Digital transformation is no longer just a buzzword; it is a necessity. The logistics and freight industries, traditionally viewed as slow-moving and resistant to change, are now at the forefront of this digital revolution. 

One company seeking to lead this charge is Freightos. In an exclusive interview with Zvi Schreiber, the CEO of Freightos, we explore the journey of this pioneering company and its groundbreaking contributions to the air cargo industry.

How Freightos started

Zvi Schreiber’s journey into the world of freight began unexpectedly. Despite his background in software and computer science, it was his role as a shipper in the electronics industry that opened his eyes to the inefficiencies and outdated practices within the logistics sector.

“I was kind of shocked as a shipper to discover how old-fashioned the industry is… I was surprised that the whole air cargo and ocean industry hadn’t gone through the same digital revolution that passenger and retail have gone through,” he recalled.

Seeing an opportunity to bridge this gap, Schreiber decided to leverage his expertise in software to create a solution. He sold his previous company in 2011 and set out to develop a digital platform for freight booking. By 2012, Freightos was born.

“We started in 2012, but for the first six years, our databases were fed by Excel sheets from the carriers. In 2018, we started getting some airlines to give us what’s called an API, an electronic connection.”

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Overcoming hurdles 

The logistics industry is deeply conservative and complex, with multiple intermediaries involved in transactions. Initially, Freightos relied on Excel for operations, and it wasn’t until 2018 that they began receiving electronic connections (APIs) from airlines, marking a turning point. 

Schreiber noted that while it took time to persuade airlines to adopt digital methods, the industry has seen substantial digital growth in the past five years.

“It’s a very sort of conservative industry, a very complicated industry because most transactions involve one or two freight forwarders, sometimes a master loader, sometimes there can be two or three or four intermediary companies.”

Freightos’ rise to prominence has not been without challenges, with Schreiber attributing their success to a combination of strategic planning, hard work, and a bit of luck. 

“We had a good strategy, and we worked hard. Maybe we’ll have a bit of luck along the way as well… We learned from other industries how passenger travel got digitalised… We raised a lot of good investments, and then we worked very hard,” he said.

Covid’s impact

The Covid-19 pandemic, despite its global disruptions, accelerated the digital transformation in air cargo. 

Schreiber explained that the pandemic highlighted the need for agility and real-time data as flights were frequently rescheduled and cargo rates fluctuated dramatically. Furthermore, with passenger flights grounded, airlines increasingly relied on cargo for revenue, prompting more investment in digital solutions.

“Covid-19 was crazy for everyone. In many ways, I think it helped the digitalisation… Things were changing so quickly… flights were getting cancelled and rescheduled, and cargo prices were going up to the roof, and things were moving very quickly.”

Freightos’ digital booking platform has seen widespread adoption, with 4,000 freight forwarders, including 19 of the top 20 global players, using their services.

Initial scepticism gave way to enthusiasm as users experienced the efficiency and convenience of digital bookings. The marketplace dynamic, where more airlines and freight forwarders attract each other, has fueled rapid growth.

“We now have 4000 freight forwarders who use our digital booking, including 19 of the top 20 global forwarders.”

“For air cargo bookings, WebCargo by Freightos is by far the biggest platform. There are a couple of smaller competitors, but we’ve really been able to establish ourselves as the leaders.”

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Freightos Air Index (FAX)

A significant innovation introduced by Freightos is the Freightos Air Index (FAX), a tool designed to bring greater transparency to the freight industry. Schreiber elaborates on its function and impact:

“It gives you the average price on any given day for air cargo in different routes, different weight breaks… I think it’s helped the industry to be more transparent and more aware of what’s going on.”

By providing a daily average price for various routes and weight categories, the Air Index enables shippers and freight forwarders to make more informed decisions. 

While digital tools like the Air Index have changed pricing transparency, implementing truly dynamic pricing remains a challenge in the freight industry. 

“In many cases, we see airlines always sending us back the same price. So it’s not truly dynamic. There are a few airlines that have truly dynamic pricing, but most still don’t.”

Despite having digital connections with 50 airlines, Freightos often finds that many of these airlines continue to use static pricing models. This lack of true dynamic pricing means that airlines are not fully leveraging their data to optimise pricing based on demand, capacity, and other factors. Only a handful of airlines have adopted dynamic pricing, while others have inefficiencies and missed revenue opportunities.

“The airlines are not pricing effectively. We have airlines that charge too little and leave money on the table. We have airlines that charge too much, and they just don’t get any bookings.”

Forward focus

Looking ahead, Freightos is looking towards several innovations, including interlining (allowing airlines to book with each other), easier payment solutions, and leveraging AI to enhance air cargo operations. 

“We’re working on interlining so that airlines can book from airlines. We’re working on payments to make it easier to pay for the airlines for the air cargo. And, of course, we’re working on various uses of AI.”

Schreiber envisions significant growth for Freightos in the next 5-10 years, driven by continued digitalisation. The goal is to digitise the entire freight industry, making it more efficient, transparent, and agile. 

“Mainly, we just want to grow. We’re still only digitised, like 1% of the whole freight industry, and it’s growing nicely. But we want to digitise the whole freight industry so it can be more efficient, transparent, and agile.”