Flexe adds fulfillment services to on-demand warehouse model

Logistics software startup Flexe Inc. is adding case- and each-level handling and basic fulfillment services to its pallet-level on-demand warehousing model, the company said yesterday at the Georgia Logistics Summit in Atlanta. Flexe says it is making the move in order to meet rising demand from retail e-commerce companies.

Seattle-based Flexe was founded in 2013 to provide an alternative to the traditional long-term leases and contracts required by most warehouses to store goods. Flexe, which operates no real estate assets, uses its software to match DCs that have excess capacity with firms needing short-term space.

The service was originally designed for pallet-in, pallet-out storage. Now the company is extending that platform to include the more complex business of handling cases, eaches, and basic fulfillment services, Flexe CEO Karl Siebrecht said in a phone interview.

"Our clients who are using this are retail e-commerce companies that are growing pretty aggressively," Siebrecht said. "If you're a large company, there are a lot of 3PLs that will compete for your business, but if you're not that large it can be harder."

In the second half of 2015, Flexe saw increasing requests from companies that wanted to quickly add DCs to their e-commerce distribution networks in order to reach more consumers with overnight shipping.

"They are trying to keep up with the changes that Amazon is driving, training consumers to expect all deliveries within two days or less and at a low cost," Siebrecht said. "There are companies that are really struggling with that, and we can help a lot."

Flexe's new case and each handling capability will be confined to clients with limited SKU counts and minimal order complexity, Siebrecht said. "The simplest scenario is pallet in, pallet out. Now we've moved into fulfillment, but we're focused on the lower end of complexity," he said. "If someone has a list of thousands of SKUs and high order complexity, they would most likely need a customized fulfillment solution in the warehouse."

Despite that constraint, the new pop-up fulfillment service can also be useful for larger companies that want to expand a portion of their portfolio, he said.

Some Flexe customers need to expand their short-term warehouse capacity to support a seasonal demand surge or a product promotional peak. For example, a large retailer might specify a subset of its full SKU list for expanded warehouse space to stock a larger quantity of backpacks for a back-to-school promotion.

"They want to pop up new fulfillment nodes with low fixed cost and low commitment," said Siebrecht. "They can dial it up, then dial it down."