{"id":20783,"date":"2016-11-18T20:20:05","date_gmt":"2016-11-19T01:20:05","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/modernizing-an-archaic-unsexy-industry\/"},"modified":"2016-11-18T20:20:40","modified_gmt":"2016-11-19T01:20:40","slug":"modernizing-an-archaic-unsexy-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/modernizing-an-archaic-unsexy-industry\/","title":{"rendered":"Modernizing an archaic, unsexy industry"},"content":{"rendered":"

Freight forwarding is a 1.1 trillion-dollar industry, comprising 12% of the global economy.1<\/sup> The industry is the circulatory system of the globe. Any item that weighs 150 kilograms or more qualifies as freight, and can use special vehicles to be transported on land, or through air and sea.<\/p>\n

Freight forwarders are the logistics and organizational backbone of this industry. When a freight is shipped, they co-ordinate for a truck to pick up the item from a local facility, arrange for the item to be transitioned to a plane or ocean carrier for international transportation, manage customs processing once the item arrives at the destination country, and co-ordinate on-ground shipment to the destination warehouse or retailer.<\/p>\n

The industry is highly fragmented. The top three players \u2013 DHL, Kuehne & Nagel, and DB Schenker Logistics \u2013 generated $73.6B in revenues in 2013, a fraction of the total size of the industry. Despite the size and number of players in the industry, freight forwarding remains archaic. The system is highly non-transparent, and as a result, inefficient. Most freight forwarders still rely on paper orders, fax, email, and excel to co-ordinate their shipments.<\/p>\n

This is where Flexport comes in.<\/p>\n

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Flexport<\/strong><\/p>\n

Flexport is a 3-year old startup that is building a software backbone for global trade. Their aim is to bring transparency to the global trade supply chain, improve efficiency and tracking, and lowering prices in the process. They aim to become the Uber of global trade.<\/p>\n

Flexport has raised $94M to date, with a recent $65M round in Sept. 2016.3<\/sup> They are a traditional licensed customs brokerage, but with software technology that allows companies to identify, purchase, organize, and track freight shipments. The process is incredibly simple from the client\u2019s perspective: they type in their item description on Flexport\u2019s platform (i.e. weight, dimensions, material), as well as the pick-up and destination locations. Flexport then uses information it has about transportation costs, customs fees, weather patterns, and global economic data (amongst other things) to produce an instant price quote. If the shipper accepts the price, Flexport\u2019s team and technology takes care of the rest.<\/p>\n

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Flexport\u2019s technology has a number of advantages over traditional freight forwarders:<\/p>\n