A year after supply chain bottlenecks disrupted the global economy, Flexport uses technology to improve its supply chain. CNBC Disruptor 50 list.
Freight, the official name of the industry that Flexport is confusing, is a multi-trillion dollar global business centuries ago of companies that transport and make goods over land, sea and air. .. According to research firms, the industry is opaque, full of esoteric regulations, plagued by analog processes, and tends to have no “major players.” IBISWorld..
In other words, when the world confuses the industry and needs to reform, it’s ripe for turmoil.
FlexportTechnology is essential to keep goods moving around the world, growing rapidly in an era when labor shortages are plagued by warehouses and ports, and the suspension of work at factories in China is increasing consumer demand. It’s colliding.
Aerial view of containers stacked at the Port of Los Angeles in San Pedro, California on January 19, 2022.
Qian Weizhong | VCG | Getty Images
The company uses the data to streamline the movement of cargo by ship, plane, truck and rail, analyze costs, improve container efficiency and calculate greenhouse gas emissions from over 10,000 clients and suppliers. doing. Of particular note is that the platform is used by emerging brands as well as Fortune 500 companies. According to the company, in 2021 customers moved nearly $ 19 billion in goods in 112 countries.
“They have a large addressable market where the technology in that market is fundamentally broken,” said David George, general partner of Andreessen Horowitz. “They have about 2% market share in their market and they have a 75% chance of winning when they are in front of their customers. It’s a very simple formula.”
Flexport founder Ryan Petersen is a lifelong entrepreneur and has established himself as CEO who wants to lead the sector and even his rivals towards solutions.
“Technology has a big role to play,” Petersen told CNBC last November. However, despite the rapid growth that Flexport is experiencing, growing from a small market share requires as much relationship building as innovation. “We have to convince many different parties to change the way they work,” he said.
“This is the job of his life. He is curious, determined and over-focused on customers and problem-solving. How he tackled the problem on Long Beach is his grit, tenacity. Well, it’s a perfect example of problem-solving ability, “George said. ..
Flexport CEO Ryan Petersen participates in a panel discussion at the Milken Institute Global Conference on Wednesday, May 4, 2022 in Beverly Hills, California, USA.
Bloomberg | Bloomberg | Getty Images
Petersen also has a dramatic talent to showcase Flexport’s features using high-profile issues and Twitter. Last October, he cautioned against the tragic delays in the Port of Long Beach and suggested specific ways to “overcome bottlenecks.”
Petersen wanted to understand the heaps at the ports of Los Angeles and Long Beach, so he rented a boat and took a closer look at the ship and container log jam, with more than 70 container ships moored for $ 64 billion. I found the cargo waiting for unloading. Problem: The truck driver was unable to return the empty container due to the crowded dock. As a result, the truck driver was unable to receive a new full container. He got caught in a ship.
“This is a negative feedback loop that circulates rapidly out of control, and if it continues unabated, it will destroy the global economy,” Petersen tweeted.
He then tweeted a solution targeting a bottleneck of lack of yard space, allowing truck yards to store up to six empty containers up to six heights instead of the previous limit of two. Proposed five recommendations, including a presidential directive to invalidate. Create a new temporary container yard on government land. The city immediately lifted the restriction of stacking empty containers to only two heights and raised them to four. Governor of California Gavin Newsom called him to understand how they could work together. It was called “Tweet Storm that Saved Christmas”.
By Christmas, Petersen rejoined it on Twitter. This time, I tweeted about the shortage of french fries in Japan. McDonald’s had to limit domestic sales due to the difficulty in obtaining potatoes. Flexport has discovered three freighters that will bring goods from Japan to the United States and return to the sky. Instead, Flexport arranged for the plane to return with 300 tonnes of potatoes. The stunts were far from a long-term solution, but they got a lot of attention, and Petersen played the protagonist, demonstrating the power of logistics.
George Frey | Getty Images
Two months later, the company announced a $ 900 million Series E funding round with a valuation of $ 8 billion, along with investors such as Andreesen Horowitz, Shopify, and Softbank (which happens to be based in Japan).
“He has big and bold goals, the industry is huge and broken. There’s a lot to do and it’s a difficult problem he’s facing,” George said. “By raising the big war chest, he gains the ability and flexibility to do what he needs in the coming years in terms of introducing new technology products and expanding geographically into new lanes. increase.”
“We have a billion liquid assets and we very much believe in the principle of having a fortress-like balance sheet to survive the geopolitical crisis and the stock market slump,” Petersen said. I told CNBC in March.
Since its funding, Petersen has been passionate about solving problems and has brought Flexport’s logistics expertise into the non-profit sector. In early March, Flexport.org announced that it was organizing the transportation of relief supplies to Ukrainian refugee sites throughout Europe. It is estimated that over the last few decades, 60% of all relief supplies provided in response to the humanitarian crisis have been wasted. This is due to lack of logistics coordination.
Flexport’s efforts to improve how products behave around the world are part of a wave of technology that addresses supply chain issues.In fact, there are companies that focus more on logistics This year’s Disruptor 50 list More than any year in the last 10 years. The other two are in the top 10 this year — Lineage Logistics At number 3 and Convoy At number 6. And there are other major sources of confusion. Flock of cargo When CloudTrucksSpecializes in truck operation.
Second, there are start-ups working on logistics from other perspectives. GopuffWe want to deliver food and necessities quickly, and we have been making a list for the third consecutive year. Zip line, Has attracted attention by using drones to provide medical essentials and is now also available to Wal-Mart.Based in Mexico JustGrocery delivery company; AirspaceUse artificial intelligence to manage the transportation of time-sensitive cargo, such as human organs for transplantation.When ExotecA French robotics company that uses AI to manage high-density inventory storage in warehouses.
“I love the idea of solving problems, especially those that have such an impact on society,” George said. “This is a huge, huge space with very little technology in place. If you can make a big swing, customer-oriented, you have the opportunity to actually build the product that people love … it’s impressive.”
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