The saga at new age freight forwarder Flexport continues on for another week.
Roughly a month ago, Flexport Flexport Chief Executive Dave Clark, a former top executive at Amazon.com, announced he was resigning his role a year after joining the company to transform it into a full-service logistics provider.
Supply Chain Digest Says...
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The letter further disputes the existence of a whistleblower and lists specific allegations as false and defamatory, including Petersen’s claims that Clark was an unfit CEO because he overextended the company’s lease obligations.
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Clark came to Flexport in September 2022 after a two-decade career building Amazon’s logistics network, initially joining the company’s founder, Ryan Petersen, as co-CEO before taking over as the sole leader in March.
With the news, Petersen has stepped back into the CEO role. Petersen also fired at least six executives brought on by Clark
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It was all a little confusing, as Clark’s interest in running for governor of Texas was partially cited as the cause.
But Clark himself cited a difference in strategy was core to the separation. It was also said Petersen and the board were not seeing a commensurate increase in revenue after several quarters of heavy spending.
Now, an article Monday on CNBC.com adds to the interesting drama.
CNBC reports that on Sept. 13, Petersen took the stage at a major supply chain conference in Phoenix - exactly a week after he had forced out Clark.
But there sitting in the first few rows of attendees was Clark.
“Petersen was surprised that he showed up, according to people with knowledge of the matter,” CNBC noted, adding that “Days earlier, Petersen had excoriated Clark, alleging he’d secretly expanded the company’s headcount and taken on unnecessary leases without Petersen or the board’s knowledge.”
But with Clark sitting just feet away, Petersen told a different tale.
“I think we’re going to look back and go, ‘Wow I’d probably do that all over again because of the progress that we’ve made,’” Petersen said in an on-stage interview.
That language seemed to suggest hiring Clark was smart. Petersen then personally commending Clark for driving Flexport’s $1.3 billion purchase of Deliverr from Shopify in May, adding technology for last-mile deliveries.
“I’m very, very lucky because I wouldn’t have had the courage to go and do that acquisition, but I give all the credit in the world to Dave Clark,” Petersen added. “There’s no one probably in the world who would be better at running that last-mile e-com fulfillment network.”
So what the heck is going on?
(See More Below)
All this “underscores the dysfunction surrounding the sudden firing of Clark,” CNBC says.
People close to Petersen pointed to a number of previously unreported incidents that eroded his confidence in Clark.
But documents viewed by CNBC and sources close to Clark undermine those claims.
“They show that Clark, who arrived when the company was struggling to bill customers and track containers, worked closely with the board and Petersen to implement decisions that Flexport now suggests were ill-advised,” CNBC reports.
What’s more, CNBC says evidence to support Flexport’s claims of financial mismanagement is sparse, raising questions about whether that narrative was put forward to justify Clark’s removal.
A Flexport spokesperson rejected that characterization.
“Ryan Petersen returned as CEO in order to restore Flexport’s culture of customer engagement and drive the growth and cost discipline required to return the company to profitability,” the spokesperson said in a statement given to CNBC.
Among Clark’s goals was to help Petersen prepare Flexport for an IPO, something the company had discussed doing within a two- to three-year window.
CNBC also reports that revenue forecasts were a key issue. As the price to ship an ocean container fell as much as 90% from the start to the end of 2022, this situation would naturally deliver a big hit to Flexport’s revenue and profit.
 There was apparently and oddly some disagreement on how much to trim projections. Clark was in favor of cutting projections way back. His view in the end won out, but ‘’the revised forecasts distressed Petersen,” according to CNBC.
What’s more, a source close to Petersen told CNBC that a meeting on the forecast went poorly for Clark because a so-called whistleblower — identified as a senior finance executive — stepped forward shortly before the meeting began and told Petersen that the numbers being presented were “not real.”
That source referred to the senior finance executive as a whistleblower because of the information he disclosed to Petersen about Clark.
Flexport’s spokesperson told CNBC in a statement: “There was no whistleblower nor was there any financial misconduct. Any allegations to the contrary are completely false.”
Getting wilder, shortly after CNBC spoke with the Petersen source on September 15, legal counsel for Clark sent a cease-and-desist letter to Flexport.
The letter, viewed by CNBC, demanded that the company preserve and retain all communications involving Clark’s departure. The letter further disputes the existence of a whistleblower and lists specific allegations as false and defamatory, including Petersen’s claims that Clark was an unfit CEO because he overextended the company’s lease obligations.
Five hours after the letter was sent, the source close to Petersen contacted CNBC and asked to retract his or here statements and all details related to Clark’s firing or about the so-called whistleblower. CNBC declined to retract his statements.
Petersen has since deleted several of his posts criticizing Clark.
There is a lot more in the excellent CNBC piece, including more on the possible political angle here: The inside story of Dave Clark’s tumultuous last days at Flexport
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