In a landscape where digital solutions are reshaping traditional industries, Freightos has emerged as a frontrunner in the digitization of the international freight sector. The second quarter of 2024 has witnessed significant milestones for the company, including the recent acquisition of Shipsta, a freight-tender procurement platform utilized by numerous Global 1000 enterprises. This strategic move positions Freightos not just as a player in spot freight pricing but as a comprehensive solution provider in the freight procurement sphere.

Understanding the Acquisition

Shipsta’s strength lies in its ability to facilitate tender procurement, allowing buyers to invite multiple suppliers to submit proposals. This process contrasts sharply with spot freight pricing, where customers seek freight services at the current market rates. With the integration of Shipsta’s capabilities, Freightos effectively broadens its service offerings, combining both spot and tender procurement to meet more diverse logistics needs.

Freightos’ acquisition, announced on August 19, is characterized as a cash and equity deal amounting to approximately €4.5 million (around $5 million) and includes about 640,000 shares of Freightos. Zvi Schreiber, CEO of Freightos, emphasized that this acquisition opens doors for significant market expansion. “This transaction expands Freightos’s existing industry-leading spot pricing, quoting, and booking capabilities by adding tender procurement,” he stated, highlighting the potential to capture a larger segment of the freight market.

Revenue Growth and Market Trends

Freightos has reported striking financial results for Q2 2024, with a record revenue of $5.7 million and a number of transactions reaching an impressive 316,500. The company’s gross booking value (GBV) has surged by 31%, now exceeding $200 million. This growth can largely be attributed to the elevated freight rates associated with ongoing disruptions, such as the Red Sea crisis, which have led businesses to seek more efficient and reliable freight solutions.

The addition of Shipsta is forecasted to contribute significantly to Freightos’ bottom line, with predictions estimating around $800,000 in revenue during the last four months of 2024. Looking ahead, 2025 is expected to bring in an additional $4 million to $5 million, reinforcing the strategic value of this acquisition.

Expanding the Carrier Network

As Freightos expands its offerings through the Shipsta acquisition, it’s also enhancing its network of carriers. The company reported an increase in available carriers on its platform, with significant new additions such as Singapore Airlines, Coyne Airways, and Thai Airways. This growth in partnerships bolsters the Freightos ecosystem, ensuring that clients have a wider array of shipping options across diverse modalities—air, ocean, road, and rail.

With a 16% increase in unique buyers digitally booking freight services—now totaling 19,100—Freightos demonstrates its effectiveness in attracting customers to a more digitized procurement process. This trend indicates a substantial shift as businesses move towards online solutions for their logistics needs, preferring platforms that not only facilitate transactions but also provide insights and efficiency.

Strategic Focus and Future Outlook

Freightos emphasizes a focus on high-value initiatives, with plans to enhance its platform capabilities continuously. The management team at Shipsta, led by Christian Wilhelm and Stefan Maratzki, will maintain oversight of product development and innovation, ensuring that the integration of their services aligns seamlessly with Freightos’ broader strategic objectives.

The driving force behind this expansion is clear: to establish Freightos as a tightly integrated, comprehensive platform capable of addressing various procurement needs within the international freight industry. By harnessing advanced technologies, Freightos aims to streamline processes and minimize the friction traditionally associated with freight logistics, ultimately translating into cost savings for enterprises.

Conclusion

Freightos’ recent acquisition of Shipsta represents a significant step in the evolution of freight procurement. By blending tender procurement with its established spot freight services, the company sets a new benchmark for efficiency and innovation in logistics. As digital solutions become increasingly vital in today’s marketplace, Freightos is well-positioned to cater to the demands of global businesses looking for reliable and cost-effective freight solutions.

In the rapidly changing world of logistics, better integration and advanced platforms such as Freightos offer a clear competitive advantage for organizations striving to optimize their supply chains and enhance their overall operational capabilities.