Founder Ryan Petersen has positioned himself as shipping's savior, earning Flexport a new $8 billion valuation. But industry rivals say the 41-year-old near-billionaire and his startup are all show.
exits Oakland’s harbor, Flexport’s founder and CEO, Ryan Petersen, turns to watch a towering 370-foot crane hook shipping containers, one by one, onto the deck of a cargo ship. Petersen admires the neat rows of rectangles colored blue, rust red and an occasional teal, stacked on the post-Panamax-class ship bound for Yokohama, Japan.
analyzes and optimizes a customer’s supply chain, then automates it, often coming up with ways to shave days off delivery and save customers millions in late fees. Flexport’s centralized tracking and messaging cut out thousands of emails, saving clients an average of four work hours per week. For a price, Flexport will even offset their carbon footprint.
But Petersen doesn’t want to be seen as a pandemic profiteer, getting rich as his customers pay unprecedented prices. He’d rather be seen as shipping’s Mr. Fix-It. Flexport is combing through customer data trying to fill each precious container more completely . It’s rerouting lighter, higher-value products like Everlane’s popular sweaters from sea to air. It helped set up a private rail ramp in Iowa for goods coming from the West Coast to avoid Chicago congestion.
But no one can dispute Petersen’s efficacy. “Every crisis needs a hero, and Ryan Petersen positioned himself as the face of this,” concedes Craig Fuller, who runs an industry data-and-news site called FreightWaves. “He engages where a lot of executives won’t. It’s what the public wanted to see.” The gate-crashing younger Petersen made a lasting impression on Paul Graham, the accelerator’s cofounder, who had an interest in global trade. For years, Petersen had tinkered with another idea, a “TurboTax for customs paperwork,” but he needed to clear a rigorous background check to move goods across the U.S. border. Finally approved in March 2013, he pitched his startup idea, Flexport, onstage to Graham at a 2,000-person event that October.
So when Thiel announced his public support for Donald Trump, who was championing big new China tariffs during his presidential campaign, Petersen committed a startup sin. Asked onstage at a June 2016 conference if he would still take Thiel’s money knowing he’d support a politician tough on China trade, Petersen spoke from the hip. “Probably not, actually. It depends how desperate we were.” Soon he was on the phone with Thiel to explain himself. The damage control worked.
Much damage had already been done. Flexport’s aggressive fundraising—it has secured more than $2 billion to date—meant dilution for Petersen personally, who today owns just 9% of his company despite having no cofounders. And in February 2020, when Covid-19 shutdowns in China started to reverberate through the supply chain, Petersen panicked. He let go of 50 staffers, about 3% of Flexport’s workforce. Reporters looking for a wider trend among SoftBank companies pounced.
The notion that Petersen hasn’t earned his stripes runs deeper than all the good press he gets. For years, skeptics have argued that Flexport’s software does little that you can’t find today in competitors’ offerings big and small. Walk into the offices of Flexport and Expeditors, a 40-year-old publicly traded freight forwarder with a market cap of about $19 billion, then strip away all the corporate logos and branding, and you’d see that the operations look exactly the same, they claim.
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