Lightning like Steve McQueen I'm in a.
Fast lane when the light turns green.
And I built up find nothing but grit Cause I made rugged blood sweat and spit yeah, like a horse I fly for a bumpy ride I like.
To play hard but I work harder.
And I weather the storm Because I'm built stronger. What is up, ladies and gentlemen? We are back. We are live. It is a freight coach podcast, the top podcast in transportation coming to you guys every single weekday, 8:30am Pacific, 10:30 Central, to break down some industry headlines. But most importantly, you guys provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real side of freight, ladies and gentlemen. And I say this before every single show. And what I mean by that is I only speak with transportation professionals because at the end of the day, you guys, I want to talk to the right individuals who have done what you're looking to do or who are currently doing what you're trying to achieve.
So you can take this information, apply it, utilize it, and see a meaningful difference in your business and your life. We did drop our newsletter today, so if you guys want to subscribe to it, I put a poll out there. It says don't auto sign me up from all of my followers and everything out there. So I don't do that. I won't do that. But if you go to the FreightCoach.com you guys, and then it'll auto prompt you to register for the newsletter every single Wednesday, this drops. And again, it's all freight focused or anything else. That's what we're out here to do is move this industry forward. But speaking of moving this industry forward, I got a very special guest for you guys here today. We're talking about this potential port strike. What you can do. How do you get ahead of this?
Is this actually gaining steam? What might happen? And there is nobody more qualified to speak about this than my good friend Steve Ferreira, literally the best dress guy in all of global supply chain. You got it unlocked today, man. What's going on? How are you, Steve?
Chris, how can I do that? Introduction. It's so nice to be here with you today. And I was thinking, you know, we're both orange color fans, so we must love the orange bowl and everything orange today. And we're going to give the audience a couple oranges to take with them on their ocean freight journey today. How's that sound?
No, this sounds fantastic, Steve. And I love your background. Your background gets changed like every Time you've been on the show these last few times, it's updating. Do you have like a graphics guy who made that?
I'll tell you, I spend so much time and energy. When I got on CNBC a few years ago, I got a real taste of what big network productions were like and I wanted to try to mimic that in my own studio. So I very rarely do this, but I just want to give you a little bit behind the scenes look. So we've got alternative cameras. It's actually a big monitor that's behind me that we build out and we fit with whatever scenes that we want. And you know, so we put a lot of time and effort to really making, you know, my content stand out. You know, it gets a lot of eyeballs. So no, thank you. Yeah, I've got a great team that does this background work for me.
I need to step my game up, sir. See, this is the thing. I just have my one little camera right here and I have my in person interview studio right next door. So anytime anybody's in Phoenix, if you're ever in Phoenix, Steve, I'd love to have you out to it. And you know, for all of our in person setup and everything, we've got a dual mic and you know, as we're going into 2025, that's one thing that I'm going to invest in is get a dual camera set up as well and really try and up the game here a little bit.
Well, you know, I think that it's, there's very few of us, you know, Chris, I think I did a study once that there's under a hundred of us that, you know, stream and put out content like, you know, like you and I do. And you know, you have the most energy that you bring to the audience of anyone I know that's whenever you, you invite me on, I definitely want to follow you because your energy is so infectious. And you know, you really, the audience and your customers should be very proud to have somebody that's such a leader in their, in their niche that you're your, your pathways that you're running for them. So congratulations.
Yeah, I really appreciate that, Steve. And you know, for me it's a lot of, you know, I just, I love this industry. Right. Like there's nothing more, there's nothing else I could actually do, I think, with my life than work in transportation, logistics, supply chain, anything like that. I just feel like, you know, a lot of it is, I feel like a little Kid, when I'm out there, man, when I see trucks rolling down the road, like, I think of my old man because he drove. And, you know, just being a part of this industry is just like, it is family legacy for me. And, you know, and then as you know, going out there and kind of starting your own thing, like, nobody's going to come and motivate you to do anything. Right?
