The faster the Los Angeles-based online underwear retailer MeUndies grew, the more frustrated its COO, Terry Lee, became. The problem was shipping: The now 5-year-old company was manufacturing in Asia and using a freight forwarder to manage the logistical tangle of international shipping to get the product to the States. “We were paying a lot of money but getting zero transparency around pricing and the bare minimum in terms of service and flexibility,” Lee says. So he set out to find a better fit for his shipping needs.
The freight-forwarding industry is made up of thousands of old-guard companies (one of which MeUndies was using) content to work by telephone. But a few startups have entered the space. In the summer of 2015, Lee picked one of the new guys: Flexport, based in San Francisco. Traditional freight forwarders are often criticized for their lack of clarity around pricing and shipment status, as well as their inability to react quickly to new needs. Flexport aims to remedy that, says founder and CEO Ryan Petersen, with a cloud-based software platform that lets customers track their shipments in real time, see itemized pricing, access customs documents and change shipping schedules on the fly.
The app’s dashboard makes tracking shipments and viewing itemized costs “incredibly easy and transparent,” Lee says. Its prices are comparable to other freight-forwarding services and lack the industry’s all-too-common hidden fees. Then there’s the human element. With an account exec running point, a Flexport team manages the entire process from pickup at factories in Asia to delivery to a MeUndies U.S. distribution center. (With traditional freight forwarders, Lee says, it’s not always clear who’s running the show.) “If we need to do something like hold a shipment at port for an extra day, they’ll make it happen,” Lee says. With his old freight forwarder, he adds, “that kind of service is unheard of.”
A second opinion
This match makes sense, says John Haber, founder and CEO of the supply-chain-management firm Spend Management Experts. That’s because MeUndies, like many young retailers, will experience short-term fluctuations in demand -- and that can quickly impact how it handles its shipments. “A bad supply chain can kill a business,” Haber says. “So having a single IT solution that provides the visibility to track and trace where that shipment is, in real time, is incredibly valuable.” But depending on the needs of your business, you may be better off with a different service -- say, an app that handles only a narrower area, such as managing customs.