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Speaker 1: Hire one and welcome to Bloomberg Intelligence Talking Transports Podcast.

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Speaker 1: I'm your host, Lee Klaskw, Senior free transportation logistics analysts

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Speaker 1: at Bloomberg Intelligence, Bloomberg's in house research arm. We're delighted

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Speaker 1: to have John Janssen, VP of Global Logistics for Sanmar.

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Speaker 1: John is a supply chain veteran with over thirty years

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Speaker 1: of experience in the fields of global transportation distribution logistics.

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Speaker 1: In twenty twenty two, John was honored by DC Velocity

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Speaker 1: with their Rainmaker Award. He served on advisory boards for

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Speaker 1: Nastrak and the University of Auburn Logistics and the Parcel Forum.

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Speaker 1: He's participated in a number of panels. That's where we've met, probably,

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Speaker 1: I don't know, ten years ago. He's also a graduate

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Speaker 1: from Boise State University, so go Broncos and he is

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Speaker 1: married to his wife Susan for over forty years, has

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Speaker 1: two daughters and five grandchildren. So thanks for joining us

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Speaker 1: on the podcast.

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Speaker 2: John, It's good to be here, Lee.

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Speaker 1: So, like I alluded to earlier, you know, I think

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Speaker 1: we ran into each other on the conference circuit.

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Speaker 3: We were on a panel together.

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Speaker 1: I don't remember what the panel was because as we

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Speaker 1: you know, they kind of all bleed together. But I

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Speaker 1: always thought your insights as a shipper are extremely insightful

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Speaker 1: and I wanted to have you on the Talking Transport podcast.

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Speaker 1: So again, thanks for joining us.

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Speaker 2: I said, it's good to be here. Yeah. I think

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Speaker 2: it was back at TPM probably ten years ago, talking

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Speaker 2: about something with the ocean industry.

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Speaker 3: Yeah.

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Speaker 1: So you know, sand Mar is not necessarily a household name.

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Speaker 1: Can you tee this up for people? What exactly does

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Speaker 1: Sandmar do?

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Speaker 2: You know? Whenever I get the chance to introduce the company,

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Speaker 2: most people have never heard of it. But I always

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Speaker 2: tell people you probably have some of our apparel that

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Speaker 2: we manufacture hanging in your closet somewhere. Sand Mark a

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Speaker 2: great company, then a business fifth two years and we

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Speaker 2: are the nation's leading supplier of wholesale apparel to the

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Speaker 2: printed marketplace. So we sell to the decorators, we sell

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Speaker 2: to the embroiderers, we sell to the uniform in companies,

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Speaker 2: and so we sell a blank canvas then has somebody

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Speaker 2: else's name printed on it, and we manufacture in twenty

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Speaker 2: five countries around the world. We have thirteen distribution centers

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Speaker 2: in the United States that cover a little over seven

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Speaker 2: point eight million square feed and so in the decorated marketplace,

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Speaker 2: you know, we're the largest at distributing product into that space.

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Speaker 3: Wow.

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Speaker 1: So you know, so you're manufacturing clothing apparel all over

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Speaker 1: the world and you are you're bringing your is your

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Speaker 1: market that you're selling those into solely in the United

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Speaker 1: States or is it also in Europe and Asia?

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Speaker 2: Primarily the United States. We manufacture and we distribute, so

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Speaker 2: it's kind of a unique model. We have several lines

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Speaker 2: that we manufacture and own, and then we also have

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Speaker 2: exclusive rights to several retail brands that we distribute into

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Speaker 2: that apparel space. Most of it's in the United States.

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Speaker 2: We have two operations, one in Poland and one in

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Speaker 2: the UK, specifically for a really large online retailer.

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Speaker 1: So when you're bringing product into the United States, is

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Speaker 1: that mostly on the ocean or do you use air

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Speaker 1: freight as well?

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Speaker 2: Primarily ocean. If you look back over the last couple

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Speaker 2: of years, we're usually either in the top fifty to

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Speaker 2: sixty largest importers into the United States, and we do

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Speaker 2: use air freight, I mean preferably not to air freight apparel,

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Speaker 2: but usually for new product launches or if we get

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Speaker 2: in a bad spot, then we'll use some air freight,

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Speaker 2: but it's like one percent of our business. Mostly it's

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Speaker 2: primarily ocean and we bring it in from both coasts,

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Speaker 2: so our manufacturing is very diverse. We're in Southeast Asia,

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Speaker 2: all of that flows through Seattle, and then everything else

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Speaker 2: that's in the sub continent region of India, Pakistan, Bangladesh.

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Speaker 2: We are the second largest apparel manufacturer in Africa and

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Speaker 2: the largest in Ghana, and then our largest facilities are

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Speaker 2: in Latin America in Honduras, and all of that flows

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Speaker 2: into either Savannah or Seattle or Miami and up to Jacksonville.

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Speaker 3: Okay.

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Speaker 1: So obviously the red Sea crisis has been not great

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Speaker 1: for shippers. How has it impacted Sandmar.

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Speaker 2: It hasn't had a significant impact only because again most

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Speaker 2: of our product is not transit sensitive, so we don't

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Speaker 2: have to have it exactly on the day. But it

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Speaker 2: has definitely impacted the standpoint that we've taken some costs

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Speaker 2: increase as we've had the carriers have had a route

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Speaker 2: around the Horn versus coming through this US comount, and

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Speaker 2: we've ended up with extra transit times, some added costs

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Speaker 2: to it, and then we've ended up actually having to

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Speaker 2: do a little bit of air freight because we couldn't

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Speaker 2: get equipment into some of the key locations. And what

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Speaker 2: we're starting to see right now is the imbalance of equipment.

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Speaker 2: So because the transit times are so long, it's taking

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Speaker 2: them longer to get empty equipment back and so, like

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Speaker 2: in Tanzania, we've had some challenges just with getting equipment

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Speaker 2: on board and having it there to load out.

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Speaker 1: On okay, and so when you're talking about equipment, you're

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Speaker 1: talking about empty containers.

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Speaker 2: Empty containers, Yeah.

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Speaker 3: And so has that changed?

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Speaker 1: So because of the Red Sea and the higher costs

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Speaker 1: and maybe the equipment availability, are you changing where you're

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Speaker 1: bringing product in? Like are you avoiding some of the

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Speaker 1: East coast ports for the West coast ports? Are you

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Speaker 1: just dealing with the longer times and higher costs.

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Speaker 2: We're currently dealing with just the longer transit times. We

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Speaker 2: are about to flip a few of the locations to

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Speaker 2: the West coast, and not only because of the Red Sea,

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Speaker 2: but precautionary with the upcoat with the East Coast labor situation.

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Speaker 2: We hope that they come to terms quickly, but at

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Speaker 2: the same time, we don't want to get stuck there,

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Speaker 2: So we're going to move some of that business to Seattle,

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Speaker 2: and we've seen some great The Seattle Northwest ports are

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Speaker 2: doing great, and so the flow through there is good.

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Speaker 2: And it's kind of a half dozen one way or

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Speaker 2: the other on some of those countries like down in

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Speaker 2: memr and Bangladesh or India. We can bring it to

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Speaker 2: the West coast almost as inexpensive as we can the

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Speaker 2: East coast, right.

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Speaker 1: And so just for those out there, the ports along

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Speaker 1: the East Coast and the Gulf Coast, they're facing a

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Speaker 1: labor and a negotiation with their workforce with a contract

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Speaker 1: that comes due in September, and unfortunately there's.

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Speaker 3: Usually some.

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Speaker 1: Work stoppages or slow slowing down of work ahead of

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Speaker 1: any negotiation. Uh So the union just flexing their muscle

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Speaker 1: a little bit. So but you know, hopefully they will

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Speaker 1: reach an agreement on time so there'll be no strike.

