Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

All right. So good morning, good afternoon, good evening, depending on where you're joining us from today. So thank you for being here. My name is Kimberly Lovell. I'm going to be the moderator for today's delivery management webinar. I am a Director on the Core Innovation team here at Expeditors. So our group focuses on driving innovation and new solutions to our core transportation business that's based on input from our customers and our employees. So this includes, of course, delivery management. So we're really excited that you're here with us today to talk through some of the challenges in the space of container deliveries and learn more about how Expeditors managed service addresses those challenges. So I have just a few housekeeping items I want to share with the group, and then I'm going to turn it over to Sean. So first of all, I'd like to mention that this session is being recorded, and the slides will be shared afterwards. So you'll receive a brief survey from us here at Expeditors following the webinar. If you don't mind spending about 2 to 3 minutes filling that out, you'll then receive all the materials for your reference or to share with somebody on your team. Next, if you're like me, when you join a webinar, the first thing you do is scramble to make sure that your video is not on and that you're muted. So while you'll see a few of the sharing video along the way, be assured that your's is off and your microphones are muted. So having said that, if you do have any questions that you'd like to ask along the way, please put them in the Q&A box. You can find that by hovering over your Zoom tool bar. So our plan is to save about 15 minutes at the end of the session for Q&A. When we get to the end of the presentation, I'm going to be reading out the questions that you share in the Q&A section. I'll share those out loud for our facilitator to answer. If for some reason, we don't get to all of the questions. We're going to capture those and make sure we follow up directly with you after the webinar. So thank you again, everybody, for being here. I now have the pleasure of introducing our facilitator for today's webinar, Mr. Sean MacCorkle. So some of you may have worked with Sean before. He is a Global Director for order management for Expeditors. And he is truly passionate about helping organizations optimize supply chains. He's been with Expeditors for 27 years. And during that time, he's worked in operations. He's managed teams in ocean transportation, in sales and our customer retention program, and he's even served as a district manager. He works directly with customers with varying supply chain models in his role as a global account manager and global product manager, and he actually have been spent 5 years on site with an Expeditors customer, leading an in-house team. He's got a lot of really interesting experience. He's also lived in 5 different cities, supporting Expeditors customers in various ways. So his energy and Sean's ingenuity are really palpable. And I'm really pleased to turn it over to him to share with us about delivery management. So Sean, take your way.

All right. Thank you, Kimberly, and good morning, everybody, from almost light Seattle, dark and gray, so we'll try and lighten it up a little this morning. Going to walk you through today -- we're going to walk through, at a high level, the delivery management program that we're rolling out. Rest assured that if this sparks some interest for you or it seems like the right kind of solution to dig further into, we'd be happy to get you further into the details and understand what we're doing. Today, we're going to walk through the delivery process where we are really trying to fit into your supply chain. We want to walk through 3 of the most common scenarios that we run into with delivery management. We'll tell you briefly the story of delivery management. It actually goes back at least a decade. We will walk through a high-level demonstration. We'll show you some of the technology that we've put together. We'll talk a little bit about long-term vision and then we'll be interested to get to your questions and make sure we clear all of that up. We do want to start just something to get your get you a little bit participative this morning. So we want to start with a poll question. And I know that my helpers are going to help me out with that. And the first thing, the simple warm-up question, my company primarily utilizes the following for container deliveries. So do you use carrier haulage, which means basically you ask the ocean carriers to arrange deliveries right to your door. Or do you do what's called merchant haulage, which is where you terminate at the border terminal and you arranged with your own trade providers. And we gave you another choice in case you felt like you didn't primarily fit into one or the other. So go ahead and give a vote and it just gives us an idea of what kind of cross-section we have today. There's no wrong answer. [Voting]

All right. So it looks like we're about 40 -- so a little bit heavier on the carrier haulage, arranging your own. They're almost about even. And then there are some other models out there like a 4PL or other. Okay. Good. So now that we get you warmed up, we're going to ask you a more challenging question. Specifically, what were the major challenges or what I would call the biggest headache for you in container delivery in 2022, knowing that 2022 was a banner year for headaches. Was it your ability to match an available trucker to an available load, the ability to know when the container was available to pick up or dispatch, the ability to prioritize and get the right product at the right time. Schedule receiving in a consistent manner, control of costs of all those access areas and storage, having space or labor available to unload the container, management of your own warehouse, some of the issues there, all of the above or really none of the above. And again, we're not tracking your answer. We don't know who answered what. This is just a general flavor so that we kind of understand what we've all gone through over the last year and what sticks out the most for you. Again, no wrong answers here. [Voting]

