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Flexport Flow Direct: ‘Easy Button’ for SMB Supply Chains?

The world’s largest container ship can hold just over 24,000 twenty-foot-equivalent units (TEUs). Getting a pallet of knitted sweaters from a factory in Shenzhen onto a vessel of that size or smaller, tracking it, clearing customs and then figuring out how to get it from a port to fulfillment center would seem daunting to the average entrepreneur working a side hustle at the end of their workday. 

But global supply chains aren’t just for the big companies—anymore, that is. 

SMBs [small- and medium-size businesses] don’t have big logistics departments They’re just regular people like us trying to run their business,” said Steve Bozicevic, Flexport senior director of new product development and general manager for the company’s Flexport Flow Direct. 

Flow Direct is a newer offering from the San Francisco-based freight forwarder addressing how the supply chains of e-commerce businesses that aren’t Amazon or some other enterprise company can evolve beyond sourcing from, say, an Alibaba or some other single-source supplier handling the manufacturing, shipping and pricing. 

“We really emphasized growth through big accounts, but over the last three to five years, the SMBs have really taken off,” Bozicevic said. “More and more people are leaving their jobs or creating side gigs to run their e-commerce stores.” 

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Flow Direct was created to help smaller companies figure out sailings from China and how to get that product into U.S. fulfillment centers, with orders sometimes as small as a pallet. 

A pilot began in the fourth quarter before the program was launched in the spring. Merchants on platforms such as Shopify make a lot of sense for Flow Direct and it’s one of the reasons it was tested with businesses there. 

“Inbounding inventory from suppliers is incredibly difficult for independent merchants to handle on their own,” Shopify president Harley Finkelstein told analysts in late July. “Today, merchants who manufacture abroad have to work with upwards of 10 vendors to receive inventory from suppliers, ship across the ocean and receive it at ports. Even if a merchant centralizes this through a freight forwarder, many of the processes are manual and fractured, designed for big businesses with large volumes and consistent demand.” 

The link with Flexport lets Shopify merchants bypass shipping a full container load while also moving product from the ports to a Shopify Fulfillment Network warehouse. 

Finkelstein said the Shopify-Flexport pilot found service from the port of origin bore out in 50 percent faster shipping times and a lower average cost per pallet. 

Others who now make up the Flexport Fulfillment Network include Shopify’s Deliverr, which it bought for $2.1 billion in July, Flowspace, ShipBob and ShipHero. 

“It’s an important area of growth,” Bozicevic said of SMBs for Flexport. “And I think the vectors have aligned in terms of five years ago SMBs weren’t that prevalent. Now there are lots and they’ve started figuring out how to operate early-stage supply chains with Chinese suppliers.” 

Ownership of those supply chains now means there’s a white space in the market for companies that can tailor solutions to the smaller shipper. 

“Really, what an SMB wants is an easy way to buy cost effective, reliable freight,” Bozicevic said. “That’s a tenet that’s your overall operating principle…. We went into that freight mindset trying to replicate the parcel experience.” 

Bozicevic knows that experience well. He came to Flexport last May with more than two decades spent in e-commerce and building shipping programs for other companies. 

He spent over five years in product management for Amazon Global Logistics & Fulfillment. Before that, he was at Pitney Bowes for six years, most recently as vice president of product management, and also Canada Post as director of product and market development for cross-border e-commerce platform Borderfree.  

Ultimately, Flow Direct’s philosophy of making things easy—consistent with Flexport’s overarching mission of simplifying global trade—will flow out to be meaningful to more than just small ocean freight shipments.  

“We have enough data and transactions in the system with hundreds of thousands of containers that we’ve moved from China to the U.S.,” Bozicevic said. “So, as we have Flow Direct, we’re going to go upstream into the full container loads or horizontally into air cargo and then down for pallet size as well…. Mid-market sellers, they want simple and cost effective.”