Is this remotely true though? Aren't the main costs of forwarding simply fuel?
At some point I was importing goods from China (really small volume though) and I did ask them for a quote, and they were twice the price what the Chinese factory could get me from their own forwarder.
There is a lot of administrative cost. IIRC, you might have something like 1 dispatcher for every 50 drivers. You have other people giving quotes via phone, decently high turnover for truck drivers, slow loading warehouses that cause a cascading effect when the driver can't complete all the stops planned for the day, and a strict limit on hours worked for truckers.
Some of the pandemic port congestion was truckers arriving at a port to pick up a particular load, but that load wasn't ready right then. Flexport has an app which basically let drivers on their platform arrive at a port, grab any container that's part of their platform, and take that to the destination. This prevented countless hours of idle trucks in ports.
Isn't it possible that tech simply overpromised, and that a couple of guys here and there smoking, typing numbers in spreadsheets on old computers, yelling over the phone and writing things down on post-it notes are simply cheaper and just as "efficient" as an army of AWS EC2 instances spilling out logs on S3 under the supervision of highly-paid engineers and dev op guys?
I think the pitch of flexport is what if we modernize the technology and make it more efficient by reducing or removing the need of all of these people managing the forwarding via excel.
That said, I can't really vouch for the soundness of this argument one way or another. It's been a long time since I worked there, and my primary interest when I did was more in understanding the industry at a conceptual level than in litigating the viability of the business model.
Another significant cost factor for a freight forwarder is IT integrations with customers and carriers--many of which are very old-school and use EDI, SOAP, or even CSV-over-FTP to communicate shipment instructions and statuses.
I'm not sure to what extent Flexport implements these kinds of integrations with their partners, but there is definitely a significant hurdle to breaking even on investment in this kind of automation vs. just hiring clerks to process everything manually with e-mails and phone calls, especially in countries with lower labor costs.
