Flexport

BACKGROUND

Introduce your business and what you do there.

I’m the VP of Logistics at a towel and tissue manufacturing and distribution company. We have three facilities: one in California, one in Virginia, and one in Oklahoma. We basically convert tissue rolls into different formats of products such as facial tissues, paper towels, and napkins.

OPPORTUNITY / CHALLENGE

What challenge were you trying to address with Flexport?

Before COVID-19, and while working remotely during the quarantine, we were having a lot of issues with our previous vendor regarding customs brokerage and international forwarding.

Due to the health crisis, it became hard to find a real person to help us out. This would cause delays for us when it came to clearing our shipments and processing the flow of goods into our facilities. Since about 70% of our raw material is imported, this was a problem for us — we were looking to upgrade our service.

SOLUTION

What was the scope of their involvement?

Flexport represents our company on the US customs brokerage, and they help us provide customs clearance into the country. They also provide forwarding services, which include inbound shipment management.

Additionally, Flexport takes care of importer security filing, which is a requirement that companies need to comply with when sending products to the US, and it needs to be filled out before the shipment departs.

What is the team composition?

We had our first contact with a salesperson from Flexport. Once we went into the RFP mode, a customer brokerage manager got involved. We've also worked with a senior manager and a couple of other team members. In total, during the RFP phase, there were over eight people involved.

How did you come to work with Flexport?

Initially, we created an RFP and sent it to five different vendors that we believed would be more efficient and capable than the one we had at the time. We compared all five responses and spent quite a bit of time speaking to each vendor. During the process, it became quite obvious that Flexport had an advantage, and they ended up winning the contract to work with us with 100% exclusivity.

How much have you invested with them?

We’ve invested around $250,000–$500,000. Customs fees represent about 1% of our sales.

What is the status of this engagement?

Flexport won the contract in January 2021, and we started working together by February 2021. We’ve continued to work together, and we’re currently rolling out a third company with them.

RESULTS & FEEDBACK

What evidence can you share that demonstrates the impact of the engagement? 

In the first few months, Flexport proved to be a drastic improvement from our previous vendor. One thing that has stood out about Flexport’s work is their use of AI and machine learning processes to replace a lot of the manual work that they typically require.

To clear a shipment, they need a commercial invoice, a packing list, and all the shipping documentation from our company as an importer of record. Then, they have to key in a lot of those data elements into the customs system.

Flexport uses some type of optical character recognition (OCR) system for document reading so that the actual manual data entry is minimized. This makes them more efficient and allows them to save on costs. We’ve had between 20%–30% savings on this area working with them.

Flexport also has a really nice portal that gives us full visibility of our shipment as soon as it gets booked at the origin. We can see it on a map when it's been loaded, and we can track the shipment during the route and when it makes stops at several other ports.

Another great thing about Flexport is their clearance time. US Customs allows us to have our customs broker clear our shipment up to five days before the actual vessel arrives at the US port. The earlier we are in terms of clearing our shipment, the better the process is and the sooner we can start arranging the pick-up.

Collaboration-wise, they actually don’t have a lot of people available to answer our questions but rather have created a forum in their portal. Everybody is plugged into that same portal, and the system allows a more collaborative approach.

Whenever there’s a document missing or we have a question, we can send it through the forum, and the people assigned to our shipment from the relevant department will get in touch through there — it’s a really nice system.

How didFlexport perform from a project management standpoint?

Flexport’s project management skills are higher than average. They’re very diligent, and they assign the necessary resources to do the setup and all the onboarding. They use their own internal system, and, on the customer side, we see when they assign the necessary resources, whether they’re from sales or management.

What did you find most impressive about them?

Flexport’s most impressive asset is their portal. We also appreciate the high degree of visibility we have and the collaborative process that the portal provides — it’s nice to be able to do everything, including sending documents, inside the portal. This system reduces a lot of reiterative interaction.

Are there any areas they could improve?

Flexport is one of the pioneers in the industry — I can’t think of anything glaring that they should be improving.

Do you have any advice for potential customers?

The first piece of advice I can give is to have a good salesperson. We’re lucky to have a very thorough one that gives us an overview of our shipments, and we have several different tools available.

Secondly, I would highly encourage using the portal early on during negotiations. This way, you can see how they work for you and see if it’s something that resonates with your company and strategy. You can sign up for a trial and create a fake shipment just to learn the entire capabilities of their system.

As a third note, I recommend getting different testimonials from their customers.