Compared to trucking carriers, freight brokerages can avoid shutdowns even during nasty freight recessions.
But, since new capacity flooded the trucking industry and consumers stopped buying as much stuff, third-party logistics companies have seen an unusual threat to their business operations. We’re now seeing big layoffs and company shutdowns.
“Typically, freight brokerages manage revenue volatility through flexible operating expenses: Computers and chairs don’t cost much, and incentive-based compensation grows and contracts with market cycles,” FreightWaves strategic analyst John Paul Hampstead wrote in July. “That’s why hiring sprees and layoffs at freight brokerages are relatively common, but outright failures are relatively rare.”
A freight broker is the intermediary between a carrier (or transportation provider, like a truck driver) and a shipper (whoever is trying to move goods, like a retailer or manufacturer). There are also freight forwarders, who are more exposed to international shipments and the customs involved.
Here are the biggest freight broker layoffs in 2023 so far. You can see a list of freight broker layoffs in 2022 here and a list of all layoffs and shutdowns in the freight industry here.
Jan. 11: Flexport, approximately 20% of workforce
The co-CEOs of Flexport, a San Francisco-based freight forwarder, published a memo on Jan. 11, saying the company was reducing its workforce by around 20%.
Increasingly automated systems along with lower freight volumes meant the company would need fewer employees than in previous years. As executives Dave Clark and Ryan Petersen wrote in the memo:
“We are overall in a good position but are not immune to the macroeconomic downturn that has impacted businesses around the world. 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, means we are overstaffed in a variety of roles across the company.”
Clark announced on Sept. 6 he was leaving Flexport; the board fired him, as FreightWaves first reported. Petersen is the sole CEO of Flexport.
Flexport has raised some $2.4 billion in funding since its founding in 2013.
Jan. 23: Uber Freight, approximately 3% of workforce
FreightWaves’ John Kingston first reported on Jan. 23 that Uber Freight, the Chicago-based freight brokerage arm of ride-sharing giant Uber, would cut about 150 jobs from its digital brokerage division. That’s 3% of Uber Freight’s total workforce.
“As you know, the logistics market is currently facing a number of headwinds, which has impacted our customer base as well as the overall industry,” CEO Lior Ron said in a memo to the staff obtained by FreightWaves. “We accelerated hiring last year within certain areas of our brokerage business, planning for a different economic reality, but the volumes did not materialize as expected.”
An Uber Freight spokesperson noted the issue of oversupply of transportation capacity in an emailed statement to FreightWaves on Feb. 23.
“Volatility is a given in our industry,” the spokesperson wrote. “In stark contrast to last year when demand was surging, today the market is oversupplied and shippers are looking to rationalize their logistics spend. These dramatic changes in the market capture why it’s so critical to have the right partners and technology in place.”
Uber Freight was established in 2017.
Feb. 16: Convoy, undisclosed number affected
Convoy co-founder and CEO Dan Lewis wrote in a Feb. 16 LinkedIn post that the company was restructuring and would eliminate an undisclosed number of roles. It would also shutter its Atlanta office.
Lewis wrote that the company’s increasingly automated freight brokerage process changed its staffing needs. A company spokesperson declined to comment further on this layoff at the time.
Founded in 2015, Convoy has attracted investments from Amazon founder Jeff Bezos, Salesforce founder and CEO Marc Benioff, and Microsoft co-founder Bill Gates. The company was valued at $3.8 billion last year, when it raised $260 million in a Series E funding round.
Convoy ultimately shut down operations on Oct. 19. The company had been based in Seattle.
April 10: Flock Freight, 45 employees
Flock Freight laid off 45 people, or 8% of its workforce, as FreightWaves’ Clarissa Hawes first reported on April 23. Flock Freight is a provider of shared truckload solutions and does not describe itself as a brokerage, though it does provide third-party logistics services.
Oren Zaslansky, CEO and co-founder of Flock Freight, which is valued at over $1.3 billion, told FreightWaves in April that the layoff decision “was deliberate and required us to create leaner teams.”
“After conducting an audit of our sales, tech and customer success teams, it was determined that a reorg was necessary and would add significant efficiencies across the company,” Zaslansky said in a statement to FreightWaves. “Flock is in the best financial health we’ve ever been in after seeing record highs in margin and acquisition in Q1, and we remain committed to building an even stronger, more sustainable supply chain by fundamentally changing the way freight moves in this country.”
Flock Freight was founded in 2015 and has raised more than $399 million in venture funding. It’s based in Encinitas, California.
May 9: Lipsey Logistics, undisclosed number
Chattanooga, Tennessee-based Lipsey Logistics laid off an undisclosed number of employees, as FreightWaves’ Hawes reported in a May 9 article.
