Unicorn Flexport is a revolution in the world of logistics, serving as a freight forwarder with software that allows customers to manage their shipments. But there are still thousands of smaller freight forwarders, many operating with outdated ERP software or spreadsheets. Called a startup GoFreight wants to help them compete by providing them with the “Shopify for Freight Forwarding” with backend software that makes their operations run more smoothly and an interface that allows them to create a storefront and provide offers in minutes.
The Los Angeles and Taipei-based startup has raised $23 million in Series A funding, co-led by Flex Capital and Headline. The round included participation from LFX Venture Partners, Palm Drive Capital and returning investors Mucker Capital, Cornerstone Ventures and Red Building Capital.
GoFreight, which currently has around 1,000 customers, helps manage the transportation of goods via ocean, air and land routes. It also allows them to set up online storefronts with a few clicks. Prospective customers can contact freight forwarders by sending them an inquiry through the store and receive a quote within minutes, instead of the 24 to 48 hours it usually takes.
Once the shipping job is underway, shipments can be tracked with an integrated real-time EDI tool so shippers and customers know exactly where their shipping containers are. The tracking software also integrates with GoFreight’s platform accounting tools so users know how shipment performance is impacting their revenue.
Co-founder and CEO Trenton Chen earned his master’s and doctoral degrees in the United States before returning to Taiwan to join TSMC. At the time, AppWorks and other startups were getting a lot of attention, and Chen decided he wanted to become an entrepreneur. He left TSMC (“it was a hard decision because no one agreed with it,” he told TechCrunch) and gave himself six months to find a viable idea. During this time, one of its co-founders was living in Los Angeles, working as an importer for a family business.
“When I was in the States, I also knew a lot of people in this industry. So many of our good friends asked us to go there and see how bad the software is. So in the last month of my six month period I decided to give it a shot, I bought a ticket for three months to go to LA and spend time with the top 10 freight forwarders learning how they do business with software. We founded GoFreight after the first week we were there,” Chen said.
Although Chen says the global shipping market is worth about $280 billion, almost all of the software he works with is outdated. GoFreight’s goal is to enable traditional shippers to remain competitive with the same quality of technology that Flexport has.
“The shipping business is about how to get cargo from point A to point B. Software can really help, but that’s not their core business. The service itself is the core business and software cannot help minimize shipping costs or make it faster. But it can certainly help provide additional valuable information to customers, importers and exporters,” Chen said, adding, “We are trying to enable incumbents to compete with Flexport. It’s an approach to make this whole industry better and faster.”
Chen says GoFreight is different from other freight forwarding software startups because most of them are trying to build a new ERP system or integrate with existing ones. This is challenging because many freight forwarders use ERP systems that are outdated, and it is a fragmented market. Some don’t even use ERP systems; instead, they work with spreadsheets or pen-and-paper systems.
On the back end, GoFreight’s software has sales, operations and accounting tools, so when customers have an inquiry, shippers can enter it into their system and then come back with a quote. Once a job is confirmed, GoFreight manages bookings, real-time shipments and all necessary electronic documents. They can also generate and send invoices through GoFreight.
“Very importantly, we’re trying to become the Shopify of the space, so with one click they can open an online store, and their importers can use the online web portal to submit an inquiry and it just pops into the system, automatically with pricing and they can book their tickets online,” Chen said. “So the front-end application is so important, and we also provide visibility solutions.”
A key challenge that GoFreight wants to solve is the quote generation process, which can take several days because freight forwarding orders are complex. For example, if a customer wants to ship three containers from Shanghai to Los Angeles, forwarders must consult with foreign agents who are also forwarders. They also need to arrange trucking and storage. Another thing to consider is spot rates versus contract rates, as spot rates can be much lower.
Most of this work is done through emails, phone calls and text messages, but a centralized customer-facing application means shippers can complete the entire process, including checking with overseas agents, through GoFreight’s integrations, which according to Chen reduced the process from two days to about 10 or 20 seconds. GoFreight is currently working with partners to build a network that connects customers with shippers and shippers with carriers.
GoFreight also provides a digital payment solution as most payments are made with paper checks. This means that shippers can issue a link to customers and once they click on it, they will be taken to the GoFreight website where they can decide which invoices to pay with credit cards or bank accounts. This information is then fed back into GoFreight’s ERP system.
Analytics provided by GoFreight can help shippers make more money, Chen said. For example, if they book a 40-foot container, GoFreight will record how much they paid for it and how much customers were charged. The system analyzes performance for top customers and overseas agents, revealing hidden fees so shippers have a better understanding of the real cost of a shipment. It also breaks down costs by SKU, so shippers and their customers know exactly how much it costs to ship an item.
The new funding will be used to develop more features such as smart quotes, rate management and purchase order management.
In a statement about the funding, Headline partner Tom Gieselman said: “GoFreight’s all-in-one software provides greater transparency into freight movements, allowing shippers to better manage their businesses, which can range from 0-1500+ users end to end. This flexibility makes the product incredibly impactful and a big reason why we identify them as one of the most promising logistics technology companies on the market.”