Like, you have to be your biggest cheerleader for a very long time. And then especially in the ebbs and the flows of things, like, you know, if viewership goes down or revenue goes down or anything like that, you got to be the one to amp yourself up to be like, no, it's not about you. Go out there, put that message out. Because, you know, it's like, I'm very fortunate to have a large audience that follows. But, like, I love those messages from those individuals who will DM me and they'll say, hey, I listened to your show. I applied what you said about sales or prospecting, and it worked. I was actually able to find a customer. And that, to me, is what it's all about putting those best practices out there to filter through all the BS that's out there online right now.
And how do we get the right information in front of people where it's not behind some ridiculous paywall that you don't even know if it's going to be accurate information or not. And that's why I love having industry experts from certain sides of the supply chain come on and really break this stuff down so people know, like, hey, this is legit, right? Like, no, they're not trying to sell me anything. Yeah. Now I know who to use in the event that I might need their services. Like, there's that comfort level that comes up with that and, you know, a lot of it. I kind of pulled it from the. The Gary V. School of content out there, where it's just like, value, value, value.
And if you put so much value out there, you'll have no problem gaining people's attention and eyeballs because they know you're a trusted resource at that point.
Oh, I love that. I interviewed Gary Vee a few years ago for Freight Waves is one of the highlights of what I've done just to be on my game, to be in the same sphere as that genius. I learned a lot from him. I see a lot of it in you, too. And, you know, I think that's the most important thing that people like you and I do is, you know, were consistent and your road didn't come overnight. I read your motivational background and you know, one day it took you know, it took you many shows, right, to get to where you are now. And same with me.
And you know, when you sit in a room or go around the country and say, hey, you know, these two guys are two of the top 100 guys in the freight industry, you know, who would have thought it, right? And it's great. It opens a lot of doors, you know, and, you know, I've got the ocean side and global logistics, you've got all the other motor and domestic and brokerage and freight side that you're specializing in. So it's a nice compliment and as I said, it's just an honor to be here today.
No, absolutely. So as we're getting closer to January 15th, that's kind of like the date that's really looming out there right now. You know, I'm not it, you know, I'm not the biggest pro union guy out there, but like, I see their sticking point here about automation and not wanting to overly automate the ports because they feel like it's going to automate them out of a job. And, you know, and that's, honestly, that's one of my biggest concerns with technology as a whole, where it's like, yeah, it's great to a point, but like, when it goes to like removing careers entirely from there, you know, as an old school guy myself, I'm like, all right, there's got to be a line, right? Because otherwise, what are we all going to do as a society if we lose our purpose?
You know, Chris, you're right on. You know, and I think that brings us to a lot of themes that we'll probably end up talking about today. You know, with President Biden being really pro union and President Trump, you know, maybe thinking about it in a different way or direction. But I think the overriding viewpoint that we have to kind of start and prime the audience with is the fact that if you look at the state of disarray and, you know, global port rankings on efficiency, you know, the US Ports come in very, very poorly, right, compared to the European ports and the Asian ports that have a lot of automation. Now, again, it's a total paradigm shift. And it's the same thing can be had with our US airports, right?
When's the last time you saw a US airport, you know, in the top 20? It's always Singapore or, you know, or Frankfurt or, you know, One of these other European because, you know, they found ways to modernize and, you know, still blend the human element. I'm not suggesting we go in the direction of Europe or the Asia, our Asia counterparts. The fact of the matter is I've been in the ocean game now for 42 years. And I remember in the 80s, you know, when we had significant developments and automation in say, the Puerto Rotterdam. You know, many people talk about when Sealand service, when Sealand, an American company, modernized the European terminals, they did it very efficiently and very quickly and it's a difficult road to hoe.
You know, just recently the ocean vendors, the ocean, the maritime owners tried to put in some semi automated cranes, you know, to help the efficiencies on the east coast. And that was obviously rebuffed, you know, per the automation argument that you're bringing forward here. So it's a little bit of a funny predicament because we are rate, we are obviously mass consumers of containerization, but we're also very inefficient. Chris?
