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Paul Brashier is vice president, drayage and intermodal, at ITS Logistics. He has been in the sales and logistics industry for over 20 years, working for such companies as Schneider National, Coors Brewing, and Coca-Cola.
Brashier joined ITS Logistics in 2015, where he created the drayage and intermodal division and brought it to number 11 in the United States, with over $300 million in revenue.
Brashier lends his expertise on US and global supply chain matters to media outlets that have included CNBC, The Wall Street Journal, MarketWatch, Bloomberg, The Loadstar, CBS News, Freight Waves, and Transport Topics.
When he isn’t working, he spends time at his ranch with his wife and family, travels, and volunteers for the Down Syndrome Network of Northern Nevada.
David Maloney, Editorial Director, DC Velocity 00:01
What's the latest with labor and West Coast ports? Supply chain issues plague the chemical industry. And fighting e-commerce fraud.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.
Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by Hyster Company, a global manufacturer with nearly a century of experience designing forklifts and high-capacity materials handling equipment used in the world's most intense industries. Operations rely on Hyster as a strong partner for everything from choosing the right mode of power source to their Edison Award-winning operator assist solution, Hyster Reaction. For more information, visit hyster.com.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insights into the top stories of this week. But to begin today: Longshoreman still don't have a contract agreement with West Coast ports, and last week they staged a temporary work stoppage. Is this a sign of more to come, or should shippers trust their goods moving through these ports? To find out more, here is Ben with today's guest.
Ben.
Ben Ames, Senior News Editor, DC Velocity 01:25
Thank you, Dave. Yeah, you described it well. we're talking about conditions that those West Coast container ports today. About a week ago, they had to shut down operations for a day or so at the ports of Los Angeles and Long Beach. That was part of the long-running contract negotiations between the Pacific Maritime Association — that's the group that represents ocean carriers and terminal operators — and the International Longshore and Warehouse Union — and that's the group that represents some 22,000 dock workers at nearly 30 ports across the region. Their current contract had expired in July of last year, almost a year ago, and nobody in logistics wants to see a repeat of what happened last time, which was a full labor strike and a shutdown of those ports back in 2015. But what are shippers supposed to do about all this? To discuss that we have today's guest, who's Paul Brashier. He's vice president of drayage and intermodal for ITS Logistics. They are a third-party logistics provider based in Reno, Nevada. Welcome, Paul.
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 02:29
Thanks for having me.
Ben Ames, Senior News Editor, DC Velocity 02:30
First of all, that was a pretty quick introduction I did to a very complicated problem. Can you add a little more context so we understand the challenge?
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 02:40
Yeah, the largest challenge is the unknown, and with supply chain, and even business, not knowing exactly what's going to happen is the largest wrinkle and headwind that not just ourselves as transportation providers, but the BCOs [beneficial cargo owners] face as well. Many supply chains are put into motion months, if not years, in advance, and if there's not, you know, a clear directive and fluidity in supply chain, these problems can be metastasized and magnified, and cause even greater issues. If you think about what happened in 2020, during Covid, when when DCs shut down due to restrictions on labor, there were still four weeks of freight on the water, trans-Pacific, that were coming into the United States, and that backs up. So, where we are right now not only has an immediate impact, but if it gets really, really problematic, it could be something that lingers on for weeks, months, multiple months into even 2024. That's something that we have to be always vigilant on.
Ben Ames, Senior News Editor, DC Velocity 04:04
Boy, I'll say so. That's a striking potential over there. Having said which, what we saw last week was just a brief work stoppage. It wasn't a full strike. So, you mentioned things are already in motion, of course, and that has been set up a long time ago, but what happens to those freight movements and the flow of goods if the strike does happen?
