There have been so many issues and so much craziness going on with cross border trade, trade wars, Hong Kong unrest then COVID and now we have this ocean freight nightmare. In today’s episode, we have Nick Bartlett, a logistics expert talking about this ocean freight madness. So let’s dive into the show.
Topics Covered in this Episode
Intro Nick Bartlett
You were on a previous GFA podcast a while back which is episode 129
What is going on in summer 2021?
When did this madness start? Covid?
When did this kick off?
What has been the “historical chart” of prices?
Is there a chart we can look at or visualize?
When will it “go back to normal”?
Christmas is coming – so… people are going to be paying Santa Claus more this year?
Predictions of the future logistics and ecommerce market
What will happen
About you and your company
People / Companies / Resources Mentioned in this Episode
Episode Length 41:08
Thank you Nick for being on the show, and thank you everybody for listening in.
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[00:00:00] Okay. Episode 357 of Global From Asia. globalfromasia.com/ocean-freight-madness. And we have a logistics expert here sharing with us today, what’s been going on. Let’s do this, I mean, it’s a very hot topic, so yeah. Welcome to the Global From Asia podcast, where the daunting process of running an international business is broken down into straight up actionable advice.
[00:00:31] And now your host, Michael Michelini. Episode 357 shows plus, you know, the gladiator. So, you know, almost like really 400 something shows. And this is a topic, you know, we, we talked about at the cross-border matchmaker a bit. Well, you know, Nick, he’s been on a show in the past. You can check it out in our show notes.
[00:00:54] We’ll link it up to the previous episode. He did his research in advance plus he works with people all the time with this. I share some of my own hardships and issues about the ocean freight. It’s like, you know, there’s been so much, so much craziness with cross border trade, you know, with trade wars, you know, the Hong Kong unrest, the, you know, now we’re doing this COVID for, for years.
[00:01:14] And one of the horrible things is the ocean freight nightmare and people spending the same as like a nice car for sending a container. So, realize you’re not alone, everybody has to deal with this. I know some of you, you know, I’ve even had a friend I heard had had a mental breakdown lately and really, you know, it’s been really stressful for all of us.
[00:01:35] So don’t, don’t think you’re alone. We’re all getting, getting dealt with a lot of these difficult challenges and let’s try to get through this, you know. So let’s dive into the show, Nick Bartlett talking about this ocean freight madness. Thank you to our sponsor, mercury.com. They help a lot of people, especially nowadays can’t get to the U S to apply in person for a bank account.
[00:01:58] We’ve used this multiple times for various joint ventures and businesses here in a Global from Asia community. So I feel very confident to say they’re a great one to check out, no application fee. So what do you have to lose? Plus a little bonus. If you use our GFA link globalfromasia.com/mercury.
[00:02:15] Thank you for supporting the show and tell them GFA sent you. Thank you, everybody for choosing to listen to, or, or watch a Global from Asia podcast. We have Nick on the show. I don’t know, years are turning, you know, time is flying. It must’ve been at least a few years ago now. Yeah, I think, I think probably Mike, it was probably 20.
[00:02:36] I’m going to say like 20 16, 20 16. 2017 maybe. We we’ve been trading for around a year or so. I think so that tells me kind of in the, in the 16, maybe early 17. Yeah. Time is flying. I mean, you have been doing these podcasts for a long time. You don’t look any younger. And I look about five years older. I just got my haircut, these Chinese barbers, you know, sometimes I take a picture, I actually have a photo, I made a blog.
[00:03:04] Mikesblog.com/haircut. And I show him, but he went a little and said in the end. He went too short on that. I think maybe he meant short and that’s probably when it would help. If you just hit a bit more Chinese. Right. I thought I was kind of checked out of China. I mean, I thought fair enough.
[00:03:29] You afraid you were afraid. They’re just pulling me back. I thought I got outta here, man. I served my time, man, but anyway, so it’s always a pleasure. You’ll tell them, we’ll come again. It’ll come. We’ll see. We’ll see. I mean, we’re having a good, I almost felt like we should’ve been recording last five or so minutes, but we’ll have a great conversation today.
[00:03:53] So Nick Bartlett you’re logistics guy, go to person, we go to a lot and you had a great live. The first episode you were on was really insightful. Got great feedback on that. And this one a little bit more timely with COVID, but you know, like we’re just getting into almost Q3, you know, there’s obviously still Christmas.
[00:04:13] Hopefully we’re going to have a good Q4 for e-commerce and retail. So obviously everybody’s starting to get these containers out and I don’t know. I mean, you know, The rates are insane. So I’m sure our listeners are curious if any kind of insights, I even have some of my own issues I can personally ask you, but yeah.
[00:04:34] I mean, do you want to give a quick background about yourself before we dive into the show. Sure, sure. So my name’s Nick Bartlett. I’m the director of CVIP logistics. We’re a Hong Kong based logistics 3PL operator throughout Asia and sort of focusing on customers, you know, that are traditionally kind of based in.
