centralized customer-facing app means freight forwarders can complete the entire process, including checking with foreign agents, through GoFreight’s integrations, which Chen says will help process the process. shortened by two days. to about 10 or 20 seconds. GoFreight is currently working with partners to build a network connecting customers to freight forwarders and freight forwarders to carriers.
GoFreight also offers a digital payment solution, as most payments were made with paper checks. This means freight forwarders can provide a link to customers, and once they click on it, they’re taken to GoFreight’s website, where they can decide which bills to pay with credit cards or bank accounts. That information then goes back to GoFreight’s ERP system.
Analytics from GoFreight could help freight forwarders make more money, Chen said. For example, if they book a 40-foot container, GoFreight keeps track of how much they paid for it and how many customers were charged. The system analyzes performance for top customers and overseas agents, uncovering hidden costs so shippers can better understand the true cost of a shipment. It also breaks down costs by SKU so shippers and their customers know exactly how much it costs to ship an item.
The new funding will be used to develop more features such as smart quotes, rate management and purchase order management.
In a statement on the funding, Headline Partner Tom Gieselmann said: “GoFreight’s all-in-one software provides greater transparency into freight movements, enabling freight forwarders to better manage their business, which can range from 0-1500+ users, end-to-end. versatility makes the product incredibly impactful, and a key reason why we identified them as one of the most promising logistics technology companies on the market.”