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 04:25
Well, one thing that we've seen a lot of over the last six to nine months — and, in some of our clients, as far back as early 2022 — was to divert bookings. That way they're hedged. So, a lot of freight is going into Houston, you know, the East Coast — primarily the southeast. New York/New Jersey is getting some of this freight as well. We're also seeing a lot of activity going through Vancouver, and surprisingly enough, Mexico. So, the only way that you can really navigate this is to make sure that you're avoiding all of the West Coast ports in the United States, and push that cargo into other areas. Now, one thing to think about here is, if this is a shot across the bow, and a beginning of some potentially very contentious labor negotiations, you'll see shippers start booking in the spot market, and start diverting freight to miss or stay away from this area, and we could start seeing that materialize as soon as next month. It'll be interesting, because most of the freight that comes into the United States for, you know, Christmas, and that retail peak season will start hitting in late Q2, early Q3, and this might be an opening salvo that forces the hands of BCOs to push more of that freight outside of the West Coast.
Ben Ames, Senior News Editor, DC Velocity 06:12
Interesting, boy, that peak season is just never far from anybody's mind in this business. But, fascinating stuff that you're talking about with rerouting some of those shipments. I guess, a couple of questions: You know, of course, companies may need their goods to end up on the West Coast, where they were sending them in the first place, not on the East Coast, so I guess that, [does] that trigger extra cost, if you have to truck it a longer way to get there?
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 06:38
Yeah, the one silver lining that came from the last 18 to 24 months is that there was a lot of infrastructure already put in place to handle situations like this, and a lot of knowledge gained, not just in the BCO realm, but also for transportation providers. For instance ITS, we had to retrofit and onboard significant capacity and asset support on the East Coast to support our clients as they started moving into these markets, because their hand was forced. So, I don't believe that it'll be an additional cost. One thing different compared to now, as opposed to 18 to 24 months ago, is that a lot of the infrastructure is already in place. And freight rates are down significantly. Your trans-Pacific rates are down — way, way down — compared to where they were even a year ago. And trucking costs are down substantially as well. So, instead of moving freight, let's say, from west to east, like normally happens during the the retail peak season, the freight will move east to west. And if IPI [inland point intermodal] is needed when those containers come into a terminal and they get put onto the rail, you're just pulling them off West Coast ramps as opposed to ramps moving west to east. And that's one thing to make sure that people keep an eye on as well. You might be booking to Dallas, door to door, but if that's IPI through LA-Long Beach, that freight is not going to move as well. So, folks want to make sure that they're keeping an eye on where their freight's coming into the United States, even if it's getting booked to an inland rail ramp.
Ben Ames, Senior News Editor, DC Velocity 08:34
Yeah, interesting stuff. So, another question that comes to mind about this sort of rerouting practice — and we've been tracking some of those rising numbers at the East Coast and the Gulf Coast container facilities — but is there enough capacity at those ports to handle all of the West Coast volumes, if they had to?
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 08:53
All would be difficult. I would say that that would be problematic. If we look at where we were a year ago and where we are today, as far as the demand and a container density on the East Coast and the Gulf, it's significantly down. I would say, in some cases, in some markets, we're 40, 50, 60% down off of volumes that were coming in last year from what we're seeing. So, our infrastructure, and other transportation providers' infrastructure, is in place to handle additional flow. I don't think demand is there. Inventories in the U.S. are still significantly high, so the retail peak for inbound freight is probably going to be muted due to the amount of inventory that a lot of folks are sitting on here in the United States. So, we're not going to see a repeat of the volume spike that we saw post-Covid. There will be more freight coming into the U.S., and the current infrastructure should be able to manage it, especially if the volumes are significantly lower — you know, inflationary pressure, cost of goods, the economy is getting to a place towards the end of this year where it might start slipping into recession. So, we might, if everything for some reason were to get diverted to the East Coast, be okay, unfortunately, because of, you know, negative economic impact.
Ben Ames, Senior News Editor, DC Velocity 10:34
Got it. Great point. Just to wrap it up here, during this this tenuous time, as you said, at the very beginning, with all the unknowns, what should shippers be aware of as they try to prepare, or at least minimize, that potential disruption?