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Speaker 1: But obviously my crystal ball is pretty pretty cracked and

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Speaker 1: pretty foggy, so no idea what's going to happen. So

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Speaker 1: it's probably a good good idea.

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Speaker 3: And a lot of shippers do due to that.

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Speaker 1: So when you bring it into the Seattle ports, is

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Speaker 1: there one railroad that you deal with or or do

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Speaker 1: you do you just use trucks?

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Speaker 3: How do you bring it inland?

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Speaker 2: Once we hit everything? He goes today through two cross

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Speaker 2: stocks again, the East coast flows through Jacksonville, West coast

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Speaker 2: flows through Seattle, and then we transload the product and

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Speaker 2: we put it up on intermodal. For most locations, we

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Speaker 2: to Arizona, we trucked Areno, but for most of it

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Speaker 2: it goes intermodal, and it's split fairly evenly between carriers

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Speaker 2: that ride the UP and carriers that ride the BNSF.

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Speaker 2: I would say our strongest relationship is with the BNSF,

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Speaker 2: But the UP over time has started to become more

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Speaker 2: customer centric, I think, and so we've balanced it out

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Speaker 2: between those two.

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Speaker 1: When you say the UP has been more customer centric,

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Speaker 1: is that something that's been relatively new because they've had

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Speaker 1: some management changes over there.

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Speaker 2: It really has. I mean, I think if you look

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Speaker 2: at the BNSF has always been very BCO facing, and

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Speaker 2: so they have salespeople that are carrier agnostic, but they're

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Speaker 2: out there supporting the BCOs. Very recently, the UP has

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Speaker 2: started to be more facing to the BCOs and actually

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Speaker 2: reaching out and developing those relationships, and while our business

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Speaker 2: rides on JB. Hunt or Schneider or Hub that having

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Speaker 2: that relationship with the rail has been critical to us

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Speaker 2: because at times when there's challenges, they can make things happen,

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Speaker 2: or they can help generate equipment.

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Speaker 1: So from a service standpoint, do you view UP and

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Speaker 1: BN equally or is there one that tends to do

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Speaker 1: a little better on the service side?

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Speaker 2: You know, right now, they both seem to be doing

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Speaker 2: really consistent. I mean, we had huge challenges like everybody

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Speaker 2: did when the West Coast got backed up, but for

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Speaker 2: the most part, both are performing really well. And then

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Speaker 2: you know, on the East Coast we connect via either

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Speaker 2: the CSX or the Norfolk Southern and so again both

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Speaker 2: of those, I would say the CSX has had the

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Speaker 2: most consistent service coming off the East Coast versus the Netfolk.

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Speaker 1: As Norfolk got any better because obviously they had a

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Speaker 1: lot of problems with that huge derailment they had you

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Speaker 1: know last year that they're still kind of you know,

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Speaker 1: working through.

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Speaker 2: Yeah, I think that we haven't seen anything really major challenges.

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Speaker 2: It just seems like the CSX runs more consistently and

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Speaker 2: seems to flow the trains better.

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Speaker 1: Gotcha do you deal with any of the Canadians Canadian

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Speaker 1: National Pacific.

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Speaker 2: We don't. We We've got some business that comes in

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Speaker 2: from Honduras and ends up going up into eastern Canada,

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Speaker 2: and that does ride up and connects to the Canadian railways,

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Speaker 2: but very very sparse, not much at all. Most of

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Speaker 2: it's all of US rail.

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Speaker 1: So roughly speaking, once it gets into you know, into

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Speaker 1: the ports, whether it's on the east or the west,

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Speaker 1: would you say eighty percent of your freights intermodaled or

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Speaker 1: is it less than Yeah.

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Speaker 2: It for moving it from one from our crosstof to distribution,

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Speaker 2: I would say at least eighty percent. We also spend

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Speaker 2: a large volume of money with the LTL industry and

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Speaker 2: our primary spend. If you looked at it across the everything,

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Speaker 2: parcels are largest spend and it dwarfs everything by by

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Speaker 2: not a short mode.

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Speaker 3: Oh so it's even more than your ocean spend.

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Speaker 2: Oh yeah, oh yeah, it's if you were to look

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Speaker 2: at it, I mean in where we're spending hundreds of

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Speaker 2: millions on freight, I mean we're looking at parcel is

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Speaker 2: far and away the largest spend because you know, we're

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Speaker 2: shipping B to B. We have some B two C customers,

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Speaker 2: but primarily we're a B to B customer, and those customers,

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Speaker 2: you know, when they order, they're getting usually you know,

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Speaker 2: a couple of boxes or seventeen pounds worth of product.

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Speaker 2: During the busy, busy season for US, we can ship

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Speaker 2: one hundred thousand parcels a night just with UPS, so

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Speaker 2: it's UH, it's a significant piece of the business. We

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Speaker 2: also use a couple of the regionals UH nowhere near UH.

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Speaker 2: Ups is are predominant way that we move business. And

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Speaker 2: then in the LTL we spend a sizeable amount of

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Speaker 2: money with our larger customers delivering to them via lt L.

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Speaker 1: Right, and so you know, there's been a lot of

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Speaker 1: talk over the years about being a shipper of choice

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Speaker 1: and obviously, you know you have a UH and manage

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Speaker 1: a lot of relationships with with capacity providers.

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Speaker 3: Is that is shipper of choice? Is that?

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Speaker 1: Is that just word salad? Or is that something that

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Speaker 1: you actually buy into and try to be a shipper

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Speaker 1: of choice? And what are the benefits for sandmar if

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Speaker 1: in fact you know that is something you aspire to be.

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Speaker 2: You know, it's it's really funny. I think that there's

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Speaker 2: an argument out there that a lot of shippers decide

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Speaker 2: to be a shipper of choice when the capacity to

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Speaker 2: be as challenged, and you know it's it is in

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Speaker 2: our DNA. If you look at sand Mar, the core

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Speaker 2: values of the company are be nice, do the right thing,

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Speaker 2: tell the truth, and so that has to flow down

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Speaker 2: to our relationships and so that you know, we strive

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Speaker 2: to be a shipper of choice. You know, most all

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Speaker 2: of our facilities are drop hook facilities. A driver doesn't

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Speaker 2: spend normally more than thirty minutes at a Sandmar facility,

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Speaker 2: and when they come in, you know, they're allowed to

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Speaker 2: use the Wi Fi, they're allowed to use our restrooms,

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Speaker 2: they're allowed to use our breakrooms, and we've got several

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Speaker 2: facilities around the United States that if they need a

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Speaker 2: spot to park overnight, then that's fine. We want to

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Speaker 2: be as friendly and as good stewards of carriers equipment

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Speaker 2: and their driver as we possibly can be. And I

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Speaker 2: think that it's it's hard to measure a dollar value

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Speaker 2: in that, but it's when drivers like come into your

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Speaker 2: facilities and the that were people look at you and

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Speaker 2: you're a good steward of their equipment, it tends to

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Speaker 2: be that they'll work with you more and I think

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Speaker 2: it generates favorable pricing.

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Speaker 3: Yeah, so on that.

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Speaker 1: So you know when when obviously the market, the trucking

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Speaker 1: mark is extremely loose right now, but you know when

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Speaker 1: things were tighter, did you find that when you were

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Speaker 1: talking with truckload providers maybe in twenty one twenty two,

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Speaker 1: were you feeling that maybe the screws weren't turned on

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Speaker 1: you relative to other shippers out there.

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Speaker 2: I think it's the case. I mean, so you know,

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Speaker 2: right now it's very I mean, everybody's trying to do

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Speaker 2: all these mini bids, and we don't play in that game. Uh,

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Speaker 2: you know, we negotiate our contracts and we try to

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Speaker 2: say that that we wanted to go at a fair

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Speaker 2: raid and that we want to be able to carry

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Speaker 2: that out. And so I think that normally, going into

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Speaker 2: every year, sometimes we don't do any bids at all.

