Flexport announces acquisition of Shopify Logistics

In a move geared towards expanding its global services into last mile and e-commerce fulfillment, San Francisco-based freight forwarding and customs brokerage services provider Flexport announced today it has acquired the assets of Shopify Logistics, a subsidiary of a multi-channel commerce platform, Shopify, including Deliverr, a fulfillment technology services provider, which Shopify acquired for $2.1 billion in 2022.

A purchase price was not disclosed.

Flexport officials said that it will become Ottawa-based Shopify’s official logistics partner, and it added that with Shopify Logistics in the fold, its tech-driven platform will power businesses of all sizes to make it easy to plan, visualize, and execute their global supply chain, from manufacture to the customer’s store or door under one unified platform.

In a note to Flexport staffers, Flexport CEO Dave Clark, whom joined the company in September 2022, following a nearly 13-year career at Amazon, in various operations, logistics and fulfillment roles, described the acquisition as the “last piece of the puzzle that enables us to drive technology fueled solutions across the entire product life cycle from the manufacturer’s floor, across the oceans and skies, through ports and fulfillment, and, now, right into the hands of customers.”

And he explained that a key driver for acquiring Shopify Logistics is because the shipping industry has not experienced the same technological revolution is seen across other sectors.

“I came to Flexport specifically because I know this team is changing that,” he said. “We are digitizing and evolving one of the most important parts of the world’s economy—global trade. And I believe in our teams to deliver—democratizing the supply chain for businesses of all sizes on our mission to make global trade easy for everyone.”

Clark also emphasized how this acquisition will help Flexport “to level the playing field for small business,” observing how in the U.S., where the e-commerce market size is pegged to top $8 trillion in 2026, one out of every four small businesses in the U.S. lack an online store presence, leaving them on the sidelines.

“We want to welcome them into the e-commerce ecosystem and support their supply chain needs; you shouldn’t have to be the biggest company in the world to have easy, cost-effective and fast supply chain solutions,” said Clark. “And we know, fast, cost-effective fulfillment operations have a dramatic impact on the fate of small businesses. When shoppers abandon their carts online, 48% do so because of extra fees (e.g., shipping costs), and another 22% cite slow delivery timelines. We are going to help fix that as we continue to bring incredible ocean, air, trucking, and middle mile services to clients plus the addition of ecommerce fulfillment and last mile capabilities.”

Parisa Sadrzadeh, Flexport SVP of SMB Product & Technology, told LM that Flexport’s goal with this acquisition is to create a single system for end-to-end supply chain planning, visibility and execution.

“The acquisition of Shopify Logistics and Deliverr will now enable our customers to optimize the movement of goods from manufacturer to the customer’s doorstep under one unified technology platform,” she said. “Shopify has been a strategic partner and investor since it participated in Flexport’s Series E funding round in early 2022. Since then, we’ve worked in close partnership to build supply chain solutions for Shopify merchants—and small businesses in particular—through products like the Flexport App on Shopify. This is a natural next step.” 

As for the key benefits of this acquisition for Flexport’s customers, Sadrzadeh said that Flexport's customers will now all have end-to-end supply chain planning, visibility, and execution to help reduce out-of-stocks and improve reliability for customers, reduce their costs, and decrease environmental impact of the movement of goods.

“Ultimately, the integration will help Flexport level the playing field for cost and speed of delivery for businesses of all sizes, not just the largest corporations in the world,” she noted. “The real competitive advantage is for Flexport’s customers as we’re able to offer more robust, end-to-end supply chain solutions. Flexport and Shopify customers will also gain access to a fast, flexible, and affordable logistics network that seamlessly integrates with Shopify—and eventually all major e-commerce marketplaces.”

Ben Gordon, founder and managing partner of Palm Beach, Florida-based Cambridge Capital, and managing partner of Ben Gordon Strategic Advisors, told LM that he believes Flexport is setting up a strategy to compete with Amazon.

“This is a return of the Jedi moment, as Flexport new CEO Dave Clark prepares to fight his prior employer,” said Gordon. “Also, note that Flexport paid using about 12% of its equity. This is a smart structure for venture funded companies that raised billions at high valuations in the 2020-2021 timeframe.”