Cargo Transport Digitalization Startups Gain Spotlight Amid Supply Chain Crisis

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the global supply chain crisis triggered by COVID-19 prolongs, startups that streamline freight transportation are gaining attention. Companies that digitize key processes such as ordering and price adjustments in the traditionally operated freight transportation market are receiving continuous investments.

According to The Economist of the UK citing PitchBook on the 8th (local time), last year, funding raised by supply chain-related technology companies exceeded $62 billion (approximately 78.8 trillion KRW), more than double that of 2019 before the pandemic. Among these, about $9 billion was invested in freight technology startups, and PitchBook counted around 10 startups that have become 'unicorn' companies valued at over $1 billion.

The Economist analyzed that investors' interest reflects the scale of the freight transportation industry and the potential for supply chain disruptions. According to Armstrong & Associates, a supply chain research firm, the annual revenue of the transportation industry itself reaches $475 billion. Additionally, the extensive third-party logistics market, including delivery management and warehouse logistics, generates $1.4 trillion in revenue.

Zvi Schreiber, CEO of Freighter, a digital transportation market leader, said, "This industry is completely offline. One might expect container shipping to be digitized like booking a flight, but that is not the case at all." Michael Wax, CEO of Porto, a freight transportation technology startup, also said, "For 90% of freight carriers, it takes a day or two just to adjust prices."

San Francisco-based digital freight transportation company Flexport is gaining attention by automating traditional transportation processes such as obtaining quotes, document preparation, and coordination between carriers. The company recorded $3.2 billion in revenue last year and was recognized with a corporate valuation exceeding $8 billion this year, nine years after its establishment. Chicago-based supply chain platform company Project44 provides information that allows real-time monitoring of how freight is moving.

The Economist reported that the interest in these freight transportation companies is partly due to supply chain issues, but the emergence of Amazon, the world's largest e-commerce company, likely had an initial impact. It is analyzed that Amazon's provision of fast delivery services such as same-day delivery necessitated improvements in the supply chain.

This content was produced with the assistance of AI translation services.