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Speaker 2: We'll renegotiate with the players that we're already using, and

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Speaker 2: then once we finished that, if there's extra business left over,

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Speaker 2: we may take that out to bid. But I think

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Speaker 2: that cycling carriers does not benefit you. I think in

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Speaker 2: the long run, our ability to develop relationships from the

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Speaker 2: senior level all the way down to the sales folks.

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Speaker 2: It benefits us because I think that they take care

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Speaker 2: of our business and they look and treat us a

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Speaker 2: little differently than they treat somebody that's transactional. And I

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Speaker 2: think during the capacity crunch that was absolutely the case

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Speaker 2: when they were making decisions as to who got equipment

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Speaker 2: and who didn't, I think it weighed in the favor

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Speaker 2: of Sandmar. Earlier this year, we got into a situation

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Speaker 2: where our equipment got way out of balance through labor

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Speaker 2: and multiple issues supply chain challenges. We ended up with

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Speaker 2: a lot of detention and we actually went to some

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Speaker 2: of our carriers and asked for some relief, and I

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Speaker 2: mean we received several millions of dollars of relief. And

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Speaker 2: that happens because we had developed a relationship with them,

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Speaker 2: and they know that they're not going to lose their

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Speaker 2: business over a few dollars. They know that we're going

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Speaker 2: to hold them accountable and that we expect service and

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Speaker 2: favorable pricing. But they know that not every year they're

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Speaker 2: going to be back in the bid cycle.

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Speaker 1: Right And do you guys on the trucking side, so

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Speaker 1: I'm assuming you play predominantly in the contractual market, are

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Speaker 1: there like a handful of carriers that you deal with,

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Speaker 1: or given the regional nature of trucking and the fragmented business,

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Speaker 1: you're not as heavily weighted as you are maybe on

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Speaker 1: the LTL side or the parcel side.

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Speaker 2: We do with a couple of the the majors, and

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Speaker 2: what we've tried to do is build vertical strength. So

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Speaker 2: if we're doing intermodal with JB. Hunting Schneider, then if

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Speaker 2: we could also utilize their their their truckload or their brokerage,

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Speaker 2: then we think putting more dollars in those corporate coffers

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Speaker 2: builds that a better UH situation for us. So again

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Speaker 2: you know the Schneiders, the Hunts, the Swiss, UH, there

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Speaker 2: are primary providers. We aren't a real digital broker player.

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Speaker 2: We stuck our tone in that water and really didn't

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Speaker 2: like it. So we tend to work with the asset

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Speaker 2: owners and those that are asset light like that have

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Speaker 2: a brokerage division that's backed up by their assets. Right.

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Speaker 1: So when you mentioned you know, dealing or trying out

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Speaker 1: the UH the technology focused brokers, So could you talk

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Speaker 1: about that experience. You know you don't need to name names,

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Speaker 1: but unless you want.

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Speaker 2: No, I think it was just it's a it's a

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Speaker 2: it's it's such a transactional marketplace, and that if we're

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Speaker 2: looking to have drop equipment to load to they some

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Speaker 2: of them struggled with drop equipment. And in our in

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Speaker 2: our operations, I mean we're flowing packages. We can't afford

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Speaker 2: to have a door empty, and so we like to

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Speaker 2: have trailer pools and so that we can put trailers

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Speaker 2: to the dock, we can load them and get them out.

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Speaker 2: So that the digital marketplace was just a struggle for

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Speaker 2: us that we didn't feel like it was a it

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Speaker 2: was a benefit for the cost savings.

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Speaker 1: Do you do you guys, use any dedicated players for

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Speaker 1: your truckload capacity?

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Speaker 2: We we do. We we brought on a dedicated fleet

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Speaker 2: in Seattle and it runs our dre service and so

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Speaker 2: when the West Coast ports got so backed up, and

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Speaker 2: one of the challenges with inconsistent ocean service is the

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Speaker 2: fact that instead of getting a vessel air other day,

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Speaker 2: sometimes we get a vessel that comes in that has

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Speaker 2: one hundred and twenty containers on it. Well, to clear

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Speaker 2: the dock and get those off the port into an

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Speaker 2: off site yard into our distribution center, we struggled with

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Speaker 2: drake capacity, and so we went out and we signed

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Speaker 2: a dedicated fleet in Seattle and it has been one

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Speaker 2: of the best decisions my domestic team's made. We've actually

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Speaker 2: we have a quasi dedicated fleet on the East Coast,

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Speaker 2: but not a formal one.

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Speaker 1: Okay, So you know you mentioned LTL and how that's

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Speaker 1: a big spend. Are you do you just deal? Are

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Speaker 1: you concentrated like you are with you know, maybe some

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Speaker 1: of the other modes in terms of the providers that

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Speaker 1: you use.

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Speaker 2: We've gotten one nationwide carrier and they garner about seventy

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Speaker 2: five to eighty percent of the business, and then we

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Speaker 2: have regionals on the West Coast, East Coast, and southeast

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Speaker 2: that help us out with some of the region business.

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Speaker 3: Sorry, are you able to say who the national carrier is?

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Speaker 2: Sure? We do with R and L is our nationwide carrier,

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Speaker 2: and then we use a Dewey, we use Oak Harbor,

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Speaker 2: and we use av It.

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Speaker 1: So those are all privately held LTL carriers And.

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Speaker 3: Go ahead.

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Speaker 2: You know R and L our customers. We do a

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Speaker 2: lot of liftgate work. Again, you're thinking of a B

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Speaker 2: two B customer that may not have a DOC and

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Speaker 2: so the R and L tail Gate and lift Gates

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Speaker 2: has been a big benefit to us, and it's been

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Speaker 2: it's been a relationship that we've had for you only

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Speaker 2: eight plus years. I'm headed back there to do a

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Speaker 2: quarterly business review with my domestic manager tomorrow.

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Speaker 1: Great, you know to mention, you know how parcel is

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Speaker 1: like your largest spend in UPS is your largest parcel provider.

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Speaker 1: Did you guys do any like moving of share away

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Speaker 1: from UPS as their labor negotiations got heated last year?

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Speaker 2: We didn't. And the reason that we didn't it goes

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Speaker 2: back to that sound like I'm hitting the same gong,

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Speaker 2: But we've really built a long term relationship with UPS

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Speaker 2: over the years. It's been a thirty eight plus year relationship,

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Speaker 2: and we've done strategic meetings that have involved as high

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Speaker 2: as Carol Tomey and UPS did a really really good

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Speaker 2: job about keeping us informed as to how the labor

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Speaker 2: negotiations were going and where things were going to land.

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Speaker 2: And then we even worked on some contingency plans that

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Speaker 2: hopefully we didn't have to pull off the shelf. But

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Speaker 2: we made the decision that we were not going to

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Speaker 2: divert freight and that we were going to stick with

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Speaker 2: kind of the folks that we were with, and other

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Speaker 2: than a little bit of trepidation as it got close

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Speaker 2: to the end, you know again, I think we were

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Speaker 2: glad that we did what we did because at the

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Speaker 2: end of the day, I think it was a big

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Speaker 2: vote of confidence for the UPS network and how they've worked.

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Speaker 3: So did that keep you up at night?

