One of the hottest start-ups of 2022 is playing in one of the most difficult spaces of the past few years – global logistics. In the context of shipping delays, container shortages and port congestion the freight forwarder Flexport has just raised a Series E funding round at an $8 billion valuation. This article takes a deep dive into the company and what they are trying to solve in the global shipping industry.
The freight forwarding market is estimated to be worth $182 billion (by way of definition, freight forwarder is the term for the agent responsible for moving goods on behalf of their owner). The market is incredibly fragmented, DHL is the largest player in the space but just has a 6% market share. Flexport started in 2013 as a freight forwarder but their ambitions are so much greater than to compete with DHL, FedEx and TNT.
Flexport want to build a global trade platform that offers accurate, real-time data for the entire industry. They are focused on offering ‘visibility’ and ‘control’. The freight forwarding business is complex, as an item makes its way from Shanghai to New York it may have multiple different transport legs across ships, plans, trains and trucks, often with many different carriers, all of whom are only worried about their own leg of the transport journey. Freight forwarders sit above these individual transport carriers and assume responsibility for the whole journey, getting that item from Shanghai to New York. And yet, even with all this complexity, the industry has been slow to adopt technology. That is what Flexport has set out to change.
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