According to reports from FreightWaves and other publications, cross-border logistics provider Flexport is developing a truck brokerage business to take care of the domestic transportation leg for imports. The move follows the recent acquisition of Deliverr, an e-commerce fulfillment company, from Shopify.
Bill Driegert, formerly of Amazon and Uber Freight, has been hired by Flexport to build the trucking division. “In this role Bill and his team will own the P&L for a free-standing trucking business along with product, tech, pricing, and procurement for our global trucking services,” according to Flexport CEO Dave Clark.
Flexport’s vision is creating a multimodal supply chain platform that “democratizes” freight transportation by giving small companies, especially those engaged in e-commerce, more affordable access to the same tools and analytics that multinational companies use. However, instead of competing against Amazon, Clark has stated that Flexport can “partner with Amazon.”
I’ve read the opinions of many analysts who claim that Flexport will try and become another UPS, FedEx, and a competitor to Amazon. I disagree. I believe what Flexport should become is Amazon’s Blackwater. Let me explain.
Throughout the 2000s, America was engaged in wars in Iraq and Afghanistan, and also engaged in counterterrorism in Africa and other countries. Although massive in size, the U.S. military quickly realized that they lacked the capabilities to do many things related to logistics and mission support. One man understood this better than anyone else – Erik Prince, founder of Blackwater, a combined security, logistics, mission support, and “no job too difficult” kind of company. Erik recognized the value of being able to fill the void for the U.S. military and the U.S. government via flexible, professional service.
In my opinion, Dave Clark should copy the Blackwater model to create a logistics organization that doesn’t try and compete with anyone. Instead, Flexport, leveraging an asset-light model where possible, and an asset-heavy model where necessary, becomes an extension of companies like Amazon. An interesting option for Clark to consider is enabling a 100% driver-contractor model for FedEx, while taking over additional FedEx services managed in-house. Stated another way, Flexport doesn’t compete against FedEx, Flexport enables FedEx to become a better company by leveraging Flexport’s platform, speed, and flexibility.
I also encourage Clark to immediately begin having discussions with the leading logistics players and corporations to ascertain their exact AI needs. Most companies Clark speaks with will struggle with AI. Flexport has an incredible opportunity to become the leader in global logistics AI and offer a service similar to AWS.
