Global supply chain snarls, from shortages of freight containers in China to a blockage in the Suez Canal, have thrown a wrench into the recovery from the COVID-19 pandemic. They have also accelerated the freight industry’s shift out of the digital dark ages. That’s benefiting a fast-growing cluster of start-up companies that had struggled to sell their software-powered freight tracking technology, until now. Digital freight start-ups show there are close to 250 companies globally, including Uber’s logistics arm Uber Freight, and some Chinese operators looking to go public like Full Truck Alliance. Digitization in the freight industry has been under way for years, but the expense of grafting digital tracking systems onto legacy databases has discouraged many companies. Now, a number of start-ups staffed by alumni of tech companies like Facebook, Amazon and Uber have developed platforms that integrate with customers’ transportation management systems, making them easy to use from home.
Ofload launched in Australia in March 2020 as the pandemic hit hard and has companies with around 15,000 trucks combined using its system. Maersk Australia – also an investor – uses it to manage all of its freight, not just the loads booked using Ofload. Hong Kong-based digital freight start-up Freightos saw a twentyfold increase in bookings between freight companies and airlines on its WebCargo platform from March 2020 to March 2021 as the air cargo industry went online during the pandemic. Increased digitization also comes amid a wave of consolidation in the sector, especially in China, sparked by the e-commerce boom during the COVID-19 pandemic. Swiss logistics firm Kuehne & Nagel said on Monday it would buy Asian logistics provider Apex International Corp from private equity firm MBK Partners, making it the world’s largest air-freight forwarder. The continued use of legacy systems and processes by incumbent freight forwarders suggests market share opportunities for new digital operators.