Logistics Startup of the Month: Stargo

Stargo

Every month we select one logistics startup which represents a positive example of innovation in Logistics and Supply Chain and has the potential to alter the way the industry operates. This May, Transmetrics selected Stargo, an AI-driven price optimization solution for the freight industry, as the “Logistics Startup of the Month” for its outstanding contribution to revolutionizing the door-to-door quote generation process.

In order to learn more about the startup and what it does, we have talked with Joel Sellam, CEO and Founder of Stargo, about the business and how Artificial Intelligence can improve the price optimization in the logistics industry.


First of all, congratulations on becoming the Logistics Startup of the Month! Could you briefly introduce our readers to Stargo?

We’re thrilled and honored. Stargo is a cloud-based pricing and proposal optimization solution. Getting the best possible proposal together for a door to door shipment can take hours if not days. We generate five plans for any route in seconds. We are using Artificial intelligence to help select the best possible journey taking into account price, time, Incoterms, profit margins, size, and tens of other criteria.

What are the main modules of your platform? Do you plan to introduce any other modules in the future?

The AI optimization engine is the key one. Next to that, we are launching 2 more modules: StarDox and StarPay. We realized that in most companies pricing and routing information lays scattered around in unstructured formats, databases, spreadsheets, pdf, emails, faxes and hence cannot be used for data mining. Our Stardox takes any format, any structure, and reads, interprets, translates and structures that information and makes it available for data mining. No more manual input work to keep rating and routing information up to date.

Proposals Screen. Picture Credit: Stargo

How does your strategic partnership with MasterCard influence your clients? Are you working on other companies in different areas?

Many players in the freight industry are acting as a bank: they provide extended credit to their customers and face longer payment cycles, always managing the risk of bad debt and defaults. Mastercard and its global network of banks are much better at handling that risk and guarantee the payment in 2 days, not in 45 or 60 days. Each shipment is assigned a unique virtual card number, which in turn makes the reconciliation of payments very easy.

Would you like to share any specific customer success story?

We have been developing our solution for over six years but have always embraced and valued input from our prospective customers. When one of our partners mentioned that our StarDox solution I told you about could also be used in the bidding process, we immediately jumped on that. Filling in a bidding request for hundreds of lanes can easily take a couple of days. You need to decipher the bidding form, interpret the request and type in the answers. StarDox combined with our optimization engine does that work in seconds.  A great story of co-development and solution generation together with customers.

Non-optimized pricing is causing a huge problem in the logistics industry and a lot of service providers are experiencing inefficiencies in this area. What do you think are the reasons behind this problem and why, do you think, Artificial Intelligence is the right technology to solve this issue?

This has to do both with the predictive as well as the learning capabilities of AI. Faster and better than a human being, AI can learn from both errors made in the past as well as learn from success stories and apply the patterns from high wins rates, high margins achieved or loyal customer behavior immediately into the future capabilities. This frees up a huge amount of time for human agents to focus on what they are best at relationship building with customers, for example.

Joel Sellam, CEO and Founder of Stargo. Picture Credit: Stargo

In your opinion, besides AI, what are some of the biggest trends in the logistics industry we should keep an eye on in the next 3 years and why?

We will see digitalization having an impact on a lot of different areas and processes beyond pricing and proposal optimization. At the end of the day, the freight and logistics world is a service industry, and as in any service industry, companies using these productivity gains for real service enhancements will come out as winners.

I believe there to be a broad consensus on the trends impacting the industry in the longer term apart from AI, I see Blockchain, autonomous vehicles and 3D printing having a huge impact. But you know where I have placed my bets (laughs).

One thing I want to say on these trends, however, is the importance of finding tangible use cases in the adaptation process. In order for an organization to really adapt and embrace the possibilities these trends offer in the long term, is it crucial organizations pick tangible problems, real pain points to be tackled with the technology. One of the first conversations we have with all of our customers is the ROI discussion on the project, the specific KPIs we’ll achieve and the bottom line impact.

Your team is based in Israel which serves as a hub for many startups. How does that affect the culture of Stargo and your view on the innovation?

On the technical front, for sure, there are exceptional levels of experience and expertise available in data science and AI. There is also the culture and a real can-do willingness to innovate and collaborate. On the business side, I have always thought of and positioned Stargo as an international company, staying close to the needs and challenges of our customers, who are global by definition. Only when we are relevant for them and their customers, they will reward us with their business.

Looking at your journey with Stargo and the experience that you’ve acquired, what would you do differently if you had a chance to start over?

I would not change a lot. I am very happy with the technology we are launching. Our development has been a long and sometimes messy journey but to bring proven innovation to the industry as complex as logistics requires time and patience.

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