Logistics giants like DHL and Kuehne + Nagel have been entrenched industry leaders for decades, but their size may be an obstacle as new technologies emerge that can significantly streamline the shipping industry. San Francisco-based freight forwarding startup Flexport is attempting to upend these massive players, using its software-based infrastructure as a competitive advantage.
Recent headlines have highlighted the necessity for tech adoption in the logistics space. Shipping carrier Hanjin’s 2016 collapse, for example, stranded 400,000 containers aboard its ships and left 8,300 cargo owners with no visibility over their freight.
Flexport uses software and data to provide greater control and visibility to clients though freight forwarding service, which facilitates the international shipment of freight through coordination with manufacturers, warehouses, shipping carriers, and other global trade players.
Competing as a new freight forwarder is no easy task due to high regulatory hurdles, complex logistical operations, and competition from both startups and incumbents.
However, Flexport’s digital-first model with real-time visibility and analytics tools differentiates it from traditional larger players. At the same time, Flexport is one of the only digitally-driven logistics startups with significant funding to tackle the entire freight forwarding process. Moreover, recent moves into capital-intensive offline services such as warehousing and trade financing may help further shield Flexport from emerging startup competition, where we’re seeing a more crowded market, while also helping it move up the value chain to more directly compete against incumbent corporations.
Source: CB Insights
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