[00:04:51] With production and the Eastern sort of selling back back to the west now focus or operations go right across B2B and B2C operations for logistics. So we work with a range of kind of traditional B2B customers, you know, guys that work on efficient freight, traditional 3PL and sort of selling the boat sort of, um, big box retailers, right through to sort of supporting more general sort of brands and on the sort of e-commerce.
[00:05:15] So we’ve been trading out of Hong Kong since 2015 and sort of growing our team. And we’re now so operating right across Asia stuff that from an operation, we’ll speak to them. We’re moving goods all around the world now, which is, which is pretty good fun, but it’s definitely presented lots of challenges for us as a business.
[00:05:30] And certainly given us lots of, lots of pretty fast learnings and a pretty unprecedented time. So hopefully there’ll be a few things I can share, give some insight and also just maybe might make everyone feel a little bit better. So, you know, certainly it’s certainly not alone. This is certainly a, a pretty scary, pretty scary time in the context of, of the damage, the damage it’s having on the business.
[00:05:51] And actually, if you look right, right down to the levels have been right on the consumer and we’re all going to feel that and the times to come agreed. Totally. Yeah. Just to reiterate what you said. I mean, I’ve tried to say this in some other episodes, you know, especially during the COVID is, you know, we’re not alone.
[00:06:05] I mean, everybody’s getting shocked, sticker, shocked with rate increases, you know, I mean, Yeah, it was, you know, even, even the biggest, even the biggest of the players in the market, you know, coming to, you know, coming to meet anyone and everyone. Put it put a solution to this problem. So, you know, we’re seeing it right throughout the sort of supply chain and right throughout the customer size as well.
[00:06:32] It’s unbelievable. So, you know, we’re just starts basically. And maybe it is when, when, when did this start? I mean, I remember when it was the height of it, you know, the scary height for me at least was mid-March like Friday, 13th, March, 2020. And that’s when I felt like the world really started to shut down and I was on Amazon and closed around.
[00:06:56] I think it was that exact day. Their, their warehouse started to close down, receiving non-essential that scared a ton of us. We had, you know, at that time Amazon business I was with had containers getting loaded up in China at that time. Where are we going to send this container now? Like, yeah. Yeah. I think if you look kind of back to the sort of timeline of the, you’d probably say that, you know, everyone thought initially this was just a China problem.
[00:07:24] Right. Everyone kind of thought, you know, Hey, this is just the thing that’s lingering around in south China. And. Disappear and someone will get on top of it and the world kind of proceeded to be normal. And then if you kind of fast forward, obviously it did escalate very quickly to that kind of around that March, March time with where it started to escalate and certain to foreign markets.
[00:07:44] If you look at what happens in logistics, you know, it was a bit of a delayed effect because you obviously had, you know, normal production going on production cycles, shipping and kind of all happening. And it sorta got to kind of February, March, April, may onwards. And then you started to slowly start seeing the NBA.
[00:08:00]And I think if you, if you tear it all back and you think, okay, how, what what’s actually happened, you know, safe to say a lot has happened and the flow and the sort of fallout or the flow out of feet of this whole COVID pandemic has certainly hit a head of big shake up on the shipping industry. And if you look at it in the context of ocean freight, you know, you’ve got sort of the perfect storm of everything you didn’t want to happen.
[00:08:26] The pandemic itself, which is in turn, has a flow down effect. So things like labor shortages at the pool or warehouses. I think you have more cases of COVID, which then spirals out of control. Then you have a whole bunch of slump in production because everyone freaks out. So it’s all down new tools. We don’t want to do any more because we’re all worried about what’s going to happen.
[00:08:43] Then you’ve got all the suppliers on the ocean freight side. So the traditional carriers, the masks and the evergreens need seats have an insane. Production is dropping. Let’s pull back. Let’s make some smart, economical choices here around how we run our fleet. Let’s at least cancel a whole bunch of silence.
[00:08:59] Let’s make sure that we’re not freaking out and not, you know, rising out on costs whilst production drops. And then you sort of fast forward. And now that kind of sucks, seven months and the opposite starts happening. So you start seeing a huge surge in production, production, and results to say that everyone slowly starts to go back to factories and working.
[00:09:18] And then you say the ocean line is just very much remaining the same sort of applying that same sort of pressure around, you know, how they operate their business, which is, we still don’t know what the outlook is going to be. The conservative let’s only run a certain amount of boats. Let’s not bring back, you know, full loads of full loads of boats coming back out of the US back into China.
[00:09:37] And in this sort of snowball effect of all these things from labor shortages to pull conditions to the planning, by the carriers that they’re doing themselves around, how much spice and availability they’re giving. then you put the Suez canal on top of it. That then happened where a boat goes, you know, got a sideways in the canal and the flights and stuff there for a few weeks and then pays a billion dollars.