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 10:49
Well, the first thing is, most shippers and BCOs are in RFP right now for trucking. They've pretty much settled all of their ocean contracts up, and now they are in the process of setting up transportation once those containers get to the U.S. So, the first thing is, make sure that you're onboarding new providers for trucking, and more importantly, onboard providers that have a national footprint that are able to be valuable if your bookings and your entry into North America need to change very quickly. That runs counter to the current trucking market we're in right now, where a lot of companies are slimming down trucking capacity, not adding new carriers, and a lot of times cutting out providers from their spend. To get ahead of that you're going to want to get these people onboarded now, instead of doing that the last minute. That way you can get breaks in place and probably protect yourself and your bottom line. The next thing is to understand your supply chain. Like I alluded to earlier in the conversation, if you have freight that you're booking to the ramp in the center of the United States — Chicago, Memphis, Atlanta, Dallas, etc. — make sure that you understand where the entry point is for those containers before it IPIs over to rail, because in most cases, that's going to be coming in through LA-Long Beach, and you're gonna want to start looking at, seeing if you can get that to enter in the Gulf and along the East Coast to hit the ramps that you need in the center part of the country.
Ben Ames, Senior News Editor, DC Velocity 12:38
Gotcha. Gotcha. Good. Sound advice. We really appreciate your being here with us today, Paul. Thanks for joining the podcast.
Paul Brashier, Vice President - Drayage and Intermodal, ITS Logistics 12:45
My pleasure. Y'all have a good weekend out there.
Ben Ames, Senior News Editor, DC Velocity 12:48
Our guest today has been Paul Brashier from ITS Logistics. Back to you, Dave.
David Maloney, Editorial Director, DC Velocity 12:54
Thank you, Paul and Ben. Now let's take a look at some of the other supply chain news from the week. And, Victoria, you wrote this week about how supply chain problems continue to plague the chemical industry. Can you share some details with us?
Victoria Kickham, Senior Editor, DC Velocity 13:09
Absolutely. And this is very much in line with what Paul and Ben were just talking about the supply chain challenges out there, continue on many fronts. This particular story though, is about the American Chemistry Council, which released a member survey this week that emphasizes the lingering effects of those delays and disruptions that we've been seeing the past few years. ACC represents a variety of chemical industry businesses, including manufacturers. In this survey asked those members to gauge how recent supply chain challenges have affected their operations, both in the past year and compared to conditions prior to the pandemic. The majority of respondents 93% said that supply chain challenges are continuing to negatively affect their US manufacturing operations, with 86% of them saying they had to modify those operations because of supply chain issues and or transportation disruptions that occurred in the second half of last year. So all of this is very recent. It's important to note that the survey respondents said in general supply chain challenges have moderated since the height of the pandemic. But they say conditions continue to be worse than they were before 2020. So still a lot of issues out there.
David Maloney, Editorial Director, DC Velocity 14:25
Victoria, did they cite any specifics? What are the some of the major problems they're seeing?
Victoria Kickham, Senior Editor, DC Velocity 14:28
Yeah, the — two things really stood out for me, and this is a pretty in-depth survey, but just to, you know, to look at a couple of things, and that was a lost business for these companies and higher transportation costs. In both the first and second half of 2022, about 36% of companies surveyed said that their customers canceled orders because they were concerned those orders would not arrive at all or they'd not arrive on time. And more than half of the chemical manufacturers surveyed said that their transportation costs are up compared to the second half of last year. So, those were a couple of things. The respondents also said that policy reforms are needed to fix what they call entrenched transportation industry problems. In particular, they're pushing for actions that will increase competition and establish minimum service standards in rail, and for efforts to increase gross-vehicle-weight limits for interstate highways to help alleviate, excuse me, trucking capacity constraints. And there's there's a variety of actions sort of happening on both of those fronts. So, a lot to consider.
David Maloney, Editorial Director, DC Velocity 15:33
It certainly seems that there is a lot of work still to be done to alleviate a lot of the supply chain bottlenecks we've been experiencing the last couple of years.
Victoria Kickham, Senior Editor, DC Velocity 15:40
Absolutely.
David Maloney, Editorial Director, DC Velocity 15:41
Thanks, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 15:42
You're welcome.
David Maloney, Editorial Director, DC Velocity 15:44
And Ben, online fraud continues to be a problem plaguing the e-commerce retailers, and you wrote this week about how the world's biggest online retailer is looking at ways to address it. Can you share what you found?
