WiseTech Global's new CargoWise pricing model raises concerns among forwarders, reflecting its strong market presence, reports S&P Global.
WiseTech Global's new pricing model for CargoWise has sparked complaints from forwarders, indicating the platform's significant market penetration, according to reports from London's S&P Global.
CargoWise is widely utilized by forwarders for various functions, including accounting and trade compliance, with estimates suggesting its market share stands at 70 percent. This gives WiseTech a stronger position in the sector than even its largest customer, DSV, holds in logistics.
WiseTech has established its dominance through strategic acquisitions of customs software vendors, which have provided direct links to authorities worldwide. This extensive network, combined with essential accounting functions, complicates the process of switching to alternative systems, as noted by forwarders.
Despite concerns over annual price increases and the slow integration of acquisitions, competitors ranging from established firms like Descartes and Softlink to startups such as GoFreight and Clear.ai have struggled to impede CargoWise's growth.
In May, WiseTech expanded its reach further with the $2.1 billion acquisition of E2open, which focuses on shipper-centric products. While customers anticipate higher costs under the new pricing model, many feel they have little choice but to continue using CargoWise.
Analysts suggest that if the backlash against the pricing changes subsides without significant customer attrition, it will confirm that WiseTech has achieved 'escape velocity,' solidifying its status as the leading software provider in the forwarding industry.
