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On Aug. 19, 2019, FreightWaves published Commentary: Competition in e-commerce is heating up! The COVID-19 pandemic has only accelerated that trend over the course of 2020. Given this state of affairs, it appears the acceleration will continue through most of 2021.
It is in this context that I spoke with Hagar Rips, co-founder and CEO of Israel-based Ladingo, toward the end of 2020 about how the early-stage startup facilitates cross-border e-commerce.
Ladingo makes cross-border B2B logistics easy
I asked Rips to describe the problem that Ladingo solves for its customers.
“We’re about making the B2B logistics more accessible — when you buy a pallet of goods and want to ship it from one country to another, our claim is that this should be just as easy as you would ship an iPhone protective case,” she said. “No dealing with multiple parties, customs and so on. You just get a fully landed rate that is final, and wait for it to arrive.”
Because COVID-19 has forced companies and government agencies around the world to shift to a work-from-home reality, this value proposition has become more compelling for companies of all sizes in the B2B e-commerce market.
However, Ladingo specializes in the segment of the market populated by small and midsize importers by consolidating communication among multiple parties, reducing response times, streamlining information about duties and taxes, and increasing transparency.
Basically, Ladingo seeks to make the B2B e-commerce experience more like the B2C experience that we have all come to take for granted.
Machine learning is in the secret sauce, and data is an obstacle and an opportunity
To do what Ladingo does at scale requires a significant amount of automation. So I asked Rips, “What is the secret sauce that makes Ladingo successful? What is unique about your approach?”
She said: “Ladingo’s secret sauce is the ability to optimize the shipping-import-export price and process, based on numerous real-world-complexities. We have created multiple learning models to tackle some of the most labor-intensive and error-prone tasks in the industry. For example: We built and trained supervised, unsupervised and reinforcement learning models to analyze and optimize processes based on global taxation and regulations.”
Startups like Ladingo that are applying machine learning and artificial intelligence to legacy industries like logistics consistently have to grapple with a lack of high-quality data that they can use in training their models.
“It is true that the industry is lacking easily-accessible, high-quality, uniform data,” Rips said. “This is part of the reason that Ladingo has invested heavily in the automation of data ingestion, cleansing and validation processes. At this time we are digesting over 2 million data points on a daily basis to keep our data complete and accurate.”
Competition
As to whether there are other startups doing something similar to what Ladingo does, Rips says, “Digital forwarders are desperate to make shipping less complex, but regulations and lack of tools have caused them to stay out of the game. Also, there are startups that are dealing with aspects of cross-border e-commerce but not the entire logistics cycle. It leaves loose ends, and still many uncertainties to the shippers who usually bear the consequences. We feel as if until now the industry did move towards being more technology-oriented, but it’s not enough to make the shipping of oversized shipments easy or quick or handled in one place, and this is exactly Ladingo’s mission.”
Readers who follow logistics technology may think of Flexport, Haven, Forto, Shippabo and FlavorCloud as potential competitors. However, as Rips points out, Ladingo’s growth so far suggests that there’s a segment of the market that is not being adequately served by existing solutions.
Conclusion
The B2B e-commerce opportunity is a big one. According to Statista, the most recent estimate available for global e-commerce gross merchandise value is $12.2 trillion. The volume of B2B e-commerce in the United States is $6.65 trillion. B2B e-commerce is only 13% of total B2B sales in the United States.
During our conversation, Rips indicated that Ladingo is poised to build on the success it experienced in 2020. The trends are in its favor; according to the team at Ladingo, 61% of B2B transactions start online. If they have their way, a significant share of those transactions will start and end at Ladingo’s web portal.
If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we’d love to tell your story in FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at media@freightwaves.com.
Author’s Disclosure: I am not an investor in any early-stage startups mentioned in this article, either personally or through REFASHIOND Ventures. I have no other financial relationship with any entities mentioned in this article.
