Urgent Read: Flexport Is Coming For Your Clients!
Looking the wrong way can get you killed, in business, as in life.
We learn this very early on, when coming to a street crossing, or learning to drive a car. It’s about survival. The same is true in business, and there are countless examples. Eastman Kodak once dominated the photographic paper business, but failed to see the impact of digital cameras, even though it took several years for the technology to improve enough to take over the industry. They were looking the wrong way. Or how else do you explain the disappearance of over 90% of travel agents in the mid-nineties? The British famously lost Singapore early in World War II, because they were looking the wrong way, despite several warnings.
In all these cases, there were ample warnings, so I think we have to say, that its not just about looking the right way, its also about acting on what you see, in time! You must notice you’re being out flanked, and you must react. The sooner the better.
Independent Freight Forwarders are being out flanked, right now, and very few seem to notice.
By now, most everyone in that business knows about the relatively new start up, FLEXPORT and they’re coming for your clients. Here’s what you will find on Wikipedia. FLEXPORT was started in 2013, in Berkeley, California. By 2016 it had over 600 customers and has grown 30% a month for the next 30 months. In 2018 it was the 8th fastest growing business in the United States, with a three-year growth rate of 15,911%. And, they recently raised 1 billion dollars from Softbank. FLEXPORT has over 1000 employees, with 12 offices and warehouses around the world.
They are one, not the only, of a new breed of Digital Freight Forwarders, on a mission to digitize Global Forwarding and Logistics. They sell transparency and efficiency over the traditional forwarding approach, and they are very effectively outflanking traditional forwarders by the droves.
There is no shortage of digital platforms out there. CARGOWISE, and several others, have done very well upgrading Forwarder systems, upgrading data interchange and communication. While important, this alone won’t provide enough defense against the FLEXPORT onslaught, just like the British in Singapore.
As someone who works with hundreds of Independent Freight Forwarders around the world, I am hearing requests from Independent Forwarders, more and more, for the killer platform that will compete with FLEXPORT. But, it’s not really about the software.
Traditional independent forwarders spend an inordinate amount of time focused on competing on transactional rates to confirm their value to their clients. Big well-funded digital operators like FRIEGHTOS and others are leading this effort. This is also looking the wrong way.
FLEXPORT’S success is not so much about digital freight forwarding, as it is about changing the whole game. It’s not about rates, its about optimizing the whole supply chain. Flexport says, “with Data Comes Change”. So, it’s not just about transparency as much as it’s about capturing structured data across the platform, “to allow for richer analysis and better business planning” …looking to completely transform the business. In short, FLEXPORT is using supply data to drive supply chain optimization as a differentiator and sales strategy.
I invite you to download FLEXPORT’S white paper entitled “From Chaos to Control: Optimizing Global Trade with Data”. And then take a good look at their SUCCESS STORIES. This is looking in the right direction.
The SUCCESS STORIES tell Independent Forwarders how they are coming for their clients, straight up. Pay very close attention, because if you don’t give this a good look, you’ll end up outflanked. FLEXPORT is offering everything an independent freight forwarder is offering including efficient freight forwarding and decent rates, and maybe even better information. But they are focusing on and successfully delivering data driven optimization, across the whole supply chain, creating efficiencies and savings that rates and service alone can’t compete with. Let’s see, save $200 on a container versus saving thousands in better planning and execution, who wins?
Independent freight forwarders must raise their game to this next level in terms of being supply chain consultants and solution providers, and they need to start now. They only way they can head off FLEXPORT, is to compete with them at their own game, thus closing the door on the need for them in the first place.
The Independent Forwarder has several ways to respond, successfully. While FLEXPORT is big and getting bigger, Independents are smaller, and should be able to react and offer up recommendations quicker, without the delays of bigness. They certainly have the expertise, if applied correctly. But this counts only if they act now. If they don’t close the door, FLEXPORT will be moving in.
Data isn’t everything and doesn’t always tell the entire story. Independents are often closer to their clients and to their vendors and often are quite flexible in bringing creative solutions beyond the data. But only If they focus on this.
And, Independent Forwarders who leverage the power of strong relationships with their counterpart Agents, both of whom have vested interests here, have an advantage of local expertise often local options that have helped them compete with Multinationals for years. In our international forwarding networks, GLOBALINK NETWORK and GLOBAL VALUE NETWORK, we’ve proven over 16 years that GOOD RELATIONSHIPS build GOOD BUSINESS. Now, it means GOOD RELATIONSHIPS WITH GOOD COMPANIES just might mean survival for both companies. It now becomes more important than ever to leverage these relationships.
In our Networks we’ll be working with members to focus on this new consultative approach to optimizing client supply chains. We’ll be rolling out strategies and approaches for members to focus on. If you’re an Independent Forwarders, we suggest you do the same as quickly as possible, supporting consultative solutions to upgrade client supply chains.
To miss this, is to be looking the wrong way, and we all know how that turns out.
We’d love to have your thoughts, input or reactions. Email us