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YC-funded freight forwarding company. Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has
by akavi 4y ago
YC-funded freight forwarding company. Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has huge returns to scale, the benefits compound. They raised 2 G$ from 2019-2022, and their CEO used that warchest to expand counter-cyclically through the pandemic. TBD if either of the two theses pan out.
Freight forwarding itself is the industry of coordinating the logistics of freight shipment, ie subcontracting with physical movers of goods (ocean carriers/railroads/trucking companies) and dealing with customs/legal requirements involved in the movement of goods
(Disclaimer: former FP employee and current shareholder)
- iab 4y agoThey raised two gillion??
- akavi 4y agoG => SI prefix for 10^9
- trimbo 4y ago"2 Gs", in the US at least, means "two thousand" (G as in Grand)
- ghaff 4y agoI wouldn't immediately parse that abbreviation in the US--but if I did I'd parse it as G being shorthand for grand. More commonly 2Gs would be used for 2x the normal force of gravity--i.e. you weigh twice as much.
- marcosdumay 4y ago> More commonly 2Gs would be used for 2x the normal force of gravity--i.e. you weigh twice as much. That's a lower case g.
- ghaff 4y agoAs with many things I never expect others to be respecting arbitrary style guides when they write something. (Same reason I wouldn't use semi-weekly or biweekly.)
- marcosdumay 4y agoThe guy went to the trouble of adhering to the guide, appending the unity at the correct place, and contextualizing it so it's clear. It's everybody here that is getting out of their way to avoid understanding the number.
- Oxidation 4y agoAlso G (uppercase) doesn't have units that result in G$ being a plausible quantity even if you could combine number-unit quantities and use like a unit like that (which you can't for this exact reason): dollar-cubic metres per kilo per second per second. It's also rather small.
- wongarsu 4y agoAnd in many places M stands for thousand, from Latin "mille" (as well as the Roman numeral). That doesn't keep people from counting in kilo-, mega- and gigadollars. Still less confusing than dealing with short vs long scale numbers in translation.
- fallingknife 4y agoWhich is why you see millions of dollars often abbreviated as $5MM, to avoid the confusion with single M.
- winphone1974 4y agoSo 2 gigabucks, gotcha!
- boeingUH60 4y ago$2.4 billion - https://www.crunchbase.com/organization/flexport/company_financials https://www.crunchbase.com/organization/flexport/company_fin....
- fallingknife 4y agoG$ - > gigadollar. Not exactly standard, but I like it.
- deleted 4y ago[deleted]
- winphone1974 4y agoI prefer gigabucks, but tomato, tomatto
- slt2021 4y agois 1 Gigadollar = 2^10 Megadollars? or did op mean Gigidollars = mere 1e3 Mebidollars ?
- dilyevsky 4y agoTwo googols
- secondcoming 4y ago2 Gigadollars. For wages that's 1000^3, for taxes it's 1024^3.
- bambax 4y ago> Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has huge returns to scale, the benefits compound Is this remotely true though? Aren't the main costs of forwarding simply fuel? At some point I was importing goods from China (really small volume though) and I did ask them for a quote, and they were twice the price what the Chinese factory could get me from their own forwarder.
- akavi 4y agoFreight forwarders merely subcontract to the underlying carriers, who, theoretically, are pretty commoditized. In this model, the differentiating costs for a freight forwarder is in the labor required to organize the various subcontracts, which is what Flexport attempts to drive down via tech. That said, I can't really vouch for the soundness of this argument one way or another. It's been a long time since I worked there, and my primary interest when I did was more in understanding the industry at a conceptual level than in litigating the viability of the business model.
- kyllo 4y agoYes, a freight forwarder is sort of like a travel agent for freight--it's a middleperson role, in contrast to carriers, which are "asset-based" and operate vessels/planes/trucks. Another significant cost factor for a freight forwarder is IT integrations with customers and carriers--many of which are very old-school and use EDI, SOAP, or even CSV-over-FTP to communicate shipment instructions and statuses. I'm not sure to what extent Flexport implements these kinds of integrations with their partners, but there is definitely a significant hurdle to breaking even on investment in this kind of automation vs. just hiring clerks to process everything manually with e-mails and phone calls, especially in countries with lower labor costs.
- DavidPeiffer 4y agoNot who you responded to, but I've listened to a number of interviews from the former CEO (highly recommend the Odd Lots podcast for his interviews and many other supply chain related conversations). A couple concepts, some details may be a bit off and I'm very open to correction. There is a lot of administrative cost. IIRC, you might have something like 1 dispatcher for every 50 drivers. You have other people giving quotes via phone, decently high turnover for truck drivers, slow loading warehouses that cause a cascading effect when the driver can't complete all the stops planned for the day, and a strict limit on hours worked for truckers. Some of the pandemic port congestion was truckers arriving at a port to pick up a particular load, but that load wasn't ready right then. Flexport has an app which basically let drivers on their platform arrive at a port, grab any container that's part of their platform, and take that to the destination. This prevented countless hours of idle trucks in ports.
- moneywoes 4y agoIs there room for more innovation in the space, thoughts?
- happytiger 4y agoDefinitely. Once you start moving containers you realize how crazy the system can get. There’s lot of room to improve the current systems.