[00:09:58] You know, and, you know, there’s, there’s, it’s faster. It’s almost unbelievable. You probably wouldn’t read about the sort of thing in terms of just how it’s, how it’s played out. And then what’s happened obviously is that timeline has progressed and all these things have pep and it’s just got worse and worse and worse and worse than that, the perfect storm of all these elements is actually created now.
[00:10:18] And all time high shipping costs, exponentially higher than it ever has been historically and carries it in a very, very strong pocket of profitability that are taking complete control of the situation. You know, reports of, you know, going from kind of 50 million in Q1, 2020 to doing sort of 2 billion and in 2021 Q1.
[00:10:39] So, you know, you are looking at seriously. You know, I guess you would say, you know, highly for choices, people who have taken, you know, take taken advantage of the situation and made it work for them. But you know, these, these perfect storm has certainly had a much bigger impact on, on, on, on the actual sort of customers themselves and the impact that it has on their businesses.
[00:11:00] But yeah, that’s sort of like in a nutshell, kind of look right back to when it’s from, when it started. Right. Through to now, it’s kind of the ultimate perfect storm of just that’s happened. And everybody’s, everybody’s been knocked off the table, so to speak, you know, everyone’s been knocked down and everybody’s trying to figure a way to get back up and then find finally a place in this new.
[00:11:19] And it’s really hard for us as a provider. So, you know, try and coordinate and facilitate all of these changes that are going on. Obviously, you know, we do our very best at making sure that we give customers as much flex and as much as many options as possible. But you know, at the same time, like, you know, we also only have a certain degree of control as well.
[00:11:39] Right. So, you know, everybody an hour, an hour, instead of their plays, the role that we play in the industry, certainly, certainly out of doing that. If you, if you’ve got a good logistics partner, they can hold onto them. But certainly if you, if you don’t have one of us to Sydney, that’s the time that the true colors of your providers will be shown for sure.
[00:11:54] Yeah. I mean like some examples, I don’t know, I’ve talked about a little bit on the show. I haven’t, I’ve been embarrassed to bring it up lately, but I was in the process of launching a new brand on Amazon and a partner with the factory and title. I don’t know if we actually made the brands, you know, we have the trademark and the packaging and may production and he’s, you know, basically it’s, it’s like a container sitting in Thailand right now in factory.
[00:12:23] I think normally a container to east coast, US I don’t know. You probably know. I dunno, he he’s a factor at the moment. Yeah. At the moment eastbound or westbound from the east, you’re sort of looking at, you know, very, very conservative, low, low price around 15 to 20,000 US dollars. Yeah. Yeah. And you know, before, yeah, before COVID net price was around 1500 to two grand.
[00:12:49] So even if you just look at it, solely for the numbers, for which they are being presented 1500 to 15 grand is pretty much that. And, you know, for any small business carrying a cargo, let’s say carrying one container or carrying a hundred containers with an average box value of say 15,000 US, or even 20 or 30 or 50, it doesn’t matter.
[00:13:11] Right. Because your , your cost space has just exponentially creeped up. And as a result, who’s, who’s, who’s going to pay for that difference. I mean, if you’re going to keep shipping stuff at a, at a breakup or a loss, or, or you just not going to. Yeah, so this, this whole fund is going to die. It’s got a tail out at some point that there’s gotta be a, a bit of a reverse, reverse moment.
[00:13:30] It’s got to come in with, with, you know, we’re shippers. Just say, you know what? I’m actually better not shipping it than I am. And then eventually that might draw the demand down and that might get the shipping lines to realize, okay, actually, maybe our customers are smarter than we give them credit for.
[00:13:45] Let’s readjust our pricing and get more in line with, with the, with where the market might serve. But right now, mate, they are riding, riding a very, very big pocket of profitability. And that sound it’s scary. So then it’s basically to the major carriers, is that the people. Yeah. Yes. So there, there are a few sensitive to things that are driving.
[00:14:06] There are a few things that are driving the cost up, right? That there’s obviously what’s sort of called kind of what they sort of call sort of space management or sort of, you know, I guess availability and silence as kind of one. So naturally in a normal environment, the carriers would operate, you know, their fleet at a hundred percent completely optimized, but because of the uncertainty that COVID created, but they.
[00:14:30] Data availability back because I thought it would be smarter to run full boats rather than half boats and around the world. Right. So, you know, make economical sense as to why they did that. But then as demands come back, they haven’t necessarily adjusted their, their own space management. If you like. And they’ve kind of continued to go, Hey, you know what, actually, we were getting 1500 bucks before.
[00:14:50] Now we get an eight or 10 or 15. This was a much bit of business for us. That’s dying. Literally, it’s not, let’s not give it to the old business. So look, I get it right. I get it. And you know, you have to remember that for a very, very long period of time. These carriers, the big boys, you know, they have run very lean, lean margin business.
