Due to the increased frequency of cargo moving between China and the U.S., the freight forwarder will first build warehouses in Hong Kong and Los Angeles for consolidation and rerouting purposes.
Freight forwarding startup Flexport will open a global network of warehouses that will serve as “fast-paced consolidation and deconsolidation points” for moving cargo between southern China and the U.S., the company said in a statement.
The first warehouses will be built in Hong Kong and Los Angeles due to the frequency of freight moving between the two cities.
Flexport CEO Ryan Petersen says the warehouses will help to keep rates low, as client cargo is consolidated into fewer shipments and rerouted when needed for reduced transit times and associated opportunity costs.
Rerouting cargo is a new feature for Flexport customers. Petersen explained the process in his recent blog post, saying, “When the container arrives at our facility in Los Angeles, our team will pull the rerouted pallet, relabel it, and arrange for delivery to the new destination while the remaining pallets continue on their original journey. At scale, this will allow companies to fulfill all of their client orders directly from the shipping container, dramatically reducing fulfillment time, the cost of delays and lost sales, and ultimately client inventory and working capital needs.”
Flexport currently has sales and service offices in San Francisco, Los Angeles, New York, Atlanta, Amsterdam, Shenzhen and Hong Kong. The company plans to develop a network of warehouses alongside these service offices.
Flexport to open global network of consolidation centers