All right. All of the above. I kind of had a guess when we put this together that, that would be the most popular. Ability to control cost looks like it gets the second place and then the others are kind of a mix. But yes, from where I sit and all the customers I talk to, I don't think there's really any surprise there. So why don't we skip past the poll and let's talk a little bit. Just as an intro, I always look at supply chain this way. There's an enormous amount of planning that your organization goes through in order to try and align product to demand. Whether you're manufacturing, whether you're trying to put things on the shelves for consumers, whether you're trying to meet online demand, just an enormous amount of planning that goes into a place. And then you place your orders as you go out and you try and source that product and try and line it up with demand, then the product gets made and you try and manage that work in progress just to get it all produced when it's expected and the quantity and quality expected. And then certainly, over the last 2 years, we have all been working much harder than ever before. In our case, for us, it was -- we said it was something like 5x harder just to get a booking to move cargo as expected to get it to the place where we want to consume it or use it and then came that final piece, which is really the delivery, the piece we want to talk about today, which is after all the steps we went through to be able to land it and then to know is that container available? Do I have a trucker that I can match to it? Is it customs cleared -- do I have an appointment slot, I can match it up to? Can I match it to the labor in my own facility to unload it. And of course, the one that a lot of us going through right now, which is -- now I have maybe too much inventory in my DC, my warehouse. Where am I going to put it? As one customer said to me last week, I'm not sure that a strike would be bad for me, I kind of need things to slow down because I'm not sure where I'm going to put it in my own facility. And then, of course, on top of all that, trying to manage all of this while not incurring extra charges. And Lord knows the industry has been full of detention, demurrage, off-site storage, extra moves, shuttling those containers to a temporary yard -- there's been a lot more complexity introduced into the market, certainly in the last year or 2 in trying to figure out how to manage all these deliveries. So as we take a look at three of the most common delivery challenges for containers, we are going to focus on the inbound supply chain, and we are talking about ocean container deliveries today. We want to talk about these 3 common issues that we see. And as we go into the demo, we'll talk to how we see delivery management supporting these challenges. And the first one that I think we run into commonly is the ability to manage space and labor. As you have these containers arriving, having the ability to manage the inbound and pick the right cargo that meets your inventory needs and match the labor to the inbound flow. I mean, obviously, what we've seen over the last couple of years is that the ships come in, the ships have gotten bigger. It may be coming inland rail to you or inland barge but you want to smooth out the flow of arrivals to match your labor and match your inventory needs, but the containers tend to arrive in clumps or large quantities especially if they're all coming off the same ship. So how do you smooth out those arrivals so that you match your labor and match your space and match your needs to what's arriving. And so one of the things that we've looked at with delivery management is trying to create predictability around which product should arrive to your facility at what time. And more importantly, how do we create earlier decisions in the process so we can take problems and highlight them further upstream so that you have a chance to make a decision earlier and not have to be so reactive at the end of the process. And then as we talk about managing the process, often what we're talking about is throwing bodies, software, various solutions at the problem. And to make it even more challenging, as we look at -- I think about the poll results, where 42% of you are using carrier haulage for that final delivery. But we know that the ocean carriers are trying to get themselves out of that piece of business more than they have in the past. So we know, we hear the stories of the carriers coming back and saying, "Hey, we're not going to offer the door deliveries" or they're certainly incentivizing away from the door deliveries because it's not -- they want to come back, in some cases, to their core business. And then you have some carriers who are trying to move further inland now. So it's an interesting and dynamic market and we know that some folks have been forced to start managing this final mile delivery in an environment where they weren't really prepared to take that on. And then we talked about the increased complexity in the process. And so what we've matched is how do we help our customers to create consistency in the process and compliance -- and in this sense, we want to talk about compliance to allocation. How do you make your truckers want to work with you? You go in and you sign a contract and you come to an agreement on a certain amount of volume. But with all the spikes and the extra moves and the shifting of ground of containers, it's a challenging market for the providers who are trying to deliver these containers and return the empties. And so what we found is delivery management starts to match the ability to comply with the allocations and promises that you've made your service providers so that they'll want to be your service provider and be able to help you out even more and then being able to provide the metrics to help understand how are you performing? How is your DC or factory performing in their unloading? Are they helping to make the problem worse or better. Really, what gets measured gets done. So we find creating the right metrics helps create the right incentives. And then ultimately, as several people said in the survey, managing costs has become extremely problematic in the current environment. And so one of the big questions we hear over and over again is, okay, I know I have a certain number of free days before I have to get that container out of the terminal or port, but how do I know when it's available, how do I know when the trucker can go in and get it? How do I know the trucker knows that it's available to go in and get it. And the ridiculous amounts of attention and demurrage charges that have been appearing that result in a record number of complaints to the FMC in the early days of their new process with the carriers. And so what we aim to do is how do we provide the coordination to help identify that container availability and understand when containers are about to or have incurred storage costs, be aware of those costs. One of the things we found is that by helping a DC or a factory understand the cost of using containers for storage or the cost of not picking up the right empty at the right time has really made them understand how to create a better process at destination because there's nothing like the dollars or the euros or the monetary penalty that helps incentivize people to change behavior. And then again, we come back to early decisions. How can we identify those potential bottlenecks or spikes in volumes much earlier in the process so that you can make decisions early. So maybe you do decide to store cargo in a container on the yard, but at least you can understand the cost offsets. I know it's going to cost me $1,000 to store it, but it might cost me $5,000 to make a different decision and pull in -- pull that product into warehouse in lieu of some other product. So being able to identify those things upstream and make those decisions early in the process is what we've been aiming to do. So one more question just to see if you're still awake out there. As we talk about managing costs, again, we're not recording. We don't know who answers what. But just to try and gauge roughly, what's the approximate amount that you expect your spending annually on detention and demurrage and other storage? You've got under $0.5 million, $0.5 million to $1 million, $1 million to $3 million, $3 million to $5 million plus, $5 million plus and again, I assure you totally anonymous, just an idea to help everybody understand what the environment looks like out there because I think some people wonder, is it only me. I think we mostly know it's not but let's take a look. [Voting]