Yeah, and I'm right there, you know, as everything's kind of unfolded like, you know, I've had Lauren began on the show a few times this year as well. And you know, with maritime law and all of that stuff and you know, and we're actually, you know, inside of my business, we're being, were personally affected by, and by affected, that's a relative term. But like when they change when the fmc, you know, changed the rules earlier this year where, you know, when it comes to detention, damage and all of that stuff, like, I think like anybody with half a brain can come to the conclusion like we got to clean this up, right? Like there's way too many moving parts that are going on out there.
There should be one point of contact when it comes down to a lot of these things, there shouldn't be six different ways to bill somebody or anything like that. I mean, that's your playing field. Ultimately, though, Steve, is, you know, like the billing side of things. If that's in disarray, everything else is going to be in disarray as well. Right. So I feel like we need a comprehensive look at how do we improve this because I think it's laughable that the United States is not the top 10 in ports, the top 10 in railway, the top 10 in airports. We are like in. Because in my mind, we're the greatest country on earth. We need to start reflecting that in.
Our supply chain, you know, and we'll talk about all those for a Second, and I'm not going to put a plug in for what I do at Ocean Audit. But the thing I want to say that you just said, that's so significant. And I don't think I've ever said this publicly before, right. But I mean, I'm not going to blow my own horn and ego because I think it's out there already. You know, I'm pretty confident guy, right. I wouldn't have the clients I did if I wasn't. But the thing is, I don't think there's a person on the soul of the earth, face of the earth, right. That knows more about, let's say, Ocean Freight invoicing as me, for example. Yet every time I go into a new client, I see something that bewilders me, right.
And if it bewilders me, what does it do to the average person at a beneficial cargo owner that may have 1/100th of the knowledge that I do. So now look, that's invoicing. We're not going to talk about invoicing today. But the fact of the matter is that whole genre carries over into this whole mantra of global containerization.
And that's, and I look at obviously with President Trump coming back into office here in January and his big push, and I think this is kind of what gets blended in. The whole tariff argument that's going on out there with a lot of this stuff is like, I mean, I truly align with, hey, I want to create more jobs here in America. I want to be the leader, the undisputed leader and everything. And I understand that like this isn't going to happen overnight or in the next four years or anything like that. But I think, like, I've just, I've worked in this industry literally my entire life. Where we're at right now, yes, we're efficient in areas, but like we could better. And that's how we need to be looking at a lot of what we're up against. Right?
Because it's like if we're going out there, I mean, tariffs is only one thing. I mean, if we're talking about, let's talk about detention and demur and ocean billion here for a second. How many businesses get raked over the coals because they're not like there's just so many outside fees that are being thrown in on that. And then how much of an effect on the end consumer price does that play into it? If they're, you know, like hypothetical example, they thought it was going to be $10,000 to move a container. But now when you're throwing detention, damage and every other fee under the sun at it, now it's 15, $16,000, hypothetical example, obviously. Now what end result does that have? Right?
So I think like we need to be looking at this as a holistic total view here on how these operations work, where these fees are coming from. Because if we're really looking to protect the American consumer from, you know, inflation and in higher prices and everything, it's got to start with a lot of this.
Yeah, there's no question, you know, and this argument, I've been working this angle for 30, 40 years, you know, where, you know, the price of a sweater at Macy's is, you know, $8, the sweater is a hundred dollars, and the transportation component is, you know, $1.25 and then it goes up to $3.25. Those costs on transportation obviously get passed on to the consumer, you know, unless Macy's can do something to salvage the costing and make their economics a lot better. And that's why we're things where port efficiency, routing, you know, over the east coast, west coast, invoice accuracy on ocean freight emerge, detention. These are all measures that beneficial cargo owners can put into play. Right, but it's a, it's a wide ranging topic obviously in terms of saving, both making the efficiency of their spend much more salvageable. Right.
And then passing those on to the consumer or better yet, not taking the price increases. We'll get into it in a second. But one of the things I found amazing is I decided for our show today to isolate cargo volume moving to the Port of New York. I pick that. I know the Port of New York folks quite well. I have a lot of respect for them. I understand the scenario, they are quite well. And you know, one of the things, and this is the first time I've shared this news, I just did this exercise this morning for our show, but give you a quick stat. From November 23rd to December 23rd, one month period, 250,000 containers, 250,000 ocean shipments passed through the Port of New York from all parts of the world. Quarter of a million, Almost precisely a quarter of a million.