A source familiar with the layoffs previously told FreightWaves an estimated 20 jobs were cut.
“We have taken [the] initiative for restructuring, controlling cost and mainstreaming efficiencies, which included a reduction of our workforce,” Kendal Helms, vice president of human resources for Lipsey Logistics, said in a statement to FreightWaves in May.
“The reduction in force was based on business necessity, and our initiatives kept the loss of employees minimal in comparison to other companies in our industry,” Helms added.
Lipsey was founded in 2007. Per LinkedIn, the company employs around 120 people.
May 19: Coyote Logistics, an undisclosed number
Coyote laid off an undisclosed number of employees. FreightWaves reported at the time:
In a memo sent to affected staffers Friday and acquired by FreightWaves, Coyote’s human resources department attributed the cuts to months of truckload rate deflation, adding: “To maintain our business health and performance, we must make strategic decisions that position us for long-term success. This includes optimizing our organizational structures and workforce, which brought us to this difficult decision.”
June 28: Transplus, bankruptcy
It’s unclear how many employees worked at Transplus, a Hernando, Mississippi-based logistics company, when it filed for bankruptcy in June.
However, as FreightWaves’ Hawes reported, more than 60 small trucking companies were owed millions of dollars. They moved loads for the brokerage and had not received payment for that work.
July 11: Freightos, 13% of employees
Freightos (NASDAQ: CRGO) announced on July 11 it would lay off 13% of its employees, as FreightWaves’ Eric Kulisch reported. Freightos is a digital marketplace for international air and ocean freight.
The Jerusalem-based company had to cut back its revenue projections for 2023. Last summer, management expected it would book $26.6 million in revenue this year. In July, it cut that projection to between $20 million and $21.2 million. As of its most recent earnings report on Nov. 21, Freightos’ current revenue project for 2023 is $20.1 million to $20.3 million.
“Despite challenging market conditions, our successful push for industry adoption of digitization has resulted in strong continued growth in total transactions and growing revenue on our Freightos platform,” CEO Zvi Schreiber said. “However, given the persistently weak market conditions, we are refining our priorities to deliver on our plan to reach profitability with the capital already raised. This includes efficiency measures that should keep us on the path to long-term, sustainable growth.”
Freightos went public in January. It was established in 2011.
July 24: Surge Transportation, bankruptcy
Digital freight brokerage Surge Transportation filed for bankruptcy on July 24, as FreightWaves’ Hampstead first reported the following day.
2023 was a more severe downturn than expected. Surge booked $135 million in gross revenues during one period in 2023, according to its bankruptcy filing. That same period last year, Surge posted $200 million.
FreightWaves previously reported that Surge, at one point, employed more than 100 people.
Surge was founded in 2016 and based in Jacksonville, Florida.
Sept. 1: Coyote Logistics, undisclosed number
Late in the summer, Coyote Logistics once again laid off an unspecified number of employees, as FreightWaves first reported.
“We’re reducing the size of our staff, primarily within corporate services, to improve efficiency and better meet evolving business needs,” a Coyote spokesperson told FreightWaves at the time. “Our people are extremely important to us. These changes are difficult but necessary to make our company more agile and better positioned for the future.”
According to LinkedIn data at the time, Coyote’s total head count was down 7% over the past two years and down 2% over the past six months.
Oct. 13: Flexport, 600 employees
Following internal drama that resulted in the unexpected firing of CEO Dave Clark, Flexport told staff on Oct. 13 it would lay off 600 workers, FreightWaves’ Kulisch reported.
Ryan Petersen, Flexport’s founder, took over the CEO role in Clark’s departure. He seemed keen on slashing programs and costs, particularly in domestic transportation, that Clark had implemented during his tenure at the company.
“Petersen has characterized his return as CEO as one of righting a ship taking on red ink because of excess spending,” Kulisch wrote. “He is focusing on driving growth in the core forwarding business through more focus on customer service and driving down costs.”
Oct. 19: Convoy, shutdown
Convoy told employees on Oct. 19 that the company was shutting down, as FreightWaves’ John Kingston reported. Some 550 employees worked at the company at the time, and all but a small team were laid off.
Convoy had more than 1,000 employees at its peak. Just 18 months ago, during the startup’s last fundraising, Convoy was valued at $3.8 billion.
On Nov. 1, Flexport told employees that it was acquiring Convoy’s entire technology stack.
The acquisition would move that small team of Convoy employees to Flexport. Flexport would not take on Convoy as a company or its liabilities.
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The post The biggest freight brokerage layoffs and bankruptcies in 2023 appeared first on FreightWaves.
