Today, Freightos has some incredibly exciting news. We’ve launched the world’s first door-to-door international freight estimator, powered by live global market rates.
This is another important step in the Freightos mission to make global trade frictionless. By increasing transparency into global freight pricing, we hope to empower millions of small and mid-size businesses around the world to improve efficiency, building on the success of the Freightos Marketplace.
The Road to the Calculator
This specific journey began over 10 years ago.
At a previous company, I regularly imported electronics from China to the United States to Europe. Just getting price quotes for this routine shipment was a nightmare. It would take days to compare multiple providers and, of course, there was no market index or transparent data to guide us.
Worse, we would sometimes lose our customer while waiting for a shipping quote. If only we had an instant quote – even an estimate – we could have used that to secure the deal.
Often we overpaid. Or we used providers that we liked and hoped that we were getting a good price, and that our goods would get there on time. But when we eventually got a bill, it often didn’t match the price quote – freight forwarders do like to throw in an extra surcharge at the end.
Freight and (In)Efficient Markets
Today, core freight services are a commodity. All the 20’ containers are 20 foot long. Shipping a metal box from Shenzhen to Long Beach is the same service, no matter which carrier’s logo is painted on the side or which forwarder is listed on the Bill of Lading. Basic freight movements are near-commodities measured with just two parameters – price and transit time.
That’s not to say all freight companies are equal. Service level, communication and more complex services like contract logistics do differentiate. Longer term tenders have their own dynamic. But for freight spot quotes which are a near-commodity, freight is an exceptionally inefficient market.
An efficient market has three components:
- All prices reflect all available information
- Prices are rapidly adjusted with new information
- Buyers and sellers are equally empowered with knowledge.
The telegram changed market behavior, enabling decision-making based on nearly-real-time information. Within four years of the telegraph’s conception, 50% of telegrams concerned stock prices (hence “ticker” prices). But that only impacted the elite who had regular access. Over time, improved distribution enabled access to more information. For example, the Rapaport Diamond Report brought diamond pricing information to subscribers in 1978 transforming the efficiency of the diamond market. And that’s despite the fact that diamonds are measured on four parameters, freight, as we said, has just two.
The internet put information distribution into hyperdrive.
Real-time pricing for airlines, real-estate, taxis became a reality. Yes, some information is still guarded carefully – a Bloomberg Terminal can cost $24,000 dollars. For the most part, however, information moved around the world at the speed of light. And even the Bloomberg data is available for free just 20 minutes later.
But not in freight, where prices slow-steam their way around the world.
Freightos’ Mission for Transparency
When we launched Freightos five years ago, we did so with the goal of empowering anyone – freight forwarders, carriers and shippers – with information. AcceleRate, our freight rate management platform, was the first step. Freightos technology is now used at 23 of the 25 biggest global forwarders and hundreds of others to streamline private pricing data within the company.
Our acquisition of WebCargoNet in August bolstered our connectivity between airlines and forwarders, another important part in the puzzle.
Launching our Freightos Marketplace this year was even more significant, giving companies that import and export goods the ability to compare freight quotes across forwarders and book online. We’re currently helping thousands of businesses instantly compare freight quotes from Asia to the US with other lanes coming soon.
But it takes time to build a marketplace.
While we’re rolling out more routes on a regular basis, we don’t want to wait to provide transparency. If our mission is frictionless global trade, we can’t justify hoarding data.
The Freightos Freight Calculator, (which is now in public beta) provides freight estimates driven by insights from hundreds of millions of data points. It’s not perfect (yet!) but it’s getting there. And to make it even more accessible, it can be easily embedded on just about any website.
Our transparency timeline hasn’t changed.
We’re aggressively scaling instant, global spot quoting. With that data, we’ll unlock forward pricing, using historical data and market rates to predict future prices. We’ll follow that with more advanced features, like multiple shipment pricing, real-time tracking, more exotic cargo (like reefers) and some other tricks we have up our sleeves.
Global freight drives the global economy. Across the board, the leaders of the industry are supportive of open data empowering better operations decision making. We’re proud to be at the vanguard of this movement.