All right. So the good news is it looks like half of you are under $0.5 million a year. Of course, I know that's all relative to the number of containers you move overall. And certainly, some of you are getting hit with much bigger numbers. So okay. Appreciate the feedback. It probably helps us all to understand where we fit in the bigger picture. All right. Let's talk briefly about where delivery management came from at Expeditors because it's interesting to me that we are rolling this out to the market globally right now but it's been a very long journey, and it's certainly not new to Expeditors. And in fact, it was back in 2012 that we first talked to one of our larger importers and they told us, hey, we have a problem. We're spending around $600,000 a year on detention and demurrage, we're delivering to 12 different sites, we're using a lot of different carriers, a lot of different ports. And we bought a software solution to help manage it, and it's just not working for us. We got it down to $600,000 but we can't seem to do any better than that. And we're spending thousands of dollars a month on the software solution, but the software provider doesn't actually intercede to do any of the service. Nobody is chasing the exceptions for us. And a really good partner, somebody who had worked with us for years and said, I'd like you guys to take a shot at managing this, I think you could do better. And we said, "Well, let's take on the challenge". It was a -- when our local branch started piecing together, grab some of the people in the branch, started tearing apart the process in a way that we like to do. We started looking at which of our pieces of technology that we had available to us could help manage it and we ended up using a combination of our TMS system, spreadsheets, Power BI, people, really just kind of back and forth. And what was interesting is that after our first full year -- so the idea came up in 2012, we spent 2013 piecing it together within our local branch and by 2014, we had a fully functioning solution for them. And what was really interesting is that we managed in 2014 to wipe out all of their detention demmurage. So their 2014 bill for detention demurrage was 0. And so they removed $600,000 of cost simply by taking a look at people process technology, but having that managed service and having somebody who would actively chase down the exceptions, made all the difference from a software solution. And then what we found was there was more demand out there. And that led to some other customers coming to us with the same type of problem, and now we had something to tailor to it. So we took and replicated what we had built with one customer and started building it with a few others and by 2017, we found that we were managing over 100,000 container deliveries and that customer base was expanding. And so based on that, we realized as it continued to grow, that we weren't going to be able to scale the solution as is, and we were going to need some technology help. So we got together with our core innovation group, Kimberly, who is helping me out with facilitation today works with that group. And we sat down and we started to design what would a collaborative platform look like that would help us to do the parts of the job that would benefit from technology. So we wanted to be able to have truckers, the warehouses or DCs or factories, the customer management, our people all on the same platform and the ability to look at scheduling, prioritization, allocation to the dray providers and really just to be able to put all of those pieces into some useful technology that would help us to enhance the existing product. And at the same time, we passed through 200,000 containers being managed under this process, and we knew that we had to scale. And that brings us to today where last month, we released in the Americas and in Europe, the delivery management platform to enhance the product offering and at the same time, we built it all into a scalable model so that any of our branches around the world could offer this to any of our customers. So that's really what we're launching today is the technology platform that supports a managed service offering that we've been doing for a decade. So now we do want to shift over and show you what that platform looks like. It's really a scope-based collaborative platform. We wanted it to be powerful enough to be able to do the collaboration and take on the challenges that our customers told us they needed solved. But we also wanted it flexible enough so that we could scale to the different needs because we do have so many different models with our customers. Sometimes we do live unload. Sometimes we do drop and pick. Sometimes we're trying to do matchbacks with our customers on import versus export containers. Sometimes, they want us to manage a little, sometimes they want us to manage a lot. In most cases, they have their own dray providers. And we are simply doing the management over the top to make sure that those dray providers understand which loads when and where. And sometimes, we are doing the deliveries either through our EIO, ocean product or we may be asked to be fill in as one of the dray providers. So it's extremely flexible for us to be able to operate in all the different ways that our customers ask us to. Switch over, and show you -- so we start with -- this is the landing page. And what we really wanted to start with was a very clean, simple view of what is the workflow and what is the status. So I'll walk you through this in a minute. But I wanted to step back and talk about the 3 scenarios that we started with. And the first one we were talking about was managing space and labor. How do I smooth out the flow. So this is a good example where at the bottom left corner here, we're looking at the number of containers expected to arrive to port by date. And so part of the offering is we're tracking inbound ETAs, we're using our enhanced DTAs that we run through the algorithms, we buy GPS data from the carriers. And we're checking to make sure that we have accurate ETAs to the port or inland terminal of arrival. And so we can track and understand where are there spikes of activity. that we may