[00:15:09] So I get it right. But this is their opportunity to cash in, but it’s the scary thing is it’s completely unregulated, right? So you don’t have anyone regulating what the shipping lines can do. And you’ve only got really, you know, half a dozen. And the world. So, you know, it’s almost, you know, it’s almost monopolistic in the sense that they operate in alliances.
[00:15:29] It’s a bit like the airlines, how they kind of coach you with each other, you know, and they have sort of a whole library kind of behind closed doors, kind of what, what, what sort of, how it might play out. So that’s kind of, that is one thing that seriously driving the price up, and that’s obviously created this huge spike in demand, but then obviously a limited amount of called silent space that you can get.
[00:15:46] Then the second big issue is that there’s a real shortage of often. Coming back to Asia. And so, yeah. Or you can get a booking and it’s all good, you know, to give context to that before COVID you could place a booking within about 10 to 14 days and get us. With a net period out of China to kind of give you context.
[00:16:06] Now you’re looking at a minimum of kind of four to six weeks, and then you’re still not even guaranteed it until a week before the sailing date. Anyway, and in that case, if the carrier gets a higher price for your book and they’ll just bump you and give it to someone else. So what’s, what’s become, you know, what was a really fairly traded transition.
[00:16:24] Has actually now become almost like commoditize. It’s almost like they’re, they’re just buying and selling it at the highest price. And, you know, it’s, it’s, that’s what I mean about it being a little bit farcical was kind of, it’s hard to believe that you can actually operate like that. This is, this is, you know, when you look at the, the volume that comes out of China and you look at the, the reliance that China has on global trade and getting stuff into certain market and getting stuck.
[00:16:49] Yeah. People’s homes. It’s sort of, it’s scary. Just the sort of thing, how much impact that these guys are having this very small group of people are actually having on, on what’s become, obviously there are things outside of their control, you know, that then also does contribute to price. You know, things like port conditions, what’s the carriers done.
[00:17:06] Don’t, you know, they don’t run all the ports in the world. So there are other kind of other factors that are driving it up. You know, those, those two kind of main things are, I kind of want, what’s sort of driving that price off and it’s, it’s certainly, it’s certainly theory just out how it’s going. You know, in fact, you know, I think a lot of, a lot of our audiences is probably the hardest hit because the small, the small seller it’s small business.
[00:17:30] I don’t like to say small, but the average seller, cause I think the bigger ones can absorb it more right than. Yeah, but, you know, even, even the, even the like guys, I can feel this really hard, you know? I mean, I totally agree for the small guys. This is going to potentially want a huge amount of amount. So you really hope at that point, that local government and you know, the specific customers from these, these different parts of the world, hopefully get support in other ways.
[00:17:57] Yeah. From external, external methods to keep them alive. But certainly, even for the big boys, you know, that, you know, they might move the volume, but sometimes their margins can be slumped too. Right. So, you know, if you are, like I said earlier, if you’re moving a box and it’s worth 50 grand US and your shipping costs, is costing you 21 or 25 or 15, you know, your margins have just taken a significant sort of, if you look at it in a period, of course they can probably carry the Capitol a lot further, the bigger boys, but in the end of the day, like everything’s still measured on a unit basis, margin and profitability.
[00:18:30] Right. So if you look at some of the world’s biggest producers of, you know, whether it be electronics or toys or, you know, anything, like they might just start saying, you know what, like, let’s just wait till the sun calls off and then we’ll make our product available again, because it’s not, what is it for us to type in or alternative?
[00:18:48] And what we’re already saying is a lot of re not a lot, but some of the bigger box retailers to start the, starting to push that, start to push that, that price through to the customer. And at the end of the day, at the end of the day, the biggest buck from them, this whole thing is as the consumer, because we will pay it.
[00:19:05] Right. And these prices that they were before, COVID, we’re not going back to those prices. Those days. In my view, those days are pretty dumb because now that there’s, you know, th th the ocean liners it. It’s the time that is enough demand to operate at the higher price point and people are willing to pay for it.
[00:19:24] Then it’s a crazy thing you would think maybe with demand and prices, surge in demand for containers might actually drop off, but actually everyone’s kept buying it. So what’s scary is that because everyone keeps buying it. The prostate surgeon. These, these got to be a tailor, as I said, but having said that, I think that we are fundamentally going to see the victim here, feed the consumer at the, at the, at the retail floor.
[00:19:44] And that’s just what’s going to happen. Right. I think some retailers have already pushed back sort of what they call and COVID surcharges onto the checkout is to try and get some cost for cost recovery on this stuff. And, you know, that’s, you know, we’re going to see that, we’ll see that in line with inflation as well.
[00:19:58] And I think it’s, it’s certainly, it’s all going to come head out pocket pretty. I agree. And then, I mean, but back to the big boys, I mean, this is a really big boy, but I don’t want to say the wrong company, but I think it’s home Depot. I might be wrong. They made their own chart. I don’t want to say the term might be wrong, but their own ships or their own boats or their own charter someplace, I’m just trying to draw a chart.
