Unicorn Flexport is transforming the world of logistics by serving as a freight forwarder with software that enables customers to manage their shipments. But there are still thousands of small freight forwarders, many running on outdated ERP software or spreadsheets. A startup called GoFreight wants to help them compete by offering “commodity freight forwarders,” back-end software that lets them run their business more efficiently, and a front-end that lets them set up a storefront and provide quotes 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.
With nearly 1,000 customers today, GoFreight helps manage the transportation of goods by ocean, air and land. It also allows them to set up an online storefront with just a few clicks. Potential customers can connect with freight forwarders by sending an inquiry to a storefront and receiving a quote within minutes, rather than what is often required within 24 to 48 hours.
Once a freight forwarding operation begins, shipments can be tracked with an EDI-integrated, real-time tool, so freight forwarders and their customers know exactly where their shipments are. Tracking software integrates with accounting tools on the GoFreight platform, so users know how shipment performance affects their revenues.
Co-founder and CEO Trenton Chen earned his Masters and PhD 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 tough decision, because no one agreed with it,” he told TechCrunch) and gave himself six months to come up with an important idea. At the time, one of the founders was living in Los Angeles as an importer for the family business.
“When I was in America, I got to know a lot of people in this industry as well. Many good friends of ours asked us to go there and see how bad the software is. So in the last month of my six months I decided to give it a chance, I bought a ticket to go to LA for three months and spend time with the first 10 freight forwarders, learning how to do it in the software business. We founded Godfrey after the first week we were there,” Chen said.
Although Chen says the global trucking market is worth about $280 billion, almost all of the software it operates on is outdated. GoFreight’s goal is to empower traditional freight forwarders to remain competitive with Flexport’s technological excellence.
“A trucking business is about how to get cargo from point A to point B. Software can certainly help, but that’s not their core business. The service itself is core business, and software can’t help reduce shipping costs or get there faster, but it can certainly add valuable information.” It can help deliver to customers, importers and exporters.This is an approach to make the entire industry better and faster.
According to Chen, GoFreight differs from other freight forwarding software startups in that most try to create a new ERP system or integrate with an existing one. This is challenging to do because many freight forwarders use outdated ERP systems and it is a fragmented market. Some don’t even use ERP systems; Instead, they work off of spreadsheets or pen-and-paper systems.
On the back end, the GoFreight software has sales, operating and accounting tools, so when customers have questions, freight forwarders enter them into their system and then get back with a quote. Once a job is confirmed, GoFreight manages the booking, real-time deliveries and any necessary electronic documents. You can generate and send invoices through GoFreight.
“Most importantly, we’re trying to be the Shopify of the place, so you can open an online store with one click, and their importers can use the online web portal to send an inquiry and it will pop up in the system. They can directly quote and book their tickets online,” he said. “So the front-end application is very important and we also provide visibility solutions,” Chen said.
A big challenge that GoFreight wants to solve is the process of generating quotes because freight orders are complex. For example, if a customer wants to ship three containers from Shanghai to Los Angeles, freight forwarders must also check with overseas agents who are freight forwarders. They also have to prepare trucks and warehouses. Another thing to consider is the contract price and spot price as spot prices can be very low.
Much of the work is done via email, phone calls and text messages, but a centralized customer-facing app means freight forwarders can complete the entire process with GoFreight integrations, including verifying external agents, in about 10 or 20 seconds. GoFreight is currently working with partners to build a network that connects customers with freight forwarders, and freight forwarders with carriers.
Since most payments are made through paper checks, GoFreight also offers a digital payment solution. This means that freight forwarders can provide customers with a link, and once they click on it, they will be taken to the GoFreight website, where they can decide what invoices to pay with credit cards or bank accounts. That information is then fed back into GoFreight’s ERP system.
GoFreight’s analytics help shippers make more money, Chen said. For example, if you book a 40-foot container, GoFreight records how much you paid and how much customers were paid. The system analyzes performance for major customers and overseas agents, uncovering hidden charges and giving freight forwarders a better understanding of the true value of cargo. It also breaks down costs by SKU, so shippers and their customers know exactly how much it will cost to ship an item.
The new funding will be used to develop additional features such as smart quotes, rate management and purchase order management.
In a statement about the funding, Headline’s Tom Geiselman said, “GoFreight’s all-in-one software provides greater transparency into freight operations, enabling freight forwarders to better manage their businesses, from 0-1500+ users end-to-end. This versatility makes the product incredibly impactful, and is a big reason why we’ve singled them out as one of the most promising logistics technology companies on the market.
