September 18th, 2023: Flexport CEO forced out as company releases an update, Shopify CFO chat at Goldman Sachs event, Klaviyo and Instacart IPO valuation, and Amazon releases Supply Chain by Amazon

I won’t do a full redux on my longer comments on this post covering various Flexport business model concerns (in a explorative, non-confrontational way)

One thing I really also don’t get about Flexport is loans product

  • What is the term of the loan–from FoB (when Flexport sees the retailer has acquired goods) through to a few months after delivery (retailer sells through, in effect it’s geared working capital)? Some thing longer? How good a credit risk do you need to be to get a Flexport loan (would they loan to companies later on in Chap 11 process/UK CVA process?). It’s a nice retail trick if you can acquire goods and sell through before having to pay for them (e.g. on credit); some retailers of fast moving goods can do that purely within the “Net payment” terms that agree with suppliers (i.e. suppliers provide the credit along with the goods, but lengthy supply chain times tend to work counter to that approach
  • In any case what some slightly bigger companies would want is not so much a loan, but a trading credit guarantee (supplier of goods has financial recourse if company won’t pay). Without a guarantee in place many suppliers want payment up front which is challenging for retail cashflow. Withdrawal of guarantee is a good way to create trading distress for a retail business; there are fairly few suppliers of guarantee and they have a nasty habit of all getting cold feet at the same time. Flexport doesn’t seem to be getting into that business (yet).
  • I also think that to provide good service to smaller shippers, Flexport needs to get some bigger ones on board, on key shipping lanes, to generate consistent volume and a flow of part-empty containers which Flexport can fill up, thus also creating consistent transit time without shipping air.

Would be useful to do a side by side ranking between Doordash/Instacart and Deliveroo/Ocado (with maybe a ecommerce grocery supplier like mercatus thrown in for seasoning). Maybe Klavyio versus its peers too.