Fr8Labs takes the lead in digitalising freight forwarding systems in Asia

Tech-driven Fr8Labs secures $1.9M (US1.5m) to streamline freight forwarding through digital solutions.

In a recent seed funding round, Fr8Labs has successfully raised $1.9 million (US$1.5 million) from prominent investors such as East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars, Venturra, and various angel investors.

This significant financial backing reflects the growing interest in Fr8Labs and its potential to transform the logistics industry in Asia.

Fr8Labs Chief Executive Officer Glenn Lai, in an interview with the Singapore Business Review, has underscored how his company has positioned itself on the path to improve the industry by utilising technology and applying current digital trends to what was once a manually-operated sector.

The startup has been offering freight forwarders a next-gen platform that consolidates information in one system which manages and tracks shipments with access to both freight forwarders and the customers.

Through this, freight forwarders will be able to reduce efforts, costs, and risks all whilst improving their shipment process.

“You can think of us as a Saas-enabled Marketplace for freight forwarders to really level up their game,” Lai told the Singapore Business Review.

After delving into freight forwarding, Fr8Labs has embarked on a journey to enhance the industry by leveraging technology to untangle the Gordian knot that challenges the players.

“There’s a bunch of very complex things that freight forwarders get involved with and because they’re dealing with so many cross border - potentially multiple countries and potentially multiple different assets — it’s very complex for a shipper or an individual business to really kind of get the right connect, to make sure that goods flow properly, and reduce the risk and the costs,” he explained.

“So while we saw a big challenge in being the operator as a freight forwarder, we saw equally the opportunity,” he added.

With over 50 signed customers across the Asia Pacific region, Fr8Labs now seeks to scale up the digitalisation of Asia’s logistics industry.

“We actually want to enable these freight forwarders to help provide digital services of their own and digital experiences to their customers,” Lai said, noting that the funds raised by Fr8Labs will support further investment in its sales and marketing initiatives and R&D resources.

An innovation partner for freight forwarders

Having been in the background of the industry for years, Lai has observed that although digitalisation efforts in logistics have already been established in regions such as the US and Europe, there is little action in Asia.

Meanwhile, Lai emphasised that Asia’s logistics industry may need a different solution “because the solutions of the West are very centred around a relatively less fragmented supply chain.”

“In Asia, there [are] a lot more SMEs, importers, and exporters and a lot more SME freight forwarders. So the solutions actually are not the same and the pain points and the current structure is not the same,” Lai told the Singapore Business Review.

Consequently, freight forwarders in Asia are still forced to heavily rely on manual operations and traditional applications such as Microsoft Excel.

“Post pandemic freight forwarders are therefore forced to actually adapt to a bunch of email, customer portals, [and] portals that they would have to access the shipping lines to basically execute on shipping. So [effectively,] their productivity has been forced to decrease because they're now [doing] more activity for the same shipment,” Lai asserted.

However, venturing into logistics digitalisation was not an easy feat even for seasoned experts such as Lai.

“Freight forwarding is not an industry that is well understood by venture capitalists. Investors are generalists. And of course, to their credit, they do spend quite a lot of time to learn and further [understand] this industry. But it [must also be an] industry [that] is not easy to get into,” he said.

“And so because of that, a majority of time that we spend on the pitch is just educating people about what this industry is about,” he added.

Despite this, Fr8Labs continues to rage against the storm and pursue being an innovation partner for freight forwarders.

“We [are] constantly working with our freight forwarders to discover how we can cut down the steps and how we can cross apply these to all other forwarders within our platform. [With] the software as a service business model, we will be constantly innovating together with our freight forwarders. We listen to our freight forwarders,” Lai said.

Driving efficiency through connectivity

Localisation is one strategy Fr8Labs focuses on. Through this, they are able to locate and address nuances specific to Southeast Asia and in Asia. And this is how the startup advances their way into the global market.

“There are a lot of local nuances in Southeast Asia and in Asia that are not easy to pass [or] that require a lot of infrastructure builds and local knowledge to be able to cater to correctly. And it takes network, time, and expertise to be able to do that efficiently,” Lai said.

Nevertheless, the vision still extends to being the name player in verified SaaS platforms known by every freight forwarder in the Southeast Asian logistics industry and progressively outside of Asia.

“Within five years, we want to be very well known and have sufficient depth in Southeast Asia itself at least, and then parts of Asia. [Our] vision is all about how we create an interconnected freight forwarding or interconnected global supply chain fit for freight forwarders,” Lai said.

Talking about the changes in the competition and business landscape and the environment, Lai pointed out that “while these statements are true today, we will continue to have to learn and adapt and innovate ourselves as well to be able to build customer success.”

“In essence we will have to continue to figure that [out] at every stage, it’s not like a one size fits all kind of answer in my opinion,” Lai added.