Another freight forwarder goes out of business

Digital freight forwarder Forto has also reportedly closed its offices in Bremen and Madrid after laying off around 10% of its workforce earlier this year.

The closure of the Madrid office means the company no longer has a presence in Spain, while the closure of the Bremen office will result in the loss of at least 75 jobs, DVZ reported last week.

DVZ also reported that Chief Operating Officer Jochen Freese, who previously worked at Ceva, Hellmann and UTi, will retire early and be replaced by Forto's head of strategy, Fabian Struck.

Freese gave an interview earlier this month, but he gave no indication of problems within the company. Instead, he pointed to Forto's "800 "employees as crucial to providing customers with an integrated freight forwarding service, with access to digital tools and personalized customer service. After Forto cut about 90 jobs, an insider said more cuts were unlikely, adding: "After this round of cuts, the executive leadership team has assured employees that Forto is lean enough to ride out the storm."

However, poor market conditions this year and the absence of a high season may have had a bigger impact on Forto than expected. Forto is not alone: logistics tech companies such as Flexport and cargo.one, as well as major tech companies including Indian digital freight forwarder FreightWalla, have also seen layoffs. This raises questions about the sustainability of venture-backed business models. Forto has raised $610 million in eight funding rounds, the most recent of which was $250 million raised in 2022.

24 institutional investors, including Northzone, Inven Capital and Cherry Ventures. Charles Marrale, CEO of digital trucking firm ExFreight, said venture capital firms evaluate companies based on their growth trajectory, which often leads companies to offer unprofitable prices to achieve that growth trajectory, but in turn, they "burn money faster." ExFreight has no venture capital involvement.

He added: "I think it could cause VCS to fail or have headaches." However, after staff cuts prior to this year, Freese said: "We have pretty good cash flow in the bank account. Our decision to reduce size is not based on investors or shareholders, but on changes in the business environment." "Before the third quarter of last year, we had some market assumptions. It's not about meeting key performance indicators, we need to make adjustments.

In fact, we continue to hire new people in both customer-facing and commercial roles." Berlin-based Forto, which did not respond to a request for comment, has offices in Tianjin, Ningbo, Shanghai, Shenzhen, Ho Chi Minh, Hanoi, Naples, Milan, Warsaw, Munich, Dusseldorf, Cologne, Rotterdam, Hamburg, Singapore and Hong Kong.