Xenata co-founder and CEO Patrik Berglund said providing ocean freight rate transparency is more important now than ever.
“In today’s [pricing] market, this spread is the most I’ve ever seen in my entire career. In this industry, it’s flabbergasting to see that. We have a market where you can find a $15,000 rate and then at the same time, we have customers moving for $2,500. That is just insane to see,” Berglund told FreightWaves.
“Let’s say you have a low-value commodity. If you have a container with $20,000 worth of cargo in it, if the cost to ship it has gone to $15,000, they cannot even move those products anymore. If this market stays elevated for a longer period of time, there will be some consequences coming from it,” he said.
Oslo, Norway-based Xeneta, an ocean freight rate benchmarking and intelligence platform, announced Thursday it has closed its $28.5 million Series C round led by its first U.S. investor, Lugard Road Capital, with participation from past investors Creandum and Investinor.
The company has raised a total of $49 million since 2012 and now is valued at more than $130 million.
Berglund said the company uses a crowdsourcing approach to bring transparency to the rating of ocean and air shipments.
“We started crowdsourcing shipping rates by going to the [retailers],” he explained. “We would get their freight prices and then we would aggregate that. … Today we have about seven of the 10 global forwarders and three of the five largest shipping lines so there’s plenty of use cases for [customers] to understand how the market moves.”
Berglund described how this price transparency now enables Xeneta’s customers to make better shipping decisions and improve the services that freight forwarders are offering their customers.
“The beautiful thing about transparency is that it forces you to focus on value-added services rather than just price,” he said. “In today’s market, I think it’s valuable for shippers whose logistics spend is through the roof. How do you justify those budget increases? Are you in line with [your peers] or not?”
Funding details: Xeneta
Lugard Road Capital
Expand into new regions, in-house data analyst team, develop commercial and technical partners
Revenue run rate
New revenue run targets
Berglund plans to use the new funds to expand to new regions, add an in-house analyst team and develop partnerships to bring more insight to the ocean and airfreight industry.
“We’ll stay on course with our mission and a big part of the investment is going to go into adding more data but also complementary data sources,” he explained. “Not only do we do pricing today, but we also have partnerships that allow us to provide insight on capacity, reliability as well. We will definitely continue to extract more intel from our own data. That’s an opportunity that we’re looking to tap into as well.”