The global transportation market is a fast growing and massive industry which serves freight, household goods, vehicle shipping, livestock, horses, pets, art, antiques, tractors, food, and dozens of other markets. Companies operating within this space are increasingly finding new and innovative ways to bring consumers (shippers) and businesses (carriers) together so they can compare and book upfront quotes, name their own prices and even receive auction-style bids from a large number of transportation service providers, ranging from independent owner-operators to the largest freight carriers and brokers.

Transportmarketplace is one of those innovative operators working in this space. The company works by bringing global shippers and carriers together to find the best rates for each group. I recently had a chance to speak with Feihuang TAN, Community Manager of Transportmarketplace, about how the company operates, its growth rate, the online transport market, and where the company is headed in the future.

I see that you have customers, providers, and a credit system. Please explain in simplest terms how Transportmarketplace makes money.

Transportmarketplace charges customers (shippers) a fee for viewing the quotes and charges providers (carriers) a fee for confirming the deal. As for shippers, four credits for occasional users or two credits for frequent and valuable users are charged for each viewed quote. As for carriers, eight credits for occasional users or four credits for frequent and valuable users are charged for the confirmed deal. Transportmarketplace Credit (TM Credit) is the virtual currency used on the platform. One TM Credit equals to 1€ or $1 USD (for countries outside of the euro zone). The details on tariffs can be found here: http://www.transportmarketplace.com/en/rates-in-credits-per-transaction.php.

Which segment is more profitable for the company, customers or providers? Explain this.

Providers are more profitable for the company. The proportion of profits stands at 40% from the shipper and 60% from the carrier. At the same time, the carrier is also a shipper because they might also have a need for the logistic allocation if it is a logistic agent.

How many networkers do you have currently? How fast is membership growing quarterly/annually?

We currently have five networkers. One is a licensed networker, and the others are commercial networkers. The differences between them is the amount of initial investment we put in them and the rights to their work.

What companies do you consider to be primary competitors?

In the U.S., uShip could be considered as the primary competitor because it also plays a role as auction house, but it targets to a niche market of the more “complicated” stuff. It is a business-to-consumer (B2C) service, while Transportmarketplace is a business-to-business (B2B) service. In China, JCtrans could be considered a primary competitor, as the service is like a digitalized traditional marketplace where carriers rent places to sell their services.

How do you differentiate your products from competitors of similar size? What, if any pricing advantages do you have over your competitors? If yes, how are you able to offer those price advantages?

Transportmarketplace offers a collaborative platform for shippers and carriers. They are free to post and look for freights. We offer a special deal for new registered members: they are given 20 credits to use as a trial. There are no commission fees on each transaction, and no subscription or monthly plan fees.

Does the company have any cash flow from financing activities? Any outstanding loans? What is the company’s total debt, if any?

The company sells software in the transportation field in France to finance a TM project (http://tralyx.com/).

Are you planning an IPO? If so, when? How much capital do you anticipate raising?

Not yet.

Where do you see the company in five years in terms of revenue, margins, and overall profitability?

Since the business model of Transportmarketplace is a new concept in the transport and logistics sector, things are too complicated and unpredictable right now to give you an idea on revenue, margins and profitability five years out.

How big do you think the global transport market will be in terms of total revenue in 2015? 2020? What percent market share do you expect to reach?

I am not sure about total revenue for the global transport market in 2015 or 2020, but we expect to reach a market share of 2 to 3 % of total global transactions.

I see you have a great website (in terms of both a business platform and advertising tool), and also advertise through Facebook, LinkedIn and Twitter. What other forms of marketing/advertising do you use to attract clients? Which methods are most useful? (word of mouth referrals, Google ads, etc.)

We use several marketing tools like Direct Mail, SEO and Social Marketing. For SEO, besides the keywords to fit Google page rank, the most frequently used method is to exchange links with other websites in the same sector to bring traffic. For Social Marketing, we have two branches. The first is aimed at a global audience, including Facebook, Twitter and Youtube. The second is aimed at China, including Renren, Sina Weibo and Youku, which are the most relevant advertising tools in this sector in China. Direct Mail is the most useful tool yet. It brings immediate high traffic to the website. The other tools take time to have an effect.

Have you faced any major hurdles to growth, or anticipate any in the future?

Networker recruitment is the biggest hurdle for us right now.

Is there any other information/new announcements/upcoming projects that are important for us to know about?

We are deploying a mobile version for smartphones based on the iOS, Android and Blackberry systems.