While freight forwarders in Western markets are working to digitize their operations, the founders say the same is not true in Southeast Asia. Fr8Labs. Reasons for this include a lack of localized software and a more fragmented logistics industry dominated by small and medium-sized enterprises. Fr8Labs wants to digitize the logistics industry in Asia with its SaaS operating system and plans to turn it into an open ecosystem where multiple players can utilize his API.
The Singapore and Indonesia-based startup today announced that it has raised $1.5 million in seed funding from East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars, Venturra, and angel investors. Fr8Labs currently has over 50 customers in Singapore, Malaysia, Indonesia, Taiwan, Australia and is expanding to other Asian regions.
The startup was founded in 2022 by CEO Glenn Rye and head of product technology Felix Lu. Mr Lai, whose family is in the freight forwarding industry, started his career in the logistics industry in 2015 with his Sinar Gas Golden Agri Resources. Then, in 2019, he and Lu joined Indonesian e-commerce logistics company Bizzy, where he served as COO and VP of Products, respectively.
After Bizzy was acquired by Warung Pintar, the two returned to Singapore, where Mr Lai became head of strategy and growth at software company Gravity Supply Chain. He has traveled the world and worked with major international logistics and supply chain companies. He found that in contrast to Asian markets, supply chains in developed markets are digitally interconnected.
Lai said one of the reasons for the technology gap in Asia’s freight transportation industry is that the market is more fragmented compared to Western countries, where corporate players dominate. Large freight forwarders can encourage other players to go digital, especially since they have systems that allow the companies they do business with to connect using APIs. Freight forwarders in Asia, on the other hand, are mainly small and medium-sized enterprises and do not have enough concentration to influence new practices. Another reason is that digital logistics systems are built for specific markets and won’t work in Asia due to different accounting and customs policies, Lai added.
As a result, many carriers in Asia, especially Southeast Asia, still use on-premises software or a combination of Microsoft Excel, email, chat, and off-the-shelf accounting systems. Lai said this not only makes it difficult to scale, but also introduces errors that can result in carriers paying customs duties and late penalties (fees charged for shipping containers that aren’t picked up on time). It says that there is a sex.
“This contrast inspired me to think about how we can improve the freight industry in Asia,” Lai tells TechCrunch. “I gathered Felix and some of his past colleagues to brainstorm a solution. Rather than disrupt the strong network, expertise and relationships of Asian freight forwarders, we , we realized that it was important to take advantage of them.”
Fr8Labs co-founders Felix Lu and Glenn Lai
Fr8Labs develops products that power these networks, including allowing freight forwarders to offer cargo insurance, foreign exchange trading, and financing capabilities to their end customers (e.g., allowing online travel agents to offer travel insurance to their passengers). (similar to the method provided). The startup’s core product is an operating system that supports the entire carrier workflow, including quoting, booking confirmation, shipping confirmation, job accounting, and accounting backends. The platform enables departments such as sales and operations to work together more efficiently and links platforms such as email and chat.
One use case is that instead of multiple manual data entries, carriers can upload a PDF of a shipping order and automatically create shipping reservations and other documents, including forms that need to be submitted to customs. is. Another example of how Fr8Labs can be used is as a warehouse management system module. This allows freight forwarders to interface directly with their clients’ backend ERP, allowing them to manage international shipments to and from the same warehouse.
A portion of Fr8Labs’ funding will be used to expand the platform, adding FX trading, lending, cargo insurance, rate management, and a marketplace. The startup’s goal is to turn its platform into an open ecosystem that can be integrated and managed with a variety of logistics technology software.
“Think of Android or Apple and how integrated each device is into the ecosystem,” Lai says. “We want to provide freight forwarders with a seamless operational experience and build further value-added services on top of that.”
Roderick Pulwana, managing partner at East Ventures, said in a statement: “While the application of technology is critical in logistics as it helps improve cost efficiency and productivity, industry players are not immune to challenges in enhancing digital logistics. Fr8Labs’ innovative technology solutions We address the challenges faced by freight forwarders in Southeast Asia. We are confident that the team’s expertise will enable Fr8Labs to transform the logistics industry and add value across the value chain.”
Source: techcrunch.com
