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[Music] hey everybody welcome to ark's monthly update it is october 2021 halloween baby's coming up and actually this marks our first anniversary of doing this uh making these videos and sending them out to you guys we send these out to our customers specifically and again the reason we started doing this was we wanted to help share some shipping information on the industry we wanted to give some tips and insights for shippers to help them deliver to their customers maybe save some money and also just tell you what was going on at arc and help you stay up to date so absolutely we appreciate you guys for tuning in and we're going to get rolling this month's update uh the segway though was about halloween so you kind of nailed it when you threw that out there but i wanted to ask what is your favorite halloween candy hands down it's snickers man like snickers that's not even halloween that's just all year round classic snickers nothing special to it just so do you rate your kids absolutely they have to pay the parent tax right yeah we go i'm walking with them they have to pay the parent tax when we get back so you know you're taking stuff as you go so absolutely the uh snickers how about you yeah you know they have a new uh kitkat dark chocolate kit kat yeah that's that's where that's it oh yeah man dark chocolate is is definitely i can't get behind our dark chocolate i'm not 100 of a convert dipping into espresso you know you're good to go yeah but i love that i love the parent tax i call it the dad tax in my house and anything you know anything that comes through the door sorry that ice cream that's a dad tax yeah exactly yeah all the time all the time so uh let's move into some industry news andrew for october um i wanted to talk a little bit about trade show one thing we've seen pick up a lot is actually international trade shows so you know there was a while there where we weren't sure how the when those were going to kick back in for u.s travelers and happy to see that they're back to a degree there are shows happening and i wanted to tell everybody too we do kind of have an expert on the team a lot of people have done international trade shows but larisse on our team really has been focusing on that and she's been doing it for a long time even before she started with arc so if anybody has questions or is looking to get into an international trade show wants to know how to do it feel free to reach out and we'd be glad to put you in touch with her yeah that's a great great point she's got i think a little over a decade of experience in the trade show space for international trade shows specifically so well-versed in it something that we pride ourselves on in terms of being able to execute whether it's you know any temporary airports and all the other requirements kind of go around trade yeah there's definitely some a little more details that go into international show and if your freight's coming back to your country or staying there and some customs so for sure um yeah let us know if we can help um air freight so you know air freight has been the work around to this ocean problem that's been going on really all year round and there's actually numbers out this week that a boeing 777 charter has hit two million dollars so not just the air frame but people are then chartering full planes they have to yeah to try to get their supplies in time and just not stop production and so um that's more than double its peak for an air charter pre-pandemic again it depends on where it's coming from from asia but and we've seen actually with costco and home depot they're chartering vessels now so they've moved beyond just chartering airplanes and i i'm jumping a little bit ahead talking about ocean but they're charting airplanes was you know apple would do that during during new releases of products or materials we've seen that happen over the years but again the price has just really increased but now we're seeing stuff that never happened before and that's the costco the retailers of the world are actually securing full vessels that they're loading up with their own cargo from you know they're consolidating at these ports it's amazing it's it's incredible yeah and they're filling them up and they're filling them up well sure it's all your christmas stuff right yeah and that's why there's 102 ships currently in the port of long beach uh as we talk as we're talking right now in october yeah it's crazy i believe they call us now super peak season super it's not just peak it'll be super super peaksy super yeah exactly it seems like it's going to just keep growing and growing but yeah so the the supply demand imbalance has driven air freight rates on major trail trade lanes five times higher than normal so i believe i mean we see it yeah everybody sees it yeah it's right hundred percent yeah it's really wild um and then actually you kind of touched on the ocean but on the truckload side of things uh the american trucking association just released an article saying that there's a shortage of 80 000 drivers in the us right now that's the projected shortage yeah and basically if nothing changes they're saying by 2030 that's going to double to 160 000 drivers which is uh you know that's a that's a hard problem to solve well it's hard because you're stuck with you know these are these have to be trained drivers they have to have experience they have to be insurable because the other side of the spectrum is like insurance runs a lot of the requirements around you know how these how these trucks can be on the road simply because you have to be insured we've seen an increase in what they're calling nuclear verdicts which are basically if an injury happens you know from a from some sort of accident or something that involves a cdl or class a driver these nuclear verdicts have been happening where they basically just wipe out the entire carrier you know the 40 million dollar claim against a carrier that does you know 20 million dollars a year there's no way they can pay because their profit's 10 percent so they just close up shop and they're they're kind of stuck because there's no way they can actually pay that so the nuclear verdicts put these guys out of business and at that point they