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Speaker 2: It's a funny story. We had our national sales conference

377
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Speaker 2: in Seattle the week leading up to it, and I

378
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Speaker 2: probably did thirty minutes on stage talking about the UPS

379
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Speaker 2: relationship and our contingency plans. And then a year ahead

380
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Speaker 2: of time, we had booked a cruise to Alaska, and

381
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Speaker 2: so like my boss looked at me and he goes, seriously,

382
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Speaker 2: you're going on a cruise to Alaska the like four

383
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Speaker 2: days before the strike could happen. And it was a

384
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Speaker 2: little bit of Like I said, there was some preputation

385
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Speaker 2: as we headed out on the cruise, but we got

386
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Speaker 2: word that was settled and all things worked out, So

387
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Speaker 2: it was I think there was definitely the head of

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Speaker 2: the union did a really really good job at creating

389
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Speaker 2: the ground swell of information and definitely put the fear

390
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Speaker 2: into the industry.

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Speaker 1: So so is there anything that keeps you up now, Oh.

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Speaker 2: You know, it's I think it's just what's next because

393
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Speaker 2: we we who would have thought that a rogue terrorist

394
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Speaker 2: group backed by Iranians could close down the Suez Canal

395
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Speaker 2: that was on nobody's you know, radar screen the first

396
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Speaker 2: of this year, or who could possibly see how big

397
00:23:46,280 --> 00:23:51,119
Speaker 2: of a deal COVID was, or you I worry a

398
00:23:51,119 --> 00:23:55,480
Speaker 2: little bit about the ocean industry and what's it going

399
00:23:55,560 --> 00:23:58,600
Speaker 2: to become, because again they've kind of gone there. There

400
00:23:58,640 --> 00:24:02,239
Speaker 2: there's lots of changes there right now. But I think

401
00:24:02,280 --> 00:24:05,600
Speaker 2: it's just that unknown about what what is it that

402
00:24:05,640 --> 00:24:08,280
Speaker 2: we can't plan for? I think somebody referred to as

403
00:24:08,280 --> 00:24:12,320
Speaker 2: a black swan. Every year there seems to be something

404
00:24:12,800 --> 00:24:15,280
Speaker 2: that jumps up that we just weren't planned for. And

405
00:24:15,320 --> 00:24:19,760
Speaker 2: so those are probably the ones that that cause a

406
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Speaker 2: little bit of of stay.

407
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Speaker 1: Awake, right And you know when you when you when

408
00:24:24,840 --> 00:24:27,560
Speaker 1: you just mentioned, you know, the the ocean industries uh

409
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Speaker 1: up for a lot of changes. Are you talking about

410
00:24:29,800 --> 00:24:32,160
Speaker 1: the what's going on the crisis of the Red Sea?

411
00:24:32,240 --> 00:24:34,640
Speaker 1: Are you talking about alliances? What are you talking about

412
00:24:34,640 --> 00:24:35,560
Speaker 1: when you mentioned that?

413
00:24:35,640 --> 00:24:38,159
Speaker 2: Well, I think you know there's right now they're in

414
00:24:38,200 --> 00:24:40,760
Speaker 2: a capacity challenge. I mean, we just came out of

415
00:24:40,800 --> 00:24:45,439
Speaker 2: TPM and you know they're not talking about major increases.

416
00:24:45,800 --> 00:24:47,480
Speaker 2: They're talking about trying to how they're going to fill

417
00:24:47,520 --> 00:24:52,359
Speaker 2: their boats. And the alliances are changing again. You've got

418
00:24:52,640 --> 00:24:55,560
Speaker 2: you know, half hag Lloyd is going to join MERS

419
00:24:56,160 --> 00:24:59,840
Speaker 2: and uh, you're going to see the two ms break up.

420
00:25:00,320 --> 00:25:02,920
Speaker 2: You're going to see the alliance have changes to it.

421
00:25:03,520 --> 00:25:06,639
Speaker 2: And it's just overall, what's that industry going to look like?

422
00:25:07,200 --> 00:25:12,120
Speaker 2: There's a ton of new boats coming online and overall,

423
00:25:12,640 --> 00:25:15,919
Speaker 2: what's that industry going to do? Because they've not always

424
00:25:15,960 --> 00:25:20,520
Speaker 2: been the best business people and so you know, we'll

425
00:25:20,800 --> 00:25:24,679
Speaker 2: see what what happens with that over the next several years.

426
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Speaker 2: And I mean, our business is so dependent upon that

427
00:25:27,920 --> 00:25:31,720
Speaker 2: ocean service from some pretty challenging locations. I mean, the

428
00:25:32,280 --> 00:25:37,760
Speaker 2: when you're coming out of Tanzania or Madagascar, the making

429
00:25:37,800 --> 00:25:40,560
Speaker 2: sure that we have reliable service out of there as

430
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Speaker 2: critical to us.

431
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Speaker 1: Yeah, whether whether you're a shipper or an investor, you

432
00:25:44,920 --> 00:25:48,159
Speaker 1: want these liners to be financially healthy. And you know,

433
00:25:48,160 --> 00:25:51,719
Speaker 1: they don't do themselves any favor by how undisciplined they

434
00:25:51,720 --> 00:25:55,159
Speaker 1: are with their you know, with with capacity. They just

435
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Speaker 1: like to order big, big new ships.

436
00:25:58,880 --> 00:26:01,960
Speaker 2: It's there's no industry like it. I mean that they

437
00:26:02,040 --> 00:26:07,159
Speaker 2: make business decisions and they then uh, there's there's ships

438
00:26:07,160 --> 00:26:10,439
Speaker 2: are starting to get empty, they drop the pricing, they

439
00:26:10,480 --> 00:26:12,800
Speaker 2: all chase each other to the bottom, and then they

440
00:26:12,880 --> 00:26:15,680
Speaker 2: blame the BCO for taking advantage of it. So it's

441
00:26:15,680 --> 00:26:19,480
Speaker 2: a crazy industry. So it's uh, but you know again,

442
00:26:19,640 --> 00:26:23,240
Speaker 2: we've we've gone down where we have three to four

443
00:26:24,160 --> 00:26:28,440
Speaker 2: really key ocean carriers and like this year at TPM,

444
00:26:29,000 --> 00:26:32,359
Speaker 2: I mean, our volumes are down somewhat, and so we

445
00:26:33,240 --> 00:26:35,760
Speaker 2: came out of a position over the last two years

446
00:26:35,760 --> 00:26:39,080
Speaker 2: where we were over inventory, I think, just like everybody else.

447
00:26:39,600 --> 00:26:43,240
Speaker 2: And so this last year we were pairing down the

448
00:26:43,280 --> 00:26:46,000
Speaker 2: carriers that we're working with, and so it really was

449
00:26:46,160 --> 00:26:49,840
Speaker 2: negotiating with the people that we've already done business with.

450
00:26:50,240 --> 00:26:53,840
Speaker 2: I mean, we're a big CMA, Evergreen, O n E

451
00:26:55,200 --> 00:26:58,120
Speaker 2: are our three primaries, and so we stay in both

452
00:26:58,119 --> 00:27:01,640
Speaker 2: of the alliances. And then uh again, if we look

453
00:27:01,680 --> 00:27:05,560
Speaker 2: at CMA, they've been a long and true carrier for us,

454
00:27:05,880 --> 00:27:09,639
Speaker 2: and so we chose to kind of renegotiate with the

455
00:27:09,640 --> 00:27:13,159
Speaker 2: field again versus putting out any kind of a really major,

456
00:27:13,200 --> 00:27:13,840
Speaker 2: major bid.

457
00:27:15,560 --> 00:27:19,639
Speaker 1: Can you talk about, you know, where rates are going.

458
00:27:19,400 --> 00:27:20,639
Speaker 3: For you across the board?

459
00:27:21,600 --> 00:27:24,840
Speaker 1: So are you you know, obviously there was a huge

460
00:27:24,880 --> 00:27:27,840
Speaker 1: spike spike in liner rates that come down. Now, I

461
00:27:27,880 --> 00:27:30,159
Speaker 1: know you probably don't play that much in the spot market,

462
00:27:30,280 --> 00:27:31,680
Speaker 1: So let's just I don't know if you can talk

463
00:27:31,720 --> 00:27:32,679
Speaker 1: about that now.