From November 24 to just a few days ago, December 1 24, 280,000. I wanted to try to accentuate that. But the thing is it's a 10% increase in volume to the Port of New York. Right. And so here we are in past the peak where past the holiday season. Why are we seeing that volume, right? Well, the obvious answer is we have some forward loading, right. In preparation for the potential January 15th strike. But we also have the fact that, you know, on cargo like, let's say, vinyl tile or a certain type of hardware or a lawnmower, you know, some of these things can be inventory longer term, right?
So, you know, we're coming a little off the peak of all that inventory warehousing issue during COVID And so, you know, great big box retailers and people with 10,000 containers or more a year, they have a little bit more flexibility on forward loading. And getting those products in before four or five of the key factors that we're going to talk about will impact them for 2025. But I thought it was really super interesting that the volume for the Port of New York is increased. Maybe not surprising, but I think what it would surprise the audience is that if we do the same measurement for December to January and January to February of 2025, I think we're going to see massive amounts of continued growth there until we hit a couple of dead spots. And that could be the strike.
It could be Chinese New Year, it could be President Trump. It could be tariffs, it could be Russia, Ukraine. It could be the fact that the ocean freight vendors themselves have completely reorganized their hub and spoke delivery systems. So I think the point I'm trying to make here, Chris, and this is really super fascinating, is that there are five or six major events happening in January, February, that will shake the core of the supply chain for ocean importers.
So what's a process somebody could follow here, Steve? Like what? You know, because, like, I mean, you're right. There's a lot of stuff that are coming up on the docket. What, what can people do to better prepared for what could potentially be happening? And then is there anything that you see that's being talked about that you think is kind of like people are blowing smoke from your experience? Right.
Well, I think the interesting thing about the next month or two, right. If there is a strike, right. I think that it's really super interesting to me because it comes at a point where the volumes are pretty weak seasonally around that time. And I'm not sure that Trump doesn't go and invoke, you know, Taft Hartley and gets them back to work, especially on light, in light of the fact that if Trump, President Trump, excuse me, has some tariffs plan, increased duties from China and other locations, you know, it's almost like a double whammy, right? So we're going to See, I mean, if we have a strike and he doesn't invoke TAF Hartley and then he invokes tariffs, we are going to see imports fall off a cliff. We really are. And that's going to hurt a little. I'm sorry, I don't mean little.
I say with peace and love. That's going to hurt the smaller importer that's below say 10,000 containers a year where he or she does not or has not had the luxury to forward plan this and that. See, Chris, this is almost like a nuclear bomb that's already gone off, right. There's very little that somebody could do right now to right the ship. I mean, obviously one of the things you'd say is, hey, let's try to get west coast space or let's try to bring cargo in through Mexico, but that horse has kind of left the barn a little bit, Right. I think you'll find it's challenging.
I think the fact that we have Chinese new year almost two weeks earlier than we did last year, starting around January 29th, means that the factories in China, they're going to do everything in their power to get as much volume out starting now up through January 10th or 15th. And we're going to see a tremendous surge. It's going to skew the numbers in a way that makes it look like there's not a problem. But in reality there could be some massive problems downstream. So the smaller importer has a few mechanisms and you know, we can get into, you know, some of the things that I might do if I were them. But please forgive me. Go ahead. And no, I play off of that.
Question that was going to be my follow up question. What can those smaller, you know, small to mid size or really anybody do to kind of circumvent a lot of what is, I mean, essentially already started, right? Because like, and I say already started because the east coast union is very much hardline right now that nothing like we're striking, right. So I think like you should, I don't know, like I don't like to, you know, fear monger or anything like that, but because I play in reality and I'm seeing what's going on right now and knowing when that strike's about to happen and then the inauguration is five days after the fact and you know that the sitting president has got his feet up right now, like he ain't getting involved in anything because, you know, rightfully so, why would he, right?
