News / Bullish Flexport will 'hit the ground running' as it integrates Shopify logistics

© Ilia Burdun

Volumes will increase for Flexport after it yesterday completed the deal to take over Shopify’s logistics arm and Deliverr subsidiary and can begin the process of integrating it and the staff.

“The Deliverr platform gives us two more pieces of the puzzle, from factory-to-door visibility,” said Neel Jones Shah, EVP and global head of airfreight, for Flexport.

“We now have to stitch it together with technology. We have all the pieces of the puzzle. It’s a very exciting time for Flexport.”

The deal saw Shopify take a 13% stake in Flexport and the companies had to wait a month for approval from authorities. Several hundred staff are transferring over to Flexport.

But there is a lot of work to do, acknowledged Mr Jones Shah, speaking to The Loadstar on the sidelines of the CNS Partnership conference in Miami.

“We now have a platform, but there is a lot of heavy lifting still to do. We will hit the ground running, we’ve been doing a lot of planning. There is a lot to get done, but we have the right people with the right experience.

“We’ve hired a lot of people who are really good, and we are still hiring engineers, aggressively looking for engineering talent.”

Flexport’s stated vision is to offer the same level of service to all, and “democratise” shipping, he added.

“We are now closer than ever to achieving it. SMBs want the option to deliver to the door. OEMs don’t want that really, but the bulk of shippers do. It’s super exciting.”

Flexport’s decisive move into e-commerce has been fuelled by its recent hires of former Amazon executives, including CEO Dave Clark.

“Our vision is still the same, but we have different personalities, and a different team. But we are embracing all that experience, it’ll get us to the next stage. You need new people when you enter a new phase of growth.”

Mr Jones Shah runs the forwarder’s airline network, which, along with a group of preferred carriers, also has three 747s operated by Atlas Air which will soon be in Flexport livery. But he doesn’t anticipate any changes to the air network yet.

“Nothing will change immediately, our network already supports it. But as shipment flows change, it will be impacted.”

And volumes should come immediately, he added. “We suspect it will bring more volumes – we are now the ‘ship it’ button on Shopify, so there is an absolute expectation that volumes will pump up.

While Mr Jones Shah is not confident that there will be a peak season this year – “more of a blip” – he is starting to see signs of recovery.

“Inventory levels depend on the vertical, but we are seeing more shippers beginning to prime the pump, and more bookings. People were nervous, but I don’t think we are going to go into recession. The global economy is in better shape than was thought.

“Inventory will continue to come down and we anticipating a bit of acceleration after that. I think 2024, 2025 and 2026 will be good for air freight, I am bullish on the long-term. All shippers are trying to get a good balance of modes.”

Mr Clark said, at the closing of the Shopify deal: “We expect to rapidly integrate the core assets of the acquisition into our operations, including three million square feet of warehouse space, to support merchants during the upcoming holiday season. We are ready to build as we expand into e-commerce fulfilment and last-mile delivery services.”