say do i want to keep doing this driving thing or do i want to go find something else to do and so you have this compounding effect of both the litigation side of of stuff happening you have people trying to come up with ideas of having younger drivers but i think we'll find insurance is going to have to accommodate the demands of class class acdl drivers or the demand needed for class cdl drivers otherwise it's going to be a very interesting problem that they have to solve yeah unless automation can step in the gap which we'll see we'll see it's far away i i don't trust a hundred thousand pounds cruising down the road at 90 miles an hour without having somebody behind the wheel that's true yeah it's so important that they know what they're doing back there because it's obviously there's a lot of people on the roads and uh potentially dangerous situations so yeah yeah it's it's a a big challenge for our industry so yeah like you said it'll be interesting to see what unfolds who gets creative and you know even this uh proposal that congress right now has some elements into that so what is the government going to try to step in and do or can how much candidates use that question right i think you hit on the head is how cr how are people going to get creative really yeah and that'll be the interesting thing to see is how do companies solve that through creative means um we've got our own set of things that we're doing to try to you know get around that issue whether it's shifting capacity to different areas that we found and i think every every logistics company is going to be faced with that and every supply chain is going to be faced with how do i get around the dependency i have on if these vacancies happen what that's going to do to my supply chain yeah interesting another thing on the truckload world if you've noticed prices if you guys have noticed prices from the west coast coming east a lot higher then east going west it's because of all the freight that's currently in southern california you mentioned 100 ocean vessels that are parked outside waiting to unload so cars are desperate to get back to the west coast so they're they're taking a lot less money to get back there but the rates that they're getting out of the west coast to go east are up to three times higher what you see on that specific lane there was a specific lane between la and dallas same miles different directions from west to east was 300 or three times sorry more expensive and i guess we've talked about it before and this is the lane balance where the where it's coming from where it's going to that's just as critical in terms of how a rate is structured um as it is you know the actual miles driven with a with a truck or a trailer just simply because the demand is there right now the rail has slowed down to a crawl where it's like taking months to get your cargo from long beach some they're not even accepting bookings right now that go inland so that means you got to book the long beach and then truck it on a translate out of long beach so you gotta bring it to a local dock take it out of the container put it into a truck and then that guy drives across the country so it's it's just this compounding effect that you're seeing so everybody's trying to get back into long beach because the loads coming out they're they're crazy high crazy expensive yeah yeah and actually i read too that one of the major railways shut down service from la to chicago which is obviously a cross-country route because they also want to keep the containers close by because people weren't returning their containers they're like the rail was like well we can't return them to you so they're just gonna sit here in chicago and obviously ocean carriers don't want their stuff just sitting all over the u.s so it's a lot of different factors and a lot of different difficult difficult scenarios that these individual carriers are trying to overcome because really logistics is a patchwork of companies it's not some big governing body that that guys long it's a patchwork of companies working together to accomplish the common goal of delivering goods to an individual or foreign individual or for a corporation so you see one you know one of the blocks fall out unless somebody comes into that gap it becomes very difficult to overcome that challenge and that's what we're seeing we're seeing a bunch of blocks dropping at the same time when typically we'd only see one or two of those things happen in an entire cycle so we're seeing it all happen at once yeah and it's really interesting you mentioned that too because i the fact that logistics is a network right it's a bunch of networks connected together i think it's easy sometimes just think i don't know i gave it to this company and they keep it the whole time yeah you know even the big companies fedex ups who do have a lot of assets who do carry from a to b often but they still pass off as well that's correct right carriers that specialize in regions or areas that they just don't want to go into for one reason or another or they're not strong in the area right they yeah you can't be good at everything all the time um but where you where you're not the best at you can always find the best person and then work with them or integrate with them and that's what every logistics company does they might not run that lane but they've got a really good trade partnership agreement with somebody and they're going to utilize them and vice versa usually you're reciprocating because you're strong doing something else so yeah absolutely it's not to think that it goes on i mean there's instances right where you put on a truck and it shows from the same truck but most of the time how the world operates successfully is a lot of independent organizations working together under the same common language of supply chain or logistics to actually deliver these goods in the time frame and in the manner that that they've agreed to based on the terms of conditions inside the bills of lading ultimately and it's also why things that don't go as smooth as you'd like often right you have that many parties involved everyone's trying to get the same goal done because ultimately that's what their job is to get done correctly that's everybody puts food on the table yeah