[00:20:20] So, I don’t know if obviously they’re there, they’re like the big, big boy, big, big boys, but yeah. So look, I think the scary, the scary thing too, the ocean freight market it’s there are very limited alternatives, right? So if you look at, you know, Hey, what am I alternatives? Like, don’t put it on a boat, you know, they’re up there on that and least, unless you’re a big boy and you can go afford to chatter.
[00:20:47] You know, for example, which is what a lot of water guys to particularly last year and the PPE market, alternatively, you go and shatter a vessel. Now some of the guys have chartered vessels and they’re running, you know, hundreds and hundreds of, of containers on these boats themselves. But Jeff has made that even if you’re a billion dollar empire, Multi-billion dollar empire.
[00:21:07] That is still a very big rush to be taking to charter your own, your own vessel right. I mean, gee, it’s just, just the, just insurance liability on that alone. Let alone, you know, this, you know, these beings or something bad happens or anything like that. So I don’t think a lot of these bigger boys that actually have a lot of appetite to go and charter a this’ll, but certainly those that have got the leverage and the volume and can fill the boat, then maybe that, that does make a lot more commercial sense.
[00:21:31] But certainly I, I imagined at an executive round table that wouldn’t be, wouldn’t be an option that many people would be keen to do, but they might have been forced into it. So I definitely know that. The, the China market has definitely seen a huge spike and the charter market for sure. And an ocean freight, but only very few can, can really entertain that as an option.
[00:21:50] There’s been a few, there’s been a few charters come out of, out of south China where, you know, one central party has taken the charter and then it’s sort of down sort of downwardly [00:22:00] sold spice on the boat and that’s, we aren’t seeing it, but that again, it’s such limited supply, right? I mean, in the grand scheme of things, right?
[00:22:06] One boat, two and a half thousand containers. It’s just it’s it’s, you know, it’s dropping the water stuff, right? So it’s, it’s, it’s neither going to have like a net pro market and pets, unless the entire market got together and said, Hey, let’s just tell, tell all the big boys we’re not, we’re not going to put containers on them anymore.
[00:22:23] And collectively go out and chocolate boats together. You know, certainly, certainly that, you know, something’s gonna have to change. Right. I mean, there’s gotta be certainly going to have to be a lot more supply, put on, put on the water that that’s become clear. Right. So who’s responsible for that. Maybe they supply will come through the charter avenue or maybe it will come more through the big boys actually starting to release more of their fleet and, and, you know, bringing more fleet and new fleet online as well.
[00:22:47] Yeah. So, you know, you must, I mean, I’ve heard it a little bit from our, you know, our community and a little bit myself, you know, and then my factory partner, like he has clients. Like you said, I think we were just paying because either you, if you, you know, whether it’s Amazon or any retail, if you don’t have product to sell, you don’t have a business.
[00:23:09] If you’re out of stock you’re what are you going to double H it’s a real double edged sword. Right. And I think a lot of businesses would probably take the position there there’s like any period of that business. There are, there are, you know, the highs and lows, right. And this is probably just a period in a central line.
[00:23:26] I think what’s scary is people don’t quite realize the snapshot is going to go on for some time. And that snapshot, how long can you, you know, how long can you last? This is really the question. So for your small guys, you know, certainly I’d say pretty limited runway, but you guys, you know, they might start to make bigger strategic decisions around how to buy around the supply chain then might change the production point.
[00:23:48] For example, you know, I might decide to produce in a different market rather than producing. Sure they might, they might start front-loading producing way more than they need to. And then just bringing it into the market to sort of almost a hedge against for the price increases. So there, there are sort of a number of different, I guess, strategies that the bigger boys will start applying, but certainly man, this is, yeah, this is, this is a long road ahead and that’s scary to think how many will actually will actually survive.
[00:24:14] But if you’re just a small Amazon seller, man, the question is, do you keep yourself relevant? Do you keep yourself online and just succeed? If you’re losing one. Alternatively, do you accept law imagines or do you just say, you know what, I’m going to ride it out for as long as, as long as we can. I mean, I think the logic, the thought process is, like you said, like survive this and then.
[00:24:35] If you, it makes you think of the forest Gump, shrimp, boats, you know, and some, some reason he was out there in a hurricane and they survived and all the other shrimp boats sunk, and then he became rich, you know, so of course, obviously you can survive, right? I mean, sometimes just staying in the game, you know, not even winning, but just of staying in the game.
[00:24:58] Right. Because youknow, we’ve talked about this in the show. You know, relaunching a product is not, it’s not so easy, you know, of course, you know, if you’re, if you’re out of stock and then you, you try to relaunch it, I mean, it can happen, but it’s the trick, the goal. I mean, any product businesses stay in stock, right.
