Facilitator of two-way committed ocean contracts New York Shipping Exchange (Nyshex) announced Wednesday it has raised $15 million in a recent funding round. The round was led by NewRoad Capital Partners and included Collate Capital, Blumberg Capital and the New York Angels.
Since its start in 2015, Nyshex has sought to ensure contract performance between shippers and carriers on its digital platform.
The exchange is designed to make sure ocean shipping contract terms are clear, there is an understandable exception resolution process and penalties for failure are enforced. Pricing is fixed for the duration of the contract and service is monitored on every booking and shipment, with disputes settled by neutral third parties from within the industry.
Nyshex says the service allows supply chain managers to better manage costs and avoid blanked sailings or seeing their freight rolled to future sailings. The platform is designed so carriers can see better vessel utilization and more predictable revenue streams.
“This capital will allow Nyshex to provide even more carriers and shippers with reliable shipping through two-way committed contracts,” a press release read. The company plans to build out its technology for freight forwarders and improve its audit and payment systems.
Prior to the latest round, the company had raised $28.8 million from investors in two series-A raises, which gave it a $48.5 million valuation, according to Pitchbook. Nyshex’s investment group also includes GE Ventures, Goldman Sachs as well as ocean carriers Hapag-Lloyd and CMA CGM.
Six of the top 10 ocean carriers are currently participating in the program, including CMA CGM, Maersk, Ocean Network Express, Hapag-Lloyd, HMM and COSCO Shipping.
In an interview with FreightWaves last October, Nyshex CEO Gordon Downes said the company is looking to extend its market for containerized freight contracts to include the retail sector and eastbound trade. The platform started out servicing the U.S. agricultural industry and other verticals on the westbound trade. It has been making the necessary technology investments needed to accomplish the expansion since.
“Nyshex is enabling stability and nearly flawless execution of ocean shipping contracts in a time of unprecedented volatility,” said Chris Sultemeier, operating partner at NewRoad and former EVP of transportation and logistics at Walmart. “Nyshex’s growth has skyrocketed over the last few years and its momentum is unwaning as more and more shippers and carriers understand the benefits of two-way committed digital contracts.”
A Wednesday Bloomberg article said the company executed contracts involving 151,000 containers during the second quarter. Downes told FreightWaves during the interview that the company processed 41,800 twenty-foot equivalent units in the second quarter of 2020.
This exchange is not a tool for booking freight on the spot market. Most of the contracts on Nyshex extend for at least multiple weeks if not longer. Nyshex says its contracts are fulfilled 99% of the time.
The Federal Maritime Commission oversees the exchange.