The Shape of Things to Come in FreightTech Pt.2 — ‘Mapping the future of Freight Technology’
Following on from our comparison last week of FreightTech in 2018 to an adolesent Fintech market, we felt it neccessary to expand on our hypothesis, explain Fintech’s progression to date, and how FreightTech is taking it’s first steps to becomming the next hot topic and vertical at global technology conferences outside of the realm of logistics.
Up to about 2015, Financial Technology companies (or Fintechs) were seen as niche companies. In fact, search for fintech landscape pre-2015 and the results will list out the VCs that are investing in small companies. The Fintech companies themselves were not thought to be big enough to be considered separate to their investments.
Move on to the end of 2015, the numbers increased but the significant ‘disruptors’ working on Fintech solutions could still be captured on a single slide:
And in a matter of months, by just the end of 2016, the Fintech landscape had increased exponentially to look like this:
Obviously a far larger group but the entire landscape could still be captured (just about) on a single page.
However, by 2018, the map was so large as that it could not be captured on a single image and was broken down by country. For example, the following is a snapshot of the Dutch Fintech landscape in mid-2018:
So how is this relevant to Freight Forwarders?
Because we’re at the beginning of the road for ‘Freight Technology’ and the exponential growth and digitization felt by those in finance is starting to make waves in logistics.
It may seem that the FreightTech startup market is getting crowded, but just compare the Dutch Fintech landscape with the current Global FreightTech landscape:
FreightTech is only starting to grow. Given that by 2025, freight will be a ~$15 Trillion market there is plenty of room for these disruptors.
As we pointed out in a previous article on synergy being the way forward, now is the time to embrace digitzation.
Those who get in first will reap massive benefits as opposed to those who think “it won’t happen for a few years”, who will see their market cap being eaten by their more progressive competitors.
And just to be clear, attending blockchain hackathons and preaching your organisation’s 2022 roadmap is not embracing digitzation.
This is happening now and those who plan on being relevant beyond 2020 understand that fact.
The inhibitor, of course, is the incredible pressure on profitability the large players are suffering today. Cost savings do have to be made but these savings should not override the bigger picture — the urgent and immediate need to digitally transform.
As a company trying to maximise their spend, would you assign your engineering team’s valuable time on building a social media post scheduling tool or would you pay Buffer $15 per month to do it for you? Would you spend millions on building a system for your sales team to monitor their pipeline’s progress or pay Salesforce $25 per month for their industry leading CRM?
The finance industry realised you can’t do everything yourself, and deploying software another company built (Software as a Service — SaaS) was a key factor in their ability to scale.
So to conclude: Focus on what you’re good at, build strategic partnerships with companies that fill in the missing pieces of your jigsaw and enjoy the FreightTech explosion that’s starting to take off.
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