With the freight marketplace widening exponentially every year, the growing communication divide in the community is also significantly felt. Fr8Hub, a digital freight marketplace startup is looking to improve peer-to-peer interaction by creating transparency and injecting efficiency in freight hauling.
The founders of Fr8Hub have roots that cut deep into the freight industry, with decades of experience in customs, surface transportation, and freight forwarding across the United States and Mexico.
“The idea behind the startup is to solve the overarching disconnect between the truckers, brokers, and the shippers,” says James Dockery-Jackson, EVP of market development.
“Customers are frustrated with brokers being obscure on their freight rates and trying to force an upsell at the last moment,” adds Dockery-Jackson. “For example, it has been a practice where brokers call in at the last minute and mention that the promised $1.50-a-mile truck isn’t showing up and that only a $2-a-mile truck is available. Fr8Hub is looking to change this equation by enabling transparency.”
Fr8Hub believes it can use its demographics to its advantage. Being located in Laredo, Texas, it has a comfortable reach to the cross-border freight business between the U.S. and Mexico. “There is about $560 billion in commerce if you consider the goods that travel between the two countries,” says Dockery-Jackson.
The driving factor behind the growth in export commerce is the steadily increasing middle-class population in Mexico.
“Before NAFTA happened, the middle-class population in Mexico was a paltry 5%, [but it] has improved to 40% now. Economists say that the Mexican export economy alone will grow by 40% over the next decade,” says Dockery-Jackson.
Though the market potential is predicted to be healthy, Dockery-Jackson believes the startup needs to find a way to overcome the cultural barriers between countries. Fr8Hub looks to differentiate itself from its competition by offering shippers in the U.S., Mexico, and Canada a transparent and seamless process to move goods - irrespective of imminent NAFTA regulation iterations or political differences between the countries.
With regard to the product, Dockery-Jackson believes that the process of development and feedback loop is never-ending. Fr8Hub has been actively seeking feedback from carriers ever since its beta phase launched and is trying to incorporate that feedback into subsequent iterations.
“We are trying to be as adaptive and dynamic as possible to meet the actual needs of the people - not the needs that we think they have,” notes Dockery-Jackson.
By listening to inputs from the freight community, Fr8Hub understands that there are a visible number of skeptics to the idea of a freight marketplace. This is true especially with mega carriers, who are not ready to adopt new practices on their face-value.
“The needs of the carrier companies are extremely diverse based on where they are located,” says Dockery-Jackson. “An operator in Laredo would want something that is very different compared to one in Denver or Chicago. At the moment, our app is designed for small-size trucking companies, but we are working on building APIs for the mega carriers.”
Dockery-Jackson is convinced that there can be no monopoly in the freight marketplace and that there will be multiple niches with on-demand or digital marketplace solutions. Fr8Hub believes it holds an inherent advantage in the NAFTA trade lanes due to its proximity to the border and its unique approach compared to other players in the digital freight space.
One of the bigger challenges for improving traction is about engaging customers in the freight industry.
“If you are buying or selling transportation services - be it a trucker, or a large carrier, or even a small shipper - you are used to doing it through manual engagement,” says Dockery-Jackson. “This is especially true with carriers. To get them engaged requires us to create a behavioral change for them to see success through our medium. Once they see it, the adoption rates would improve.”
Fr8Hub recently concluded a private round of seed funding and is looking to raise its Series A in October. With a robust market potential and a need-of-the-hour product, the startup is optimistic about making its presence felt in the digital freight marketplace.