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The devastation wrought by the COVID-19 pandemic is still being felt throughout the freight and logistics industries as disrupted supply chains attempt to get back on track amid geopolitical uncertainty, rampant inflation and rising interest rates.
More than three-quarters of freight and transportation enterprises surveyed by Ernst & Young had suffered negative consequences, with just two percent seeing it as a positive.
But for Douglas Brown, the new Vice President and Head of Europe for supply chain management company Flexport, the stranded ships, pallet shortages and lack of raw materials presented an opportunity that few others responded to as quickly. Early on in the crisis, he saw that it would be months before normal services could be resumed, so he embarked on a strategy that was, to say the least, counterintuitive.
“Last year’s economic headwinds caused a worldwide slowdown, but we decided to stay in growth mode,” Brown tells The CEO Magazine. “We are investing in our engineering resources and doubling our software engineering talent, with the goal of delivering a suite of new products that provide digitally-enabled global trade solutions and improve the transparency, quality and cost of our customers’ supply chains.”
That increase in engineering talent includes at least 50 positions in Amsterdam.
“We’ll probably take that to 100 as we look to continue to outperform the market and grow by 30 percent,” he explains.
The decision by the Flexport leadership to embark on a bold geographical expansion was significant and has had a powerful impact on the company’s growth ambitions.
Brown was named Vice President and Head of Europe in January 2022 after three years in Hong Kong as the company’s General Manager of China, and then Head of Asia.
“From a personal and professional standpoint, I wanted to head back home and challenge myself. Fifteen years is a long time in Asia, and this is a fantastic company and a fantastic role with huge opportunity for growth,” he says.
“When I transferred to Europe from Asia in Q1 2022, we were already present in Northern Europe, including Denmark, Germany, the UK and here in the Netherlands. In my first year, we’ve entered Belgium, Sweden, Italy and Spain, so it’s a pretty exciting time to be leading Flexport Europe. We have further expansion plans, both in Europe and the Middle East.”
Flexport was founded in San Francisco and has achieved remarkable growth in just a decade, with a revenue of US$3.8 billion, a workforce of more than 3,000 employees and around 30 offices across North America, Europe and Asia.
By gathering data from various points in the supply chain, its technology provides businesses with visibility of their goods’ locations and facilitates smooth movement from factory to store shelves. The tech-enabled freight forwarder aims to create a comprehensive global supply chain business for its customers.
The company quickly gained a reputation as a disrupter in the freight forwarding industry. By 2022, it was valued at US$8 billion and had secured additional funding of US$935 million to help it move goods worth nearly US$19 billion across 112 countries annually. Revenue had doubled to US$3.2 billion in just 12 months.
Rapid expansion was on Brown’s mind even before his plane had touched down at Amsterdam’s Schiphol Airport.
“Europe’s less than a third of our global revenue so we’re big, but there’s still a lot room to grow,” he explains. “Flexport’s value proposition is an absolute game-changer, not just in North America but also here in Europe.”
His instincts align with industry commentators predicting a surge in transportation over the coming decades. The global freight trade was valued at US$28.6 billion in 2021 and is projected to expand at a compound annual growth rate of more than 11 percent through at least 2030. Automation driven by AI is set to transform the sector and increase efficiencies substantially.
Brown is the first to admit that such innovation is long overdue.
“Historically, it hasn’t exactly been the most forward-thinking industry in the world,” he admits. “It’s a bit archaic, and that’s where this whole value proposition comes from.
“I’m not knocking any of my previous employers, but I’ve seen it from the supplier side, from the warehouse operator’s side and from clients. I’ve felt that need for more data, wishing there was something better. Flexport has been trying to fill that hole with technology, infrastructure and expertise.”
And with its industry-leading capabilities and enviable agility, that hole is becoming smaller by the day.
“I love it when I’m speaking to a potential new client, as nine times out of 10 you’ll get that aha moment when they realize we genuinely are different. I saw it in Asia, and I see it here in Europe,” he confirms.
The future of supply chains is constantly evolving, shaped by a variety of factors. These include technological advancements such as AI, automation and economic trends. Brown is particularly committed to driving the topic of more sustainable supply chains.
“Greenhouse gas emissions from transportation, manufacturing and energy consumption throughout the supply chain have a huge impact on the environment. We want to help companies identify opportunities for sustainability improvements,” Brown says.
Just one prominent example is the offset of emissions from Swedish fashion house NA-KD. As one of Europe’s fastest growing ecommerce companies, it uses ocean freight for all of its buyer consolidation shipments and now utilizes more environmentally friendly LNG vessels to do so.
Flexport’s decision to invest in technology to digitize the supply chain and reduce emissions couldn’t have been more timely.
“We have a very clear global strategy for the next couple of years to really fast forward our software development,” Brown points out.
It seems his forward thinking in devoting Flexport’s resources to develop new technologies while lockdowns were crippling logistics and shipping is about to bear fruit.