Flexport to open up new warehouse in Southern California

San Francisco-based freight forwarding and customs brokerage services provider Flexport recently announced plans to open up a warehouse in close proximity to the Port of Los Angeles and the Port of Long Beach, effective next month.

Flexport is a licensed freight forwarder that uses people and software to manage the complexity of international trade, according to its website. Rather than managing complex coordination required for long-distance, global shipments typically done via phone, fax, and spreadsheets, Flexport leverages a Web-based app with real-time visibility of shipments. The company provides various services, including air freight, ocean freight, trucking, warehouse & fulfillment, customs brokerage, and cargo insurance. 

Flexport COO Sanne Manders told LM that many things factored into the decision to open up this new warehouse.

“We are always looking for ways to improve the user experience,” he said. “One of the bottlenecks in supply chains right now is the consolidation/deconsolidation process for LCL (less-than-container load), Air and Transloading. It can take days to de-consolidate a container at the destination. By taking control end-to-end of this process, we are able to cut out several days of transit time. It also allows for new services, for instance, DC Bypass. Since Flexport knows on an SKU level what is in a shipment, we can reallocate inventory on the go. We use the warehouse as a cross-dock to re-label and directly send inventory to the final consignee, often a DC of a retailer or an Amazon warehouse. This saves time, therefore working capital, and also handling costs as it skips the DC of the importer.”

Specific services Flexport will offer out this 100,000 square-foot facility in Buena Park, Calif. include: cross-docking activities: consolidation, deconsolidation, relabeling etc. It will also serve as a hub for LTL (less-than-truckload) shipment dispatching.

Manders cited myriad customer benefits of this new warehouse. One being improved transit time, with Flexport able to remove 3-4 days out and making its LCL product a deferred air product on the transpacific. This saves shippers money, he said, while their transit times are by and large similar.

Another benefit is improved visibility, he said, while shipments are in its warehouse, coupled with integrating its warehouse operations into its global tracking system, which, he added, will provide customers with end-to-end visibility on a SKU level.

New functionality was also mentioned by Manders as a benefit.

“Digitizing a supply chain doesn't only give more visibility and efficiency, it also sets up for new functionality,” he said. “DC Bypass (distribution center bypass) is one of those. Example: Purchase orders are cut way before demand is allocated. Demand planning has a much shorter cycle than supply planning. To bridge this gap, importers would prefer to allocate inventory as late as possible. Therefore they often import into their DCs, before sending it off to their clients' DCs (retailers, Amazon, jet.com etc.). This is costly in terms of handling and inventory costs (days on hand). We can skip the importers DC by dynamically allocating inventory while in transit, enabled by our SKU visibility.”

In the United States, Flexport is keen on rolling out more of these facilities, said Manders, with this California-based facility the first one on the U.S. shore. Flexport recently opened up a consolidation center in Hong Kong. These first facilities will serve as a blueprint for the later roll out, he said.

When asked what the biggest differences and competitive advantages of this news are from a Flexport perspective, Manders said that explaining to our customers that the company will be improving the service level of all consolidation products, especially LCL and Air.

“We already run a very high-quality LCL product compared to the market, currently active on 50 lanes, with close to zero holds in customs exams due to prescreening of all cargo and expedited transit times options for many port pairs,” he said. “This will only improve by taking control of the physical process that is prone to errors and delays and typically underinvested by the industry as it is seen as a cost center.”