Boca Terry Tell us who you are and what your company does.
Ed Rone Expeditors is one of the world’s largest global logistics companies. We’re a publicly traded Fortune 500 company with 18,000 employees in 350 locations around the world.
We facilitate the global flow of our clients’ goods from door to door. To do that, we work with USA importers to coordinate all the steps involved in getting shipping containers filled with items made in vendors’ factories to the ocean carriers that bring the containers from port to port. In addition, we manage the final customs clearance, and we coordinate delivery to our end customers’ warehouses.
BT What is your connection to Boca Terry?
ER I’ve been with Expeditors for 22 years and have worked with Edward Cohen of Boca Terry for most of that time. He was one of my first customers when I was a District Sales Executive early in my career.
BT How does the system work when Boca Terry hires you?
ER Boca Terry notifies Expeditors when it is preparing to move its freight from its factories in Shanghai, Vietnam, India, etc. We take the booking info, coordinate with our overseas origin offices, assess how many towels and robes etc. will need to be shipped along with the correct container size, and determine when they’ll be ready to be picked up.
Then we send a truck to pick up the goods, put them in a 20- or 40-foot shipping container, bring the container to an ocean port, load it onto a vessel and sail to a U.S. port. Once it’s at the dock, we get it off the ship and on its way to a Boca Terry warehouse or directly to the customer. We perform documentation and paperwork for Customs, too, acting as a customs broker.
BT It’s no secret that the supply chain is strained right now. What are the main concerns?
ER There is a massive bottleneck in the ocean shipping market globally, for several reasons. Among them are these: Consumers are demanding record-setting volumes of freight. There aren’t enough shipping containers globally, nor does the current fleet of ships have open capacity for all the containers that need to be put onboard. In addition, there are equipment shortages. For example, we use chassis, which are metal frames with wheels, to transport shipping containers. There’s a shortage of those too, meaning freight containers might sit at a factory or on a dock much longer than they should. It’s unknown when that will change.
The trucking industry is also generating challenges for an already difficult logistics market. Drivers are leaving the industry for higher-paying jobs, there is a shortage of trucking equipment, fuel prices are rising, and environmental regulations in some states are negatively impacting the industry.
BT What other elements should we know about?
ER Let’s talk about demurrage and detention. “Demurrage” refers to storage charges we pay the port when a shipping container is there and can’t be removed yet. “Detention” refers to fees the steamship line pays when a container is outside port too long. Together, demurrage and detention motivate companies to move containers quickly. They can streamline that by making sure their warehouses are ready to receive and unload the freight in a timely manner.
BT How does the future look?
ER Promising. More ocean vessels are being built, and they’ll available in 2023-24. Plus, the market will ultimately work itself out. Freight rates will adjust over time, and either volumes will align with vessel capacity, or carriers will order more vessels to meet demand.
BT What should Boca Terry and its clients do to make things work better?
ER Companies should add stability by placing bookings much further out than they did historically. The further out customers place their orders, the more time companies like Boca Terry have to access materials, forecast manufacturing and shipping abilities, and work on strategies to make inventories readily available. In the past, it was standard practice to book a shipping container two weeks prior to the sailing date. In the current environment, we need more time. The further out a company books, the better visibility the logistics provider has to prepare to confirm rates, booking space, etc.