- Logixboard helps small and medium freight forwarders compete with Kuehne + Nagel and DHL.
- Freight forwarders arrange cargo movement across ocean, air, rail, and road.
- The Seattle-based startup just raised $13 million to improve its software and grab market share.
- See more stories on Insider’s business page.
2020 was the year of the freight forwarder. For moving everything from PPE to vaccines, frantic retailers, hospitals, and even governments leaned hard on players that do the job by any means necessary — and that’s the specialty of freight forwarders, the travel agents of the logistics world.
Freight forwarders don’t own or operate ships, trains, planes, or trucks. Instead, they arrange transit from place to place for a customer — managing the relationship with each carrier along the way. The chaos of shuttered factories, canceled flights and sailings, combined with shifting regulations in every country made 2020 a logistically stressful year. It proved freight forwarders’ value as essential to supply chains, but it also revealed their weak points.
Logixboard, a Seattle-based startup that makes software to help freight forwarders talk to their desperate customers, saw a 14-fold increase in users on its platform last year. And it just raised a $13 million Series A round, led by Redpoint Ventures, to capitalize on that momentum.
“When there’s disarray and chaos in the market, there’s typically opportunity for growth. Freight forwarding companies really became a pillar for shippers all over the world, helping them manage that complexity,” Julian Alvarez, the 5-year-old startup’s cofounder and CEO told Insider.
The big names in the freight forwarding space are Kuehne + Nagel, Sinotrans, DHL, DB Schenker, DSV Panalpina, and Expeditors. (The opportunities are so tempting, though, that even some of the oldest players in freight, like Maersk, are jumping into the fray.)
These big players have thousands of employees around the world and are more likely to have sophisticated digital platforms that customers can use to track their cargo. But below the top tier is an immense list of forwarders with between 200 and 500 employees. Those are the businesses Logixboard sees as its target customers.
“If you think about a product that we all know, like an iPhone for example, each piece is probably moved by a different freight forwarder,” Annie Kadavy, managing director at Redpoint Ventures and former head of strategic operations at Uber Freight, told Insider. “The market fragmentation is advantageous to a business like Logixboard, simply put.”
Ending the era of Excel and fax machines
Even before the pandemic, cofounders (and brothers) Julian and Juan Alvarez saw that the way most freight forwarders did business was ripe for disruption. Working for freight forwarder Pilot Freight Services, Juan kept important customers in the loop by sending them Excel spreadsheets twice a day.
The freight forwarders’ customers, too, are locked in a time warp for the most part, Kadavy said. “The efficiency of a logistics or transportation management team inside of a shipper is really low and really painful. They probably all have fax machines in their offices.”
When Julian learned about the manual nature of Juan’s work, he convinced him to quit his job at Pilot and cofound Logixboard. “Anytime you start seeing Excel tables, you know that there’s an opportunity,” Julian told Insider.
The brothers built a software platform that gives freight forwarders a simple dashboard to show their customers where cargo is, and where and when it might go next, along with a messaging system to streamline communication.
Focusing on a good customer experience is what has differentiated Logixboard from the big software players already catering to forwarders — companies like WiseTech Global, Descartes, BluJay and Magaya, according to Alvarez.
When all of these companies had to go remote due to the pandemic, digital connections between shipper and forwarder and freight information became even more essential. At the same time, global supply chains were seizing up from disruption after disruption. Forwarders needed an offtake valve for the flood of incoming requests for ETAs and information.
Alvarez’s bet is that while Logixboard’s platform helped companies to get through the pandemic, it will soon allow forwarders to handle the same amount of freight with fewer employees. He calls it a “self-service” model.
The influx of funding will help Logixboard build its capability to take on the section of the market they can’t currently access due to tech integration issues. Freight forwarders often operate multiple software platforms to orchestrate within the different modes of freight: ocean, rail, air, and road. Integrating with all of those platforms is one of Logixboard’s biggest barriers to market share, and the new funds will help Alvarez knock them down. The company will double in size this year, Alvarez said, hiring around 24 people.
After a lucrative but stressful 2020, Alvaraz said shippers like major retailers are putting visibility and digital platforms in their requests for proposals when they’re hunting for a new forwarder.
Right now, with freight rates at historic levels no matter the mode of transport, mid-sized freight forwarders have a hard time competing on price — but they can compete on peace of mind. Logixboard gives them a platform to answer the most important question in any supply chain: Where’s my stuff?
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