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CargoHound: New freight service laps up plenty of attention

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CargoHound: New freight service laps up plenty of attention article image

CargoHound, a new online marketplace that connects exporters and importers with freight forwarders, is commanding much industry attention.

The Australian startup, which recently secured $800,000 in seed funding, is changing the way goods are shipped from Australia.

Chief executive Ian Smith says the service can be described as the Uber of international freight.

"There is nothing like this for international freight," he told the Sydney Morning Herald recently. "While there are sites like us, they are in different industries. However, while we are disruptive, we are also inclusive and are designed to be equally beneficial to both buyers and sellers."

Mr Smith says CargoHound can reduce the time, cost and risk associated with shipping products internationally.

"The platform lets exporters and importers compare quotes from a number of service providers so they can quickly identify the freight service that best suits their requirements and budget," he says. "The exporters just type in what they need and the freight forwarders that are interested in the job send through their quotes. Everyone is anonymous until a job is accepted."

CargoHound is free to exporters and importers while freight forwarders pay an annual subscription as well as a commission for each successful transaction.  

Freight costs a major issue

An Australian International Business Survey conducted last year found that 63 percent of exporters believe transportation and freight costs were adversely affecting their competitiveness. 

According to the Department of Foreign Affairs and Trade (DFAT) there are more than 800 freight forwarders in Australia and industry revenue is $8 billion.

And there are 105,000 Australian exporters and importers with total trade valued at $525 billion in and out of Australia last year.  

CargoHound aims to sign up between 300 and 500 importers/exporters and up to 50 freight forwarders within the next nine months.

The new seed funding from undisclosed investors in the US, UK and Australia will help the company to achieve that goal.

CargoHound is the brainchild of Ian Smith, Kim Mauch and Pete Johnson, who have all worked in the industry for many years.

The three co-founders recognised the industry had a lot of inefficiencies and transparency problems and so decided to launch a new “revolutionary” way of streamlining freight operations. 

Mr Smith says the seed capital has allowed the company to hire key staff, expand and execute a strategic sales and marketing plan. 

Biggest challenge

The platform recently went through a beta testing phase, where 40 importers and exporters and 10 freighters took part. Smith says the feedback was overwhelmingly positive from the proof-of-concept testing.

The biggest challenge is in getting both sides of the industry involved, admits Mr Smith.

But already a number of freight forwarders have supported the new concept and many import/exporters have begun posting jobs.

CargoHound allows buyers (importers and exporters) to compare quotes from multiple "peer rated" service providers, and quickly identify the freight service that best suits their requirements and budget. 

Sellers (freight forwarders and carriers) are able to reduce the time and cost of developing new business. 

Positive moveCargo hound logo

The Export Council of Australia sees CargoHound's launch as a positive for the sector. 

ECA chair Dianne Tipping says research shows most companies have little or no knowledge of the breakdown of costs they are charged for freight movements.

"Industry needs to make an effort to be better educated in understanding international transport and logistics issues and costs," Ms Tipping told the SMH.

"A better understanding of the costs would empower exporters to exercise a greater degree of control over these costs. Technology solutions such as CargoHound may offer the ability to ... (address) this problem." 

The online marketplace is planning to launch later this month. 

Dynamic Export wishes the new venture every success.

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