Flexport CEO says resolving global shipping delays ‘may take a while’
Flexport CEO Ryan Petersen told CNBC there’s no single fix to resolve the shipping delays that have disrupted the global economy.
That’s because one key reason they are happening — consumers buying more physical products during the Covid pandemic as they spent less on services — will not revert right away, Petersen said in a “Mad Money” interview.
“The real, probably, solution here is: Wait it out. No one likes to hear that,” said Petersen, whose company is a freight forwarder that uses cloud computing and machine learning to help modernize the global shipping industry. Privately held Flexport was No. 41 on CNBC’s Disruptor 50 in 2021.
“I think you’re going to see dollars shift back [to services] and the decline in goods, but it may take a while, especially with the Christmas season coming up,” Petersen said.
Numerous challenges — from congestion at ports to shortages of shipping containers — have arisen during the coronavirus pandemic, leading to higher costs and delays. Home Depot even bought its own container ship to try mitigating problems.
Demand for goods returning to normal, pre-Covid levels is unlikely to be enough to deliver reprieve to the shipping industry, Petersen said. “Until we somehow get the flow to get below normal, it’s really going to be very hard to resolve,” he said.
Petersen said some near-term improvements can be made, adding that Flexport’s technology is designed to do just that.
For example, he said the company recently used machine learning to analyze the roughly 400,000 containers it’s shipping right now and found “they’re only 70% full.”
“So, we can put more stuff in the containers. Very simple solution. We’re working with our clients to say, ’Hey, stuff the thing full because I can’t put more containers on the ship, but I can put more stuff in the container.”