Global Shipping Demand is Declining

San Francisco-based logistics company Flexport has announced that it is laying off 20% of its global workforce, equivalent to around 700 employees, due to a slowdown in global trade. The company, which is a rapidly growing tech-enabled freight forwarder, said that more automated systems and reduced shipping volumes mean it has more employees than it needs. The company's co-CEOs, Dave Clark and Ryan Petersen, wrote in a memo posted on the company's website: "Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts through 2023. Lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, mean we are overstaffed in a variety of roles across the company.” Flexport said it will provide severance packages, which for U.S. employees includes 12 weeks’ pay, six months extended health care, a bonus payment and accelerated vesting in the employee ownership program. This news follows job cuts in the logistics and tech sectors in recent months, as companies such as C.H. Robinson, Amazon, and Salesforce have also had to cut jobs.