Instant booking is competitive necessity for forwarders, says Freightos CEO

This fireside chat recap is from FreightWaves’ Supply Chain Meets FinTech event on Wednesday.

FIRESIDE CHAT TOPIC: Automated booking and payment for international shipments.

DETAILS: Multiparty booking platforms for air and ocean shipments are rapidly gaining traction, simplifying the customer experience while saving huge amounts of time. Freightos is one of the primary providers in this space, and its founder explains how the system makes life easier for carriers and forwarders of all sizes. 

SPEAKER: Zvi Schreiber, founder and CEO of Freightos.   

BIO: Schreiber is a serial tech entrepreneur. He was CEO of Lightech (acquired by GE) and of Unicorn (acquired by IBM). Zvi holds a Ph.D. in computer science and is author of “Fizz,” the history of physics in a novel, and of “Money, Going out of Style,” which explores money and economics. He is a frequent speaker at industry events and author of various articles, papers and patents. Schreiber lives with his family in Jerusalem.

KEY QUOTES BY SCHREIBER:

“It’s really very new that our air and ocean track carriers have APIs. In other words, real-time electronic connections. Previous exchanges were matching the freight forwarders, or the importers and exporters, with the carriers. But the rates were typically coming off an Excel spreadsheet, and the bookings were typically getting confirmed by a human being. That’s all started to change, most rapidly in air.” 

“We’ve added payments recently… . So you still got freight forwarders sometimes writing out piles of checks in the air cargo industry that are typically using a system called CASS, which is owned by the International Air Transport Association.  But many of the small freight forwarders can’t even afford to become members of IATA and CASS. So they have no good way to work with the airlines directly. And so what we’ve been able to do is to create a payment system, which is open to everyone, that doesn’t require any kind of expensive membership or bank guarantee. When you’re booking with a carrier on WebCargo by Freightos, the booking and payment is in the same place. When you shop on Amazon, you book and you pay into the same thing, at the same moment. It’s only in the freight business  where you book and think, ‘OK, how am I gonna pay the carrier?’” 

“The big forwarders are not going to be the early adopters of our payment platform, because they either have a direct payment arrangement or they’re happy with IATA CASS. And that’s fine. I think over time as our payment becomes more and more efficient. Maybe we can offer credits of foreign currency, because a lot of these transactions are cross-border. So I think as we will make our payment system quicker, and they have more and more options, it may become attractive to a wider audience of big freight forwarders as well. But as of now, the forwarders who are enjoying this are typically small forwarders, who do not have a membership at IATA CASS and certainly don’t have a direct relationship with the airlines.”

“The return on investment is clear. I mean, number one, it’s giving a better service to the customer. Especially with younger people coming into the industry, they expect instant service, and the average time, for a forwarder who doesn’t have the right tools, to do a simple price quote is three days. Second of all, the accuracy of the quote. Because rates are changing so quickly, that if you don’t have the right tools, you quote the wrong price. If it’s too low, you lose money. If it’s too high, you don’t get the business. And then third of all, it’s the internal cost, you know, there’s a shortage of staff in the industry. So I think it’s clearly becoming a competitive necessity, both from a customer perspective and from a cost perspective to have automation tools.”

Source: freightwaves - Instant booking is competitive necessity for forwarders, says Freightos CEO
Editor: FreightWaves Staff