Shared truckload service provider Flock Freight is laying off 54 employees, marking another company in the freight tech space seeing cuts to staff.
Flock Freight is a certified B Corporation that leverages software to pool less-than-truckload (LTL) shipments into one full truckload in an effort to transport goods via truck more efficiently. By using probability pricing algorithms, the company can pool freight from multiple shippers that are all heading in the same direction.
The company’s technology is built so trucking companies can skip transshipment hubs, where goods are unloaded from one truck at an intermediate destination before being loaded to another. The software provider says its solutions can reduce carbon emissions by up to 40 percent compared to traditional shipping methods.
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Like many players in freight tech over the past year, Flock Freight cut employees in a market that simply hasn’t been favorable from a revenue standpoint as a freight recession where trucking capacity still exceeds demand lingers across logistics.
Flock Freight, which laid off 45 people in April 2023, joins other companies in the field experiencing job cuts, including digital freight forwarder Flexport, defunct digital trucking marketplace Convoy, shared warehousing solutions provider Flexe and supply chain visibility companies like Project44 and FourKites.
Flock Freight confirmed to Sourcing Journal that the majority of employees impacted are back office employees.
“While separating from teammates is painful, these actions will aid Flock in achieving profitability over the near term,” said a Flock Freight representative. “Flock is backed by some of the world’s largest, most sophisticated investors and we appreciate their continued support.”
According to a report from FreightWaves, Flock Freight co-founder and CEO Oren Zaslansky told the publication that the company’s profitability path now “can be measured in months, not years.”
In October 2021, Flock Freight raised $215 million in a Series D round, valuing the company at $1.3 billion and capping off a total $399 million in funding. The software provider hasn’t generated outside funding in the time since, as venture funding dried up in a high-interest rate economic environment.
According to Pitchbook, venture capital funding into supply chain technology in 2023 totaled $10.5 billion, down 66 percent from the $31.2 billion in capital deployed through 2022.
In a statement, the Flock Freight spokesperson cited the need for greater operating efficiency across the business, highlighting the company’s core product, Flock Direct.
CMA CGM: no imminent staff reductions
While Flock Freight feels the pressures of many of its freight tech brethren, one of the biggest global logistics titans doesn’t plan on reducing headcount any time soon.
Container shipping giant CMA CGM said it will commit to no job cuts for a full year after the recent finalization of its $5.3 billion acquisition of Bolloré Logistics. Layoffs sometimes follow major takeovers like this as acquiring companies seek to eliminate redundant positions and cut costs, particularly if there is an overlap of geographies and business verticals.
The commitment comes even after the ocean carrier saw fourth-quarter revenue dip 37 percent year-over-year to $10.6 billion on losses of roughly $90 million.
Already with 155,000 employees of its own, CMA CGM will be taking on roughly 15,000 workers. According to a Loadstar report, the French container shipping firm will also maintain all the benefits of the combined staff for at least three years.
Sourcing Journal reached out to CMA CGM.
Ceva Logistics CEO Mathieu Friedberg, who also serves as the executive vice president of logistics for CMA CGM Group, will head Bolloré Logistics. The Bolloré Logistics name is expected to be retained during a transitory period, but will be absorbed into the Ceva Logistics brand.
CMA CGM’s commitment to maintain its employee base counters that of one of its chief competitors, Maersk, which has been in the process of cutting 10,000 employees since the beginning of 2023. With all the cuts in place, Maersk aims to get its total workforce down to roughly 100,000 employees.
Like CMA CGM, Maersk had a rough fourth quarter, incurring a massive net loss of $456 million on a 34 percent decline in revenue to $11.7 billion.
Both companies have felt the impacts of the freight recession on the ocean over the past few years, as spot rates collapsed from late 2021-early 2022 highs amid the weakened demand. Combined with multiple acquisitions made by each company to expand beyond their core competency of ocean freight, both carriers are likely to cut costs to return to profitability.