but there are time zones there's countries there's customs and borders and there's a lot of different factors that get into yeah how many things move and even how they how you communicate like how you communicate with someone in china is vastly different than how you're going to communicate with someone in europe or in africa or india it's just a different culturally not just you know culturally how they operate is very very different so being able to facilitate trans continental trans-border language barriers like it's a big challenge for this industry and and for how much stuff moves around it's kind of shocking that it moves around with relative ease yeah we're just in a we're just in a cycle right now where it is in the u.s specifically it is compounded simply because of the mixture of our legal and physical requirements that are are pushing against pushing putting downward pressure on logistics through labor and legal stuff because i mean with california you have smog issues that you're dealing with in terms of what types of vehicles are allowed in what type of vehicles you know are allowed to operate inside the the uh um states so there's a there's a myriad of issues that you got to walk through carefully and this is not saying the issues are good or bad it's just saying there's issues that you have to overcome or solve for when trying to figure out the solution around it yeah yeah it's really interesting let's move into our shipping insight this month and here's the question i want to pose to you what is a logistics first mindset and why is that becoming more and more important in today's world yeah it's a great question matt i i think we talked about a little bit actually is that the the closer we get to the the closer our organizations get to the customer is ultimately going to get better so we've seen this with amazon where amazon doesn't ship from a dc 2000 miles away from you they're shipping from dc's hundreds of miles away from you and they want to get that closer and closer and closer if they can simply because speed to get you the product you want exactly what you want when you want it and then delivered to your door at the convenience so i think what we're seeing ultimately inside this kind of logistics first mindset is how do i as a as a shipper and a supply chain or manufacturer get my product to the end destination as fast as possible and then how do i get the sourcing of my goods my raw materials to make my products as fast and efficient as possible and we've seen amazon do this very very effectively on the second portion right they don't really have to do as much on the sourcing now they've grown into that where they do make their own products now but that's second they're primarily reselling but primarily they're a reseller and they've done a good job of putting pressure on the market to demonstrate what the customer actually truly wants so we've seen just different things right like two day is the sweet spot for shipping anything faster than two day is nice but not a requirement or a demand typically two days is just long enough to where you're like oh good my product arrived but it's not to where you're getting antsy why is your product not there so they've really made that like a staple in terms of of how you have to focus so as an organization you have to start thinking okay if the amazon effect is pushing against me in terms of me getting my product into people's hands what are the things i have to do to have a focus like is me putting my warehouse in this location smart or not smart is this is me partnering with this carrier that does transportation this way smart or is there a better option for me to do that and so i think what we're seeing constantly in terms of of how you can make lead with the logistics mindset is is simply by looking through the decisions that you have to make as an organization and leading it leading looking at it through the lens of your supply chain i think if i'm not mistaken tim cook the ceo of apple now that's where he came up he came actually through the supply chain kind of vane inside apple simply because a company like apple sources so much product for their organization to properly function in terms of producing these goods that it requires someone who can think creatively around topics and also really think creatively around how you can get a product from concept to actually creation so we see that when corporations lead with a logistics mindset the acquisition you're doing how does this fit in terms of our supply chain what type of assets are we getting out of it and where does our storage from that sort of stuff happen it really helps them capitalize i think a lot of times on the value of a dollar more or the value they get out of an organization more aggressively than if they just bought stuff because it was convenient for them and not really thinking about it through a mindset of logistic spending yeah and cost and it's amazing too because i mean as you're talking about this this is the b2b world like this isn't the b2c world where the b2c world people got two day but now that's what we call the amazon effect right yeah and now it's trickled in they say 80 percent of b2b customers expect that type of service yeah so how they pushed it so far that our mindsets have just changed to say well we shouldn't have to wait more than two days even if we're talking about business products yeah and also too i want to ask you because a lot of the bigger companies that have maybe big supply chain divisions you're thinking walmarts and targets these big retailers you know they've been doing this for for a while they've been doing this for a few decades trying to push the logistics how can a smaller business or medium-sized company are there any changes that they can make to help them have a better logistics first mindset sure i think how i've always viewed it as you can get a couple things right but you can't get everything so a lot of times people look at price as the number one goal when uh distributing their goods like how can i get this thing done for as cheap as possible or you know a carrier comes in and they sell on price that's it's the easiest thing to sell on it's like oh i can be cheaper than the next guy when in reality what you're looking for is in my