[00:25:19] At least as much as possible to keep the yeah. And, and, and I think that’s probably at the moment that certainly the strategy at the moment. W at least from our side and what we can see in terms of our customer base and what they’re doing, that they are just choosing that right. Choosing to stay on shelf, choosing to be, you know, to not lose momentum.
[00:25:38] Also, you know, I guess you’ll have to look at it on the other side of this as well, right? Like what’s this huge supply chain disruptions and rising prices. The great thing is this demand. And, you know, so, so, you know, you kind of can’t, can’t forget, you know, just on one side of the equation games in trouble, you’ve actually got on the other side of the equation, you’ve actually got some, some real benefits as well.
[00:25:58] Right. So, you know, I think like just taking a balanced view is obviously what a lot of businesses are trying to do, but, you know, Hey look, the world’s different. Pretty good shot given the context around, around demand. So for the first sort of products and consumer products. So I think we’re, we should kind of can listen to them in some senses that, you know, we, everyone could be sitting on, you know, not, not doing anything, not, not spinning.
[00:26:21] Yeah. But an actual fact we’ve caught, you know, e-comm has pretty much fast forward three years, three to five years, you know, and shipping costs have increased. Sure. But Hey, consumers still want to still get it to them, stay relevant. And I reckon you’re right, mark. You come out the end of this. You could be w you could be the last man standing on the shrunk boat, you know?
[00:26:39] Yeah. Let’s say, you know, there’s plenty of business. They’re going to fall by the wayside. Right. So, you know, you gotta, I think, you know, a lot of businesses are probably staying pretty close. And figuring out how it was the what’s this going to look like if an act integrating, like, where are we going to come out on this?
[00:26:54] We might come out. It might be food at the moment. We might come out first and 18 months old and two years. So yeah, hang in there. Hang. Yeah. I mean the other side, I don’t want to sound negative, but I mean, I have talked about it. I mean, I’m, I’m starting to help, you know, just more and more aggregators and own these roll up funds and it makes you think like bigger is better scale, right?
[00:27:15] I mean before COVID, if you ship more, especially LCL and FCL, right? Like taking you feel whole container, it’s usually better economics than, than sharing. So, you know, I I’ve been noticing more sellers willing or interested to maybe, maybe, maybe, maybe take a number now. Right. You know, get out while they can, or while it’s, while it’s good or, I mean, there’s, it’s overheating, you know, there’s, there’s huge competition to buy out these sellers and get these brands.
[00:27:44] So that’s another, another side of the story too, you know, there’s these a lot.
[00:27:51] You know, timing is everything, right? So if, you know, if you’ve built a great business and you know, there’s demand for it, now throw an aggregator. Whether it beyou you’ve been kind of someone like a, like an EPA, like aggregator, right. Someone got a whole bunch of, yeah. So, you know, a lot of these, uh, that’s a big shift in that, in the market.
[00:28:12] Right. So, you know, this. Like private equity backed companies that are coming in right. And doing some pretty, pretty big things and actually giving ironically, it’s probably giving Amazon a bit of a run for their money and in some senses. It’s true. It’s true. And then of course there. They’re dealing with like anti trust or, you know, a lot of the US pushing Europe, I think too is pushing Amazon to be lb to predatory, you know, with their tactics.
[00:28:40] You know? So that’s another side of side of that, but yeah, I think we went towards the end of this discussion. I mean, there is, I mean, You’re is there light at the end of the tunnel? You’re saying, I mean, I don’t know. I, I th I was, I was told her her maybe after the Christmas rush, maybe after Q3, early Q4.
[00:29:00] Yeah. That’s what I’ve been hearing few. Yeah. I think, I think from our perspective and look, certainly like, we’re, we’re lucky we get to talk to lots and lots of people in the industry, and we talk to, you know, Well, they are partners and freight forwarders and carriers directly, and that’s, that’s always kind of get good insight from them.
[00:29:17] I think, at least from how we see it, you know, I think 2021 is going to be much, much, much the same that we’re going to get through. You know, we might start saying a little bit of pressure alleviating on the container shortage at the back end of Q3. So that’s, I think we might, might say a little bit of a better situation there, but in terms of where those price points are, I think we’re probably going to see most of that going in.
[00:29:38] And to the rest of the year, obviously we’re also coming into peak season. So unexpected challenges to meet, to meet, to be lumped. Certainly don’t expect all your Christmas presents ready on Christmas day. Some might be a little bit late. That has been the other little caveat I’d give to lots of, lots of moms and dads out there is, uh, you know, plan early, get you get sort of early, you know, Walmart might run out.
[00:30:00] Your favorite, you know, your favorite toy or something like that. So you might need to kind of be thinking a little bit through the heat, just given the major shortages and delay of getting products into these markets. And then look in terms of the next year, while I do think probably we will see a bit of a reduction next year and 2022, and then hopefully, you know, Sorta see what happens after that.
