By Augusta Saraiva (Bloomberg) —
Freight-booking platform Freightos Ltd. is going public Thursday, one of the few such moves for the shipping industry during the pandemic era.
With headquarters in Jerusalem and Barcelona, Freightos is going public with special purpose acquisition company Gesher I Acquisition Corp. The newly combined firm will be listed on the Nasdaq under the ticker “CRGO.”
Founded in 2012, Freightos operates as a digital marketplace for international air and ocean freight. The platform allows for real-time global rate comparisons as well as booking and shipping management services. The company oversees over $1 billion in gross bookings and had an estimated $19 million in revenue last year.
The move isn’t meant to “dramatically change our business, just to accelerate it,” said Freightos Chief Executive Officer Zvi Schreiber. “The strategy doesn’t change. We just have some new tools, some more capital to accelerate that.”
The transaction happens at a turning point for the shipping industry, which is going through a rebalancing after seeing profits soar as consumers worldwide splurged on goods in the first two years of the pandemic.
Global trade is projected to grow just 1% this year, according to World Trade Organization estimates, compared with 3.5% in 2022.
Freight forwarders could see their operating income fall as much as 45% as global demand continues to retreat amid persistent inflation and rising borrowing costs, according to Bloomberg Intelligence senior logistics analyst Lee Klaskow.
“Freightos and the broader forwarding markets are facing pressure from declining ocean and air rates as they normalize from their pandemic peak,” he said.
Still, Klaskow sees Freightos benefiting from the digitization in logistics over the long term. For Gesher, the digital nature of the shipping firm was one of the main reasons that motivated the company to take it public.
“We were looking for a company to partner with that had some kind of disruptive technology competing with phones and faxes — we were looking for a market leader,” said Gesher CEO Ezra Gardner. “We believe that Freightos is the market leader. And we don’t think you ever go back, once you go digital, to phones and faxes.”
Despite the uncertain global economic outlook, Gardner sees Freightos using its technology to continue expanding as a public company and navigate the headwinds.
“Even though you hear over a million transactions, over a billion dollars of gross bookings, we are a small fraction digitally of what’s being done in the market,” he said. “So there’s massive growth ahead.”
Freightos joins Israeli container carrier ZIM Integrated Shipping Services Ltd. as one of the few logistics companies to have gone public since the onset of the pandemic. ZIM was first offered in January 2021 around $15 a share, peaked at $91.23 in March 2022 and traded earlier today at $18.35.
© 2023 Bloomberg L.P.
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