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Does Freightos have what it takes to lower costs, boost transparency?

IT remains to be seen whether Hong Kong-based Freightos, a new "online freight marketplace" is going to revolutionise the cargo market as it claims, or deliver on its promise to "make the process of moving goods around the world smooth for everyone".

Freightos' product is a software as a service (SaaS) that can be accessed via a web browser. The SaaS database component behind Freightos can link up with the systems of airlines, forwarders, shippers, and ground handlers and check for and provide status updates or simply check for price and availability of cargo space for a certain shipment.

Where such availability is given and the price is within defined parameters, Freightos can book the consignment automatically.

But will Freightos succeed and realise a lofty position within the market? Maybe, says New York's Flying Typers (Air Cargo News), which has raised questions about the sensibility of putting forwarders and carriers in one pot.

"If there is anything IATA and FIATA would agree upon it is that they have different interests, and that is certainly true for NVOOCS as well as the big players in the maritime sector.

"We can only wonder what happens when the traditional system of shipper talking to forwarder and forwarder talking to airline or ocean carrier - which eventually books and prepares shipment for transport - is replaced by Freightos," said the opinion piece by Flying Typers.

"It is reasonable to expect current stakeholders will naturally defend their interests and their business shares, so while transparency is something everyone claims to want. Too much all at once may be more than stakeholders are prepared to handle."

It also speculates that rates would rise if airlines or shipping lines have to factor in the risk of late or non-payment by shippers, as well as make the services of forwarders "largely superfluous."

Another problem is that the provision of transport services is usually integrated with customs clearance, issuance of documentation, and the securement, verification and declaration of cargo contents. Most of these tasks cannot be carried out by shippers.

"The highly diverse interests from the stakeholders might prove Freightos' biggest hurdle. If they deliver what they claim "frictionless trade" then indicating a budget, certain service parameters and transit time should be enough to get an offer for transportation. The more the SaaS learns, the better its software algorithms (predictions) will be."

One possible option of how the Freightos business model might play out is that Freightos brings interest groups such as FIATA, IATA, IMO and European Shipper's Council (ESC) aboard. This way the interests of stakeholders are balanced against one another, creating a true win-win situation for everyone, said Flying Typers.