464
00:27:32,760 --> 00:27:35,800
Speaker 2: We try to stay out of the spot market. You know,

465
00:27:36,040 --> 00:27:40,000
Speaker 2: if you look back to three years ago, our nv

466
00:27:40,080 --> 00:27:45,480
Speaker 2: OCC spend was pretty significant. That's when capacity was a challenge,

467
00:27:45,800 --> 00:27:49,840
Speaker 2: the ports were jammed up. So this year we will

468
00:27:49,880 --> 00:27:54,280
Speaker 2: probably cover ninety percent of our spend with contract and

469
00:27:54,800 --> 00:27:57,840
Speaker 2: the we think the rates are going to go up

470
00:27:58,040 --> 00:28:02,120
Speaker 2: slightly from where they have been, but we don't think

471
00:28:02,119 --> 00:28:04,960
Speaker 2: it's going to be anything near where. I mean, coming

472
00:28:05,000 --> 00:28:07,639
Speaker 2: out of Chinese New Year, the spot rate out of

473
00:28:07,680 --> 00:28:12,440
Speaker 2: Asia was eight to ten thousand dollars. I mean, we

474
00:28:12,440 --> 00:28:14,840
Speaker 2: were never even where close to that, and so I

475
00:28:14,880 --> 00:28:18,600
Speaker 2: think it's going to be in that high two s

476
00:28:18,680 --> 00:28:26,840
Speaker 2: low threes somewhere in there out of the Pacific coast transit, right.

477
00:28:27,320 --> 00:28:29,840
Speaker 1: And so I guess with that, with that kind of

478
00:28:30,480 --> 00:28:35,080
Speaker 1: conversation about rates, you know, can you talk about where

479
00:28:35,119 --> 00:28:37,879
Speaker 1: you're seeing you know, where you during the mid season,

480
00:28:37,960 --> 00:28:41,800
Speaker 1: or your negotiations with other capacity providers. You know, where

481
00:28:41,800 --> 00:28:43,880
Speaker 1: do you see truckload rates going this year?

482
00:28:45,360 --> 00:28:47,960
Speaker 2: I think they have to come up at some point.

483
00:28:49,440 --> 00:28:52,400
Speaker 1: I'm sure if you if you offer them a higher price,

484
00:28:52,440 --> 00:28:53,080
Speaker 1: they'll take it.

485
00:28:56,080 --> 00:28:59,440
Speaker 2: Yeah, that's probably true. You know, I don't know that

486
00:28:59,520 --> 00:29:04,640
Speaker 2: the owner operators can stay in the business at the

487
00:29:04,720 --> 00:29:06,760
Speaker 2: rates of where there are right now. I mean, that

488
00:29:06,880 --> 00:29:10,640
Speaker 2: has to be hurting a lot of the small I mean,

489
00:29:10,840 --> 00:29:12,800
Speaker 2: with so many of the truck there's so many trucking

490
00:29:12,800 --> 00:29:16,600
Speaker 2: companies that have like five trucks for fewer and those

491
00:29:16,640 --> 00:29:19,760
Speaker 2: guys have got to really be hurting. And so you know,

492
00:29:19,840 --> 00:29:24,320
Speaker 2: I think that it's probably going to be Q three

493
00:29:25,000 --> 00:29:27,800
Speaker 2: Q late Q two Q three before we see it

494
00:29:27,800 --> 00:29:31,040
Speaker 2: get healthy again. But I mean, I think right now

495
00:29:31,480 --> 00:29:34,120
Speaker 2: there's just nothing that I can see on the horizon

496
00:29:34,560 --> 00:29:37,080
Speaker 2: that's going to drive those rates up right.

497
00:29:38,440 --> 00:29:40,480
Speaker 1: Yeah, it's definitely got to come from the supply side.

498
00:29:40,760 --> 00:29:42,680
Speaker 1: A lot of a lot of a lot of players

499
00:29:42,760 --> 00:29:45,000
Speaker 1: have been in the business longer than they would have

500
00:29:45,080 --> 00:29:47,000
Speaker 1: just because of all the cash reserves that they're able

501
00:29:47,040 --> 00:29:50,880
Speaker 1: to generate, you know, during the good times, and that

502
00:29:51,320 --> 00:29:54,520
Speaker 1: cash seems to be depleting, and I think.

503
00:29:54,440 --> 00:29:57,280
Speaker 2: A lot comes into this economy. You know, we came

504
00:29:57,320 --> 00:30:02,240
Speaker 2: into this over inventoried, and so like we're projecting a

505
00:30:02,360 --> 00:30:05,959
Speaker 2: year very similar to last year. So we you know,

506
00:30:05,960 --> 00:30:11,240
Speaker 2: we're we're looking at small growth, but growth, and but

507
00:30:11,400 --> 00:30:15,680
Speaker 2: not the normal double digit growth of Sandmar experiences and

508
00:30:15,720 --> 00:30:19,080
Speaker 2: so that kind of goes out towards the what we

509
00:30:19,240 --> 00:30:22,560
Speaker 2: was doing our transportation spend. And the good news is

510
00:30:23,360 --> 00:30:28,600
Speaker 2: we won't be seeing the huge amount of detention and

511
00:30:28,760 --> 00:30:33,400
Speaker 2: demerge and uh, those types of dollars that are out there.

512
00:30:33,800 --> 00:30:36,360
Speaker 2: And I think so we're you know, we're trying to

513
00:30:36,400 --> 00:30:40,800
Speaker 2: be pretty cautious, and I think it's just we will

514
00:30:40,800 --> 00:30:44,360
Speaker 2: probably be you know, maybe Q four before we see

515
00:30:44,360 --> 00:30:46,160
Speaker 2: what the economy is going to do. There's a lot

516
00:30:46,160 --> 00:30:49,280
Speaker 2: of things going on with elections and everything else, what's

517
00:30:49,320 --> 00:30:52,440
Speaker 2: going to happen, and so I think people are just

518
00:30:52,440 --> 00:30:53,200
Speaker 2: being a conservative.

519
00:30:54,000 --> 00:30:56,200
Speaker 1: Yeah, So when you you mentioned, you know, maybe late

520
00:30:56,320 --> 00:30:58,760
Speaker 1: two Q early three Q, you might see things turn

521
00:30:58,800 --> 00:31:00,800
Speaker 1: around the truckload market. We talk at the spot market,

522
00:31:00,840 --> 00:31:03,120
Speaker 1: are you talking about contractual.

523
00:31:03,480 --> 00:31:05,640
Speaker 2: I think that's when we could see the spot come

524
00:31:05,680 --> 00:31:08,080
Speaker 2: back up. A lot depends on I mean, it kind

525
00:31:08,080 --> 00:31:11,320
Speaker 2: of starts on the ocean and comes in and you

526
00:31:11,360 --> 00:31:13,400
Speaker 2: know where's it going to go? But I mean I

527
00:31:13,400 --> 00:31:16,360
Speaker 2: think there you could see that that's when the spot

528
00:31:16,480 --> 00:31:21,080
Speaker 2: might start to make some return. And then contractually, you know,

529
00:31:21,160 --> 00:31:25,320
Speaker 2: we head into our truckload intermodal contractual period here in

530
00:31:25,360 --> 00:31:27,880
Speaker 2: about sixty days and so we'll see where that market's

531
00:31:27,920 --> 00:31:34,400
Speaker 2: going to go for us, but again not expecting significant increases.

532
00:31:34,880 --> 00:31:36,520
Speaker 2: We think it's going to be relatively flat.

533
00:31:36,920 --> 00:31:42,880
Speaker 1: So right, so you think you're thinking intermodal relatively flat,

534
00:31:42,920 --> 00:31:44,040
Speaker 1: That's that's interesting.

