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After years of chaos in the global supply chain, Ryan Petersen, CEO of the logistics company Flexport, felt 2026 might offer some modicum of order. The pandemic was firmly in the rearview mirror. Red Sea shipping channels\u2014which had been closed due to the Gaza crisis\u2014were finally opening. The Supreme Court struck down many of Donald Trump\u2019s tariffs, and some Flexport customers were hoping for refunds. Petersen could finally concentrate on what he had identified as the company\u2019s major push of the year\u2014embracing the latest AI technologies to make Flexport run more efficiently.<\/p>\n
Then the United States and Israel went to war with Iran. Chaos is back, and it\u2019s going to cost us all.<\/p>\n
I spoke with Petersen this week to get a sense of how bad things are in the global supply chain\u2014and what this means for Flexport\u2019s business.<\/p>\n
While the Iran war will wreak havoc on Flexport\u2019s customers, it\u2019s also an opportunity for the company to prove its worth. After all, its business is built on routing and tracking goods with cloud technology, improvising when necessary to get stuff to its destination. Those are necessary skills when the Strait of Hormuz is perilous\u2014several ships were attacked there this week\u2014and major Middle East ports are under fire.<\/p>\n
Port countries like Kuwait, Qatar, and the United Arab Emirates are central hubs for goods in transit. One large shipping company told Petersen that it won\u2019t load containers on ships routed through some of the major ports of the Middle East. If a voyage is underway, the container must be dropped off at the next port of call. \u201cNow you as an importer or a company that\u2019s shipping cargo suddenly have a container in France or Tangier, and it\u2019s on you to figure out what to do about this,\u201d says Petersen. Doing nothing means that the cargo racks up higher and higher storage fees. All those costs ultimately get passed on to consumers.<\/p>\n
Petersen tells me that only recently did major shipping companies resume moving cargo through the Red Sea, which had been deemed a hazard due to Houthi attacks. Now that\u2019s come to a standstill because of the war. The alternative route has been a long detour around Africa. \u201cIt drives up the price quite a bit, because a voyage costs more, but more importantly, it reduces supply: Ships do fewer voyages per year,\u201d says Petersen. \u201cThere was a lot of hope that returning through the Red Sea would increase capacity in the market and reduce prices, but now that\u2019s off the table.\u201d<\/p>\n
Petersen visualizes the situation for me by firing up a product called Atlas, which tracks the movement of container vessels in real time. Coincidentally, Flexport launched Atlas two days before the war began. Petersen cautioned me that not all the positions are accurate, because many companies have turned off their vessels\u2019 transponders\u2014or even used high-tech methods to spoof their locations to avoid attacks. Still, it\u2019s obvious that traffic in the Middle East is moribund. Petersen waves his cursor over a cluster of ships congregating around the UAE port Jebel Ali, which is near the Strait of Hormuz. It looks like the traffic jam at the beginning of La La Land<\/em>. \u201cThese ships have been stagnant in this area,\u201d he says. \u201cYou wouldn\u2019t normally see so many clustered here.\u201d<\/p>\n That\u2019s not the worst of it, he adds. Flexport isn\u2019t heavily involved in the oil trade, but Petersen thinks that energy shortages will have a bigger negative impact than whatever is in those containers stuck in Tangier. \u201cThe US is self-sufficient, but globally there\u2019s not enough oil to go around\u2014you\u2019re gonna have shortages, and then you will see a crazy parabolic rise in the price.\u201d<\/p>\n Petersen is not terribly optimistic about what happens to the supply chain if the war goes on. \u201cThey need to get this solved,\u201d he says. \u201cBesides oil, the thing I\u2019m really worried about is inflation.\u201d Petersen notes that the president has said the US might insure all ships going through the strait, costing possibly hundreds of billions of dollars. Also, he says, \u201cwe have to print more money to cover these tariff bills, as we have to refund $175 billion.\u201d (Petersen believes there\u2019s a 99 percent chance the US refunds that money to importers. But not to the consumers who paid more for goods.)<\/p>\n Petersen of course is committed to helping his customers through the mess. But what frustrates him is how the crisis pulls him away from his AI strategy goals. One of the things that Flexport does for customers is provide customs brokerage, handling the complicated documentation required to move goods internationally. Flexport previously had an automated system that filled out the paperwork with around a 5 percent error rate, after which a compliance team double-checked the documents, lowering the error rate to 1.8 percent. Last November, Flexport began using a cutting-edge \u201cAI auditor.\u201d The error rate dropped to 0.2 percent. \u201cWe had this wake-up call,\u201d he says. \u201cIt\u2019s like, wait, it\u2019s not that AI is cheaper\u2014it\u2019s just way better.\u201d<\/p>\n Petersen himself has become somewhat of an AI nut. \u201cI just want to spend all day building tech and applying AI, and end up neglecting other things that matter, like my wife and kids. But now I\u2019m getting pulled into other stuff,\u201d he says. Like a broken supply chain. The looming threat of high inflation. And maybe an endless war. I\u2019d rather vibe code, too.<\/p>\n","protected":false},"excerpt":{"rendered":" Save StorySave this storySave StorySave this story After years of chaos in the global supply chain, Ryan Petersen, CEO of the logistics company Flexport, felt 2026 might offer some modicum of order. The pandemic was firmly in the rearview mirror. Red Sea shipping channels\u2014which had been closed due to the Gaza crisis\u2014were finally opening. The […]<\/p>\n","protected":false},"author":1,"featured_media":47520,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-47519","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/47519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=47519"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/47519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/47520"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=47519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=47519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=47519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}