Freight is a trillion dollar industry and hasn’t moved at the speed of the 21st century, relying for a long time on logs, emails and (even) phone calls to communicate. But there is a new generation of startups using technology to address the biggest problems in a complex global supply chain, ten of which have made 2022 CNBC disruptor 50 list.
One in particular, Flexport, not only topping CNBC’s Disruptor 50 list this yearbut also believes it is ready to compete with the largest logistics operator in the world: Amazon. This is according to founder and CEO Ryan Petersen, even if he doesn’t make the claim in a boastful way.
“We could be one of the largest companies in the world if we lived up to our potential,” Petersen said in an interview with CNBC’s. “Technical checkTuesday. “There is a lot to do though,” she added.
“Amazon is the best logistics company in the world, and I say this very humbly, because I would like Flexport to be the best logistics company in the world,” Petersen said. “But we haven’t earned that right, and I really look to Amazon and try to learn as much as possible about how they operate,” he said. “There is still so much commotion in that company.”
Petersen started Flexport in 2013 because he thought there should be a better way to manage the flow of goods which are loaded onto merchant ships, airplanes, trucks and railways and transported around the world. The company’s freight forwarding and brokerage services are in the cloud, allowing it to analyze costs, container efficiency and greenhouse gas emissions quickly and with greater accuracy than legacy systems.
Last year, as the supply chain crisis persisted, Flexport had its bottleneck: a waiting list. “We couldn’t take more customers. We couldn’t even serve all the customers we had,” she said.
The waiting list has been drawn up and revenue growth has been significant. In 2019, before the pandemic, Flexport made $ 650 million in revenue. Last year, revenue exceeding $ 3 billion. This year is on track for $ 5 billion, according to Petersen.
“We’re still a little sliver,” he said. “We think we are less than 1% or 2% of global container shipping and that doesn’t matter in all of our other businesses: air freight, customs, cargo insurance, we have a commercial finance group that deals with the financing of ‘inventory”.
Flexport investor David George, general partner of Andreessen Horowitz, told CNBC: “It’s a huge, huge space with very little technology in place.”
The company has more than 10,000 customers and suppliers in 112 countries and, in addition to revenue growth, recorded its first positive EBIT year in 2021.
In February, the company announced a $ 900 million Series E funding round with a $ 8 billion valuation, with investors including Andreesen Horowitz, Shopify and Softbank.
As the supply chain remains defined by uncertainty, Petersen is reluctant to make any predictions but says the company is seeing a disruption in demand.
“We are definitely seeing a slowdown in consumer demand, the destruction of demand as they say,” Petersen said. “We are seeing that warehouses are starting to really fill up and a lot of our cargo is leaving the ports. Warehouses have nowhere to put it, so it’s a pretty bad situation out there, especially for direct to newer consumer brands and trend and that do not have a very long track record for forecasting demand “.
The situation in China, meanwhile, may not be as bad as some think, at least in the ports. “The ports are running really smoothly in Shanghai,” Petersen said. “It’s more that the factories are slowing down a bit. The first signs it’s starting to reopen, in companies going back to production, it’s a bit early to say exactly what that bubble will be like, the bubble in the sense of all these orders. that have been entered as they move through the systems to descend. We’ll know in a few weeks. “
Amid market volatility and other inflationary pressures over the past year, Petersen also said he faced internal pressure to get the company on the stock exchange, which he resisted.
“I thought the market was a little overheated,” he said. “I mean, there are always people who would like to see it, to celebrate it, but we decided it was better to remain reserved and yet put some money in the budget given the madness of the markets and we are very, very happy that we did.”
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