need to help smooth out. So in this case, if I have 14 containers coming in on the same date and let's say, my facility is able to receive 5 or 6 a day, I'm going to need to smooth out that volume without incurring costs. And so we do that. One of the ways we can do that is usually using the drag and drop scheduling feature where we have the ability to take each of your facilities, we can have multiple facilities set up. We can figure each one. We can allow for a certain number of containers per day or we could actually put specific door and time assignments to each of these slots. And so it's highly configurable so that we could create those delivery plans. And then as I look at my containers, I want to be able to see what's going on with this container. This one is arriving 18th of December, it doesn't have a dray provider assigned. We'll get to that in a second. But I can simply -- if it's coming on the 18, I want to get that one scheduled for maybe Tuesday, the 20th and it's simple drag and drop once the trucker or expeditors or the customer, it can be configured for any of the parties who want to do the scheduling. We can lock that down. And now that's dragged into a spot. I have some indicators here for higher priority containers. This one has been assigned a high priority, 18th of December. So this one, I want to get in right on Monday morning in the 19. I want it brought right to my facility. I've got another high priority drop in here -- so I have the ability to start building out my schedule. And what I've done here is I'm allowing 4, 5 container deliveries a day, and I have an overflow capacity of an extra 2 per day if I really need it. And what's happening right now in the market is with a lot of extra inventory, one of the things that we see, we want to make this highly flexible is -- maybe I want to slow that down and I want to block those off. And I want to say, "Hey, I need to just slow that down to 4 containers a day right now" and let's see what happens if I need to go into my overflow or not. And then I can review those containers and I take a look at, okay, well, this is my -- I believe this is my highest top priority container I can see some of the details here. So I've got 3 priority containers coming in Monday. And the DC themselves could review this, say I agree with this. Let's lock it down and confirm that plan. And now that plan can get released to the truckers and say, yes, that's my appointment schedule for Monday, December 19. So that's how we help to manage and smooth out that flow -- and again, we made it configurable so that it could be Expeditors managing that flow. It could be the customer managing that flow if they want to do their own scheduling through the app or it could be the truckers setting up their own appointments and somebody else reviewing and managing that on a daily basis. Okay. The second issue that we were talking about was managing process. How do I start to identify -- let me go back to the dashboard. And again, this is all real-time linked to our back-end TMS. And so everything that happens in the dashboard is real-time updated with the system that actually will notify -- can notify truckers to do the pickups or either the full or empty containers and helps us to manage internally in the background. But I also want to look at, hey, tomorrow -- for today, actually, the 13. I have 4 containers arriving but one of them hasn't been assigned to a trucker yet. So being able to allocate and if I have one truck or I might do the other trucker for this one, just to spread it out and match to my allocations. So it's easy for me to do and make sure that I've allocated all of my containers to a trucker. And I can review I've got my priorities here. So if you want the ability to say, hey, I've got this top container. And I want to -- I can keep track of nodes. This is really important [ part ] for -- so I mean, I can keep track of any of the notes on that container. I want to -- but I can also -- I can make sure that I understand, do I have a purchase order number attached to this? Is there a specific value. I can track chassis separate from the container itself. And I may just want to -- and I keep track of all of the dates in the process. But I also -- maybe just want to put my own priority note on this and just say this is a super hot container. Whatever I want to do to identify which container I could help, we can add references. So if I want to add what the contents are. I can do all kinds of things to help me identify which container is the priority. And this helps me to manage, make sure I understand where are the priorities in my process and which do I have truckers assigned? Are the truckers aware of what they need to do. So all the different ways that we want to keep track of the process. And then the last piece, the last issue we talked about was managing costs. And as we look at managing costs in the process, it was really important for us to understand at a glance where are the dollars building up. And so really, these top 3 graphs, these are the in-transit inbound. So these are all of the containers that are headed to port or to terminal that have not arrived yet and I can tell which ones have been prioritized and which ones have not been prioritized. Have they been assigned to a delivery location, do I want to change delivery location. Maybe in the process, I realize that I don't need that inventory in warehouse B, I needed a warehouse B in another location. So I have the ability to go in and change that delivery location. So again, if I look here at the 3 containers arriving today, maybe I want to change the location, I want to look at delivery location. But I don't have the value up on the screen, but I could change that delivery location as easily as I can change truckers, I could change any of the priorities. And then as I go back, if I look at the middle piece, I can tell which are the ones that have already arrived and which containers are about to incur storage, so they have 2 days or left -- 2 days or less left on free time, and I can tell which containers are already building up storage costs. And so I want to be able to quickly get at those containers. I want to make sure that they've