Flexport loses CEO

There appears to be a crisis at the top of Flexport. Dave Clarke has resigned as CEO and the founder, Chairman and previous CEO, Ryan Petersen, has taken his place. In a statement on his twitter account, Dave Clark said that he would be resigning, although he did not say when, stating that “Ryan and I discussed his desire to return to focusing on growth in the core freight business. In light of that, I feel that he is best suited to lead the company in that direction.”.

In reply Mr Petersen commented that, “Flexport sits at a crossroad where the choice is either to spend our way out of the current downturn in global logistics or pursue a path that gets us back to profitability quickly. The board and I agree that operational excellence and profitability in the near-term is the right path.”

At one level, this action seems to be a very familiar conflict between a founder of a company and a CEO who has strong opinions of his own. Dave Clark mentions elsewhere in the statement that he and Mr Petersen had agreed a “vision” and created an “operating model and structure to realise that vision” implying that Ryan Petersen had deviated from this agreed path.

However, it is interesting to speculate what “return to focusing on growth in the core freight business” means. It might suggest a greater willingness to increase sales by lowering prices and thus profit margins. This is certainly a policy issue that the conventional freight-forwarding sector has had to confront over the past year as the return to normality has driven-down freight-rates.

There is also the question of the vertical expansion of Flexport into fulfilment and ‘last-mile’ delivery through the purchase of Shopify Logistics. Possibly the development of the vision of ‘end-to-end’ integrated services has caused conflict between the two men.

Either-way, the company is presumably back in the situation that it found itself at the beginning of the year. Then it was consolidating aggressively, making 20% of its staff redundant in the face of falling demand. The solution to this situation was a new CEO. It will be interesting to see what the response is this time.

Author: Thomas Cullen

Source: Ti Insights

Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry. 

Visit GSCI subscription to sign up today or contact Michael Clover for a free demonstration: [email protected] | +44 (0) 1666 519907