How To Create 100 Unicorns, Overnight.

With a degree in Psychology and background in tech, the shipping industry wasn't exactly a natural progression for me, in fact it was a very steep learning curve.

But I was completely captivated by the pitch when speaking to the team at Kontainers before I joined, sometimes even found myself laughing and saying "surely not" about things that were, and still are, totally normal.

What are you on about?

With the majority of my network (and most people to be honest), the process that moves over 90% of the things around you from one side of the world to the other is a complete mystery. So here's a very quick overview for context:

Containerization might not be what comes to mind when you think of innovation, but it changed the world more than anyone could ever measure.

It's what enabled the 'supply-chain' for your MacBook to leave the production line, be put in a container, loaded on to different modes of transport with ease, and eventually land on your desk.

This invisible industry powering gloablization usually only gets on the front page when things go wrong or the prices of everyday good increases, which has been all too frequent in recent months, with US/China Trade-Wars and the stockpiling of drugs in light of Brexit.

So obviously, as one of the last pillar industries to be digitized, there is a ginormous opportunity for investors to cash in on the surgical operation that's about to take place on the backbone of the global economy.

So What's The Problem?

Fax machines still exist, amongst other things.

Today, I can accidentally say "Hey Siri" instead of "Hey Google" and get frustrated because I got my digital slave's names mixed up.

But moving a metal box from A to B? Oh boy:

After clicking request rate and being transported back to UI from the 90', here's the standard procedure:

Fill out the form above. Wait.

Get an email requesting more detail. Wait.

Get a quote.

Fill out someone else's form. Wait.

Get an email requesting more detail. Wait.

Get a quote.

Realise the first quote was thousands of dollars more and you're not able to fill out anymore forms. Accept quote.

Fill in a booking form, arrange additional info for customs, approve Bill of Lading [all on paper].

Have goods picked up. Have no idea where anything is for weeks.

Pray.

Goods (hopefully) arrive at destination

And believe it or not, this is a best case scenario example.

You're Joking?

Nope. That's what a "this is the way we've always done it" attitude for decades gets you.

Without going down a rabbit hole, to give you an example of one major issue, Marcin Zarzecki, CEO of Quotiss, wrote a great piece on the complexity of rate sheets using an example from one shipping line on one trade lane (Asia/Europe), in which there can be around 500,000,000 unique rates in a single file. And over 99% of the content of these rate sheets will never be used.

A literal needle in a haystack, with the rest of the hay rotting away in digital trash.

So Why Isn't Anyone Doing Anything About It?

A lot of companies are, but it's very, very, very difficult.

Some of the biggest enterprise software companies working with the biggest shipping brands in the world have tried and failed. The complexity and intricacies are usually a pessimistic executive's first defence-mechanism to digitization.

A poster child for "See, that digital stuff doesn't work" was DHL's spectacular failure in 2015 which reportedly cost them €345m (which was apparently closer the the billion mark).

But the global freight market will be worth anywhere between $4trillion and $15trillion by 2025, depending on who you ask, and fearless new digital players have emerged from all over the world, to claim a small, yet extremely valuable, piece of that pie.

Similar to early days in Fintech, the cohort is relatively small right now, but the world's leading VCs have now turned their spotlight to logistics and massive funds are now flowing in to FreightTech in an effort to back the next Salesforce of freight.

Money, Money, Money

A great example of this investor money being put to work is Silicon Valley's Digital Forwarder, Flexport, worth a tantalising $1billion according to CB Insights. Flexport are essentially a small DHL who care about their customer's digital experience, don't like fax machines and allow dogs in their office.

The important point there is the emphasis on Customer Experience (CX).

In stark contrast to the absolute chaos I mentioned above, booking freight with Flexport is closer to booking a flight. Fast, online, relatively straight forward if you have all your documentation together.

Customer-centricity is the future of freight, and for the 'Laggards' who disregard this evolution, (or worse, pretend they're doing something about it), they are in for a rude awakening as their market share erodes.

And if the rumours are true, Flexport's next funding round expected to hit headlines any day now. Personally, I'm guessing around $600million, while I've even heard suggestions of $3billion and a late swoop for Panalpina(!)

And while that may sound ludicrous to industry veterans, the global corporate co-working space, WeWork, has now raised a total of $10billion after adding a whopping $3billion round late last year.

VCs parting with billions of dollars to take over an industry are relatively common in Flexport's neighbourhood, and they would accomplish their goal of becoming a top10 global forwarder by adding an extra '0' to the cheque, so why not?

The Four Pillars of a Modern Freight Forwarder

The reason Flexport, as a digital forwarder, need to raise these big numbers, is because of what they are trying to compensate for in a very 'personal' industry. Technology is the final piece of the jigsaw, the forth of four pillars, to serve the end users who have been utterly neglected to date. But what are the first three?

• Global Network
• Industry Knowledge
• Client Relationships

Traditional forwarders have spent decades setting up infrastructure all over the world and as much effort training and developing their staff to both maintain old and build new relationships with clients.

But they don't have the tech.

Yet.

The Democratization of Freight Software

To become a Modern Forwarder, you need all 4 pillars. And up until now, it cost millions of dollars, took years to build and had no guarantee of uptake, even going live (see above).

As our Graham Parker announced yesterday, at TPM this year, we're going to turn the entire industry on its head by offering every forwarder in attendance their own front-office platform.

In English, the unique selling point that Flexport have enjoyed to date and commands their valuation, will be nullified overnight.

Every Traditional Forwarder that goes to TPM next month, can leave the conference as a Digital Forwarder and go home to all of their customers offering them a better CX than the billion dollar industry boogeyman.

As VIP Sponsors of TPM, we will have a Kontainers 'Activation Center' where freight forwarders can check out their own platform, and BCOs can see what life would be like if their forwarders were offering them the Kontainers product.

One thing, that I think everyone in the industry can agree on, is that 2019 is going to be a seriously exciting year for everyone in FreightTech.