been assigned. I want to make sure that they've been customs cleared. But this is where the active management piece is really important. At the end of the day, somebody's got to contact and make sure that these containers move and they need to move today because if they don't, they're just going to add up more storage for tomorrow. And that's where we found the real value in the managed process where -- and Expeditors employee is going to contact the truckers, the port, they're going to troubleshoot getting that container move. Maybe it needs an appointment, and we need to sort out the appointment, maybe it needs a chassis, so we need to figure out on a daily basis, how do we get these out of here and reduce cost or stop the clock so that we don't continue to incur costs. And then the same is true for the empties. We have visibility. These are all the empties on the various yards. I can filter by location. So if I want to change to just the AB warehouse and filter to that, I could do it, so that I have the view for the piece I need and this will show me which containers are on my yard that are actively incurring. So I have one container on the yard that's incurring storage that needs to get returned to the port today or to the terminal and then I have 3 containers that have 2 days or less, and so those need to be taken care of as well. So it allows me to very quickly understand by location, could be by -- or my entire network view, what's out there that's going to cost me money and do I want to make decisions early on. In this case, if I look down at the middle section, I've got a problem with customs release. I've got 3 old containers that haven't been released yet. All the yellow needs to be custom-released. So being able to identify those issues early on, so I can make decisions, what needs to be done. And then the critical piece to us is the ability to have someone actively involved in the process. Who's going to contact the party responsible for that delay and figure out how to troubleshoot it, move along and work with you to make a decision, what do you want to address, what decisions do you want to make in order to either reduce the delay, speed of the process, do you want to hold longer but understand what the cost is of holding profit. All right. So that's our demo today, very clean look of your overall status of all the containers in transit, arrived at destination and the ones that are delivering or at your facility and need to be returned, the ability to dig into the details in real time and update data, collaborate across the platform and be able to keep updated, whether it's notes or identifying what's going on with each container, the ability to do scheduling in a drag-and-drop environment, and be able to reach and figure your delivery location on demand and all the configuration right here. So I'm going to stop the demo at this point, and we'll go back to a few slides, and we're headed quickly towards our Q&A. But before we do that, just wanted to talk to a reminder that our delivery management service is first about people behind the process. Not just software, we absolutely are going to manage exceptions live. We're going to chase down. We're going to work with you on what are the allocations for your truckers, what are the metrics we need to hold everyone to, what needs to be reported daily, weekly, monthly, quarterly, that's important. We're going to help you work out and scope out a process. I find that we have slightly different scope with most of our customers and understanding the process variation specific to you is critical to success. It's not a one-size-fits-all, it's flexible technology that sits on top of the process that works best for you in your business and then being able to shift when we need to and then having the technology to back it up. And that's really been the key to putting this platform together with our innovation group so that we have a way to collaborate across the multiple parties and all be looking at the same thing at the same time. And then our long-term vision, where we headed, obviously, our #1 goal right now as we roll this out is to get customers engaging with the platform. We're coming off of our pilot beta users and now we're moving to getting a lot more customers on and involved, which means we're developing feedback on usability and features. And our #1 goal is to start to build those things in that one of the next big pieces we're headed for is the detention and demurrage calculator that will help us to store all of your specific rules and be able to not only tell you how many containers are building up storage but how much storage they're actually building. We've already had lots of requests for other modes -- it's amazing. We started managing containers, and we very quickly found that folks want to help with domestic trailers and air freight and how can we expand this? And yes, we've been asked and yes, we're exploring how do we handle those other modes. Exports, we have a book of business right now where we are managing complex export accounts so that we can align from multiple supply locations, how do we get those full containers delivered to the right ports at the right time, managing through the complexity. And then on the horizon down the road, lots of other ideas in the incubator, and we're looking forward to getting more and more customers engaged so that we can continue to gather that feedback and build in the needs really for the industry as the industry keeps moving and changing. And then the last pit, we are presenting. We're going to do a panel at the RILA, which is the Retail Industry Leaders Association. Their supply chain conference is down in Orlando in February. And on February 22, we'll be presenting. So if any of you are attending or anybody from your company is attending the supply chain conference please sign up for our session. And I know you can hit the link -- the bar code here on the screen if you want more information, and we will get to send out so that you have access to it if you're looking for more information. So with that, we will move to Q&A. And Kimberly will help me with any questions that may have been building up while I've been chatting with you.

