In Western markets, freight forwarders are properly into digitizing their operations, however the identical doesn’t maintain true in Southeast Asia, say the founders of Fr8Labs. The explanations for that embrace the shortage of localized software program and a extra fragmented logistics trade the place SMBs dominate. Fr8Labs desires to digitize Asia’s logistics trade with its SaaS working system and has plans to show it into an open ecosystem that a number of gamers can faucet into with APIs.
The Singapore and Indonesia-based startup introduced at this time it has raised $1.5 million in seed funding from East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars, Venturra and angel buyers. Fr8Labs at the moment has greater than 50 clients in Singapore, Malaysia, Indonesia, Taiwan and Australia and is increasing into the remainder of Asia.
The startup was based in 2022 by chief government officer Glenn Lai and chief of product and know-how officer Felix Lu. Lai, who has members of the family within the freight forwarding trade, began his personal profession in logistics in 2015 at Sinar Fuel Golden Agri Assets. Then in 2019, he and Lu joined e-commerce logistics firm Bizzy in Indonesia, the place they served as COO and VP of product, respectively.
After Bizzy was acquired by Warung Pintar, the 2 returned to Singapore, the place Lai was chief of technique and progress at software program firm Gravity Provide Chain. He traveled all over the world, working with main worldwide logistics and provide chain corporations. In developed markets, he seen that offer chains have been digitally interconnected, in distinction to Asian markets.
Lai says one purpose for the know-how hole in Asia’s freight forwarding trade is that the market is extra fragmented in comparison with Western nations the place enterprise gamers dominate. Giant freight forwarders are in a position to sway different gamers to digitize, particularly since they’ve techniques that the businesses they work with can plug into with APIs. Then again, Asia’s freight forwarders are primarily SMBs and don’t have the identical sort of centralized energy to affect new practices. Lai provides that another excuse is that digital logistics techniques are created for particular markets, and don’t work in Asia due to totally different accounting or customs insurance policies.
In consequence, many freight forwarders in Asia, particularly Southeast Asia, nonetheless use on-premise software program, or a mix of Microsoft Excel, e mail, chat and off-the-shelf accounting techniques. Lai says this makes it tough for them to scale and in addition leads to errors that may value freight forwarders customs or demurrage penalties (charges charged on delivery containers that aren’t picked up on time).
“This distinction impressed me to consider how we may enhance the freight forwarding trade in Asia,” Lai tells TechCrunch. “I introduced Felix and a few previous colleagues collectively to brainstorm options. We realized that leveraging the sturdy networks, experience and relationships of Asian freight forwarders, fairly than disrupting them, was key.”
Fr8Labs is growing merchandise that may improve these networks, together with giving freight forwarders the power to supply cargo insurance coverage, FX commerce and financing amenities to their finish clients (much like how on-line journey companies supply journey insurance coverage to passengers). The startup’s core providing is its Working System that helps a freight forwarder’s whole workflow: citation, reserving confirmations, cargo affirmation, job accounting and an accounting backend. The platform helps departments like gross sales and operations collaborate extra effectively and hyperlinks platforms like e mail and chat.
One use case is that as an alternative of doing a number of handbook information entries, a freight forwarder can add a PDF of a delivery order and have cargo reserving and different paperwork created robotically, together with types that should be submitted to customs. One other instance of how Fr8Labs can be utilized is its Warehouse Administration System module, which lets freight forwarders interface straight with their consumer’s backend ERP, to allow them to handle worldwide shipments to and from the identical warehouse.
A part of Fr8Labs’ funding shall be used to broaden its platform, with plans so as to add FX commerce, financing, cargo insurance coverage, charges administration and a market. The startup’s aim is to show its platform into an open ecosystem that may combine with and handle totally different logistics tech software program.
“Consider Android or Apple, and the way properly built-in every of their gadgets are within the ecosystem,” says Lai. “We need to present the freight forwarder a seamless expertise for them to function on, after which construct extra value-adding companies on high of it.”
In a press release, East Ventures managing accomplice Roderick Purwana mentioned, “The applying of know-how is essential in logistics as a result of it may assist to extend value effectivity and productiveness, but gamers within the industries usually are not proof against challenges in enhancing digital logistics. Fr8Labs’ modern tech answer is right here to deal with the challenges freight forwarders face in Southeast Asia. With the group’s experience, we’re assured that Fr8Labs can rework the logistics trade, including worth throughout the worth chain.”