FreightExchange aims to reduce inefficiencies in the freight industry by filling a truck’s empty space
As many an Australian who has ever waited for an online purchase to be delivered can attest – particularly those living in regional or remote areas – the vastness of this country can often make shipping a headache, one felt by businesses and carriers too.
A key issue in the logistics space is, in fact, any empty space, as it essentially means wasted time and money. Looking to provide opportunities for waste reduction, cost efficiencies, revenue generation, and sustainability in the industry is startup FreightExchange.
Founded by Cate Hull and Martyn Hann in 2014, FreightExchange aims to reduce waste in the freight industry by connecting freight carriers with extra capacity on a particular leg to those needing something shipped, allowing a carrier to fill a gap in their truck with a smaller load.
With experience in big data and enterprise automation, Hull began mulling over the idea for the platform while working in the port city of Fremantle.
Speaking to port managers and freight operators, Hull saw an opportunity to apply real-time optimisation to freight transport fleets in order to maximise space usage.
“Globally, long-haul freight logistics networks are fragmented and untrusted. Pricing, tracking and moving freight is time-consuming and error prone. The resulting underutilised capacity and lack of transparency cost all sides of the industry billions each year,” Hull explained.
“Take the example of a container of goods to be distributed around Australia. The goods come by sea to the port, then onto a truck that takes them to a distribution centre, where they’re unpacked and put on another truck to be transferred to a warehouse and eventually to the store. With so many links in the chain and hand-offs at each point, the process is complex.”
The FreightExchange platform looks to bring transparency to each step in this process, which in turn allows for the identification of empty capacity in the chain which can be filled by the other side of its marketplace.
“We’re developing the technology to provide visibility of the freight when it changes hands, making it easier to see where it is and what the costs are at each point,” Hull said.
Development of the platform, which was helped along by the startup’s participation in the muru-D accelerator program in 2015, began with market research, with Hull and Hann speaking with more than 150 potential customers about the potential FreightExchange product to establish demand and guide the direction of the service.
The service now works by having a customer enter the key details of their freight, including its weight and dimensions, and where it must travel from and to.
From there, FreightExchange will show a price and transit time for the shipment; if accepted, the customer will select the level of service they want and pay the freight, with the driver than coming to pick it up.
Meanwhile, a carrier signing up to the platform will first input their fleet information, as well as details around what kind of freight they carry and how much they charge.
To ensure trust, FreightExchange verifies this information and a carrier’s relevant documents to ensure they hold the necessary licenses and insurances; once approved, a carrier can then advertise their regular freight prices, as well as their discounted last-minute availabilities at any given time.
While developing the platform, Hull said the team was focused on creating partnerships with third party logistics and freight transport companies, however quickly found the sales cycle was too slow.
“We pivoted to serving small businesses; we then learned that it was most important to acquire shippers as opposed to transport companies. We’re slowly evolving back into an enterprise freight platform, but I couldn’t predict the path we’d take to get there,” she said.
Another key challenge faced by the startup revolved around developing trust on both sides of the marketplace. Explained Hull, road transport operators need to know they will get paid and that they will be undertaking work suitable for them, while shippers need a level of clarity around the level of service they can expect from both FreightExchange and the carrier shipping their goods.
“We overcome these issues by paying carriers upon providing proof of delivery. We carefully screen carriers, shippers and loads to minimise risks relating to cost overruns, losses or damages in transit and delays,” Hull said.
The startup also looks to maintain a high standard of customer service by constantly iterating on feedback from customers around new features and products in “short repeated cycles”.
Since April 2015, Hull said the startup has generated several million dollars in revenue, shipped for almost 3,000 customers, around a third of them now regulars.
It has also signed up over 1,000 carriers onto the platform, integrating with carriers including Toll, TNT, and Allied Express, and signed partnership agreements with Transport for NSW and Shell.
In building the business, Hull said FreightExchange has had a focus on diversity. Among other initiatives, it has implemented a ‘blind’ hiring process, so a candidate’s age, background, or gender is not known prior to an interview, leading to a 50/50 gender split in the team, and representation from various background and cultures.
Looking ahead, the focus for FreightExchange is on further tech development, in particular facilitating automation; here the startup is automating load sharing across organisations and data feeds from the government, bringing in licensing, insurances and smart contracts.
Development around pricing and routing optimisation, as well as bringing in additional shipping methods such as rail and sea, is also in the works.
To help in this development, Hull said FreightExchange will be looking towards investment from third party logistics companies, with the goal to expand internationally and apply for patents.
Image: Martyn Hann and Cate Hull. Source: Supplied.