in my experience has been is having someone who can come alongside you and help you avoid the pitfalls of that you may experience along the way so something as simple as a quality control like how does your organization handle quality control when you're doing forward stocking locations so that means pushing product into other warehouses to get closer to the end consumer but then how do you do the quality control from the origin and then on the back side of the destination how are you validating that stuff is truly up to the standards of of whatever was required so there's a lot of these odd ideas and concepts that smaller organizations don't really come across they really focus on price because that's one of the big things they can control but looking outside of it and looking at things like communication visibility and overall costs like what would be like your total total ltv or whatever your your lifetime value you get out of something or your overall cost you actually spend on something what seems to constantly a reoccurring theme is the cheapest carrier up front is not going to be the best long-term value for your organization in terms of overall spend inside your division so i think setting goals inside your organization that doesn't focus on just near-term profits but long-term value in your supply chain space is one of the main or number one reasons uh that somebody can truly take advantage of having more of a logistics first mindset than a reactionary mindset to things being forced upon you from the from the industry ultimately yeah and i think too uh interestingly enough even the way you organize your warehouse and even the way you run your shipping department right a lot of times i think customers they're so focused on production and making sure that the thing gets done or something gets made properly and then shipping is kind of an afterthought right it absolutely is so hey i don't know we'll throw on a skid and try to ship it out of here but if you do some planning on that and even realize cares have times where they like to come in and pick up right at different locations so finding out when those optimal times are and having maybe stuff ready then you might put yourself in a better position with a carrier and even packaging right too we've 100 we've talked about packaging multiple times yeah if you don't understand how your freight is looked at from a carrier's perspective you might be paying a lot of extra money for stuff that you could avoid if you look at it from their perspective and maybe change around some packaging we've talked about dimensional weight absolutely understanding that making sure your freight is fitting within their dimensions to make your freight more desirable really quick not just desirable but actually have capacity available yeah so if you're shipping stuff at 105 inches tall like there's only a certain amount of carriers that can actually handle that you reduce that by eight inches and most trucks can handle it yeah so there's there's just little caveats to the shipping world where having a good partner that can walk you through those steps in terms of selection carrier selection or just you know how should we do these things is critical to to making the right decisions that can save your company significant amounts of money over a longer period of time on top of just simply getting a cheap rate so if you can if you can mix the the benefit of the best value rate with with com with information you're talking about where it's actually like hey this is industry knowledge that we want to impart on you um it it will help a regular smaller medium-sized shipper truly take the same get the same advantages of large organizations yeah great and this wasn't meant to be a plug for you know some of our supply chain services but we can help people that oh yeah it wasn't supposed to be yeah i really want to bring this up because it all this this stuff happening the news i mean it's making major news about supply chain issues and but you're seeing the logistics first companies still are they're staying ahead it's not perfect but they are they're planning and they're staying ahead because they're thinking about this stuff early and often they're not waiting just to react to the market you nailed it yeah yep so all right so uh that's it really for this month andrew on our our october update fantastic i did have a did you know section uh i was hoping for it news coming uh it's all about halloween so did you know that right behind christmas halloween's the second most commercial unexpected right in the united states commercial i would guess would have thought thanksgiving would be more commercial i guess you sell a lot of stuff for that following yeah there's a lot it's interesting so how much do you think americans are going to spend this year i have no idea i don't even know 5 billion double it 10 billion yeah 10 billion wow project to spend 10 billion 10 billion on halloween costumes and candy oh my goodness you gotta get in the costume business dude so a couple other funny things uh the world's heaviest pumpkin ever grew in a swiss garden it weighed over two thousand pounds as much as a small car so i'd like to see that thing and then this one i thought was crazy but there's certain states where they have said that trick-or-treating is really only for kids so if you get caught trick-or-treating you're over 12 years old you could get fines up to a thousand dollars in some states even virginia there are some states you could get jail time it's a 13 year old you could get jack get jailed for trick or treat it's kind of crazy jail time for a snickers bag yeah they say they said that they would let a third tier off the hook if he was with his 12 year old brother or sister but yeah that's that's crazy that's nuts that's crazy yeah i don't know what the but the reason any safety or something but that's yeah that's nuts all right everybody that wraps us up for this month october 2021. thank you so much for tuning in and as always if you have questions on shipping logistics reach out to arc we're more than happy to help we're more than happy to take a look at your operations and see how things are going and see how we can help and until next month take care thank you everyone take care [Music] you