So, but it's like all the people who live in reality that are going to be potentially affected by this. What could I do today to kind of shift that? Is it bringing it through the west coast ports? Would you advise people on that right now, Steve?
You know, it's really interesting question, and I, I think that the other wild card, too, for a lot of my audience and some of your audience that is on the oceanside, they knew all too well that one of the most famous shipping conferences, TPM 2025, is coming up in its annual Long beach kind of mating dance, so to speak, where everyone in the ocean community gets together on March 1st. And of course, it's always been looked upon. To answer your question about what can someone do? I'm coming in a circular way around to what that is, because I think that it's always typically been a week or two weeks before TPM and during TPM where everyone sits down and kind of looks at, you know, negotiating, you know, rates and service deals and systematic relationships for 2025.
So here's the thing in my heart of hearts, what I think, as somebody with under 10,000 containers, engineers could do and should do, start now. I think the idea here is that, you know, don't wait until February, don't wait until March, you know, start looking at the relationships and the freight forwarders and the direct carriers that you have and start building out, you know, those rate negotiations now and so that you can be, you know, inclusive. Right? In their business review of, hey, I've got this space to the west coast because obviously if you're landlocked because of a work stoppage on the east coast, your only alternative is really the West Coast. You don't really want to monkey around with, you know, the Mexican options and things like that.
So I think you've got Seattle, Oakland, Louisiana, you know, Long beach as your ports of entry. But if you negotiate now and you start working on rate levels now and, you know, a couple of clients have asked me, well, Steve, is this the year that we should start to look at using, benchmarking our rates off of the freight indices, you know, or should we negotiate, you know, fixed rates like we've always done in the future, in the past, Excuse me. And so, you know, there are some great indices out there like Drew Rays and that, you know, Freight House and, you know, so it's really interesting because the freight indexes show where the high and low markets are.
And a lot of people don't like these freight indices because, you know, they can really blow out a budget if all a sudden the spread turns in the favor of the ocean carriers. But I think at the bottom line is, you know, if you've got 10,000 containers, you may want to allocate, you know, 15, 20% of those against the indices and start looking at, you know, again, building out those relationships so the cargo can come in. I think the other thing too, Chris, is a little bit of a wild card is right, there are all types of importers, right? Some have where it's an inventory issue, some have, you know, fashion where it's real time. And so then this raises the whole issue.
You know, the air freight industry has been a little bit flat, right, in terms of they've not really seen anything surging on the air freight volumes as it relates to the east coast strike. Now, as we get a little closer, you know, we could see that take place. So my Steve's coaches, course forwarder, to borrow your phrase, is maybe huddle up with your freight forwarder, your global provider, and maybe get some air freight space, you know, potentially locked up for that, you know, super urgent.
If you've got a fashion rollout that you're doing, maybe block some space there and certainly start moving the ball forward and get those relationships to 20, 25, which are going to be the rate agreements that you signed, get those done a little early, which gives you the best bet in the relationship in the hunt for space on the right vessels for the west coast in the event of a strike cruise.
Now, is this something where they should, I guess, kind of like take a targeted approach, right, where it's like, hey, maybe Q1, we plan to go everything through the west coast port just to, you know, just to be safe, right? Do we play it safe like that and then kind of transition or like, how much lead time are people really getting out there? I mean, because I know, you know, it could be two months, it could be 60 days or whatever from order to showing up at the coast here. So it's like, are you working with your clients on. On putting together a strategic plan like that where it's kind of like, hey, let's do this for January, February inventory. Let's, you know, just to be on the safe side.
So, you know, you get it because, like, what I don't want to see is all of those manufacturers out there who are ordering their inventory for production and their forwarder isn't even kind of bringing this up, which I would hope that everybody's talking about this, especially as we're getting closer and closer to January 15th. But I don't Assume anything. I assume that ultimately you got to proactively look into this stuff yourself and take this upon yourself to kind of plan that out, especially for Q1.
