Air & Sea International has been in the freight logistics business since 1985.
Brent Fowler started the Murray, Utah-based international freight forwarder, and his son, Jason Fowler, now oversees day-to-day operations as president.
"We have thousands of agents around the world, but it's kind of nice being an independent freight forwarder, we're not tied down to one agent," says Jason. "We have the flexibility and versatility to move rather quickly, where a lot of larger multinationals do not."
CompanyWeek recently spoke with Jason to make sense of an increasingly unpredictable supply chain.
CompanyWeek: Tell me a little bit about Air & Sea International.
Jason Fowler: My dad, Brent Fowler, and myself have grown the company now to where it's 20, 25 employees. Last year was probably our biggest year. This year, it's been a tale of two years -- completely different this year than last year. Supply chain issues haven't completely gone away, they're just different issues.
CW: What's changed? What were you seeing in 2021 and how has it changed in 2022?
JF: We primarily do import ocean freight. That's the bulk of what we do. In 2018, you could move a container from China-based ports to the U.S. West Coast for about $1,500. Last year in 2021, everything was so crazy. . . . Containers were going for between $15,000 and $20,000, and the supply chain woes that hit the ports didn't help at all. It was extremely costly to bring cargo in.
Companies saw this explosive growth, and they thought it would keep coming and coming and coming. This year, everybody wanted out of their house and I think they people stopped buying material things.
Right now, inventories across working with most of our customers, their inventories are full. They're waiting for Christmas and November to roll around before they're going to replenish those inventories.
Last year, we were turning customers away because we just couldn't handle the volume. We just couldn't service the customers because the carriers wouldn't give us booking. This year, it's completely opposite. Prices are about $1,800 to $2,000 to the West Coast, way more competitive. They're looking for deals, they're looking to get into something longer-term, where they're not riding this roller coaster of rates, and they're really looking for some reliability and visibility for their cargo. Last year was just about getting onto a vessel any way you could.
CW: Do you see a return to normalcy on the horizon? What's the light at the end of the tunnel?
JF: I'm hoping in November we see a pickup of cargo coming in and people buying things again, for Christmas, new winter clothing, things like that. It really just depends on the economy. If things get tighter, it's a tough time for people to continue to buy things. But, right now, the dollar is strong, so importing goods is cheaper.
CW: What other changes are you seeing in your markets?
JF: We also do air freight. Last year again, rates were extremely high, because a lot of the truck drivers were going to the ports and moving containers rather than doing long-haul trucking, or even short-haul short-haul trucking.
We have some new regulations in domestic transportation that went into play, and that sped up some of the people who were ready to retire, so domestic transportation prices were extremely high. This year, they've cooled down, but not as much as the ocean freight.
One of the reasons that ocean freight is so cheap right now, there were a lot of smaller carriers that popped up when prices were so explosive. With the cost-cutting and the rates going down so much, I think the bigger carriers are trying to get rid of the smaller carriers.
CW: Any crystal ball for 2023?
JF: It just depends if you're an optimist or a pessimist. If we go into recession, things are going to continue to be slow. If we can get that soft landing, we'll see not only a big spike in the stock market but also people will start buying things again. We won't go back to 2021 levels. That's just not in the cards, because that was an anomaly.
CW: What do you do for domestic manufacturers with a global supply chain?
JF: We do a lot of air freight for smaller parts and pieces. . . . We do anything from FedEx small package domestically and internationally to bringing the Antonov, which is the world's largest aircraft, into the Salt Lake airport for a big mine that's out here. We do it all.
CW: What can manufacturers do to mitigate supply chain issues? Any advice?
JF: The best practice is to forecast. The more communication or forecasting that you can do with your vendors from your factory to your freight forwarder, the more reliable it will be and the better pricing you're going to get.
The more forecasting a transportation company can get will get you a lot more consistency. The thing that supply chains hate is inconsistency, and you saw that last year.
CW: Any other comments, Jason?
JF: If any of your readership needs any help with transportation for domestic or international cargo, definitely send us an email or give us a call. We'd be more than happy to help.
Eric Peterson is editor of CompanyWeek. Email him at firstname.lastname@example.org.