Ben Ames, Senior News Editor, DC Velocity 15:57
Yeah. This one was kind of interesting, because it's one of those problems that's largely invisible until it affects you, so we got information this week from Amazon, which of course runs one of the world's biggest e-commerce sites — that goes without saying — and this week, they released their Brand Protection Report, as they call it. In that report, Amazon said that during the past year, it had spent $1.2 billion and employed 15,000 people all to fight fraud in its online marketplace. So, Amazon's making that big of an investment for two reasons: They said they need to maintain trust with customers — of course, that you'll receive an authentic product when you click that buy button — and also to maintain trust with vendors, that they will be free from competition with what Amazon calls bad actors who might make cheap counterfeits and steal market share. So, to prevent that, Amazon employs people like machine-learning scientists, software developers, and trained investigators, and the company says they're making progress, that the number of attempts by what they call those bad actors to create new selling accounts has decreased. It was 6 million attempts in 2020; 800,000 in 2022, last year. They also said that the number of what they call notices of infringement that are submitted by brands — that means, basically, retailers complaining about competitive fakes — decreased by some 35% since 2021. And in another step, they also said that when they do find fake items, Amazon seizes and disposes of them in order to keep them off the market. So, you know, to me that shows, obviously, impressive improvement, by the numbers, but you still end up with a really big-scale problem.
David Maloney, Editorial Director, DC Velocity 17:50
Sure, and it is a big problem. Did the report say what sort of counterfeit goods are still being sold?
Ben Ames, Senior News Editor, DC Velocity 17:58
Well, Amazon, in its own report, did not specify that. Of course, they sell nearly anything there is to be sold. But I did some more reporting and found a couple similar reports, actually, that came out in the same time span. One was from the American Apparel & Footwear Association. It's a clothing trade group. They had recently released a statement. They were applauding action by the federal government, which was a report from the Office of the United States Trade Representative. That's called the Notorious Markets report, and that report looks into retail platforms around the world that are known to sell counterfeit goods. So, the apparel and footwear folks were applauding the federal action to back up these efforts. A second example I found was from another trade association that's called the Power Tool Institute. Obviously, they represent power tool industry makers, manufacturers vendors. But they were warning this week that supply chain pressures have spurred an influx of counterfeit batteries. So, what the group said was that what they call "suspiciously lower-priced power tool batteries" are probably too good to be true, and are more often than not revealed to be knockoffs or counterfeits or unauthorized replacements. And we're seeing more of those lately because the scammers are leveraging vulnerabilities in the global supply chain at the same time that the public still needs those new batteries. So, that that's, there's some interesting and very large-scale trends at work here, and some real efforts to try to fight back against it
David Maloney, Editorial Director, DC Velocity 19:39
Right. And getting a fake product is bad enough, but some of the products, like lithium batteries, can be even dangerous to use if they're not manufactured properly. So, buyer beware. Hopefully we can all be a little more diligent when we order things online.
Ben Ames, Senior News Editor, DC Velocity 19:54
Absolutely, yep. Good points.
David Maloney, Editorial Director, DC Velocity 19:55
Thanks, Ben. We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories, and also check out the podcast Notes section for some direct links on the topics that we discussed today.
And again, our thanks to Paul Brashier of ITS Logistics for being our guest. We welcome your comments on this topic and our other stories. You and email us at podcast@dcvelocity.com.
We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. Our new episodes are uploaded on Fridays.
Speaking of subscribing, check out our sister podcast series Supply Chain in the Fast Lane, coproduced by the Council of Supply Chain Management Professionals and Supply Chain Quarterly. Subscribe wherever you get your podcasts.
And a reminder that Logistics Matters is sponsored by Hyster. With strength, durability, and their continuous focus on safety, Hyster is powering your possibilities. For more information, visit hyster.com.
We'll be back again next week with another edition of Logistics Matters. Be sure to join us. Until then, have a great week.
Articles and resources mentioned in this episode:
- ITS Logistics
- Supply chain problems continue to plague chemical industry
- Amazon spent $12-billion fighting fraudulent e-commerce products in 2022
- Visit Supply Chain Quarterly
- Listen to CSCMP and Supply Chain Quarterly's Supply Chain in the Fast Lane podcast
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