Apr 19, 2013 · 2 minutes

The shipping industry is a magnificent mix of old-fashioned opacity, possible corruption, and outmoded technology, encompassing everything from unpredictable and volatile pricing for freight forwarding to code-named cartel collusion and, worse, a reliance on fax machines for receiving price quotations. 

The most disruptive force the shipping industry has seen in the last two decades?


The industry for moving containers from one part of the world to another, in other words, is about as murky as the night-time fog through which the freighters must navigate. That fact makes an impulse for transparency in the industry as difficult as it is inevitable. One of the startups that has a chance of making that happen is sitting quietly in Oslo, Norway, where a couple of former executives from logistics giant Kuehne+Nagel are trying to shine a light on the volatile and unpredictable pricing systems within the industry.

Xeneta, founded by Patrik Berglund, Thomas Sørbø, and Vilhelm Vardøy, has just raised a $1.6 million round of funding from Scandinavian investment firms Creandum and Alden to develop a price-comparison platform that helps counter the supply chain complexity and hidden rates within the industry. In the space of less than a year, Xeneta’s platform already covers 125,000 data points per month, representing more than 1,000 port-to-port combinations to and from Europe. While Xeneta started with the intention of focusing just on Europe, it is planning to expand early to the US because of high interest.

Rather than ask shipping lines to provide details of their pricing mechanisms – a task that has in the past proven to be too difficult a challenge to surmount – Xeneta goes straight to those lines’ customers and asks them to upload their freight rates into the system, which is both a strength and weakness of the platform. For Xeneta to be successful in the long run, it needs total buy-in and cooperation from these customers, who at the same time might be vulnerable to pressure from shipping lines that have a strong interest in being able to control the messaging around their pricing. Not every company has the clout of Walmart.

Once the data is uploaded, Xeneta’s system  churns it and compares it against other data to get a sense of pricing trends and patterns. The more data the system churns, the more useful it becomes. Xeneta can then use that information to help customers save money, and determine which lines are the most reliable. The data is also interesting to financial institutions, who can track the pricing changes and trends to inform their investment decisions.

While Xeneta’s software-as-a-service product is free to users, it also offers a premium, subscription-based version that presents granular price comparisons within industries and sectors – clothing, for instance, or auto parts – so customers get more specific data than just a generic market average. The premium version also offers automated alerts about price variations.

Xeneta’s path ahead is an intimidating one. While CEO Berglund says Xeneta wants to work closely with shipping lines, increased transparency is not necessarily going to make them happy in the short-term. Opacity, as many politicians will tell you, can be good for business. Indeed, an executive at one of the world’s leading shipping lines said to Berglund, “The shippers are going to kiss your hand, but somebody is going to kill you.”

When it comes to the shipping industry, the pain of disruption could be a two-way process. But that doesn’t make it any less inevitable.