Ryan Petersen, chief executive officer of the tech-focused freight company Flexport Inc., hasn’t shied away from criticizing the Trump administration’s trade war.
In late April, Petersen traveled to Washington, D.C., to give Trump officials and Republican lawmakers his two cents on tariffs.
His message, delivered to those with whom he rubbed shoulders at the Hill and Valley Forum, was straightforward. It won’t be thousands, but “millions,” of small businesses that will get wiped out because of Trump’s tariffs, he told them.
Petersen attended the forum — a consortium of U.S. lawmakers and venture capitalists that first convened in 2023 to combat China’s influence in the U.S. technology industry — to convey his viewpoint that Trump’s crippling 145% tariffs on Chinese imports into the U.S., and Beijing’s 125% duties on U.S. goods flowing into China, were unsustainable.
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He pointed to reports for incoming cargo in the twin-ports complex in Los Angeles and Long Beach that are projected to fall by 35% through the year.
Still, Petersen, who launched his San Francisco-based company in 2013, wonders if ratcheting down the tariffs now is too late. “I think a lot of companies will fail if this goes on longer,” he said. “Certainly, if this went on for a quarter, you’d have mass failure of small and medium-sized businesses.”
Flexport is a freight middleman. It buys space on ships, planes and trucks, earning money on the spread between its costs and the rates it charges customers. As a middleman in the global supply chain, Flexport then charges a markup for making the space available to companies who then book the ride. Their freight forwarding model is asset-light — except for three freight planes and five fulfillment warehouses — with Flexport not owning the transportation infrastructure, but instead leveraging relationships with carriers and its technology platform to create value.
Since its inception, more than 13,000 companies of all sizes — from emerging brands to Fortune 500s — have used Flexport’s logistics and technology to move more than $175 billion in merchandise, according to a statement from the company. Flexport doesn’t share the dollar-value of merchandise moved annually, but it is fair to say “billions of dollars” were moved in 2024, a company spokeswoman said.
Petersen said that Flexport, which put off any plans to go public this year, has raised more than $2.6 billion in funding from venture capitalists over the past dozen years, helping the privately held company reach a peak valuation of $8 billion in 2022.
In January, Flexport raised $260 million from e-commerce provider Shopify, a move that came after Flexport acquired Shopify’s Logistics operations in 2023 in a deal that included fulfillment provider Deliverr and a dozen warehouses. The acquisition helped the company expand into e-commerce fulfillment and last-mile delivery. The company also owns three Boeing-built 747-400F aircraft to move products, flying planes out of Beijing and elsewhere.
Since the Shopify deal, Flexport has exited third-party warehouses and consolidated fulfillment operations into five Flexport-owned facilities in Atlanta, Chicago, Dallas, Phillipsburg, New Jersey and San Bernardino, its busiest warehouse with over 200 workers and more than 1.1 million square-feet of space next to the San Bernardino International Airport. The warehouse is about three-quarters full.
We asked Petersen about his approach to tariffs and how he has positioned his company for growth. His answers have been edited for clarity and length.
Q: Are bookings down to ship goods from China to the U.S.?
A: Bookings are down 60%. It’ll take a few weeks before that hits the ports complex in Long Beach and Los Angeles. Now, that’s container volume.
What also is going to happen is that the number of container ships sailing from China to the U.S. is going to go down by nearly a quarter — possibly higher.
This started three weeks ago. So that’s already starting to happen.
Q: With roughly 34.8 million small businesses in the U.S., what impact are tariffs having on the economy?
A: Our nation buys $440 billion worth of goods from China, according to the U.S. Trade Representative, and if bookings decline by 60% on ocean freight, that’s just a massive impact. That’s over a $1 trillion dollars of economic activity that’s going to just be wiped out overnight.
So yeah, I would expect large scale failures of e-commerce businesses especially, but also companies that are buying from China.
Q: Are you starting to see inflation rear its head?
