Freightos Downgrades Cargo Growth Prediction for Shipping Industry

The online freight booking business expects 2023 revenue growth of 15% to 21%, down from a prior forecast of 87%

Containers atop a ship at the Port of Oakland

Freightos Ltd. has lowered its growth forecast due to weak freight rates and low cargo volumes, as the Israeli company expects revenue to grow between 15% and 21% this year over 2022, compared to the previous 87% growth forecast. “The industry has obviously changed beyond recognition,” said Zvi Schreiber, the chief executive and founder of Freightos. He also stated that wavering global economic conditions, lower trade demand, and abundant shipping capacity have created a “substantial headwind” in the company's growth plans. The company's revenue projection for 2023 is between $22.3 million and $23.6 million, a significant drop from its June 2022 projection for this year of $39.5 million.

Freightos went public in January as many freight companies were struggling after air and ocean cargoes dropped from Covid-pandemic highs last year. Other companies, such as A.P. Moller-Maersk A/S and Flexport Inc., have reported significant revenue loss, while U.S. truck freight brokers have stopped hiring because of weaker domestic shipping volume. In the last week of January, ocean container shipping rates from Asia to the U.S. West Coast were down 91% YoY, and rates from Asia to Northern Europe were down 77%. According to the International Air Transport Association, worldwide air cargo traffic decreased 14.9% YoY in January.

Freightos operates like an Expedia or Travelocity for freight, allowing companies with goods to ship to compare prices and book space on planes and ships. Freightos earns revenue either as a flat fee for a booking or a percentage of a booking’s value. The company reported 2022 revenues of $19.1 million, an almost 72% increase from the prior year, but 9.5% less than its June 2022 forecast. During the fourth quarter, the company doubled the number of transactions despite a slowdown in the global freight market. Freightos officials say they are sheltered from some of the broader industry pressures as the platform continues to add carriers and sign up new shipping customers.

In January, Freightos raised more than $80 million through its merger with Gesher I Acquisition Corp., with British asset manager M&G PLC contributing $60 million and Qatar Airways Ltd. investing $10 million. After opening at $22.76 in January, the company's shares fell to under $5 in the following weeks. On Monday, the price was down 3.6% at $4.34.