The global logistics industry is massive, and it’s no surprise since many products we regularly buy in supermarkets are imported from other countries. Even produce that isn’t imported still requires a logistics network to get it from the factory or farm to the shop.
Logistics accounts for roughly 12% of global gross domestic product (GDP) and 10% of GDP in the US, to put the importance of this industry into perspective. In 2021, the global logistics market size was $4.92 trillion, which will likely reach $6.55 trillion by 2027.
This industry is highly lucrative, but it faces various challenges, from fluctuating fuel costs and rising freight costs to environmental concerns and sustainability. These issues are what I am most interested in: how companies will adapt and find new, greener ways of working. When pressure is applied, new technology is bound to be created, and that’s an exciting prospect.
Flexport, in particular, faces even more significant challenges since it operates in logistics and supply chain management. The former focuses on moving and storing goods, while the latter involves sourcing, processing, and delivering goods. Consequently, Flexport’s scope is much broader than some of its competitors.
In this Flexport competitors analysis, I will look closely at the most extensive logistics and supply chain management companies worldwide to determine which ones are equipped to deal with the challenges ahead.
The Bottom Line Up Front
Flexport is often called a disrupter by industry experts, and in my experience, this is certainly a title it can use to its advantage. There are many pain points when moving goods across continents, and Flexpoint provides a digital way to manage what can otherwise be a very complex and challenging process.
However, tech evolves rapidly, and other companies are catching on. UPS, in particular, is one competitor Flexport is unlikely to overthrow. Nevertheless, as long as it maintains its cutting-edge, easy-to-use technology, Flexport is in a strong position.
List of Flexport’s Main Competitors
- XPO Logistics
- Echo Global Logistics
- Kuehne + Nagel
Flexport’s Business Strategy
Flexport Inc. is a US-based multinational corporation that offers logistics and supply chain management, including customs brokerage and freight forwarding. It was founded in 2013 with headquarters in San Francisco, California.
Freight forwarding is Flexport’s primary source of revenue. Freight forwarders act as intermediaries between the organization shipping the goods and the final destination. In addition to this, Flexport offers many other logistics management tools, such as:
- Flexport Platform – allows users to manage their supply chain
- Visibility – users can track their shipment
- Order management – users can collaborate on orders
- Customers – users can clear goods and gain insights
- Climate – users can offset their carbon emissions
Transportation and trade management tools are also available in one easy-to-use technology platform. In short, Flexport’s mission is to “simplify global trade by connecting everyone in the supply chain.”
Flexport has 10,000 clients across 200 countries, and its customers include Fairphone, American Metal, Cloud Paper, Gerber, and the Ministry of Supply. It has offices in Amsterdam, Atlanta, Shenzhen, and Hong Kong.
In the first 30 months since Flexport was founded, it increased revenue by 25% each month. It has raised an impressive $2.2 billion, with the most recent round in February 2022, when the company raised $935 million in Series E funding. The capital will be used to:
- Expand into new geographies and markets worldwide
- Accelerate the development of the platform
- Support logistics innovation by investing in startups
Flexport creates bespoke quotes for its clients based on their essential tools and services. This is a transactional revenue model with hybrid pricing; some clients may wish to begin a subscription if they plan on using Flexport regularly, while others may only need the platform for one shipment.
Ultimately, Flexport’s business strategy focuses on moving away from the competitive culture which has traditionally driven the freight industry to a more collaborative culture.
Flexport acquired Crux Systems – the most advanced solution for tracking ocean containers – in 2019 to accelerate the automation of its shipment tracking capabilities. Acquisitions like this offer a faster way of boosting Flexport’s capabilities and overtaking other companies in the industry by providing a better service.
However, Flexport’s focus remains on creating a collaborative culture. In 2021, it created a Certified Partners Network, which will help Flexport customers scale across 89 countries. Partners include Shipwire, JetOneX, Nolan Transport Group, and ShipBob.
Flexport’s revenue in 2021 was $3.3 billion, up from $1.3 billion the year before and $670 million in 2019.
Flexport Competitors Analysis
Flexport competes against companies like UPS and American Export Lines in the logistics and supply chain management industry.
United Parcel Service (UPS) is a global shipping and supply chain management company. Originally known as American Messenger Company, it was founded in 1907, and its headquarters are in Sandy Springs, Georgia.
Today, UPS is one of the world’s largest shipping couriers. Its central international hub in Louisville, Kentucky, is the fifth busiest airport in the world based on cargo traffic.
UPS Supply Chain Solutions, which provides transportation and logistics services, is the business branch that competes directly with Flexport. It is represented in over 1,000 locations across 120 countries and specializes in international sea freight, air freight, customs clearing, and contract logistics.
