Flexport’s founder, Ryan Petersen, has been on a clean-up campaign since the ousted co-CEO Dave Clark left the company. Petersen now claims that using AI-based GPT-4 has increased the company’s productivity by leaps and bounds. He claims that operator tasks, which used to take half an hour, are now only taking 20 seconds with a single prompt.
Not only is it saving time, but more importantly, money. This is a controversial matter for shippers, who asked the founder if it means the savings will be passed on to the customers. Petersen’s response on social media was blunt: “We call this ‘scale economies shared’ — automation is one of many forms of scale we can leverage to provide lower costs to our customers, which then drives still more scale economies in a never-ending virtuous cycle.”
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Cutting labor costs with artificial intelligence
Petersen says labor cost in coordinating freight is about 10% of the cost of international shipping. “AI will make almost everything you buy cheaper. A huge number of similar tasks in freight forwarding will be susceptible to similar AI-based automation. We plan to knock them all down one by one in the months ahead.”
Some raised their eyebrows at Petersen’s comment that the savings would trickle down to the consumer, with one person stating that “these savings won’t be passed onto the consumers. More money will bolster profits.”
Petersen is adamant that if Flexport doesn’t cut prices, “the competitors will”.
Response from business
Many businessmen applauded Petersen for his decision, while others asked critical questions. An X user (formerly known as Twitter) questioned whether there will still be control over the system, while Flexport is scaling to “auto pilot”. The user is concerned that artificial intelligence would simply “do things like it wants” without properly explaining the logic behind it. “What if it starts doing some things more inefficiently?”
Petersen says: “We get to see the decisions it makes. It seems to be better than us.”
Former CFO’s departure
Flexport CFO Kenny Wagers left the company last week. CNBC reports that Stuart Leung is expected to assume the role of CFO. He’s been at the company for seven years.
President and chief commercial officer Teresa Carlson as well as Jennifer Boden, vice president of people and employees experience, also left last month.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