A: Yeah, we are definitely seeing our customers raise prices in response to the tariffs, passing that price through to the customers.
The most famous example is Amazon threatening to put the import duties on the checkout page, and then Trump got really [upset] at them, and they backed off on that. This is a pretty common phenomenon right now. Even if people are not displaying the import duties, they are adding them to the price of everything. This is especially true in e-commerce right now. Many companies have already started to raise prices.
That’s the ultimate problem in all this.
Q: Are the 145% tariffs imposed on China imports into the U.S. unsustainable?
A: Yes, I think if the U.S. tries to impose them permanently, they’re going to find out very quickly that the feedback mechanisms from the market will tell the administration that they must change course. And that’s kind of what happened when they had their original tariffs in place. The market tanked, and the bond market tanked, and then a couple days later, the administration reversed course.
I think if they persist on the China side for long enough, the impact of the tariffs will flow through to the real economy, and that freight stops showing up, and inflation starts really spiking as a result. I think you’re going to see those signals to the White House that they have to change course.
Q: Do you see any need for tariffs?
A: Personally, I don’t like tariffs at all, but I respect why there are some. The government has to get revenue from somewhere, and tariffs are one place to do it. I should be very clear. I’m against taxes in all their forms.
Q: Are you supportive of President Trump and the Republican-led Congress to cut taxes later this year?
A: Yeah, cut taxes, cut tariffs, let the people have their money.
Q: Are you a free-trader?
A: I am. I’m an idealist in that regard. The administration is sounding like mercantilists, maximizing the nation’s wealth by increasing exports and minimizing imports, essentially creating a favorable balance of trade.
It is odd to see the Republican Party being the ones talking about a planned economy, and the government controlling the economy, instead of being about free markets and letting people lose.
In the speech I heard Howard Lutnick deliver on April 30, I think if he had been working for the Democrats, everybody would say, ‘Oh my god, the socialists have taken over, and they’re running the government right now, and they’re going to do Stalinist central planning.’
It does not sound like the Republican Party that I grew up with. And now, all of a sudden, the Democrats are espousing Milton Friedman (an economist who advocated free-market capitalism) and Adam Smith (an economist considered the father of capitalism). So, it’s quite a turn of events from my perspective.
I’m an independent. I don’t like either party. No matter who’s in office, they just keep increasing taxes, and they keep increasing spending. I’d like to see the government be smaller.
Q: Is the Trump administration losing the support of small businesses in the U.S.?
A: Yeah, people are [upset], that’s for sure. I think they have to reverse course on this.
President Donald Trump has floated the idea of eliminating income taxes for Americans making less than $200,000 per year. I think people will like that, or cutting federal taxes on tipped income for waiters in the restaurant industry.
The core business community — a lot of them voted for Trump — are now feeling like, ‘Wait a minute, this isn’t the pro-business environment that I thought we were going to get.’
On the day of the reciprocal tariff announcement on April 2, China was going to be at 54%, not the 145% where we ended up.
So, that lower tariff might be a reasonable kind of target, but I’m not sure if that’s low enough. I remember the day that the tariffs were announced, and everybody was pretty freaked out about the 54% already. Now it seems quaint. We’d love to get to that level. But a month ago, that was considered an extremely high number.
About Ryan Petersen
Title: CEO and founder of Flexport Inc.
Age: 44
Education: Bachelor’s degree in economics from UC Berkeley, and MBA from Columbia University.
Languages: English, Portuguese and Spanish, limited proficiency in Chinese and French.
Author: The Big Ship and the Little Digger
Flexport headquarters: San Francisco
Employees: 2,100
Revenues: $2.1 billion
Competitors: Flexport’s chief rivals in the freight forwarding and logistics space include global giants like Swiss-based Kuehne + Nagel International AG; Bellevue, Washington-based Expeditors International of Washington Inc., as well as smaller players like Denmark-based DSV and German-based SAP Transportation Management.
