Logistics can be unpredictable, but recently the swings in the business have reached new heights.
During the COVID-19 lockdowns, logistics companies let go of drivers and retired their trucks. When the economy adjusted and was ready to generate output again, there was a sudden lack of vehicles.
Similarly, when Russia invaded Ukraine, 100 000 Ukrainian and Belarussian drivers disappeared from the market. Roughly 5% of capacity to transport goods around Europe vanished.
“Uncertainty is the new normal in the supply-chain market,” says Maximilian Schaeffer, chief executive of InstaFreight, a German logistics technology start-up.
As one of the fastest growing start-ups in Germany, it was difficult for InstaFreight to hit the brakes. But the company managed to scale down, adapting its products and adjusting its business model.
Still, there was another obstacle. “The entire funding market,” says Schaeffer, “basically collapsed.”
Finance for digital logistics
That’s why the European Investment Bank’s European Guarantee Fund has been so important, providing financing to sound companies that were hit by the COVID-19 lockdowns. The EU bank made a €25 million venture debt loan to Instafreight in 2021.
The European Investment Bank’s Guarantee Fund supported InstaFreight to see it through the turmoil of COVID-19 – as well as the second blow of the war in Ukraine. But it also backed the company because its goals are consistent with Europe’s carbon-neutrality ambitions. Transport creates almost a quarter of Europe's greenhouse gas emissions. Road transport is by far the biggest polluter, accounting for 70% of those emissions.
InstaFreight’s digital systems aim at an efficient, sustainable European market for land transport, connecting shippers and carriers effectively, and avoiding situations in which empty trucks move around Europe, consuming unnecessary fuel and releasing greenhouse gases into the atmosphere.
Digital and climate-aware: Not the typical startup
We meet Maximilian at the headquarters of his company in Berlin, located in an old industrial building. A huge mid-twentieth century elevator leaves you in front of a big white wooden door. The exterior doesn’t suggest anything fancy, but inside you get what you would expect from a modern start-up: plenty of light, minimalist furniture, colourful decoration, open spaces, recreational areas…
But you soon learn this start-up is much more than just a fancy set-up.
InstaFreight is a fully fledged logistics provider and the only player in Europe that combines innovative international transport management solutions with digital freight forwarding services. It connects medium-sized and large shippers with smaller carriers across Europe.
Valuable data from transport logistics startup
Schaeffer lays out the advantages of a digital platform that directs trucks all over the continent. “We are sitting on a big data pool,” he says, “and we need to be able to tap into that data to become better in forecasting what is going to happen, and to take decisions based on facts.”
Tolls can provide details about every single truck in Europe, for example. Where they come from. Where they’re headed. Schaeffer believes artificial intelligence can be applied to this data, identifying market trends and producing economic forecasts.
But it’s hard to get hold of that data.
“Europe needs to level-up with other parts of the world,” he says, “be it the US or China, where dealing with data is a little bit more advanced than within the European Union.”
With the financial support of the European Investment Bank, InstaFreight has managed to navigate a tough period. Now Shaeffer is ready to use his innovative instruments to help companies deal with future crises that will inevitably come our way.