Flexport is a licensed freight forwarder that uses people and software to manage the complexity of international trade. The US based software company offers services in air freight, ocean freight, trucking, warehouse & fulfillment, customs brokerage, and cargo insurance. Flexport connects customers with carriers, and software takes care of customs, tariffs and other logistics.
A Web-based dashboard lets a U.S. importer comparison-shop by typing in variables — Port A on this day or Port B on this one, railcar versus tractor-trailer — and displays price-quotes from transport companies. Flexport, cuts down on paperwork and headaches for importers, like booking sites do for travelers. It’s one of the first freight-forwarding outfits to digitize international shipping, making it easy to move goods through customs and around the world – “A freight forwarder for the Internet age.”
“The world wants software to manage their business,” CEO Petersen said in a recent Bloomberg interview. “They’re used to using software to do everything and then all of a sudden they’ve got to move their freight.” Flexport, which has raised $6.6 million from investors including Peter Thiel’s Founders Fund, Google Ventures and actor Ashton Kutcher’s fund, is another startup looking to arm in on an established industry. Uber Technologies Inc. is changing the way people move around cities; Flexport wants to do the same with stuff in the holds of container ships in oceans.
If the two-year-old effort succeeds, “there will be more international trade because of Flexport, and international trade is a very big thing for there to be more of,” says Paul Graham, co-founder of Y Combinator, the startup factory that has discovered, schooled and helped finance more than 700 companies, including Airbnb Inc. and Dropbox Inc. Flexport’s a Y Combinator graduate, class of 2014.
By most any measure, the odds are against it. For one thing, the majority of startups fail. And Bill Trenchard, a partner at First Round Capital, says traditional freight forwarding is a challenging business to scale. The Big Three are DHL Supply Chain & Global Forward, Kuehne & Nagel and DB Schenker Logistics, which together generated revenue of $73.6 billion in 2013. First Round backed Flexport anyway. Trenchard says if anyone can make it work, it’s probably Petersen.
“This is a tremendously hard business to execute as there are so many moving parts,” Trenchard says. “They need to be a great tech, logistics and services company all at the same time. Few entrepreneurs can pull this off while rapidly scaling. I think Ryan is uniquely suited to the challenge.”
Flexport has 31 employees and offices in San Francisco’s SOMA district, which is where a lot of startups rent office space. And about half of its customers are other startups, including Bellabeat, which makes wearable tracking devices. When Morena Simatic, Bellabeat’s chief operating officer, needed to ship a ton of lumber from Croatia to Las Vegas build a booth for the Consumer Electronics Show, she logged on to Flexport’s website.
“Everything was being done a few days before Christmas, it was super hard to organize everything,” Simatic said. “I don’t know how they did it, but they did it.”
With $26.9 million in funding, Flexport grew the volume of goods it ships by 16X this year. Y Combinator president Paul Graham says “Flexport is one of that small handful of startups that are going to change the world.” Freight might finally be getting the weight of attention it deserves.
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