Most merchants in South Korea keep track of their international shipping logistics via email until their cargo safely gets to its destination. This includes all the administrative processes, from shippers to importers, and covers logistics, customs, charges and transportation booking.
Portlogics, a South Korean digital freight forwarder that offers a robotic process automation-based forwarding management system, wants to help merchants track international shipping logistics and get status updates on shipments, digitizing the process with its software tool.
The CEO of Portlogics, Hyoung-chul Choi, is a serial entrepreneur who first noticed the inefficient way to track international logistics when he ran his first startup, YLP, a middle-mile logistics startup that South Korean telco SKT‘s subsidiary T-Map Mobility acquired in 2021.
During the pandemic, the shipping price constantly fluctuated, so shippers couldn’t anticipate the cargo fees. Realizing how urgently the freight forwarding industry needed to be digitally transformed, Choi and three other co-founders started Portlogics that same year, developing a web-based trade order management and freight management system for merchants that they can now use whether their goods are being shipped on a boat, or transported by road or rail.
More than 26 companies now use Portlogics’ software tool, Choi said, adding that they include large logistics firms and shippers like GS Global and Hyundai Bioland, which produces materials used in cosmetics and health supplements.
That kind of traction has enabled the Korean startup to receive $1.6 million (2 billion won) in pre-Series A funding from investors, including K2G Fund and strategic investor GS Global, which Korean conglomerate GS Holdings owns.
Portlogics, which now has 19 employees (six in R&D), will use the new capital to further develop its platform, including by hiring additional employees.
The startup also plans to introduce artificial intelligence and machine learning that can make sense of the data the outfit has been collecting and better empower it to estimate e-booking and shipping costs, Choi explained. In addition, Portlogics is in talks with B2B SaaS security companies to help it protect the customers using its software and bolster its own data security measures, Choi added.
Portlogics currently centers on South Korea’s freight forwarding industry but intends to open offices in Southeast Asia and the U.S. after 2024, Choi said, observing that there is a lot of market share left to grab.
According to one estimate by the research firm Allied Research, the global digital freight forwarding market is projected to increase to $22.9 billion in 2030, up from $2.92 billion in 2020.
“The global supply chain management and logistics have been reshuffled [due to rising tension between the U.S. and China], and more companies are reshoring the U.S. by building chip and battery factories,” said managing partner of K2G Fund Archi KyoungRok Kong. “In this paradigm shift, more Korean vendors are participating in global supply chain management ecosystems, and it turns out that freight forwarding transactions from South Korea to the U.S. and globally are getting higher. So, K2G Fund believes that it is a great time there would be sizable upside opportunities for freight forwarding companies based in South Korea.”