Got it, Sean, take a sip of water, if you need it, while I start reading through these. All right. Yes. First question we had, in scheduling the auto performed with operational change -- or excuse me, with optional changes by the user.

Sorry, can you repeat that one?

Can scheduling be auto performed with optional changes by the user.

Scheduling is not automatic today, but we do have background processes that are able to handle that. This isn't the only way to do scheduling and it's not mandatory to use the drag-and-drop scheduling feature. That was just something that came back over and over and over again and feedback. We do automated scheduling in a sense where we just automatically take loads and populate against the trucker allocations. We do that today in the background using our TMS and just send the appointments to the truckers. But we got a lot of feedback from primarily smaller importers than what they really wanted was a way to really manage their own deliveries in an appointment scheduling app and in fact, we discovered that in Europe, it's almost mandatory to have that kind of functionality. So that's why we built it that way. So yes, it's not mandatory to use this feature. We can automate it using the TMS.

Great. Thanks, Sean. The next one we have is for scheduling, can you use the drop in the same container for multiple plants in case the container has multiple stops to make?

That's interesting. Yes. Not directly in the tool. I hadn't heard that one before, but that's the kind of feedback we're really interested in. That would be like a milk run on the back end. That would be interesting.

Yes. Agree. That's a cool one. I have to hold on to that one for [you]. Awesome. Okay. Next one we have is when changing delivery location, can the system send an instruction to the carrier. For example, if the new location is in a different country, can a request for a new COD be sent.

