CargoHound, the first true online marketplace for international freight, has closed an $800,000 seed funding round from investors in the UK, US and Australia to support its aggressive expansion strategy in Australia and New Zealand.
Developed over three years in close consultation with the industry, CargoHound is a revolutionary tool that connects exporters and importers with reliable “community rated” freight forwarders and carriers reducing the time, cost and risk of shipping products internationally.
Freight costs remain a major pain point for Australian companies looking to trade overseas due to the high cost of international freight, the time it takes to find the best freight rate from multiple service providers and the difficulty of finding a reliable service provider for different markets around the world.
The Australian International Business Survey (2014) found that 63 per cent of Australian exporters believed transportation and freight costs were adversely affecting their competitiveness.
Furthermore, the Manufacturers Excellence Taskforce of Australia (META) Report 2014 found that most Australian exporters have little or no knowledge of costs passed onto them by freight forwarders.
Born of the industry, for the industry
The CargoHound concept was the original brainchild of Kim Mauch who has worked at the “coal face” of export and import for 25 years.
“As a long term buyer of international freight, I could see where the efficiency and transparency was lacking in the sector and knew exporters and importers were crying out for a better way.
“Teaming up with co-founders and industry veterans Pete Johnson (commodity trade specialist) and Ian Smith (ex-Australian Trade Commissioner) we have been able to develop a user friendly website that we know the industry needs, not what we think they want,” Kim said.
Co-founder and CargoHound CEO Ian Smith said that having first mover advantage was imperative to scaling quickly in the massive international freight market.
He pointed out that in Australia alone, total merchandise trade totalled $525 billion in 2014 and the number of importers and exporters has grown rapidly to over 105,000.
“By our estimates, capturing just 0.75 per cent of this market for air and sea freight will equate to revenues of over $100,000 per month for CargoHound within 12 months.
“And if our recently completed beta testing is any guide the demand is definitely there. The response from our 40 importers/exporters and 10 freight forwarders was overwhelmingly positive which bodes well for future growth,” Ian said.
What is CargoHound changing?
CargoHound is disruptive but inclusive at the same time.
It has been designed to be equally beneficial to both the buyers and sellers of international freight and increase overall supply chain efficiencies by cutting the time and effort it takes to source freight rates from multiple service providers.
However, there are a number of indirect competitors in the space.
In general the key differences to CargoHound are that many of them deal in predominately domestic freight (i.e. truckloads) and that some provide a similar service for parcels (online purchases) rather than larger shipments for import/export.
Also, others are more like directories. They generally have a limited number of freight forwarders listed providing fixed pricing rather than “live” job specific quotes and do not have a rating system.
In collaboration with its key partner the Export Council of Australia, CargoHound had its launch events last week in Brisbane, Canberra, Sydney and Melbourne which were a huge success with around 300 companies in attendance.
The events, which are free to attend, are targeted at importers and exporters and will feature freight & logistics experts discussing how to increase international freight efficiencies, manage costs and improve overall profitability. They will be in Perth and Adelaide on 18 and 19 August respectively.