Flexport, a San Francisco-based shipping startup, is reportedly facing skepticism from important customers and a drop in revenue.
This follows complaints about issues like canceled deliveries and inconsistent communication, Bloomberg reported Thursday (Nov. 2).
Reached by PYMNTS, Flexport provided an emailed statement: “Unfortunately, when it comes to information about our customers, Bloomberg has been proven wrong time and again for this story by both Flexport and its customers. We caution that the information provided by background sources in this regard is misleading or untrue.”
Known for its technology-driven logistics approach, the company has raised $2.35 billion in funding since its establishment in 2013, according to the Bloomberg report.
In one case cited in the report, an eCommerce merchant told Bloomberg of an incident in which her package failed to arrive at a customer’s location, and she only discovered that the delivery had been canceled after reaching out to Flexport.
In addition, two major customers have scaled back their relationships with Flexport due to “poor performance” and another collected contractual penalties from the firm, the report said, citing unnamed sources.
Flexport has also seen a drop in its valuation to as low as $1.4 billion in September after once reaching $8 billion, per the report.
Flexport’s founder, Ryan Petersen, returned as CEO and is focused on rebuilding trust with customers and employees, the report said. Petersen aims to reconnect with customers, emphasizing the importance of personal relationships and customer service. He is in the process of meeting with the company’s top 200 customers by the end of November.
The company’s core business, freight forwarding, has been strained due to falling shipping rates and soft demand, per the report. The company’s long-term plan was to expand into more profitable services like loans and cargo insurance while diversifying into other lines of business.
Despite the challenges, Petersen aims to integrate the company into more of its customers’ operations, leading to higher profit margins and more data, the report said. He plans to restore profitability by 2025 and will potentially consider an initial public offering (IPO) at that time.