Flexing the automation muscle

Top of the morning.

We are The Antifragilist, where our mission is to make your everyday feel like a long weekend.

This week we will be doing a not-so-deep dive into Flexport.

What is Flexport you ask?

Flexport is a technology-enabled freight forwarder. A freight forwarder isn’t something you hear or read about often, but it is one of the most critical businesses right now. Let me explain why.

If you haven’t been living on Mollusk’s colonized Mars yet, you probably have heard words like shortages, supply chain, and logistics a lot lately. Supply chain has been all the rage of the post covid world. Headlines like those below have been the norm.

So, what exactly is a supply chain?

I am counting on you to be smart enough to understand the above diagram and not need an explanation.

As you can see from the figure, Logistics is critical, and rightly so.

Now a little flash back...

I worked for a manufacturing company a few years back. When a product was complete and ready to be shipped, we called one of the freight forwarders (the logistics in the above diagram) like Expeditors. They would come and pick up the goods and that was that for us. However, a lot happens at Expeditor’s end. They are responsible to arrange for the trucks in both the sender and receiver’s countries. They must book the freight across the ocean, pass through the customs on both sides, store the goods in warehouses and then arrange the final delivery while trying to make a profit. That’s a lot of logistics processes to go through making freight forwarders a crucial part of the supply chain. The whole process is coordinated through different communication methods like phones, email, and fax machines. You read that right, we were still using fax machines to send shipping documents and can confirm many still do.

Enter Flexport.

Flexport manages ocean and airfreight shipments for retailers and manufacturers by leveraging technology. The company is still a freight forwarder but with much better technology. They have automated the transaction process, improved user experience, and provided more visibility to their customers and of course made money along the way.

The company has seen steady growth in revenue over the years. It doubled the revenue in 2021 to $3.1 billion while moving $19 billion of gross merchandise through its platform.

The company was founded by Ryan Peterson in 2014. The best thing about Ryan Peterson is he was born and raised in Bethesda, Maryland, a state with historic figures like Phelps, Ledecky, Penn Badgley (Hello, You), Stacy Keebler (those legs), and the ultimate GOAT Dave Chappelle. He seems to be gritty, and smart too.

Flexport recently raised $935 million at an $8 billion valuation. Sleepy, 40-year-old freight forwarders like Expeditors is trading at $19 billion right now so go figure. Third-Party logistics is a 1 trillion dollar market. Yes, trillion with a T, so there is a lot of untapped opportunities. I would do a SWOT analysis between them but looks like a waste of time.

The company has raised money from investors like Andreessen Horowitz, MSD Partners (that’s Michael Dell), Founders Fund (Peter Thiel), Softbank (Yikes), Alex Ohanian (Serena William’s husband, and Reddit’s co-founder), etc. It’s a YC 2014 batch.

So, if you think babies should get their formula, and your spouses shouldn’t be waiting any longer for their Shein dresses, go join Flexport and hopefully make some money too.