535
00:31:45,040 --> 00:31:47,360
Speaker 2: I don't know. I just don't see what's going to

536
00:31:47,360 --> 00:31:51,480
Speaker 2: be the challenges that are going to cause it to move.

537
00:31:51,800 --> 00:31:55,640
Speaker 2: And I think if you were to you look back

538
00:31:55,680 --> 00:31:59,040
Speaker 2: at those things that kind of say, I hope it

539
00:31:59,040 --> 00:32:02,320
Speaker 2: doesn't happen. If we see a big growth coming in

540
00:32:02,360 --> 00:32:06,360
Speaker 2: the imports, then I guess the question will be are

541
00:32:06,480 --> 00:32:08,840
Speaker 2: the care are there? Is the rail going to respond

542
00:32:08,960 --> 00:32:12,240
Speaker 2: with crews and equipment in time so that we don't

543
00:32:12,320 --> 00:32:14,880
Speaker 2: end up with a backlog and end up with.

544
00:32:14,880 --> 00:32:18,240
Speaker 3: Challenges right how quickly?

545
00:32:18,360 --> 00:32:22,520
Speaker 1: Like if you know, if you're if you're have whatever

546
00:32:22,600 --> 00:32:27,000
Speaker 1: a trailer or a container fifty three foot container already

547
00:32:27,160 --> 00:32:30,120
Speaker 1: go for intermodal and there's services user. Are you able

548
00:32:30,160 --> 00:32:32,240
Speaker 1: to like turn on a dime and say, you know,

549
00:32:32,360 --> 00:32:34,720
Speaker 1: we're going to send that out via truck instead.

550
00:32:36,600 --> 00:32:40,480
Speaker 2: Stuff that's already loaded now, But we we have gone

551
00:32:40,520 --> 00:32:42,560
Speaker 2: to wear and I think a lot of this is

552
00:32:42,600 --> 00:32:45,120
Speaker 2: again that when you look at our relationships with the

553
00:32:45,200 --> 00:32:49,040
Speaker 2: Hunts and this the Schneiders of the world, they off

554
00:32:49,160 --> 00:32:52,960
Speaker 2: they also offer OTR a service. So having the ability

555
00:32:53,040 --> 00:32:55,880
Speaker 2: if we needed to flip the switch and turn on

556
00:32:55,960 --> 00:32:59,760
Speaker 2: some OTR, then we have the capabilities to do that, right,

557
00:33:00,160 --> 00:33:02,480
Speaker 2: something that we we had to do back in a

558
00:33:02,520 --> 00:33:05,720
Speaker 2: couple of years ago when the rail just turned into

559
00:33:05,760 --> 00:33:08,160
Speaker 2: a nightmare and we ended up having to move some

560
00:33:08,200 --> 00:33:09,040
Speaker 2: stuff over the road.

561
00:33:09,800 --> 00:33:11,560
Speaker 1: Okay, that's that's great.

562
00:33:11,600 --> 00:33:12,240
Speaker 3: That's interesting.

563
00:33:12,400 --> 00:33:15,640
Speaker 1: So I just on the lt L side, you know

564
00:33:15,680 --> 00:33:17,360
Speaker 1: the pub you don't it doesn't seem like you deal

565
00:33:17,400 --> 00:33:20,200
Speaker 1: with a lot of the publicly traded folks, but you

566
00:33:20,200 --> 00:33:22,840
Speaker 1: know they telegraph their monthly numbers.

567
00:33:22,680 --> 00:33:23,760
Speaker 3: Uh to the street.

568
00:33:24,800 --> 00:33:27,520
Speaker 1: You know you're seeing their revenue per one hundred eight

569
00:33:27,760 --> 00:33:31,800
Speaker 1: X fuel going up mid single digits call it. Are

570
00:33:31,840 --> 00:33:34,800
Speaker 1: you seeing those kind of increases like mid tie single

571
00:33:34,840 --> 00:33:36,840
Speaker 1: digits from your LTL carriers?

572
00:33:37,880 --> 00:33:40,680
Speaker 2: We were again, we're right in the middle of a

573
00:33:41,080 --> 00:33:45,520
Speaker 2: of a contract negotiation, and you know, we're we're trying

574
00:33:45,600 --> 00:33:50,640
Speaker 2: to stay in the low single digits. I think their

575
00:33:50,720 --> 00:33:56,480
Speaker 2: ask is going to be in the UH mid to

576
00:33:56,840 --> 00:33:59,600
Speaker 2: higher single digits, and I think that we'll see where

577
00:33:59,640 --> 00:34:02,720
Speaker 2: we settle. I think of one of the challenges and

578
00:34:03,640 --> 00:34:07,760
Speaker 2: I kind of blame ups for this. They have introduced

579
00:34:08,400 --> 00:34:13,440
Speaker 2: ascestorial fees to the industry, and so all of a sudden,

580
00:34:13,480 --> 00:34:16,239
Speaker 2: you're not just talking base rate. We're talking about what's

581
00:34:16,239 --> 00:34:19,400
Speaker 2: a lift gate, what's an extended area, what's And the

582
00:34:19,520 --> 00:34:22,680
Speaker 2: LTL guys, the truckload guys, the ocean guys, they have

583
00:34:22,840 --> 00:34:26,719
Speaker 2: all backed up and realized that ass thetorials are margin enhancement,

584
00:34:27,120 --> 00:34:30,680
Speaker 2: and so that you know you're you're negotiating several different

585
00:34:30,719 --> 00:34:34,480
Speaker 2: aspects of this business. When you get into the LKL

586
00:34:34,920 --> 00:34:35,960
Speaker 2: or the truckload market.

587
00:34:37,719 --> 00:34:42,080
Speaker 1: You know you mentioned inventory levels a bunch of time earlier.

588
00:34:42,320 --> 00:34:44,880
Speaker 1: So are you guys done with your d stocking or

589
00:34:44,960 --> 00:34:46,520
Speaker 1: is there more de stocking to go?

590
00:34:46,560 --> 00:34:51,279
Speaker 2: At San mar Well, the good news with our inventory

591
00:34:51,520 --> 00:34:56,000
Speaker 2: is it doesn't age out. Because if you are a

592
00:34:57,320 --> 00:35:00,360
Speaker 2: if you're running a Starbucks, then you don't want to

593
00:35:00,400 --> 00:35:03,880
Speaker 2: switch that polo that your crew is wearing, so that

594
00:35:04,280 --> 00:35:07,399
Speaker 2: the number one selling polo or Sandmar is the same

595
00:35:07,480 --> 00:35:09,600
Speaker 2: number one selling polo that was there a year ago.

596
00:35:09,920 --> 00:35:13,040
Speaker 2: So our inventory, we may hang on to it longer,

597
00:35:13,480 --> 00:35:16,680
Speaker 2: but it doesn't like we have it's not fashion centric,

598
00:35:17,000 --> 00:35:19,480
Speaker 2: so that all of a sudden it's out of fashion.

599
00:35:19,520 --> 00:35:22,000
Speaker 2: We got to get rid of it. So it's it's

600
00:35:22,080 --> 00:35:26,520
Speaker 2: just we we didn't take our foot off the accelerator

601
00:35:27,480 --> 00:35:29,799
Speaker 2: when the econ was starting to slow down, and so

602
00:35:29,880 --> 00:35:33,279
Speaker 2: we ended up with quite a bit of inventory. And

603
00:35:33,320 --> 00:35:36,640
Speaker 2: so we've currently been in the position that repositioned it

604
00:35:36,719 --> 00:35:39,719
Speaker 2: for the right location so that we can service our

605
00:35:39,800 --> 00:35:44,000
Speaker 2: customers in a one day footprint. Today, about seventy percent

606
00:35:44,000 --> 00:35:48,040
Speaker 2: of our customers received one day service, which you wouldn't

607
00:35:48,080 --> 00:35:51,160
Speaker 2: think in apparel, I got an embroider or a decorator

608
00:35:51,280 --> 00:35:54,520
Speaker 2: requires one day service. But you know, once Amazon has

609
00:35:54,520 --> 00:35:57,600
Speaker 2: set the bar for what service needs to be, we

610
00:35:57,680 --> 00:36:01,680
Speaker 2: need to meet it. So on day footprint is you know,

611
00:36:01,760 --> 00:36:03,120
Speaker 2: it's continuing to grow.