UPS uses a transactional revenue model, creating custom quotes based on the needs of each client. It offers a wide variety of solutions, such as:
- Freight consolidation
- Supplier management
- Transportation management
- Insurance services
- Customs Brokerage
Customers of UPS Supply Chain Solutions include Japan Airlines, Lupin Pharmaceuticals, eSecuritel, and Tidal New York.
UPS didn’t fully enter the supply chain management industry until 1995 when it acquired SonicAir to offer service parts logistics and launched UPS Logistics Group.
The company went public in 1999 in the largest initial public offering of the century.
Acquisitions have formed a core aspect of UPS’s business strategy over the last twenty years. In 2001, for instance, UPS acquired Mail Boxes Etc., a franchised network of shipping and packing retailers across Canada and the US.
Then, in 2004, UPS entered the heavy freight business when it purchased Menlo Worldwide Forwarding, which it rebranded as UPS Supply Chain Solutions. A year later, it acquired Overnite Transportation, a less-than-truckload (LTL) company, for $1.25 billion and rebranded it as UPS Freight.
XPO Logistics is a freight transportation company offering truck brokerage and less-than-truckload services in 18 countries. It was founded in 1989, and its corporate headquarters are in Greenwich, Connecticut.
XPO is an industry leader thanks to its dedication to innovation. With a global network of 749 locations and over 43,000 employees, it uses the latest technology to manage supply chains for leading blue-chip companies across various industries.
In North America, XPO is the fourth-largest truck broker and the third-largest pure-play LTL provider. Like its competitors, it uses a transactional revenue model with custom quotes.
XPO has made 18 acquisitions in total; including East Coast Air Charter, Inc. in 2013, Simply Logistics, Inc. in 2014, and more recently, it acquired Kuehne + Nagel’s contract logistics network in the UK and Ireland in 2021.
Acquisitions are essential in the supply chain and logistics industry because they allow companies to gain new technology, better working methods, and global expansion through existing infrastructure.
For example, in 2015, XPO announced a $3.56 billion deal to buy Europe-based company Norbert Dentressangle, which helped XPO move into the European market.
The upshot of these acquisitions is that XPO was the seventh best-performing stock of the last decade on the Fortune 500; its share price rose more than 1000% from when Brad Jacobs, its CEO, took control.
In 2020, XPO announced plans to create a spin-off company called XGO Logistics, effectively separating two sides of the business: XPO provides freight transportation while XGO is the world’s largest pure-play provider of contract logistics. The spin-off was completed toward the end of 2021.
For the full year 2021, XPO reported $12.8 billion in revenue, compared to $10.2 billion in 2020.
Echo Global Logistics
Echo Global Logistics, Inc. provides technology-enabled supply chain management and transportation services worldwide. It was founded in 2005, and its headquarters are in Chicago, Illinois.
Echo’s mission is to simplify transportation management, connecting carriers who can transport goods quickly with businesses that need to ship products. To achieve this, it offers two essential tools:
- EchoShip – a self-service shipping platform for truckload and LTL shippers.
- EchoDrive – a web portal and mobile app that allows carriers to manage and track shipments.
Pricing depends on each client’s needs, and the company makes money via a transactional revenue model.
Echo’s transportation network consists of over 50,000 providers serving 35,000 clients across various industries. It raised $80 million when it went public in 2009, offering 5.7 million shares at $14 per share.
In 2021, Echo was acquired by private equity firm The Jordan Company for $1.3 billion. Jordan paid $48.25 per share, 54% more than Echo’s closing stock price on the Thursday before the deal went through.
Echo’s chairman and CEO said the deal would help the company’s rapid expansion, particularly in its supply chain capabilities, since Jordan is an experienced financial partner with ample funds.
Following this, Echo acquired Roadtex Transportation, a cold chain and LDL provider, in 2022. Roadtex had a network of 32 cold storage facilities at the time of purchase.
Echo’s revenue in 2021 jumped 42.5% to $985.6 million, up from $691.5 million the previous year.
Geodis is a French transportation company that provides logistics services in Europe, Southeast Asia, Latin America, and Africa. It was founded in 1990, and its headquarters are in Levallois-Perret, France.
Geodis began life as a rail freight company in Le Havre founded by Emile Calberson. In the 1950s, the company expanded into North Africa, and in the 1970s, Calberson opened agencies in Britain, the Netherlands, Germany, and Italy.
In 1995, the freight company merged with SCETA Group subsidiaries to create Calberson General Company, which adopted the corporate name Geodis. The Geodis Group was privatized in 1996 and reorganized into four divisions: road, groupage, overseas, and logistics.
