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This swashbuckling $3 billion company is single-handedly trying to fix the supply-chain crisis

Flexport brings digital savvy and a get-it-done attitude on behalf of its customers to solve the bottlenecks keeping your stuff from getting to you faster.

This swashbuckling $3 billion company is single-handedly trying to fix the supply-chain crisis
[Illustration: Violet Reed]

This story is part of Fast Company’s Most Innovative Companies of 2022. Explore the full list of companies that are reshaping their businesses, industries, and the broader culture.

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“Our first priority is to solve customer problems,” says Ryan Petersen, CEO of Flexport, which has built a software platform for companies to manage every aspect of their supply chain. Amid the supply chain chaos, Flexport has risen to the challenge, bringing online everything from customers’ factories in Asia to the trucks that deliver to fulfillment centers. With each node it digitizes, there’s more data to help customers resolve issues and inform new Flexport services, including order management, ocean freight procurement, and customs assistance. The company makes money—over $3 billion in 2021—from how much customers use its services.

Flexport’s order management product, launched in February 2021, is a good place to start in assessing the way in which the company creates value for its customers—and the entirety of the supply chain. Because there’s a lack of visibility into where goods are in transoceanic shipping (thanks to systems and vendors not being sufficiently connected), there are challenges for importers (in this case, a Flexport customer) from the time that they inform one of their factories that they are ordering more product. In response, order management allows the factory to facilitate delivery with the push of a button, and Flexport’s software then automatically registers a shipment’s milestones, such as arriving into port and clearing customs, saving as much as two hours a day in manual tracking.

As more knowledge and awareness gets built across the supply chain, Flexport can help customers change course if they need products faster, shifting from ocean to air freight. Customers can choose to try to get on faster boats that make fewer calls into port; Flexport can offer them high-priority loading, meaning that they get last-on, first-off status on a ship. The company also now offers a blended approach, called SeaAir, that ships goods via the ocean from Asia to the UAE, then flies them to more than 35 European locations. With cargo space at a premium—shipping a container from Asia to the United States can cost $30,000 or more—Flexport’s OceanMatch offering can pair a client that has unused container space with another firm in need, saving money and boosting efficiency. The company has a similar program to optimize trucking capacity.

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Once a shipment reaches port, goods can then get stuck while importers wait for customs officials to discern tariffs. Flexport’s Customs product helps customers find savings in duties and ensure that goods meet the latest rules, while its Duty Drawback feature helps secure refunds for excess duties paid beyond what is legally owed. There’s an estimated $9 billion in unclaimed duty drawbacks.

Congestion in the ports located on the West Coast of the United States, such as Los Angeles and Long Beach, has had far-reaching effects, creating delays at Chicago rail yards. Flexport’s data lets customers discover excess shipping capacity anywhere in the system, and the company works to create it via deals such one with an independent rail carrier to move cargo from L.A. to Iowa, giving customers an alternative hub to get product into the Midwest without delay.

Paying factories, shippers, customs, and the like can create challenges for fast-growing, cash-constrained companies, especially when there are delays. Flexport leverages insights from a customer’s business to finance supply-chain expenses, freeing up working capital.

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That’s a productized version of the company’s creative problem-solving, which is a hallmark of how it operates. This was evident last October when CEO Petersen rented a boat to tour California’s Long Beach port from the point of view of the ships idling off the coast. He identified the bottleneck—insufficient yard space at container terminals—and tweeted a fix. His suggestion: let truck yards store empty containers up to six high rather than two, the local zoning limit. The next day, city officials temporarily suspended container-stacking limits.

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