612
00:36:04,800 --> 00:36:07,319
Speaker 1: So so there's there's a lot of talk and I

613
00:36:07,320 --> 00:36:09,400
Speaker 1: don't really know if it really works for the apparel

614
00:36:09,480 --> 00:36:14,240
Speaker 1: industry about near shoring or you know, uh, de risking

615
00:36:14,280 --> 00:36:19,000
Speaker 1: away from China or de risking away from your enemies

616
00:36:19,040 --> 00:36:19,600
Speaker 1: if you will.

617
00:36:20,239 --> 00:36:22,000
Speaker 3: Uh where where.

618
00:36:21,800 --> 00:36:24,759
Speaker 1: Does has Samar have been doing anything as relates to

619
00:36:24,920 --> 00:36:29,520
Speaker 1: changing their supply chains to kind of make them more resilient.

620
00:36:30,680 --> 00:36:35,080
Speaker 2: Sure, yeah, we've we we have. We started several years ago,

621
00:36:36,160 --> 00:36:39,399
Speaker 2: almost back during the Trump tariff era, when you weren't

622
00:36:39,440 --> 00:36:42,080
Speaker 2: sure what's going to be tariffed, what's not going to

623
00:36:42,080 --> 00:36:47,440
Speaker 2: be tariffed. And the apparel industry pays a unbelievable percentage

624
00:36:47,560 --> 00:36:50,560
Speaker 2: of tariffs in this country, and so our ability to

625
00:36:50,600 --> 00:36:54,000
Speaker 2: find duty free areas and where we can operate friendly

626
00:36:54,160 --> 00:36:57,120
Speaker 2: is a benefit. So we've moved a lot of business.

627
00:36:57,440 --> 00:37:01,440
Speaker 2: I think you'll probably less than twelve percent of our

628
00:37:01,480 --> 00:37:06,320
Speaker 2: businesses in China. We've made major investments in Africa. We've

629
00:37:06,360 --> 00:37:10,359
Speaker 2: made major investments in Honduras, and so that you know,

630
00:37:10,400 --> 00:37:13,839
Speaker 2: you look at the fact that we send yarn from

631
00:37:13,880 --> 00:37:17,080
Speaker 2: the United States to Sunduras, we spin it, we turn

632
00:37:17,160 --> 00:37:19,799
Speaker 2: it into shirts, we bring it back so we can

633
00:37:19,840 --> 00:37:22,839
Speaker 2: take advantage of KAFTA, so it's duty free and it's

634
00:37:22,880 --> 00:37:28,800
Speaker 2: three day transit. So definitely we've made those investments in

635
00:37:28,840 --> 00:37:31,359
Speaker 2: some of those regions and we continue to make those

636
00:37:31,400 --> 00:37:35,040
Speaker 2: investments in areas where we can you know, where we

637
00:37:35,080 --> 00:37:37,279
Speaker 2: have a supply chain benefit and we can get a

638
00:37:38,280 --> 00:37:39,040
Speaker 2: tariff benefit.

639
00:37:40,040 --> 00:37:43,000
Speaker 1: Right And you mentioned twelve percent of your businesses out

640
00:37:43,000 --> 00:37:47,359
Speaker 1: of a China. Was that a much higher number five

641
00:37:47,440 --> 00:37:47,919
Speaker 1: years ago?

642
00:37:48,680 --> 00:37:53,800
Speaker 2: Oh see, yeah, significantly. Yeah. So when we started moving

643
00:37:53,800 --> 00:37:57,719
Speaker 2: toward the Vietnams of the world and the Indias and

644
00:37:57,760 --> 00:38:02,520
Speaker 2: the Bangladesh's and the Africa's, that's that's where all that

645
00:38:02,560 --> 00:38:03,480
Speaker 2: business ended up. Going.

646
00:38:05,440 --> 00:38:09,160
Speaker 1: Okay, are you doing anything in Mexico for an apparel company?

647
00:38:09,239 --> 00:38:10,760
Speaker 1: Just doesn't make sure it makes sense.

648
00:38:11,239 --> 00:38:13,440
Speaker 2: The apparently, in this view, is big in Mexico. We're

649
00:38:13,480 --> 00:38:18,760
Speaker 2: not there. We focus more on the other Latin America

650
00:38:19,320 --> 00:38:22,520
Speaker 2: and uh, you know, we've got we've got some large

651
00:38:22,520 --> 00:38:26,120
Speaker 2: facilities in Honduras. Our largest port in the world is

652
00:38:26,120 --> 00:38:31,160
Speaker 2: Port of Cortes, and so we've found the workforce to

653
00:38:31,280 --> 00:38:34,359
Speaker 2: be incredibly stable and quality work and so it's been

654
00:38:34,360 --> 00:38:36,280
Speaker 2: a great, great location for us.

655
00:38:36,960 --> 00:38:39,280
Speaker 3: So the porta Coutez is larger than Seattle.

656
00:38:40,480 --> 00:38:44,560
Speaker 2: Oh yeah. For export, it's our largest export port of

657
00:38:44,800 --> 00:38:49,000
Speaker 2: shipping product out. We shipped more product out of Cortes,

658
00:38:50,120 --> 00:38:52,760
Speaker 2: I mean on a weekly basis that comes in through Miami,

659
00:38:52,800 --> 00:38:55,360
Speaker 2: you or Everglades, and so it's a big shipping location

660
00:38:55,440 --> 00:38:56,000
Speaker 2: for us.

661
00:38:57,160 --> 00:38:59,359
Speaker 1: How how many days is that transit time?

662
00:39:00,360 --> 00:39:05,360
Speaker 2: It's three to four days and it's tremendous transit. We

663
00:39:05,360 --> 00:39:07,640
Speaker 2: we have two core providers down there that provide the

664
00:39:07,680 --> 00:39:10,280
Speaker 2: ocean service and they do a great job.

665
00:39:11,080 --> 00:39:15,000
Speaker 1: Great So there's a lot of talk about sustainability. You know,

666
00:39:15,040 --> 00:39:18,080
Speaker 1: when you guys are planning your supply chains, where does

667
00:39:18,120 --> 00:39:21,279
Speaker 1: sustainability come in at least on the purchase transportation side,

668
00:39:21,320 --> 00:39:25,879
Speaker 1: because obviously you know it's it's burning fuel, so it's

669
00:39:25,920 --> 00:39:27,759
Speaker 1: it's not so green friendly. So what are you guys

670
00:39:27,840 --> 00:39:28,520
Speaker 1: trying to do there?

