Betsy Stewart

The idea for a company built around the concept of ‘logistics on demand’ started at a cocktail party. “I’m about to sign a lease for five years for 100,000 square feet of warehouse space that I don’t need.” Was it the set-up for a bad B2B joke? Not at all. What the speaker really needed was immediate space to ramp-up for the holiday season and possibly more to accommodate expected growth. “If you could just get me 20,000 square feet of warehouse space for three months, that would be excellent.” 

Karl Siebrecht was at this party and heard this conversation and along with two others, founded a company to address the need for more agile logistics. And so goes the origin story of Flexe, as shared by its CTO, Dave Glick. “Supply chain in the best of times is complex,” according to Glick. “Forecasting is hard.” And so at its core Flexe offers a solution: flexibility in time and space.

Historically, fixed logistics was the only game in town. Rent (on often too-long or too-costly terms) or expend capital to build. Even with the most precise inputs forecasting is nothing more than an educated guess. Market conditions change. Demand shifts. The ideal solution for inventory storage has to be more dynamic.

On-demand warehousing makes a lot of sense, doing for physical space what cloud providers did for data storage: use what you need, pay for what you use.

As we know, variations in warehouse capacity needs and inventory levels can be impacted by everything from global events to regional weather conditions. A shift in political climate, inflationary concerns, or skewed seasonality will upend the best laid logistics plan. Companies need to be able to pivot and respond in real-time. Consider holiday inventory planning. Many businesses start this process on January 2nd, with toy orders on the books by February. But demand can change, as it likely will this year. Where will the extra stock be stored? And for how long? Technology is a tool to improve operational efficiency and help cut costs. 

The pandemic promoted a shift that reimagined digital commerce. Alcohol delivery to your door? Live commerce? Buy-online-pickup-in-store? (Lululemon reports that 20% of their BOPIS customers buy an additional item once in the store.) The trend is always towards an easier and more flexible experience for the consumer. And that includes delivery timeframes. Amazon has set the expectation at two-day shipping. Will a consistent and cost-effective one-day bar soon be raised? To accommodate this likelihood, our eventual stuff needs to be nearer to us*. 

(*Side note: we've been keeping an eye on the “instant grocery” delivery providers, which have been trying to compress basic grocery delivery to less than 30 minutes. Companies like GoPuff, Gettir, and Gorillas [no relation to us] have raised billions collectively attempting to bring grocery and c-store products closer to consumers. To date, each and every one has struggled to scale and achieve profitability, with competitor Jokr already pulling out of the US market. We’ll see how this plays out, but there may well be a limit to how quickly fulfillment can be achieved within a viable business model.)   

Organizing inventory to best accommodate potential buyers makes sense. The capability to provide physical proximity between product and purchaser helps improve the delivery equation and the customer experience. If a business or brand determines a high percentage of orders are coming from Seattle, renting space near there makes sense. And what if the dominant order base shifts to Miami? Rent space in Florida. That transition is more complicated and expensive with non-adjustable and asset-heavy fixed logistics. 

Providing a complement to a fixed logistics network addresses many omnichannel needs – prioritizing warehouse placement, promoting next-level inventory management, perfecting fulfillment, and preparing transportation needs, to name a few. This enables businesses to improve delivery times by positioning inventory closer to customers, replenishing retail stock faster, and preparing for disruptions. Warehousing-as-a-service is the future. With all variable costs, lean into this technology-first strategy for modern logistics to decrease delivery times, deal with disruptions, and make data-driven decisions. Be more agile and adaptable with flexible logistics.

Explore this topic further and learn more about Flexe in a great conversation on omnichannel logistics with Dave Glick on the latest episode of Commerce Confidential.