OpenPort offers Mobile logistics solutions for the world’s largest companies, and the local carriers who work with them.
Tell us about OpenPort. What inspired you to start it?
Prior to founding OpenPort along with my partner Rob Haney, I spent a lot of my career working with 3PLs (third party logistics providers). I was Vice President of Business Development APAC at Agility Logistics, and before that the Head of Consumer Retail Asia at DHL. So I had over 10 years of executive-level business development experience with leading logistics service providers in Asia, working on solving board-level supply chain problems for multi-nationals focused on the retail and consumer goods industries. I saw the issues faced by these companies in emerging markets, and the inefficiencies in the current supply chain systems. I knew there could be a new approach, that the system could be improved.
Two things occurred which made the timing right. First, and for the first time in history, most of the world’s population in now in the consumer class. That’s over 3 billion in the markets in which we operate alone. That means supply chains in emerging markets need to improve in order to meet this demand. Second, the mass penetration and adoption of smartphones in emerging markets, which provided the catalyst for a new logistics management approach.
Lastly, and this is less about timing, but emerging markets are well positioned to be leaders in new technology, as they do not have outdated legacy systems that need to be replaced, or incumbents who will fight to preserve outdated and inefficient systems from which they derive profit.
OpenPort, being for the enterprise logistics market, provides an end-to-end supply chain solution. We can take orders directly from the Enterprise Resource Planning (ERP) systems of the world’s largest shippers and route them to the mobile phones of trucking operators in local markets, all on a single platform. Further, because the platform is integrated with a transport marketplace, there is no need to use an intermediary to find a carrier. The OpenPort platform provides a fully neutral and transparent connection to on-demand transport procurement. This cuts out the middleman, providing savings for the shipper, and better margins for the transporter.
We work with domestic transport providers of all sizes. Asset owners benefit hugely from using our system, by increasing their asset utilization. We are very happy to be able to bring this improvement to the local economy, and that the transporters that we have met with so far are very keen to use our system. It also has advantages for local infrastructure, as more full trucks, more of the time, reducing total number needed on the roads.
With our marketplace, as a neutral operator, we do not mark up prices. They are set by the transporters, and that is exactly what you will see. What we add is performance metrics for transporters. We also offer control towers services – we are not software only.
We believe our system can improve logistics contribution to EBIT by up to 30% for shippers.
What were the biggest challenges in launching your platform? Did you have all the expertise you needed or did you have to outsource any of the components?
Certainly, there are challenges. As a multi-market company, finding talented people in multiple countries to help build OpenPort was a huge task – we are very fortunate to have attracted an excellent and experienced team. This was one of our biggest challenges, but now it is definitely one of our biggest strengths. We have built a phenomenal team.
For our technology, which is developed in the US, we have a team of developers with over a decade of experience working together on custom logistics software, which was a huge advantage in getting the platform off the ground. A lot of the groundwork was already laid, and we are very agile in how we develop new capabilities.
You have operations in 6 different countries and Singapore to start soon. Do you encounter major differences dealing with different markets?
Yes, but that is why we hire experienced local leaders in each country to build the business. And while there are differences, there are similarities also. We are working on a number of regional deals for some of our largest clients, expanding the scope of the work we are doing with them in Indonesia to Pakistan and China, for instance.
The current logistics model differs between markets, so how we approach getting companies on board with our platform has to be customized to that.
Congratulations on your latest Series A funding! Can you share some tips on how to close a Series A financing?
Thank you! Start early, that would be the first thing. It’s a long process, so be sure that your current funding can see you through it. Make you sure you find investment partners who really share your vision, who are aligned with your goals and who will support you. Everyone wins if you are pulling in the same direction. We are fortunate to be backed by Susquehanna International Group and Caldera Pacific Ventures, two leading private equity firms, who offer us excellent guidance in addition to capital.
What do you think of Hong Kong’s Startup Scene?
Promising, with room for growth. There are a lot of important factors in place here – rule of law, financing, talent. Proximity to large and exciting markets. The support for startups is growing also, there is a nice ecosystem of government and private support in various forms building up. It is necessary to foster a healthy and vibrant start-up scene in order for Hong Kong to maintain its standing on the global stage. Small economies need to be forward thinking, agile and innovative.
In 5 years from now, how do you see OpenPort impact the logistics industry?
We want to be in 20 countries across Asia, and be the leading platform for connecting the world’s largest shippers with local carriers in emerging markets. We believe this can have huge knock-on effects, not only making logistics more efficient and affordable for shippers and more profitable for carriers, but keeping more of those profits in the local economies (as they are not being taken by an international 3PL), and perhaps helping to reduce some of the congestion in transport networks through a more networked and optimized supply chain. And ultimately, to ensure that operating in emerging markets is financially feasible for multinationals, ensuring that consumer goods remain affordable.
What’s next for OpenPort?
We have been building our management team – Morten Damgaard has now joined us as COO, and we have a new senior hire in Indonesia, where we see great potential. Our managing director there, Audy Antow, is taking on a regional role as VP for Business Development. We will build our client base, solidify our presence in our current markets, and continue to develop amazing technology – we have a number of cool products in the pipeline.
What is something you want people to know about OpenPort?
Logistics is really gaining a lot of ground recently as a sector for start-ups, which is great as there is so much to be accomplished in this industry. That also means a lot of attention from outside of the industry, in addition a lot of new players, which can make things confusing for new observers.
The vast majority of logistics start-ups that we see today are focused on delivery, not freight. What I mean by that is that their models are, in one shape or another, built to service e-commerce companies and SME’s who need to ship product to consumers. Occasionally, it’s single pallet or single truckload between two SME’s, but broadly speaking, it’s single delivery and for B2C. This is a great area for innovation, and many people will benefit from the new approaches we are seeing.
OpenPort, however, serves enterprise customers. Our platform, our technology, and our service is built around serving the world’s largest shippers – multinational consumers goods companies, electronics, chemicals, food and beverages, commodities – and connecting them with the transporters, the actual asset owners, in emerging markets. Most of the supply chain activity in the world is made up of this, generally unseen, sector.
Many people, when they think of the transport, will think about how, as an example, an Amazon package will be delivered to them. Few will wonder how every single supermarket, convenience store and mom & pop corner store in Indonesia’s thousands of islands comes to be stocked with multitudes of goods. This is the challenge we are tackling – how to get a bottle of shampoo, indeed, hundreds of thousands of bottles of shampoo – where they need to be, as efficiently as possible.
It’s a different challenge, and it requires a different model, which we call Open Enterprise Logistics (OEL).
Interview by Ludivine Lombard Taverne