Next Trucking Lays Off 20% of Workforce, Reversing Fast Growth
Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
Venture-backed NEXT Trucking has laid off nearly 20 percent of its workforce as trade tensions have put pressure on the Southern California ports where it is concentrated.
The company had been on a fast track for growth as it sought to bring a sleek tech-sensibility to the grimier port logistics industry. Layoffs of 65 of its 300 workers will take effect on March 17, according to a document filed with state's Employment Development Department.
NEXT spokesman Mike Bush said the company was "deprecating our least profitable business units in order to focus on growth areas" including an aggressive push in New York and New Jersey. But, he would not specify what areas of the company were being slimmed down.
One of several app-driven startups that recently emerged to ease inefficiencies in cargo transportation, NEXT has raised $134 million from backers that include Brookfield Ventures – an owner of seaport properties around the world, including a stake in TraPac terminal in Los Angeles — and Sequoia Capital.
Founded by husband and wife team Elton Chung, a former investment banker, and e-commerce entrepreneur Lidia Yan, the company was touting plans to expand last year when it opened a 25,000 square foot headquarters in El Segundo.
Billed as a "FreightTech" company, NEXT Trucking runs a proprietary fleet and uses drivers to operate in the Los Angeles and Long Beach ports where it matches truckers to shippers. It launched in 2015 and according to its website has ferried $50 billion worth of goods for companies like Steve Madden and electronics-maker Sharp.
Southern California ports have recently seen a fall in imports as trade tensions between China and the United States intensified last year. Although relations have smoothed a bit, many companies have moved their supply chains away from China to Southeast Asian countries, altering shipping routes from the West Coast to the East Coast. The trucking industry and ride-based apps like Uber have also been grappling with a California law that redefines the role of an independent contractor.
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