[00:30:22] But, but I certainly feel like we’re, I feel like we’re sort of near the peak at the moment that that’s at least at least my, my feeling. And then, you know, hopefully the, a ways off, a little bit coming into Q1 2022, when, when demands are a little bit lower and also, you know, by that time you’d sort of hope that the carriers that had been funded that maybe they’ll start.
[00:30:40] Start to realize that they need to, you know, maybe try and try and help resolve this problem for shippers
[00:30:51] really interesting to hit. This is going to pass to the consumer, right? If you gotta pay 10 X on your shipping, you know, obviously like you said, if you don’t have control over it. Yeah. Yeah. I mean, look, it’s, it’s not, it’s no different to raw material cost increases or, you know, shortage of foreign materials.
[00:31:10] You know, all of these things start to start, start to play up a little bit as well. So you, you know, I think certainly the consumer is going to feel us, you know, but I, you know, I, I certainly don’t think there’s, there’s light at the end of the tunnel, immediate labor, you know, we might be back to some normality maybe in the next year and, and 2023, that’s kind of my, sort of my view, but certainly we’ll never be back in pre COVID prices, unfortunately, I don’t think so.
[00:31:37] Get used to, you know, maybe a pan up around that. 3 4, 5 grand a container rather than the 1500, two grand that you were historically used to insane the same. I mean, yeah. I mean, I can remember even less, obviously. I guess there’s always going to be inflation or price increases, but geez. Yeah, exactly.
[00:31:56] You’re going to probably feel it a lot more. Just give them these really obvious increases and such significant increases. So, so Nick I’m, I know you shared a little bit the beginning, but maybe we can hear more about your business and how, how you can help. Hopefully there’s ways, you know, I’m, you know, lots, you know, you’ve been doing this since pre COVID, right.
[00:32:15] You’re going to, you’re going to be safe. Yeah, yeah, yeah. Wow. I’ll sign to some of the guys. Yeah. And the team the other day that, you know, w w w we’re kind of working through a really, you know, unprecedented at time in terms of what what’s going on. Right. And I think we’ll certainly look back on this time, and I think we’ll think how we act.
[00:32:38] No, we navigated all of these situations. We live through false measure and, you know, type of events, which, you know, always in context, but never really happened. You know? And, and as a result, we’ve seen a real seismic shift in the way that the market operates and even people’s understanding of it too.
[00:32:52] Right? Like even, even shippers on the standing of a historically, didn’t really need to know too much about it. Right. It was easy. It was a fairly easy way to [00:33:00] try out. What’s more complex, there’s more, more pieces. So I think from, from our perspective, certainly we have, you know, w we’re not, it’s obviously not an easy time as a provider, certainly under a lot of pressure to make sure that we find the right solutions for customers, but also that we can send you to, to try and be adaptable and work around the challenges too.
[00:33:18] Right. I think what we’ve seen when we’ve had success is we’re, you know, we’re an operator there, so we operate as a force. Provide us. So we set kind of about all of the providers in the market, almost like your control tower, top, top provider. And as a result of that, we have access to a wide range of partners and carriers that we can work with.
[00:33:35] And we get a very nice sort of cross section spread of what’s going on, but also we are a lot more solution driven in terms of being able to piece something together in a pretty difficult climate. So I think that’s kind of been a real, a real differentiator for us in the last year or so in particular, particularly as a sector.
[00:33:50] Throwing more curve balls at businesses. But yeah, like I said earlier, you know, we, we’re a logistics company based out of Hong Kong servicing sort of, you know, customers based all around the world, but predominantly with production and the east. So we have sort of like a slight homebound operations and Vietnam and Taiwan, Hong Kong, Singapore and Australia.
[00:34:09] And then we obviously have south China that when we then sort of tried back back, back to the west. So for us. Customers across the spectrum from selling into retail right through to selling directly online. We sort of worked directly with those customers to sort of build out the most suitable logistics solution.
[00:34:27] And then once it’s sort of designed and built, we then kind of support and run the operational delivery. And in addition to that, we have some software that supports our business across our sort of B2B and our B2C services. So customers can kind of get a full view of what sort of what’s going on across the, across the logistics.
[00:34:44] So look, any, any, any small business or enterprise company has kind of who we work with? We don’t, we don’t. You know, we don’t sort of specialize Justin Small business or Justin book business. We certainly have a nice wide sort of cross sectional on our books at the moment. And, you know, we’re really nimble, we’re small and relatively swollen and we’re adaptable, you know, and I think that’s, that’s certainly a key feature of our service.
[00:35:05] So if you can reach out for a coffee or a zoom call, or what if are we chair? What are the fences, would it be offensive? We can, we can do it. And hopefully you found out tonight a little bit insightful in terms of the realities of the ocean freight market and. Yeah, thanks Nick for your candidness. And yeah, like, you know, that’s, I think the people you work with and you’re always very, you know, straight up and helpful and, and, you know, tell us how it is, which I think people appreciate.
