The potential of services that combine trade finance and freight services has been understood for some time.
In a 2018 report, Boston Consulting Group estimated venture capitalists had poured more than $3.3 billion into digital shipping and logistics start-ups between 2012 and 2017, and suggested that digital freight forwarders would inevitably expand their offerings to connect to other service offerings along the logistics value chain.
In June, UK-based digital freight forwarder Beacon announced it had raised more than $15 million in its Series A fundraising round.
The company believes its ability to offer supply chain finance alongside freight forwarding will allow customers to better control and manage their cash flow – suppliers often demand payment before goods are shipped and, with months-long shipment times, importers need flexible finance to meet their working capital needs.
“By working with customers to solve their working capital constraint problems, we can provide a simpler and more complete solution that is also more interesting economically,” says CEO Fraser Robinson.
“Providing both shipping and financing services enables us to pool our profits to ensure prices on the freight side are competitive.”
Lack of working capital and liquidity is one of the biggest growth challenges for businesses, says Richard Fattal, co-founder of Zencargo.
“Freight forwarders are well placed to service this need given their