Hi folks, itâs Brad in San Francisco. Silicon Valley is transfixed by the drama at the once high-flying logistics startup Flexport. But firs [View in browser](
[Bloomberg](
Hi folks, itâs Brad in San Francisco. Silicon Valley is transfixed by the drama at the once high-flying logistics startup Flexport. But first⦠Three things you need to know today: ⢠[Hereâs everything Apple plans]( to show Tuesday
⢠Illinois used incentives to [get a Chinese battery plant](
⢠Intel eyes its [longest stock rally since 2005]( Be very a-freight San Francisco-based Flexport was founded in 2013 to bring order to the fragmented global supply chain. Its software allows companies to route cargo from manufacturers and onto container ships, planes, trains or trucks and to save money by doing it all efficiently and fast. âOptimizing supply chainsâ isnât typically the stuff of internet fame, yet the tech press covered Flexport closely, and founder Ryan Petersen was [on the cover of Forbes](. Thatâs partly because prominent venture capital firms like Andreessen Horowitz, Founders Fund and SoftBank piled into the startup, lifting its valuation to $8 billion last year, and partly because Petersen himself is a charismatic spokesperson with a knack for commanding attention [on Twitter]( (now X) and in the media. During the supply chain crisis in fall 2021, for example, Petersen chartered a boat at the Port of Long Beach [and tweeted about the backup]( of ships offshore. In June 2022, Petersen poached former Amazon.com Inc. logistics czar Dave Clark, one of the tech giantâs highest profile execs, to take over as chief executive officer. It seemed like another reason to pay close attention. But on Wednesday, Clark said he was [resigning]( and that Petersen was returning as CEO. Then the cover really seemed to fly off the shipping container, so to speak. Petersen [posted a memo to employees]( bragging of a âfortress balance sheetâ (usually the thing you say before calamity) and stressing the need for a âreturn to profitability.â There were news stories about a [personality clash]( between the two execs, and Clark gave an interview to The Information saying he [was effectively fired]( while hinting he might [run for governor of Texas]( in 2026. Several other Amazon execs who had followed Clark to Flexport were also let go. And on Friday, Petersen announced he was [rescinding offer letters]( to recently hired employees and [subleasing office space](. I profiled Clark for my last book, Amazon Unbound. Nicknamed â[The Sniper](,â Clark was known as a methodical and demanding builder who battled unions, didnât suffer underachieving employees and was responsible for stepping on the throats of partners like United Parcel Service Inc. and FedEx Corp. when they couldnât fulfill Amazonâs rising needs. When he left Amazon, there was grudging admiration but not a lot of warm and fuzzy testimonials among his former colleagues. So itâs possible Clark wasnât the best fit at Flexport. Yet thereâs also a much simpler solution for its deepening problems. In its core business of freight â the transport of bulk goods on ships and the like â the company earns fees based on the prices of goods it ships and stores. And hereâs an illustration of what has happened to the cost of freight since the pandemic ended: Flexportâs business, to express this another way, is closely tethered to a commodity â one thatâs cratered since the pandemic ended, people returned to shopping in stores and rising interest rates dampened consumer demand. Thatâs changed the entire outlook for Flexport. The company commanded 0.46% of total US seaborne imports at the start of the pandemic in January 2020 and peaked under Clark at 1.15% this February, according to data from S&P Global Market Intelligence Panjiva. Since then, its market share has headed downward, to 1.06% in August. When capacity was scarce during Covid, Flexport was printing money. With shipping terminals now full of empty containers and the price to ship falling, thereâs not as much need for small internet businesses to save money by using Flexportâs services. Freight prices donât seem to be rebounding anytime soon, either. Thereâs another layer to this. While at Flexport, Clark acquired a logistics company, Deliverr, from Shopify Inc., part of an effort to bring Flexport into home delivery. The Flexport board had hired Clark to think big, so why stop at shipping cargo to warehouses when you can bring goods right to peopleâs doorsteps? But then the pandemic ended, e-commerce sales plateaued and Flexportâs revenue â propping up that $8 billion valuation set during the boom â started to fall. With that set of pungent facts at hand, Flexport apparently decided it had to return to profitability, fast. âThey have to get lean quickly,â said Rick Watson, an e-commerce strategy consultant whose [two]( [posts]( on the situation at Flexport are must-reads. âBut you start putting constraints on someone like Dave Clark, and heâs like, What the hell, this isnât what I signed up for.â The same pandemic hangover is affecting retail companies everywhere, from [Instacart Inc.](mailto: to Amazon, which lost 51%of its market value in 2022, and Target, down 30% this year. At Flexport, the reckoning has just been a little more entertaining to watch. â[Brad Stone](mailto:bstone12@bloomberg.net), with Brendan Murray The big story An iPhone was hacked remotely using software made by Israelâs NSO Group. Apple moved quickly to [patch the vulnerability last week](. One to watch
[Watch the Bloomberg Technology TV interview]( with Garry Tan, CEO of Y Combinator. Get fully charged Nvidia will partner with Indiaâs Tata and Reliance on [AI development](. Epic Gamesâ chief creative officer will [retire after seven years]( in the role. Alibaba put an IPO of its grocery chain on the back burner after [disappointing results for consumer stocks](. Jack Maâs Ant Group unveiled AI language models for [wealth management and insurance](. Apple shares may struggle as business risks from China mount, [JPMorgan said](. VC data firm CB Insights is weighing a potential sale that [could value the company at $800 million](. More from Bloomberg Get Bloomberg Tech newsletters in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage
- [Game On]( for reporting on the video game business
- [Power On]( for Apple scoops, consumer tech news and more
- [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley
- [Soundbite]( for reporting on podcasting, the music industry and audio trends
- [Hyperdrive]( for expert insight into the future of cars Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
[Unsubscribe](
[Bloomberg.com](
[Contact Us]( Bloomberg L.P.
731 Lexington Avenue,
New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](