Flexport CEO Ryan Petersen on tariff chaos, customs fraud at scale, and why 60% of Amazon sellers are non-resident importers

Summary

Ryan Petersen, CEO of Flexport, offers a ground-level read on how tariff volatility is reshaping global trade flows, exposing a customs fraud problem he estimates affects roughly 11% of US ocean freight, and complicating any durable reshoring narrative.

Tariff Whipsaw Is the Baseline Now

When Trump announced 100% duties on China last Friday, it landed within hours of Flexport wrapping a three-day planning session in San Francisco with 540 of its leaders. The last time duties hit comparable levels, in April and May, Flexport's China-to-US volumes fell 60% before recovering once tariffs were relaxed five weeks later. Petersen is not panicking this cycle, citing Polymarket odds at 13% that the new rate survives through November 1, though that market carries only $146,000 in liquidity, limiting its value as a hedging tool. The administration signaled possible easing by Sunday.

Petersen makes monthly trips to Washington to gather intelligence directly, describing the current administration as unusually accessible to business input on customs policy. The real-time policy environment has pushed Flexport's customs engineering team onto permanent on-call rotations to keep its tariffs.flexport.com calculator current, with rule changes routinely dropped on Friday afternoons.

The Reshoring Case Is Weaker Than Headlines Suggest

For most consumer goods categories, reshoring is not a viable response to tariff pressure. Supply chain transitions require a minimum four-to-five year commitment before payback, and return on capital extends beyond that. The clearest evidence of policy misfires is a US-based bicycle manufacturer that faces tariffs on imported components while foreign competitors import finished bikes duty-free, pushing the domestic producer toward offshoring rather than onshoring.

India's tariff treatment adds another layer of instability. Until Friday's China escalation, India tariffs were roughly equivalent to China tariffs, undermining any straightforward China-plus-one pivot. Latin America carries lower rates but no certainty of permanence.

Customs Fraud Is Scaling Fast

The most significant structural problem Petersen identifies is a US-specific legal gap. The United States is the only country that allows foreign companies to import goods without a domestic legal entity or local employee. With tariffs now high enough to create a material financial incentive to misrepresent shipment values, that gap is being exploited at scale.

Petersen's analysis of public ocean freight shipping manifests suggests approximately 10 to 11% of US trade has shifted to factory-as-importer arrangements, a structure that enables underreporting of declared values. On the Amazon marketplace, 60% of sellers are now nonresident importers, the category most associated with this practice. US companies are also inadvertently exposed by allowing their overseas factories to handle importation on their behalf. Under current law, if the price paid for goods is less than the duties alone would have been, courts are likely to find the buyer should have known about the fraud.

Petersen's proposed fix is simple and consistent with how every other major trading nation operates: require a US legal entity with a US bank account and a US employee who can be held personally liable. He is actively presenting this proposal in Washington and says receptivity has been high.

Port Automation Frozen; River Network Underused

US port automation is contractually prohibited for another four to five years on the East Coast and approximately four years on the West Coast under current union agreements. The technology is not in question. The Long Beach Container Terminal, built roughly ten years ago, operates as a fully autonomous facility covering approximately a square mile with no human workers on the floor.

Petersen flags the US inland river network as a significantly underutilized logistics asset. If Latin America becomes a larger trading partner, he argues New Orleans should logically become the country's largest port, given its position at the mouth of the Mississippi River system, which connects through to the Great Lakes and Canada. Union contracts currently constrain container shipping on that network.

Shipping Futures as a Strategic Opportunity

Petersen sees a gap in financial infrastructure around freight pricing. Viable futures markets for container shipping rates do not yet exist at scale. His view is that Flexport, as one of the largest participants in the market, should eventually be trading shipping as a commodity once those instruments mature, citing Southwest Airlines' fuel hedging as the relevant analogy for how logistics operators can use futures to build durable pricing advantages.