[00:35:32] So what’s the best place people could find out more or. Sure so you can visit our state now www.cviplogistics.com. Alternatively, you can find me on LinkedIn at potlucks. That’s B a R T L E T T. Or you can get me on Wechat in Bartlett one. Okay, perfect. That’s great. A lot of ways. Thanks so much, Nick.
[00:35:53] And, uh, yeah. I hope to see you in real life. One day, all of us, right? We’re all going crazy. It’s going to be, it’s going to be, it’s going to be a Wade when I start saying my colleagues up in China, but it’ll be nice to get back on, get back on the train and get back on the, on the plane, down to down to Vietnam and Australia.
[00:36:13] And then you can use it. It’s been hard for our, you know, all of our community, you know, like we’re all travelers that’s by definition is yeah. Yeah.
[00:36:26] He had lost all his it’s all redundant. Cause he runs stuff. Everyone’s become a nightmare.
[00:36:37] Yeah. Cool man. Thanks a lot. Thanks a lot for your time, Mike. And that’s always a pleasure supporting GFA as well. Thank you buddy for listening. It’s just me. No, I’d prefer audio to chat a little bit, but like I said, during the show, I I’ve also been negatively affected, you know, trying to launch a new brand with a Thailand factory.
[00:36:55] I think I might’ve mentioned this in some of our community shows. No our masterminds, but yeah, I mean, it’s like over a value of $20,000, which is a nice car. Right. You know, you could buy a car for that, you know, so down payment, maybe for houses and things like that, you know, this is not small money here and that’s one container, any, you know, like Nick says, what’s the value of the goods in the container.
[00:37:19] If this is. I just think the consumer’s going to pay, right. I mean, you know, we as sellers or business owners might be able to UBS sober for a little while, but if it keeps going, it’s got to get passed on to the buyer, the end buyer, the people in their home, you know, trying to buy this product off Amazon or off their website or in a store or wherever it’s happening to everybody.
[00:37:45] So, I don’t know. I’d love to hear what you’ve been doing and how you’ve been dealing with it. We have to survive. We have to continue to do business. A product based business means you have to have product. You know, if you run out of product, as you know, back orders, you know, out of stock listings, you know, losing their, you know, ranking of velocity and et cetera.
[00:38:07] I think we’re going to have to figure out a way. And I think probably the ways increased price, some people I’ve talked to have increased price considerably. Again, it really depends on the value of your product. How much is the total value of that container? What is your, you know, margin? How much profit is you already making on this?
[00:38:24] Even before COVID, you know, before they shipping fees, what. And, you know, hopefully you can just, I think you’re going to have to move your prices more, right. And maybe your competitors will not do that. And maybe they’ll lose money. You go out of business or go out of stock, especially with Christmas coming.
[00:38:39] I know it’s very stressful time for all of us and let’s try to stay positive. You know, that’s why we try to do it. The community here at GFA and especially our, our membership at GFA VIP, we have these masterminds and we try our best to. Get through these tough times together because that’s the best way is, is knowing you’re not alone.
[00:39:01] Even listening to this show, hearing Nick, hearing me stay motivated, stay positive. You know, I think a lot of us are dealing with massive pressure. You know, like I’ve said it throughout the show. I have a lot of my belongings and Philippines still that I couldn’t even move out of my own apartment that I was staying in.
[00:39:19] A lot of my belongings are in Thailand. Now I have for Amazon brands talking to Amazon warehouse of a factory in Thailand for a product we’re trying to launch because it’s just too expensive to send two or three containers at 20 something thousand us. It’s just crazy. It’s just really crazy. So, you know, realize that is happening to everyone and you can laugh at me if you’d like, it makes you feel better.
[00:39:44] Maybe it may be that’ll be worth it. You know what I mean? I don’t mind laugh at me or laugh, you know? Try to try to stay lay hearted. And I hope to see you in an event one day, or I hope to hear your stories after this, where you come out bigger and better than ever. Right. I think whatever doesn’t kill you only makes you stronger.
[00:40:01] And I just feel like this show topic we had to do sooner than later. And I appreciate you for listening all the way through in this blah, blah, blah. And I, I truly wish you the best, you know, even as a, you know, maybe. Barter events or memberships or whatever I’m doing is free podcasts too, to maybe help motivate you, help push you along.
[00:40:24] And I hope that’s what today’s show might have done, or maybe it scared the heck out of you. I don’t know, but we have to face our fears and, you know, we have to be, um, positive minded and of attraction. If you think positive, positive things will come. Let’s think positive. Thank you for listening global from asia.com.
[00:40:45] Ocean dash freight dash madness. Take care. To get more info about running an international business, please visit our website at www.globalfromasia.com. That’s www.globalfromasia.com. Also be sure to subscribe to our iTunes feed. Thanks for tuning in.