MERGERS & ACQUISITIONS NEWS

The former Amazon executive, who oversaw the building of Amazon’s transportation network for its sellers, has said he now aims to do the same for rival shipping customers via Flexport, where he became CEO on 1 March after spending six months as co-CEO.

He continued: The end-to-end supply chain industry has not undergone the technological breakthroughs and data platforming we have seen in other sectors. Flexport is changing that. After the past several years of public discourse focusing on what’s wrong with the supply chain, it’s exciting to look ahead to how Flexport can bring solutions and make the global supply chain better for everyone.

Through the integration of Shopify Logistics, Flexport will strengthen its advanced AI-driven optimization to streamline the full global supply chain, reducing costs and improving reliability for customers”, the forwarder said. “Traditional supply chain technology has failed to create a single system for end-to-end supply chain planning, visibility and execution. Flexport intends to change all that, reducing out-of-stocks for customers, costs for companies, and decreasing the environmental impact of the movement of goods.

Clark added: Following in the spirit of our partners at Shopify, Flexport has built technology solutions on top of a global, diverse network of logistics partners to make the world simpler for merchants and enterprises selling across all their channels around the world. With this acquisition, we will deepen and expand these partnerships, providing all merchants and businesses more opportunities to grow and succeed because their success is our success.

The companies expect the deal to close in the second quarter subject to customary closing conditions, including the receipt of regulatory approvals.

Tobi Lütke, founder and CEO of Shopify, said the sale of Shopify Logistics to Flexport will enable Flexport and Shopify to carry the merchantcentered logistics vision forward, and give more businesses access to a fast, flexible and affordable logistics network that seamlessly integrates with the Shopify tools they know and love.

Lütke told Shopify staff, On May 3, 2023, Shopify entered into a definitive agreement to sell the majority of our logistics business, including the people, technology, and services related to these operations, to Flexport, a leading tech-driven global logistics platform. Shopify has been building a world-class logistics solution that is port to porch – giving merchants speed, flexibility and affordability, all with a simple, seamless integration into the Shopify tools they already know and rely on every day. This transaction will take the logistics solution Shopify has been building and place it in the hands of a trusted and mission-aligned partner Flexport.

He said the transition of Shopify logistics assets to Flexport will be led by Harish Abbott, co-founder and CEO of Deliverr, under the guidance of Flexport CEO Dave Clark. In connection with the closing of the sale, Shopify is entitled to name a director to Flexport’s board.

Flexport will also become the official ‘Shopify Logistics Partner’ and provider of ‘Shop Promise’ for millions of Shopify merchants. Shop Promise enables transparent shipping timelines, including two-day and next-day delivery options to customers of Shopify merchants, and will be extensible to all major commerce platforms, Flexport said, adding: These services will be powered by Flexport and available on the merchant-facing Shopify Fulfillment Network app, which offers merchants an integrated logistics experience through Shopify.

Flexport said its technology “now makes it easy for businesses to plan, visualize and execute the movement of goods from manufacturer to the customer's store or door, unified under one technology platform.”

Further explaining the sale, Lütke said, building logistics infrastructure is a side quest every e-commerce entrepreneur is eventually pulled into because of the way the logistics industry works: a series of disparate players, all focused on different aspects. To run your store you work with extremely carefully designed software. To run logistics, you will use pen, paper, and phone calls a lot. And most of the time your service providers don’t talk to each other. Coordinating them to act together is your burden. Instead of every merchant individually taking on their own side quest, Shopify decided to accept it on their behalf. We set to work building software addressable logistics that didn’t exist before. Logistics was clearly a worthwhile side quest for us, and started to create the conditions for our main quest to succeed.

From the beginning, we worked with lots of partners on all aspects of this same problem: warehouses, robotics, transportation, crossdock, freight. We iteratively built a solution, step by step, through software, leases, and M&A deals, that could be an independent company one day. Shopify was the perfect place to bootstrap this effort from 0 to 1 and we have done this. The next step is to take what we have and take it from 1 to N as a main quest. Flexport, led by CEO Dave Clark and Founder Ryan Petersen, is the best builder and operator in the world of logistics. Contributing our work to Flexport, under the leadership of Harish Abbott, allows everything about Shopify Logistics to be more ambitious and global in nature. Making the global supply chains efficient and software addressable is Flexport’s main quest and so this is the perfect home for this part of Shopify.

9 MAY 2023 | Source: ARCHLYNK