671
00:39:30,120 --> 00:39:34,000
Speaker 2: Sustainability starts at the top of the company. We've I mean,

672
00:39:34,040 --> 00:39:36,080
Speaker 2: if anybody wants to go look at it, we publish

673
00:39:36,080 --> 00:39:39,400
Speaker 2: it online. We have a very detailed and we have

674
00:39:39,560 --> 00:39:45,480
Speaker 2: a major commitment to sustainability, and so our transportation, I mean,

675
00:39:45,480 --> 00:39:47,440
Speaker 2: we're always looking for that you said, you know, the

676
00:39:47,480 --> 00:39:51,920
Speaker 2: green Greenway truckers. We work with our ocean carriers and

677
00:39:52,080 --> 00:39:55,720
Speaker 2: if they are providing a level of service that offers

678
00:39:55,719 --> 00:39:58,480
Speaker 2: some sustainability, we're going to take advantage of it, even

679
00:39:58,520 --> 00:40:03,640
Speaker 2: if that's slightly more exped some of our Caribbean shippers

680
00:40:03,840 --> 00:40:08,839
Speaker 2: are using liquefied gas versus bunker fuel. And then if

681
00:40:08,880 --> 00:40:12,560
Speaker 2: you look inside the countries, I mean we've we have

682
00:40:12,680 --> 00:40:16,440
Speaker 2: the largest solar array in Latin America. We also do

683
00:40:16,520 --> 00:40:19,759
Speaker 2: biofuel production there to help fund the energy to run

684
00:40:19,760 --> 00:40:23,840
Speaker 2: our factories. So we've we as a company have produced

685
00:40:24,320 --> 00:40:27,040
Speaker 2: the first what we call our reteat So it's a

686
00:40:27,120 --> 00:40:31,680
Speaker 2: one hundred percent re manufactured products, so the scraps on

687
00:40:31,719 --> 00:40:36,320
Speaker 2: the floor returned to thread, sewn into fabric and producing

688
00:40:36,440 --> 00:40:39,920
Speaker 2: a one hundred percent recycled T shirt and one hundred

689
00:40:39,920 --> 00:40:45,680
Speaker 2: percent recycled polo. So sustainability is a huge deal within the.

690
00:40:45,640 --> 00:40:47,600
Speaker 3: Sandmar that's great.

691
00:40:47,680 --> 00:40:49,399
Speaker 1: I think I got to call you later, maybe get

692
00:40:49,440 --> 00:40:53,600
Speaker 1: some Talking Transports podcast T shirts made up for myself,

693
00:40:53,719 --> 00:40:55,440
Speaker 1: maybe some hats and things like that.

694
00:40:56,280 --> 00:40:56,759
Speaker 2: We would love.

695
00:40:56,800 --> 00:41:02,479
Speaker 1: So, yeah, how did you get into transportation and supply chains?

696
00:41:02,480 --> 00:41:04,160
Speaker 1: I mean when you were a little kid, you're like,

697
00:41:04,239 --> 00:41:06,799
Speaker 1: I want to be in supply chain and logistics.

698
00:41:06,920 --> 00:41:09,360
Speaker 2: No, I wanted to be a placekicker for the Chicago Bears.

699
00:41:10,719 --> 00:41:16,160
Speaker 2: But it's funny. I think I got my start because

700
00:41:16,160 --> 00:41:19,200
Speaker 2: of football coach in college got me a job driving

701
00:41:19,200 --> 00:41:21,400
Speaker 2: a school bus that I did for four years of college.

702
00:41:21,440 --> 00:41:26,120
Speaker 2: But my first job out of college was the market

703
00:41:26,160 --> 00:41:29,359
Speaker 2: was pretty crummy back in nineteen eighty three, and so

704
00:41:30,400 --> 00:41:34,359
Speaker 2: I got on with a truckload carrier and started out

705
00:41:34,400 --> 00:41:38,600
Speaker 2: in sales and was a little carrier out of pay

706
00:41:38,640 --> 00:41:41,960
Speaker 2: at Idaho called May Trucking, and I think they're still around.

707
00:41:42,400 --> 00:41:46,040
Speaker 2: And then I ended up moving into the LTL industry,

708
00:41:46,520 --> 00:41:50,160
Speaker 2: and I was with Yellow and with CF and then

709
00:41:50,400 --> 00:41:53,120
Speaker 2: from there I got recruited to go to the other

710
00:41:53,160 --> 00:41:55,960
Speaker 2: side of the fence and be in logistics and transportation,

711
00:41:56,560 --> 00:42:00,880
Speaker 2: and I've never looked back. So it's been my life

712
00:42:01,120 --> 00:42:02,280
Speaker 2: ever since I came out of college.

713
00:42:04,800 --> 00:42:07,319
Speaker 1: Is there a book that you maybe might have read

714
00:42:07,360 --> 00:42:11,000
Speaker 1: about transportation or supply chains that you know you kind

715
00:42:11,000 --> 00:42:13,400
Speaker 1: of keep close to your heart that you recommend to

716
00:42:13,400 --> 00:42:15,440
Speaker 1: people that might be interested in the industry.

717
00:42:17,239 --> 00:42:24,480
Speaker 2: Not specifically about transportation. I mean LinkedIn is a great tool.

718
00:42:24,640 --> 00:42:28,840
Speaker 2: I follow a lot of leadership people, and I spend

719
00:42:28,840 --> 00:42:36,200
Speaker 2: more on like leadership principles and relationship building and those

720
00:42:36,239 --> 00:42:39,040
Speaker 2: types of core skill sets because at the end of

721
00:42:39,080 --> 00:42:44,240
Speaker 2: the day, the transportation world, while it's becoming far more digital,

722
00:42:44,960 --> 00:42:49,480
Speaker 2: it is still a relationship based business. And I think

723
00:42:49,520 --> 00:42:51,759
Speaker 2: to be successful in it that you have to have

724
00:42:51,800 --> 00:42:54,920
Speaker 2: that skill set, and so we've worked really hard in

725
00:42:54,920 --> 00:43:01,040
Speaker 2: those areas. I mean, if it's funny, the current president

726
00:43:01,160 --> 00:43:05,239
Speaker 2: of the Americas for CMA, he wrote a novel that

727
00:43:05,360 --> 00:43:07,960
Speaker 2: I read that was a pretty cool it's more of

728
00:43:08,080 --> 00:43:12,560
Speaker 2: a murder mystery. But you know, so I focus more

729
00:43:12,600 --> 00:43:18,040
Speaker 2: down the road of the leadership and some of those

730
00:43:18,040 --> 00:43:19,040
Speaker 2: skill sets.

731
00:43:19,719 --> 00:43:24,839
Speaker 1: All right, great, Well, it's always great to have you John.

732
00:43:24,880 --> 00:43:29,479
Speaker 1: I really appreciate your time, very insightful. So thanks again

733
00:43:29,480 --> 00:43:30,680
Speaker 1: for coming onto the podcast.

734
00:43:32,400 --> 00:43:36,120
Speaker 2: It's always I love catching up with you. Hopefully we'll

735
00:43:36,120 --> 00:43:38,960
Speaker 2: find our ways on a panel somewhere across the US

736
00:43:38,960 --> 00:43:40,799
Speaker 2: here in the upcoming months or year.

737
00:43:41,520 --> 00:43:42,719
Speaker 3: I hope so, I hope so.

738
00:43:43,160 --> 00:43:45,600
Speaker 1: And I want to thank everyone for tuning in. If

739
00:43:45,640 --> 00:43:47,600
Speaker 1: you liked the episode, please subscribe.

740
00:43:47,120 --> 00:43:47,920
Speaker 3: And leave a review.

741
00:43:48,200 --> 00:43:51,520
Speaker 1: We've lined up a great number of guests for the podcast,

742
00:43:51,520 --> 00:43:55,920
Speaker 1: so check back to here conversations with C suite executive, shippers, regulators,

743
00:43:55,920 --> 00:43:59,200
Speaker 1: and decision makers within the freight transportation markets. Also, if

744
00:43:59,200 --> 00:44:01,279
Speaker 1: you have an idea for future episode, hit me up

745
00:44:01,320 --> 00:44:04,400
Speaker 1: on the Bloomberg terminal or on Twitter at Logistics Lee.

746
00:44:04,440 --> 00:44:05,520
Speaker 1: Thanks everyone, take care,