Digital forwarders back in the spotlight: can they compete?
The demise of India’s digital forwarder, Freightwalla, has put the tech-led forwarding industry in the ...
Here at The Loadstar, even before Covid, we received a lot of press releases reminding us how crucial the supply chain is; how beneficial logistics is to the world.
Whether it’s an airline touting that it has carried life-saving pharmaceuticals, or a forwarder arranging to deliver goods to a crisis-hit country, the PR machine is constant. (Despite the fact that airlines carry goods – that is their job – and forwarders arrange the movement – that is theirs.)
But now, finally, there is a really good illustration of the true benefits logistics can bring.
And it comes from a former social worker.
“There were only so many traumatised children I could help. I wanted to be able to upscale my impact. I did a project with a logistics company and found it very interesting. Logistics is the perfect intersection [with society], as it is closely tied with the economy.
“I worked in the developing world and saw people lose their lives because there wasn’t enough medical access. I understand how it works. So we wanted to take available inventory, and let logistics play its role.”
So said Susy Schöneberg, now head of Flexport.org, Flexport’s humanitarian foundation, who explained that chief executive Ryan Peterson “allowed me to look at the social impact [of logistics] and trusted me to build Flexport.org”.
Flexport has long divided the crowd. But no one can deny that a company which is just seven years old and founded a charitable arm in 2016, is making a significant difference: for the good of the world, and not for the good of its PR.
Ms Schöneberg is key to this. Colleagues nominated her for The Loadstar’s hero of the week, writing: “She’s been working night and day for weeks to move PPE shipments; we couldn’t think of anyone more deserving.”
But it’s not just the current crisis. In 2019, the organisation she founded shipped 4.7m pounds of humanitarian aid around the world. This year, it activated its Covid-relief efforts in January. Even before the WHO called a public health emergency, it was shipping masks to Wuhan.
Since then, it has shipped over 45m units for the response efforts, including 43m masks and respirators, as well as medical supplies and hospital equipment.
It also launched The Frontline Responders Fund, created in partnership with people, including Arnold Schwarzenegger and Edward Norton, to cover the cost of shipping PPE. The fund had raised $7.3m at the time of writing and so far distributed more than 70% to organisations equipping frontline responders with PPE – more than seven million units of supplies.
And it has transported more than 250,000 meals for vulnerable people.
Ms Schöneberg has indeed been busy. While the organisation’s work is global, and it is working with Europe’s Distribution Aid, which supports refugees in Europe and is also present in Latin America and Africa, its main focus right now is the US.
“Our support is requested by hospitals. We have a peer distribution system for medical supplies in US. They ran out of inventory very quickly, and couldn’t get supplies fast enough.
“Most had never shipped internationally and needed a lot of guidance. It’s very hard to get air freight capacity and there has been a big increase in prices.
“But there are two crises – not only hospitals, but also a public health crisis which has led to isolation, job losses and food issues. So we are also transporting food for the US and other regions.”
And, she says, there have been a “bunch of challenges”.
“The first is accessing PPE and other supplies and the second is transportation.
“People doing this [ie, hospitals etc] have no international supply chain experience, and don’t have relationships with factories.”
In addition, she notes that factories have had to re-tool and need new materials and machines, for which they need cash.
“And quality control is hard if you are making goods for the first time.
“In transportation, there is limited capacity, and distribution is based on need, but there is no public data available. So partnerships are really crucial.
“And then there’s regulation – much is regulated, and rightly so, but it’s an extra step to take.”
The world has swiftly become aware that all these scarce resources – such as PPE and air freight capacity – are in such high demand that competition among companies, regions and countries is fierce. So how can Flexport.org ensure that by, say booking air freight capacity for its shipments, it is not taking it away from someone else more in need?
“It’s a really good question,” she says, noting that partnerships are crucial in this respect.
“Flexport.org has really strong relations with not-for-profits around the world, and we have already established partnerships. We manage logistics and distribution needs, and multiple organisations are responding.
“We work on the ground and encourage information, and bring goods to where there is the highest need. But we don’t decide – the emergency aid organisations do.”
And what is Flexport the forwarder’s role?
“We use Flexport’s technology, which gives visibility and real-time information. And we use Flexport’s infrastructure and expertise, such as in buying air freight.”
Her team is 10-strong, and includes technology staff, but also has volunteers from the forwarding side.
Aside from the challenges of sourcing and moving goods, what are the other major concerns?
“The challenge to overcome is funding fatigue. We need to make everyone aware that this is a global crisis. Support and funding is worrying me most – can we provide support in the long term?
“The second gap is the long-term recovery. Look at natural disasters, such as those recently in the Bahamas and Mozambique – the real recovery and struggles come in the months afterwards.
“We will be involved in Covid-19 for as long as it takes. We will be busy with it until the end of the year, certainly.”
Perhaps it goes without saying that all Flexport.org’s activities, including flights, are carbon-neutral. Last year it offset 34,900 tonnes of CO2, the equivalent of 578,356 tree seedlings.
“There are three components to our environmental strategy – transparency, reduction of emissions by optimising transport, and carbon offset projects to truly mitigate the transport emissions. And we help partners manage carbon emissions.”
Amid all this activity, still the most striking thing is that Ms Schöneberg understood that logistics could ‘scale-up’ humanitarian operations so effectively. And what is more, she has provided a template for anyone else who can ship goods to areas of need; who know of excess inventory that can be donated; who have expertise in documentation, or procuring capacity, or sourcing goods. This should be part and parcel of every logistics company’s daily activity.
We’ll leave you with words from Arnold Schwarzenegger. “When I heard about Flexport.org’s plan, this was a no-brainer for me.”
You can donate to the The Frontline Responders Fund here.
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