- Amazon's departing head of retail will become CEO of supply chain tech unicorn Flexport.
- Clark's ambition and reputation will be good for Flexport, his former colleagues say.
- They also say his experience and personality may be an awkward fit for the asset-light startup.
Amazon consumer CEO Dave Clark's decision to take the reins at Flexport is a sign of the logistics startup's need to grow. Multiple executives who worked on his teams at Amazon say Clark's ambition and reputation will be good for Flexport — but that his experience and personality may be an awkward fit for the asset-light model of a freight forwarder.
Clark — who spent 23 years at Amazon and built out much of its sprawling logistics footprint — will start in September and share the job with Flexport founder and current CEO Ryan Petersen until next year, when Petersen will transition out of the C-suite and into an executive chairman role.
"With Dave coming on board, in five years Flexport is going to be known hands down as the world's best supply chain company," Petersen said on CNBC Wednesday morning.
Flexport is already the biggest startup in the relatively nascent space of supply chain tech. It has raised more than $2 billion in funding since 2013 and claims $3.3 billion in revenue last year — on track for $5 billion this year according to Petersen. IPO rumors have been swirling for years and the company is profitable, according to Petersen.
Flexport has also received investment from Amazon competitor Shopify, which participated in Flexport's $935 million Series E round in February. But Petersen has yet to convince many industry players that his product lives up to its $8 billion valuation.
"I'm still not convinced Flexport isn't the WeWork of logistics," a former Amazon logistics executive told Insider. But bringing on Clark as CEO "gives them a massive boost in credibility," they said. "Dave is in no way full of shit."
Clark is known as a hard-nosed operator who can quickly build big logistics networks. But the scale of his most recent push to grow Amazon's warehousing and logistics capacity led the company to admit to overexpansion and over-staffing and may have ultimately sunk his status at the company he helped shape. Clark denied this to Forbes and a Flexport spokesperson declined to comment for this report.
Clark has implied that one motivation for leaving Amazon was that he wanted to take the helm at a newer company. "I've had an incredible time at Amazon, but it's time for me to build again," he wrote on LinkedIn on Wednesday. The switch almost certainly means a pay cut: Amazon paid Clark $56 million last year and by resigning, Clark is losing nearly $70 million in shares of unvested Amazon stock, according to documents from Amazon's annual shareholder meeting and Insider calculations.
A different kind of logistics giant
At Amazon, Clark was responsible for building out an e-commerce logistics network that no retailer can rival and that holds its own when compared to UPS and FedEx.
"What made him successful at Amazon is he bucks the system," said a former Amazon logistics executive after Clark's departure announcement.
Flexport is a logistics company, but it doesn't have a physical network of warehouses, trucks, and vans like Amazon. Freight forwarders are the travel agents of the cargo world. Flexport creates the most logical path across the world for cargo and deals with problems that arise along the way.
Noting that Amazon didn't start building its own network in earnest until around 2016, one former Clark direct report said the Flexport job is a good fit. "Amazon was asset light in logistics until it wasn't. We leveraged a lot of people's assets and capabilities until it reached the size and scale to build on our own," they said.
Flexport v. Amazon
Flexport has at times been referred to as competitive with Amazon, but Petersen rejected that notion on CNBC.
"We don't see ourselves as anti-Amazon at all. We try to make it as easy as possible for companies that sell through Amazon to get their goods delivered into FBA," he said, referring to Amazon's e-commerce order fulfillment service.
Flexport competes for the freight spend of some Amazon sellers who may use Amazon's freight services. But the bulk of Amazon's logistics might is in warehousing, fulfillment and delivery, which Flexport doesn't do.
Others wonder if bringing on Clark is a sign that Flexport may have grander ambitions. "Clearly they have more ambition than I understood," said a former Clark direct report referring to the move, adding that they will need to pay more attention to Flexport now.
Petersen and Clark told Forbes that buying logistics assets could get in the way of Flexport's aim to underprice the market. And it would be a fundamental shift for Flexport to start piling up warehouses and vehicles. "Yet that's the only thing Dave knows how to do," said another former Amazon logistics executive.
Also perhaps foreign to Clark, and inherent in an asset-light logistics operation, is the necessity to maintain healthy partnerships. Global freight is a constant push and pull between carriers with capacity on ships, planes, trains, and trucks and the players that want their cargo to be top priority.
"I don't know if he's a big partnership builder guy. I've never been in a meeting with him where he's talking about being a good partner to our vendors and suppliers," said the same former exec. "It's always about leverage."
Do you work for Flexport? Got a tip? Contact reporter Emma Cosgrove via the encrypted messaging app Signal (+1-862-294-3077) or email (firstname.lastname@example.org).