If it's in a different country, if it actually changes the ocean routing, that's where the people behind the process is important because it's not automated. That process is you have to contact the carrier. You have to build leading changes, there's a number of steps. And that's where I think being a forwarder at our core, we know how to react to that. But the instruction can be given through the platform so that we can execute against it.

Perfect. Next, in countries where Expeditors is the customs broker. Can the team use delivery management to plan. What about if we use a different customs broker.

Yes and yes. So it's not mandatory that Expeditors be the customs broker. It's just preferred. But yes, you can use this with whatever customs broker you like. And where Expeditors is the customs broker, absolutely, we are planning to leverage this where possible to help with our own internal operations. One of the really interesting value propositions that we built right into this was we wanted a way to collaborate with our customers, but we also wanted a way to do better, easier scheduling just internally. So we use the same tools, same process, where we can sell it as a service on top of what you're already doing or we can use it internally to just help us with our efficiency and process.

Yes. Thanks, Sean. And just I will add on to that, if you don't mind, that there -- we get the question of does Expeditors need to manage the ocean or some other service or use delivery management. And the answer is no. So it can be a stand-alone service that we manage for you as well. So I know this was specifically about customs, but that applies to all of our products as well.

Yes. We don't have to be the ocean carrier. We don't have to be the trucker. We don't have to be any of the parties, we can simply be the management piece to make sure that it all arrives as you expect or departs as you expect for exports.

All right. The next question is someone who I think may have seen in the platform before. They're asking when is the cost calculator going into effect. This is a peep into our future.

That's great. That's absolutely a high priority for 2023. And if I were better at wrangling IS estimates, I'd give you a better date, but I've done this long enough to know that you don't give a hard date. You wait until it comes out through IS. But no, at top of our list.

All right. And just a little more context for those who don't know, that's -- tried to give a little bit of insight into potential detention and demurrage and help you to manage that a little bit more closely.

Yes.

Next question, can drayage carriers upload appointment schedules via spreadsheet for multiple containers or appointments at a time.

And the answer is yes. So it has an upload feature that would allow the provider, really any of the collaborative parties to be able to upload their data automatically into the tool.

All right. Next one is, if using EIO service for door delivery, would the import teams be using similar tools for prioritization?

The teams have access to use it and that depends on the model. So we've made it available for any of our EIO teams who want to use it for helping to manage the door deliveries. At the same time, we have some customers who want to add on that level of service and visibility so that they can better understand the door deliveries as well. So I would say, just talk to your local EIO team, and they can walk you through how the process works and how we can implement this into it.

Great. Next, can the software get integrated with TMS software that we're using currently?

We send a lot of data back and forth with customers so the important thing for us is that this connects to our underlying TMS and our underlying TMS communicates with our customer's TMS or software offerings. So yes, it can exchange data back and forth with your software. EDI is still the #1 way. Obviously, we're working on new APIs. But Yes, absolutely. Tons of EDI that we're passing back and forth today.

Thanks, Sean. The next one here is what was the process like before the platform existed.

I could say it's probably a lot like yours was before you put a solution over the top. I would say it was ad hoc, local. And I think the important thing is that as a company, we did not sell management of your dray providers. It may have been an ad hoc thing that a branch took on but for the most part, we didn't play in that space. So we would end our services wherever they ended. So wherever the EIO bill leading stop, we might be doing forwarding services, and we might stop at the export side and not be involved on the import side or we might be involved in brokerage and brokerage might be -- we'd help you to clear it. We would issue a delivery order to the trucker upon delivery, but there wasn't that overall management encapsulating the entire process, watching the containers come in while matching that to delivery appointments. Very much reactive process, whereas the need for this grows as a far more proactive approach to container deliveries and being able to match things like priority status, appointment schedules, specific slots. This has made it far more precise and far more controlled.

Yes. And what Sean is referencing to is plus 10 years ago, right? So the process for the managed service actually is not changing. The platform that we're adding sort of enables that, right? So the process itself is supported by the technology. But yes, back in the day, it was a little bit different.

