FreightWaves is building a media empire around the logistics industry
|Simon Owens||Oct 13, 2020|
Quick question: how big do you think the global freight industry is? If your guess is in the billions, then you’re aiming too low. According to some estimates, global logistics generate somewhere in the range of $8 and $12 trillion annually.
For Craig Fuller, that number represents a massive opportunity. His company FreightWaves covers this industry across text, video, and podcasts. But FreightWaves is a lot more than just a trade publication; it also delivers data and intelligence. In fact, it’s much more analogous to a Bloomberg LP, which in addition to its massive media business also generates billions of dollars a year from its expensive Bloomberg terminals.
I interviewed Craig about how he built his expertise in freight, where the company sources its data, and why it recently took on venture capital investment.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player. If you scroll down you’ll also find some transcribed highlights from the interview.
This transcript has been edited for clarity.
How he got the idea for FreightWaves
Craig comes from a family of trucking magnates, so that’s how he initially got to know the freight industry, but he got the idea for FreightWaves after he left trucking and launched a payments business. “That was really where the importance of data became obvious to me,” he said. “There was this emergence of FinTech companies taking payment data, credit card data, financial data, and selling it to hedge funds that wanted realtime data on how consumers were spending their money. It left an impression on me that there was this whole industry of taking data at a macro anonymized level and helping companies make better decisions about what's happening in the economy.”
The earliest iteration of FreightWaves was a data product similar to what you’d get with a Bloomberg terminal. “Global logistics is a $9.6 trillion industry. We're talking about an industry that is so critical to our economy and has a lot of fragmentation. And really what we do from a data standpoint is we take anonymized data from sources from all over the world that are basically providing real time analytics of movement of cargo, and effectively we get to see the world's economy move in near real time. Our customers that are using the data are using it to make better pricing decisions, to figure out what capacity looks like, to figure out how they should think about pricing freight, all of these decisions they have to make to help their business. We have the fastest data that's tracking all of these items in near real time. And that gives us a sense of what's taking place across the economy.”
Why FreightWaves expanded into publishing industry news
In its earliest days, FreightWaves didn’t employ any journalists, but Craig began to notice that the trade press was not doing a good job of explaining how traditional freight companies were becoming overshadowed and outmaneuvered by the growing tech industry, especially as companies like Amazon began to take on the responsibility of their own product delivery. “B2B publishers ran on a media cycle where they have an editorial calendar and they conduct an interview and then publish the story four or five months later. And then the traditional business press knew how to tell stories about technology innovation or venture capital, but they didn't really understand the freight industry. And what we found is that there was no one really that was able to blend and understand how to cover both aspects.”
FreightWaves began hiring writers who were able to leverage the company’s data to tell stories. “A lot of times, numbers without context are sort of meaningless, especially when we have 150,000 indexes we produce every day. The problem is a lot of these data sets have never been seen before. They're completely brand new. Even people in our industry have never had access to the data. And so without a media outlet to bring context to it, it would be very difficult to scale our data business.”
Today, FreightWaves has an editorial team of 50. “Basically we're producing about 45 articles a day. “I'm proud to say that we pay much higher than, frankly, most editorial publications. The reason for that is that we have the benefit of this recurring revenue subscription business, and our company is trading at software multiples, and we use our media business for content-driven customer acquisition, engagement, and education that in many ways subsidizes our data business.”
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Ok, back to our scheduled programming…
How FreightWaves got into video
Craig had no grand plans to “pivot to video.” One day the company recorded a quick video about a new weather product it had launched and uploaded it onto LinkedIn almost as a lark. “All of a sudden it got a lot of likes and people were like, ‘this is really cool.’ And so we did it the next day. And then I got people saying, ‘can you do this every day? I love these reports.’ And so we started expanding into sort of market reports, and then it became a thing where we would do a five minute video every single day, with sort of an update using the data we had on our platform.”
Fans of the video series began to ask Craig whether he’d be willing to create an entire video network. “I'm like, I don't want to create a network. That's ridiculous. But we kept getting so much inbound interest from our industry that wanted to get access to video that we realized there was an opportunity to create a daily show beyond five minutes. And so we decided to create something called FreightWaves TV, and it started off small, and it wasn't very profitable. In fact, when we went into the budgetary season earlier this year, there was a conversation about whether we should continue to do the TV product because it wasn't profitable. We ended up holding onto the product, because we thought it was really important for a SaaS data platform to have good real time visualizations. And we thought it really met what we were trying to do in terms of information services and media combined with data.”
And then Covid 19 happened. “We had a live event planned where we’ll get 1500, 2000 people there. We were expecting 2,500 people in Atlanta in May and Covid hit, and so we looked for a virtual platform where we could host a virtual event. And what we realized is that we had spent hundreds of thousands of dollars on video production, media equipment. We had gone from a GoPro to these $20,000 cameras you see in studios and all the mixing boards and software that go along with it. We’ve invested probably seven figures at this point in our TV product. What we realized is we actually had better infrastructure than most of these virtual platforms did. And so we ended up hosting our event through our video distribution, and what was really awesome about it is we were expecting about 2,500 people to come to Atlanta, but instead we had 90,000 people who came and watched three days of content that we were putting out about the freight market.”
For FreightWaves, this represented a new business opportunity. “What's happened now is we're able to take that TV infrastructure and go beyond just doing something every six months to doing something almost monthly where we'll take a topic that's important, but perhaps something we wouldn't build an in person event around, and we'll really dive into those topics, we'll make a day of it. The nice thing about it from a financial standpoint is those virtual events are running in 90% to 95% margins. I’ll say that in-person events were half of our revenue last year. This year they’ll be zero. I wouldn't say that I'm happy about that, but I would say I'm very, very encouraged and excited about what virtual media can do, because I just think it offers a lot of opportunity that you wouldn't get from an in-person experience.”
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