In this February 10, 2023 edition of Supply Chain Matters This Week in Supply Chain Tech we highlight news related to Shopify and Flexport, as well as Frieghtos, each in the transportation and logistics visibility tech segment.
Flexport Partners with Shopify for Logistics and Fulfillment Visibility
San Francisco based global transportation and logistics Cloud platform provider Flexport announced this week the launch of the Flexport App on Shopify – a described one-stop, integrated solution designed for small-and-medium-sized businesses (SMBs) to meet their global trade needs. This app is reportedly the first milestone in Flexport’s strategic partnership with Shopify to empower SMBs with the technology and tools they need to grow their businesses globally.
Reportedly, the first application of this joint offering is the ability to book and track ocean movements from Chinese ports to the United States.
In February of 2022, this column highlighted the completion of Flexport’s $935 million Series E round led by high profile Silicon Valley investor Andreessen Horowitz and MSD Partners, along with Shopify. What specifically captured this column’s interest in the Series E round of funding was the addition of online commerce platform provider Shopify, which at the time has was reported as exploring strategy options for expanding into broader control of the platform’s online fulfillment network, so that SMB businesses would have alternatives to the use of Amazon for online fulfillment logistics services.
Shopify itself has been growing inherent logistics services by way of acquisition. That includes the acquisition of collaborative warehouse robotics provider 6 River Systems in 2019, and online shipping fulfilment services provider Deliverr in May of last year.
This announced partnership adds to the overall tech support capabilities available to Shopify hosted sellers.
Both of these tech providers have not be immune to the existing trend of declining online and E-Commerce volumes after the boom in the prior two years.
In January of this year Flexport announced that it will be cutting 20 percent of its total workforce, amounting to upwards of 600 workers. The company cited falling demand for shipping services in 2023 and the overall macroeconomic downturn that has impacted global businesses as reasons for this action. In a communication to employees, Co-CEO’s Ryan Peterson and Dave Clark cited improved organizational efficiencies as a result of revised organizational structures leading to a conclusion that this start-up was overstaffed in a variety of roles.
In July of last year, Shopify announced an overall 10 percent reduction in headcount, amounting to upwards of 1,000 workers, with the CEO admitting that the tech provider’s bet on explosive online commerce growth did not pan out as initially planned.
Feightos Goes Public in SPAC Deal
Cloud based freight booking and payments tech provider Freightos began trading as a public company in late January via a merger with a special purpose acquisition company Gesher I Acquisition. The tech company reportedly raised $80 million in the transaction.
Existing shareholders in Freightos include SGX Group (the Singapore Exchange Limited), FedEx Corporation, a number of major airlines, including Qatar Airways, IAG Cargo, the cargo division of International Airlines Group, LATAM Airlines Group.
This transaction coincided with prior higher demand for online shipping services booming in the prior two -year period. This online provider has a particular focus on bookings and transactions related to air freight and ocean movements and caters to servicing small and medium businesses shipping and logistics visibility needs.
According to reporting by The Wall Street Journal, the offering was initially priced at $10 per share, peaked to over $30 in early trading, falling back to over $10, reportedly: “making it one of the biggest public stock offerings in the freight sector over the past years and defying a broader pause in new listings in an uncertain economic environment.”
As we pen this posting, the company’s stock has declined to $5.35 per share, taking a deep dive since early February.
The Israeli based company reportedly handled 668,000 transactions in 2022, representing a 154 percent increase from 2021. Transactions in Q4 of 2022 were noted as a record 211,000 transactions, up from 97,000 that occurred in Q1-2021. A press release indicates: “Freightos has experienced record platform transactions for every one of the previous 12 quarters.”
The Wall Street Journal report cites a statement from Freightos Chairman CEO, Zvi Schrieber, indicating that “.. investors view Frieghtos as a long-term investment. Bookings on our platform are growing fast and consistently, but turning our growing transaction volume into massive revenue and profit will take time.”
The company expects to report 2022 financial performance before the end of April.
This concludes our February 10, 2023 Edition of This Week in Supply Chain Tech.
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