Freightos Sees $1.8T Opportunity to Digitize Freight, Supply Chain

The future of freight, logistics and the supply chain lies with digitization and online platforms.

That’s according to freight booking and payments firm Freightos, which filed its F-4 with the Securities and Exchange Commission (SEC) Dec. 9 as it aims to list on the public markets.

The filing details Freightos’ go-to-market strategy and the potential that lies ahead in bringing a decidedly inefficient industry into the digital age. As has been widely reported through the past several months, the company aims to go public through a merger with special purpose acquisition company (SPAC) Gesher Acquisition.

In Need of Digital Transformation

Vagaries of the stock market aside, in drilling down into the filing itself, the greenfield opportunity to modernize the global freight market is a significant one.

“Despite its size and importance, global freight has not yet undergone a comprehensive digital transformation,” the company said in the filing. “Unlike passenger travel, hotels and retail, cross-border freight services remain largely offline, opaque and inefficient.”

Freightos went on to state that as shipments cross the globe via air or ocean, they have multiple touch points and intermediaries. The manual processes that dominate these interactions — thousands of replicated interactions daily — wind up causing delays, inconsistent pricing and all manner of inefficiencies.

The company maintained that its platform segment, which connects buyers and seller of freight services to digitize pricing and payments, and its solutions segment, which helps automate procurement, can streamline and speed up those interactions. The third-party logistics and supply chain management space itself generated about $1 trillion in revenue in 2020 and is on track to generate as much as $1.8 trillion in sales by 2026 within a global trade market that is worth more than $22.5 trillion, the company said, citing data by Global Market Insights.

International B2B Strategy

“We are seeking to position Freightos as the leading platform for digitally procuring international freight services and as a key platform for international [B2B eCommerce],” Freightos said in the filing.

The progression from B2C to B2B is a natural one that points the way for the company’s own efforts, paved by the likes of Booking.com and Uber.

Revenues, overall, as measured through the six months that ended in June 2022, increased by $4.6 million, or 92%, to $9.5 million compared to $5 million for the six months ended June 30, 2021.

In an October interview with Karen Webster, Freightos CEO Zvi Schreiber said that moving pricing online is critical to helping stakeholders discover pricing and thus make real-time decisions about bookings, reflective of the swiftly changing dynamics of supply and demand. He also noted that 40% of airlines are using platforms (Freightos among them) to improve logistics operations, and he stated that airline-related bookings across the Freightos platform have soared by 100 times since the beginning of 2020.

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