Flexport’s freight volumes are up 40% from a year ago while its headcount has grown 5%, founder and CEO Ryan Petersen told FreightWaves. He credits the gap to artificial intelligence tools the company now runs across customs, routing and its own engineering teams.
The AI has a limit in customs, the most regulated part of Flexport’s business. There, an AI-generated tariff code still has to pass a licensed broker before it can legally reach U.S. Customs and Border Protection.
“Our volumes are up 40% annually. And headcount’s only up 5%, so you can see the AI’s working,” Petersen said.
The interview followed Flexport’s fall technology release, which added an AI classification tool to its customs software and rail, barge and air routing to its free Flexport Atlas map. Time magazine named Flexport’s Customs Technology Suite to its Best Inventions of 2026 list on Oct. 15.
AI classification still needs a licensed broker
Classifying goods under the Harmonized Tariff Schedule is “the hardest problem in customs,” Petersen said. Flexport’s new tool suggests a 10-digit code and links the CBP rulings behind it.
Federal law limits who can do that work for someone else. In a Jan. 16 ruling, CBP found that a foreign online platform was conducting customs business when its AI tool derived tariff subheadings beyond the six-digit level for goods that would be entered. Under 19 U.S.C. 1641, only a licensed customs broker can conduct customs business on behalf of another party.
Any AI-suggested code a customer wants to use goes to a licensed customs broker on Flexport’s team, who reviews it by hand before filing. “It’s kind of like how AI meets the real world,” Petersen said.
AI models hallucinate often in customs work, he said, partly because CBP leaves its binding rulings on specific products posted after newer ones supersede them.
“They don’t delete the old one. They’re both there,” Petersen said. An AI model can cite the outdated ruling, he said, where an experienced broker would know to ignore it.
Flexport says audits found 20% error rate at rivals
In February, Flexport launched a free tool that lets any company audit its customs broker’s past entries. Petersen called it “probably the meanest thing we’ve ever built.”
Audits of entries filed by competing brokers found an average error rate of 20%, he said. He blamed the errors on 2025’s tariff churn.
Flexport’s own error rate on U.S. customs filings last year was 0.2%, which Petersen put at about 100 times better.
That comparison has grown since February, when Petersen estimated the 0.2% rate was a 100X improvement over any other broker. Flexport’s release said that estimate was “based on what we know of other customs brokers.”
A tariff database has to be updated regularly by experts who follow rule changes, Petersen said. Flexport offers its tariff simulator free to the public and builds the same data into the workflow its brokers use to clear entries.
At some point, Petersen said, an importer that isn’t using Flexport’s tariff technology is close to negligent.
AI writes code for customer rules
Flexport also keeps AI from acting alone on customer rules. Logistics customers set their own delivery rules, Petersen said, such as notice 10 days ahead for one warehouse and three days ahead for another.
Petersen called the rules “a spaghetti web of business logic.” Customers are valuable enough that a forwarder follows whatever rules they set, he said.
AI alone can’t be trusted to follow those rules consistently, he said. “If it misses, the misses are worth too much.”
So Flexport has AI write code for those rules. Once an expert signs off, the code runs the same way every time.
Petersen ties ocean demand to tariff refunds
Flexport’s ocean peak started early this year, Petersen said: “Basically since April, we’ve been just ripping.”
Flexport first read the surge as an early peak season, Petersen said. Customers are still booking cargo that won’t arrive before Christmas, so he now counts it as growth.
Petersen has a theory for the demand that he said he hasn’t seen written anywhere: tariff refunds. The Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act in February. As of Oct. 2, CBP had sent about $126 billion in refunds to the Treasury Department for disbursement, Supply Chain Dive reported, citing a court filing.
Petersen called the refunds a “massive stimulus for the industry” that companies hadn’t planned for.
Customers have told him they plan to spend the money on more inventory, he said, and many have been short on capital for a long time.
“Most lottery winners go bankrupt,” Petersen said he tells customers. “Don’t go crazy buying inventory.”
Supply matters too, Petersen said. Only 10 or 11 ocean carriers remain, and they have gotten better at controlling capacity by slowing ships and canceling sailings.
Freightos’ Oct. 20 weekly update put Asia-U.S. West Coast rates at $8,126 per 40-foot container and East Coast rates at $9,700, calling trans-Pacific prices “stable but still highly elevated” even as volumes are expected to cool. FreightWaves noted in September that those rates remain well below their 2021 highs.
Data center cargo fills air freight
On ocean freight, Petersen said he makes “zero market predictions.” He is watching air freight, where he estimated that data center cargo, from chips and server racks to construction materials, accounts for around 8% of global capacity. He said it is projected to triple next year, and lanes from Taiwan and Southeast Asia to the U.S. will be “really constrained.”
An air freight expert at Flexport’s conference put the number of full freighters flying from Taiwan to the U.S. just for data centers at 30 a day, Petersen said.
A single freighter can carry cargo worth as much as $500 million when it is all GPUs and server racks, he said. Waiting 30 days for an ocean crossing would add interest on that cargo and delay revenue from the finished data center.
That cargo will move by air “probably forever,” he said.
The data center surge has moved air rates less than Petersen expected. New capacity is part of the reason, he said: Middle Eastern airlines are returning planes to service and have bought more cargo aircraft.
Smaller teams, bigger AI budgets
AI is also changing how Flexport organizes engineers. The company is weighing teams of two or three engineers, down from a standard of eight, Petersen said. Atlas started as a one-engineer project, he said.
Companies worried about what AI tokens cost should spend more, Petersen said, since he estimates the tools make an engineer seven times more efficient.
Flexport has held two large technology releases a year for the past two years, and the fall release was its fourth on that schedule. Petersen said the company may move to three or four releases in 2027 because of how fast its teams are building.
He is not worried that AI model makers will move into freight.
“The frontier companies are not going to become a logistics provider,” Petersen said. “We just have to be super aggressive in using them to make our business amazing, keep adding new products, extending what we do.”
Why it matters: Flexport credits AI for 40% volume growth on 5% more staff. In customs, its AI still routes through licensed brokers, as CBP rules require, and the 20% error rate it cites for competitors comes from its own audits.
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