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Flexport’s road to profitability is a longer one than expected, but its founder is optimistic 2025 is the year the freight forwarder pushes through.
Ryan Petersen, founder and CEO of Flexport, told the Wall Street Journal that the company missed its profitability target at the end of 2024 due to weaker-than-expected demand for its e-commerce fulfillment and distribution services.
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“We came up short,” Petersen said, who also told the publication that an initial public offering wouldn’t be entertained until after the year was over. But he expects Flexport to be “quite profitable” by the end of 2025.
The Wall Street Journal article hinted at Flexport hiring more employees overseas with Petersen saying he plans to add hundreds of workers in Southeast Asia and in Latin America, where importers are increasingly shifting their supply chains as they seek alternatives to China.
Petersen did not indicate what positions would be hired, but the move appears to mimic the thought process of DHL, which said it could hire 200 more international workers in countries like Malaysia to help process a potential increase in shipments through its network if the U.S. suspended the de minimis provision.
The turning tides in global trade, including tariffs levied by the Trump administration and the future of de minimis, among other geopolitical uncertainties, appear to be giving Flexport new life.
Although demand for e-commerce fulfillment and distribution services was not up to snuff for much of 2024, policy changes in Mexico that abruptly restricted tax-free textile imports into the country accelerated business for those segments within Flexport. The restriction prompted apparel brands to move their goods from fulfillment centers in Mexico to U.S. warehouses.
On a podcast earlier this month, Petersen said the logistics firm doubled the revenue of its e-commerce fulfillment segment in the first 60 days of the year as shippers sought assistance after the import restriction.
The solid top-line start to 2025 continues on the wider revenue momentum built throughout 2024. The founder said the company generated revenue last year of $2.1 billion, up more than 30 percent from the $1.6 billion brought in throughout 2023.