Executive Insights: FreightHub Co-Founder Michael Wax on online freight forwarding and what to look forward to
Shippers’ demands are forcing forwarders to play a much more active role in supply chains these days. But what does that look like in practice for a recent market entry that’s still proving the viability of the online freight forwarding model?
We talked with FreightHub co-founder Michael Wax about what his company is doing to establish itself as an active partner to shippers, and what the ideal forwarder-shipper relationship should look like.
Wax also pointed out that there have been more than 40,000 forwarders in the market. He said that “that’s not about to change, and there will always be plenty of options for shippers to choose from. We don’t worry about competition but rather focus on ourselves.”
There seems to be a proliferation of web-based logistics service companies ranging from niche and limited services to full service platforms that offer full service forwarding. Where does FreightHub fall into this picture, and how do you expect the sector to evolve in response?
FreightHub is a full-service, vertically integrated freight forwarding platform. We see ourselves as a technology company offering logistics services.
Our strong belief is that over the next years the freight forwarding market will see a strong consolidation leaving the market with companies that managed to successfully digitize their services in order to do three things.
First, decrease operational cost in the longtail (Very Small Businesses and SMB).
Secondly, increase the level of automation and integration with partners to increase transparency and reliability of the service. And finally, build enough volume to offer attractive prices.
What really distinguishes an online freight forwarder from the conventional forwarder model, and in the longer term, what trends do you expect to see in both the online and conventional model?
We follow a genuine innovation model re-engineering our software based on client requirements, rather than playing catching with an update software landscapes that has grown like a cancer through corporate structures and now fails to offer efficient workflows.
Flexport is considered to be one of your major competitors. In terms of competition or the online freight market, what are you doing to distinguish your products and services, and what are some differences that we should be aware of?
Up to this point, there have been 40,000 forwarders in the market. That’s not about to change, and there will always be plenty of options for shippers to choose from. We don’t worry about competition but rather focus on ourselves.
I can imagine that you find yourselves in conversations with conventional forwarders at industry events. What do you hear from them, and are their attitudes towards the role of forwarders changing?
We’re colleagues, so we discuss common challenges and connect over dinner or drinks to evaluate if there’s a potential for cooperation. Of course, some of them still see virtual or digital freight forwarders as a complete fail, but in the end this statement just proves they haven’t realized the potential of technology focused forwarding yet.
Shippers’ demands are forcing forwarders to play a much more active role in supply chains these days. What is FreightHub doing to establish itself as an active partner to shippers, and what should a forwarder-shipper relationship look like?
We have a close relationship with our key clients and believe that this is very important for a successful partnership. However, we try to move as much conversation from the phone or emails into a more standardized, pro-active way of communication on our platform to update the customer as soon as something comes up.
What technology are you watching most closely at FreightHub, and what excites you about it?
We’re tech guys, we monitor everything that’s going on there from AI to Blockchain, discuss latest crypto investments over lunch or talk about the problems with voice control in last night’s pizza order.
Speaking of the market in general, what advice do you have for smaller shippers that want to cut costs?
Check your invoices.