“At least 30 procedures are carried out to fulfill a freight forwarding order, and 90% of them are performed by human workers.”
SaaS like CargoGM enables the companies in the international logistics industry to cut workforce and work more efficiently.
International logistics-focused SaaS provider CargoGM (大掌柜) has landed tens of millions of yuan in a pre-A funding round led by Zhuopu Capital and joined by Yunqi Partners. The financing will be mainly used for the upgrade of its existing products as well as the development of a platform for the provision of PaaS solutions, which offer greater flexibility than SaaS products.
CargoGM is a SaaS provider dedicated to helping international logistics operators improve efficiency and cut costs, its direct rival being WiseTech Global, an Australia-listed company that has developed the product CargoWise One.
LIU Kai, CEO of CargoGM, believes that the complexity of the freight forwarding business makes tools essential for freight forwarders.
“At least 30 procedures are carried out to fulfill a freight forwarding order, and 90% of them are performed by human workers,” said LIU.
International logistics involves numerous factors, from customs, ports and warehouses to trucks, carriers and customs brokers, and the long transaction cycle has created an inefficient payment and settlement system. These make companies cry out for a tool that can connect all the procedures to enable the smooth flow of information, LIU noted.
He also observed that today’s freight forwarders, unlike eight years ago, can no longer exploit the opacity of the transaction process to impose markups on services. Instead, clients now have higher requirements for services. This is when tools that allow real-time feedback become handy as they can help improve efficiency.
And that’s where CargoGM comes in. It offers SaaS solutions that enable freight forwarders to manage online all the procedures that can be standardized in the value chain.
CargoGM focuses on three aspects: the standardization of internal procedures for freight forwarders, connecting users with different segments of the value chain (wharves, customs brokers and warehouses), and the upgrade of its existing infrastructure so that it can provide a cloud computing platform for medium and large-sized companies to develop their own software based on specific needs.
Specifically, the freight forwarding process starts with manufacturers quoting prices on the goods to be shipped. Given that prices change all the time, CargoGM offers an automated quoting tool to replace the manual quoting process.
As for order placing, at present, manufacturers place more than 80% of orders by sending an email or a message via QQ, Tencent’s instant messaging software, to freight forwarders, but with CargoGM, manufacturers can use the ordering system to place orders directly online. CargoGM also supports shipping space booking, order checking, truck dispatching, processing, shipment tracking, etc.
“Enabling freight forwarders to manage their operations online is just the first step. The next is standardization and eventually intelligent operations,” said LIU.
He demonstrated what CargoGM can do with an example: A freight forwarder in Ningbo with a team of 50 may handle 4,000 to 5,000 transmission extension units (TEU) a month, but with the help of CargoGM, the company can cut its labour force by one third yet be able to undertake more business.
The company claims to have over 1,000 clients for its business management system currently; over 40,000 active users use its tools to check and quote prices and more than 10,000 clients handle orders using its software on a daily basis.
CargoGM is rolling out an English version of its software in 2018, with a view to helping Chinese freight forwarders tap into foreign markets and connecting them with overseas partners. With respect to the company’s future development, LIU wants to eventually build CargoGM into a platform. “When two-thirds of companies in the industry are using the same tool, it naturally becomes a platform that links all.”