A fair point. What was it like before the platform, we did all the same things but we would give you visibility through spreadsheets or Power BI dashboards. So it was a lot of passing back and forth up until last year. We passed the e-mail a lot of information back and forth, but we didn't have a one place that we could all go and collaborate in real time. So the platform really changes the experience.

All right. Thanks, Sean. Next, we have a question. Is the delivery management focus more on the unloading or delays at the final destination or on the delays at the port or rail ramp? How does the container availability come into play?

All of the above really, we start picking up a container. We want to pick up a container record as far upstream as possible ideally off of an ASN or once it departs or engine so that we have the transit time on the water to start to understand what trucker to allocate it to, what's the delivery location, what do the appointments look like, be able to track the vessel for delays, the inland delays? Do we have carrier EDI, do we have other ways of bringing in status, so we can understand, has it moved to a rail carrier or a barge service? Do we -- so we're focused on everything from the moment we have a container record inbound until it delivers and the empty has been returned to the provider.

Great. Next, how our door moves with the [ steamship ] flying carriers handled through the platform?

It's really the same way. I think the difference is in the control aspect but it really is very similar, which is being able to track and understand where the delays are and then having to work -- again, key people in process behind the technology is having that relationship, we meet with the truckers. We find out who the carriers truckers are. We meet with them regularly. We have that open communication so that we can help to influence which containers get moved in which order. Because obviously, with the carrier moves, the carrier has outsourced that to a trucking provider and really the trucking provider is the one that's going to take care of the rest of it. So we want to be in direct contact with them through your introduction and the carriers introduction, so that we can help to manage the containers, prioritize delivery, pickup and return the same way we would if you were managing the trade contracts.

Perfect. I want to pause and everybody know. We have a couple -- about 3 or 4 more questions I see here in about 4 more minutes. If there's anything urgent that you want to put in the chat, please do it now. We'd love to be able to answer as many as possible while we're here together. The next one is, is there a minimum or maximum number of containers to qualify for the program.

Great question. One of the first questions we had early in the process was we were working with some very large importers. And then we scaled up to one of the largest importers in the country, and we scaled down to some companies we started working with in the Midwest who we're bringing in somewhere between 3 and 10 containers a month. So I would argue that if you have the challenges that delivery management solves, we have scaled from the lowest volume to the highest volume we can imagine. And that's always been a piece important for us. And the platform actually helps us to do that better than ever because it was harder to scale before we have the technology. Now that we have the interactive platform, it's been really easy to help some of those smaller customers have the exact same experience.

Excellent. And the next question is, can this be sold as a SaaS offering only?

Interesting question. Stay tuned would be my answer. We are not currently selling it as a SaaS offering, but we do have something in the works, so it's on our horizon. That would go under the dot, dot, dot that I was talking about, where we have some ideas that are already coming in. So yes, we're ahead of that direction.

All right. And can you manage our truckers or does Expeditors need to be performing the truck move.

Yes, we can manage to truckers. In fact, a large percentage of what we do today is managing your dray contracts, your providers.

Great. And then the last one that I see here so far is, does this work with containers moving on rail or barge or ocean only?

Works very well on containers moving on rail or barge. In the U.S., we have rail track information that we can bring in. So we are still tracking those containers all the way through. In Europe, we see more of the barge service where we're tracking the same way. But yes, no, it's not just a port. It's absolutely the inland move. Again, every step from the first time we have access to the container record until it delivers to your facility and we've got to give you the visibility in between. And we've been very successful in doing that. Really, that's what we do as a company is we really collect data and information for multiple providers. It's what we're good at and bring it all together to understand what the -- what your supply chain looks like.

Excellent. So with just one minute left, I'm very impressed with our timing here. We'll go ahead and close it out. I don't see any additional questions. Again, I wanted to let everyone know that when you do fill out the survey that will come your way following this webinar, you will get access to all these materials to share with someone on your team or to reference for later. We're looking forward to what's next. Biggest thing as a follow-up is if you do, fill out that survey or a question about if you'd like to talk more about it or get more information about delivery management to let us know and that way we can know to put you in touch with somebody to have a more direct conversation. So I believe that we have, Sean, anything else to wrap it up.

I just want to thank everybody. I hope everybody has a happy holidays. Thanks for attending today and hope that our entire industry can take a little bit of a breath and we can all catch up and get back to some 2019 normalcy and supply chain. Thanks, everyone.