- Amazon’s head of retail will become CEO of supply chain technology unicorn Flexport.
- Clark’s ambition and reputation will be good for Flexport, say his former colleagues.
- They also say that his background and personality might be an odd fit for the light asset startup.
Amazon consumer CEO Dave Clark’s decision to take over the reins at Flexport is a sign of the logistics startup’s need for growth. Several executives who worked on their teams at Amazon say Clark’s ambition and reputation will be good for Flexport — but that his experience and personality might be an odd fit for a dispatcher’s light asset model.
Clark – who spent 23 years at Amazon and built much of its extensive logistics business – will begin in September and will share the role with Flexport founder and current CEO Ryan Petersen until next year, when Petersen will transition from C. -suite for the executive chairman position.
“With Dave on board, in five years Flexport will be known as the best supply chain company in the world,” Petersen told CNBC Wednesday morning.
Flexport is already the biggest startup in the relatively fledgling supply chain technology space. The company has raised more than $2 billion in funding since 2013 and claims $3.3 billion in revenue last year — on track for $5 billion this year, according to Petersen. IPO rumors have been circulating for years and the company is profitable, according to Petersen.
Flexport also received investment from Amazon competitor Shopify, which participated in Flexport’s $935 million Series E round in February. But Petersen has yet to convince many industry players that his product lives up to its $8 billion valuation.
“I’m still not convinced that Flexport is not the WeWork of logistics,” a former Amazon logistics executive told Insider. But bringing in Clark as CEO “gives them a huge boost in credibility,” they said. “Dave is by no means full of shit.”
Clark is known as a tenacious operator who can quickly build large logistical networks. But the scale of his latest effort to increase Amazon’s warehousing and logistics capacity has led the company to admit to overexpansion and overstaffing and may have sunk his status at the company he helped shape. Clark denied this to Forbes and a Flexport spokesperson declined to comment for this report.
Clark hinted that one motivation for leaving Amazon was that he wanted to take over a newer company. “I had an amazing time at Amazon, but it’s time to build again,” he wrote on LinkedIn on Wednesday. The move almost certainly means a pay cut: Amazon paid Clark $56 million last year, and by stepping down, Clark is losing nearly $70 million worth of uninvested Amazon stock, according to annual shareholder meeting documents. from Amazon and Insider calculations.
A different kind of logistics giant
At Amazon, Clark was responsible for building an e-commerce logistics network that no retailer can rival and that stands out when compared to UPS and FedEx.
“What made him successful at Amazon is that he goes against the grain,” a former Amazon logistics executive said after the announcement of Clark’s departure.
Flexport is a logistics company, but it doesn’t have a physical network of warehouses, trucks and vans like Amazon does. Freight forwarders are the travel agents of the cargo world. Flexport creates the most logical worldwide path for cargo and handles issues that arise along the way.
Noting that Amazon didn’t start building its own network in earnest until around 2016, a former direct report from Clark said the Flexport job is a good fit. “Amazon was a light asset in logistics until it wasn’t. We leveraged a lot of people’s assets and capabilities until it reached the size and scale to build on our own,” they said.
Flexport vs. amazon
Flexport is sometimes considered competitive with Amazon, but Petersen rejected that notion on CNBC.
“We don’t see ourselves as anti-Amazon. We try to make it as easy as possible for companies that sell through Amazon to deliver their products to FBA,” he said, referring to Amazon’s e-commerce order fulfillment service. .
Flexport competes for the shipping costs of some Amazon sellers who can use Amazon shipping services. But most of Amazon’s logistics can be in warehousing, fulfillment and delivery, which Flexport doesn’t.
Others wonder if bringing in Clark is a sign that Flexport may have greater ambitions. “Clearly they have more ambition than I understand,” said a former direct report from Clark referring to the move, adding that they will need to pay more attention to Flexport now.
Petersen and Clark told Forbes that buying logistics assets could get in the way of Flexport’s goal of devaluing the market. And it would be a fundamental change for Flexport to start stacking warehouses and vehicles. “However, that’s the only thing Dave knows how to do,” said another former Amazon logistics executive.
Also perhaps strange to Clark, and inherent in an assetless logistics operation, is the need to maintain healthy partnerships. Global freight is a constant push and pull between carriers with capacity on ships, planes, trains and trucks and players who want their cargo to be top priority.
“I don’t know if he’s a great partnership builder. I’ve never been in a meeting with him where he’s talked about being a good partner for our vendors and suppliers,” said the same former executive. “It’s always a question of leverage.”