Yeah, it's a little bit like my golf swing. It's. It's definitely a work in progress in terms of how the importers look at this. But I think that any smart importance when you start doing the suggestions that I'm alluding to here and start that negotiation process, an adjunct relationship to that negotiation process is setting the allocation. So like you said, hey, we want to go super heavy by January, February, March, and then we want to go back to 15 allocations to New York, 10 allocation to Baltimore in April. So these are things that are projections, but they can move plus or minus. The thing is the flexibility with the partners to make sure that happens and to at least give yourself a reserve.
Right.
Hey, we need a minimum of, you know, X amount to move at the, to the port of Baltimore or X amount to move to the Port of New York. If we get a few more in, you know, relationship to that extra space, it's a bonus. Right. But those things are not going to happen unless you're ready to step to the plate and kind of ramp up or speed up those negotiations. So I think what I'm seeing in my clients is I'm seeing a more frenzied approach towards calling the ball, so to speak, and setting those contracts and rate agreements a bit tad earlier than would normally be scheduled. To me, that seems to make the most sense. And then of course, you've got one of the six factors in there. Ukraine, Russia, coming up on three years. And obviously Red Sea U.S.
Says that, yeah, we haven't even addressed that. But these are all wild cards that need to be kind of put into the mix.
And I would say, you know, it might be, you know, and then I kind of feel like your bailout for, you know, suggestion for everybody is essentially air freight. Right. Like at, you know, make sure you have the funds available to bring in a 747 of inventory in the event that you need. Because like, you know, again, I, I perfect. Everybody likes to talk in perfect world scenarios, but I think what Covid exposed was kind of how bad things can get really quick. So I like bringing into things like where it's like I have my primary objectives, but I have my backups as well.
And again, I've been doing this on the domestic OTR side for so long, Steve, where assumptions are a massive killer for a lot of people because I've been Told by so many of my customers, they're like, hey, listen, we're a manufacturer. We're not a transportation company. Like, that's why we work with you. We expect you to bring this information to us. And I want more and more people.
Whether you're a forwarder, air freight, intermodal, whatever it is, you need to be having these conversations with your customers to get them in a place because this, you know, again, I don't want to fearmonger, but, like, if this shuts down and it's a long time, it could be catastrophic out there for the smaller importers like you're talking about, because they might not have the budget or the priority in line for some of these people to shift to a different mode of transportation to get their product well.
And the final word on that, I think, is you raise a great point, you know, and again, I know that when I looked at one retailer, right, I ended up getting them a $5 million refund on overpayments or overbilling on Ocean Freight. And I said to them, they came to me, they said, hey, Steve, you know how we use the 5 million? He said, no, how'd you use it? Did you get a new WMS or TMS? He goes, no, we allocated 2 million of it to air freight. We were able to get basically our air freight for free because we use the refund that you got us. And I'm not, again, not blowing my own on this. But you're right.
I think it's really important that clients, whether they use me or not or use someone else, but you've got to allocate a pretty good amount for that emergency fund. That's like an emergency kiddie bank, a piggy bank. I think you're onto something with where the clients need to allocate their funds. But again, I hope and pray, right, that 95% of the clients have sort of figured out, figure this out on their own. And I think that there's still hope for those that haven't. But obviously, the time to act is now.
Hey, could not agree more with that, Steve. And that's what it is. We got to take that proactive approach, ladies and gentlemen, but that's going to be it for today. Steve, how does anybody reach out to you to find out more about what you have going on at Ocean Audit?
I love my LinkedIn connectivity and my presence here. So Steve Ferreira on LinkedIn or Ocean Audit on LinkedIn or Steve F@ocean audit.com, you can reach me anytime.
Perfect. And if you guys can't 5C, for whatever reason, hit me up. I will gladly put you guys in contact with them, but that's going to be it for today, ladies and gentlemen. We got a guest coming on tomorrow and Friday. We're finishing this year strong. We don't believe in this gap time. We're coming at you with more and more value every single weekday. As always, if you guys got value, subscribe to the show. Share it out there to your network, because if you see value, your network's going to see value as well. I appreciate you guys. I love you guys, and we'll be talking to you soon.