Geodis has a presence in over 60 countries, with a network connecting more than 165,000 clients in 168 countries. The company’s strategy focuses on becoming “the undisputed leader in the Transport and Logistics sector.”
Seven rules govern Geodis’s operating principles:
- Make it easy for clients to do business with the company
- Win, retain, and develop profitable clients
- Deliver a consistently perfect service
- Get paid for what it does
- Recruit, develop, and retain high-quality people
- Ensure the safety of employees and clients, always
- Be a good citizen
Geodis became one of Europe’s premier Freight Forwarding operators when it acquired TNT Freight Management in 2006, renaming it Geodis Wilson. This move also strengthened the company’s position in Australia, Asia, the American continent, and Scandinavia.
Two years later, Geodis acquired the IBM worldwide logistics activity monitoring platform, giving rise to its fifth area of business: supply chain optimization. These acquisitions, put together, make Geodis a serious competitor of Flexport.
In 2021, Geodis reported 10.9 billion euros in revenue, up 28% compared to the previous year and 33% from 2020.
Kuehne + Nagel
Kuehne + Nagel International AG is a global logistics and transport company founded in 1890 with headquarters in Schindellegi, Switzerland. It has almost 1,300 offices in 106 countries and is the world’s largest freight forwarder, transporting 4.6 million tons of goods by ocean and 2.2 million by air in 2021.
You can separate K+N’s logistics into five segments:
- Air Logistics
- Sea Logistics
- Road logistics
- Contract Logistics
- Rail logistics
The company has over 400,000 customers and 79,000 supply chain and logistics specialists.
Given the highly-polluting industry in which K+N operates, it is unsurprising the company has a Net Zero Carbon Initiative that it hopes to achieve by 2030. Sustainable logistics will be vital in the future, not only due to government regulations but also due to consumer choices. To accomplish this net zero target, K+N is using biofuels and solar power.
K+N appeared on the Fortune 500 list for the first time in 2022, ranking 396th globally and 9th in Switzerland. This came after the company faced legal troubles two years earlier when it was fined $31 million for its involvement in a freight forwarding cartel case.
Recently, K+N has capitalized on the global need for better healthcare, launching regular charters from Liege to Asia, Africa, and the Americas and expanding its healthcare network in North America with a new distribution center.
Flexport SWOT Analysis
This SWOT analysis covers Flexport’s strengths, weaknesses, opportunities, and threats.
- Global presence with offices in multiple countries
- Excellent acquisition history
- Strong financials with continuous growth
- Several successful funding rounds have consolidated the company’s financial position
- Large partner network
- Easy-to-use service
- Offers a broad range of tools across the supply chain management and transportation industry
- Amazon’s Consumer Chief is the CEO
- Poor brand recognition
- Business can be affected by fluctuating transportation and import costs in different countries
- Poor reviews on Trustpilot
- Lack of communication
- Offer new services relating to the transportation industry
- Expand into new and emerging markets
- Improve communication with clients
- Streamline the service using the latest technology
- Invest in research and development to improve the user experience
- Competition from rivals with better brand recognition, like UPS
- Shipments are often late, causing customers to use other companies instead
- Transportation costs are at an all-time high
- Lack of skilled workers to keep the supply chain moving
Flexport Competitors Analysis FAQs
Question: Who is Flexport’s biggest competitor?
Answer: Kuehne + Nagel is Flexport’s biggest competitor based on revenue and the amount of freight it is responsible for. However, UPS and XPO Logistics also generate more annual revenue than Flexport. Ultimately, all companies in this article pose a significant threat to each other because they are all aiming to become the go-to supply chain management and logistics company.
Question: What is Flexport worth?
Answer: Flexport won an $8 billion valuation in 2022 after a $935 million funding round that included Shopify as a key investor.
Question: What makes Flexport different?
Answer: Flexport is shaking up the freight forwarding world through digitization, creating better visibility and control for shippers.
Question: Is Flexport a SaaS?
Answer: Flexport isn’t a SaaS company in the traditional sense. Instead, it is a tech-enabled freight forwarder.
Flexport is an impressive company by all standards. Time-saving automation makes our modern world go around – at least, that’s what I always say – and Flexport has had the advantage of getting there first in the supply chain management industry.
However, new technology soon grows old, and other companies have already adopted similar systems, making it harder for consumers to choose where to spend their money.
As a result, two things will be vital for Flexport’s future growth: consistent delivery of results and research and development. Together, these things will help Flexport stand out, even against big rivals like UPS.
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