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

Hello, dear customers and friends. My name is Raul Molina. I'm the Business Development Manager for the Laredo Corridor office. Today, it's a privilege to have all and each of you here with us in this important conference that our Laredo branch and our executive management organized for you. Today's topic will cover the Laredo Gateway and the expected impacts from the near-shoring effects. I will show you some highlights of our Laredo offices. Our Laredo corridor office comprises of 2 branches, 1 in Laredo, Texas and 1 in Nuevo Laredo in the Mexico side. Our Laredo branch runs 2 warehouses with capacity for 320,000 square feet, yard capacity for 450 trailers, free-trade zone capabilities and access -- immediate access to our ground network services in all the U.S. and Canada. Our U.S. customs brokerage team has a monthly average of 20 processes, 28,000 entries per month. And our Mexico's customs team processes more than 23,000 customs releases each month. Today, it's an honor to have all you here. And now our branch manager for Laredo, Jorge Valdez, will introduce our speakers. Thank you for joining us.

Thank you, Raul. And again, welcome, everyone. We really appreciate you taking the time to attend this webinar now today. I'm Jorge Valdes, Branch Manager for Expeditors Laredo branch. And we're very excited about the future of the region and the port of Laredo in particular. We're here ready to support you with your logistics needs. But most importantly, today, we want to make sure that you have the latest updates and the information available at your hands for the upcoming months and years. An interesting fact, Laredo was the #1 port amongst all air, ocean and land ports in the U.S. for the first quarter of this year. Laredo's been a top 3 port for several years now and occasionally #1 in certain month, but it's the first time that it's #1 for a full quarter. So again, very exciting. And with that said, we have some great guests today that will share more details with you regarding nearshoring, its impacts in the region and the and the port. We have Fernanda Kroup, VP and Head of Onyx, who will provide us with the market outlook, what we can expect in the upcoming months and years. And then our good friends at CBP Laredo will provide us with an update on their expectations and projects of the port, everything they're doing in preparation for the imminent growth. We have Assistant Board Director, Javier Vasquez, with us. We have Cindy McCorkle, CBP Supervisor at World Trade Bridge; Raul Romero, CBP Supervisor of Colombia Bridge; and Margie Garza, CBP Supervisor for Rail here in Laredo as well. So with that, I will get out of your way and turn it over to Fernanda. Thank you.

Thank you very much, Jorge. It's great to be here. And so I thought we could start by talking a little bit about who Onyx is, we're the vision of expeditors. And our work is in geopolitics and macroeconomics. And so when the Laredo team reached out to us, asking us to provide a macro update on macroeconomics and then on re/nearshoring, we're so happy, and it's great to be here with you today and definitely a very eventful few years, right? So I'll start with that global macro updates. I'm going to talk a little bit about the performance of key economies moving forward. All of this has an impact on supply chains and on reshoring, nearshoring. So bear with me here. 2023 is a tough year for everybody. For the U.S. economy, we see a lot of -- a bit of a hangover, right, in terms of consumption and growth coming out of the pandemic, right? We see about flat growth, 1.2% for 2023. Consumers are feeling the pinch. We have inflation and credit tightening, which means higher interest rates. And so there's -- 2023 and 2024 are very much transition years coming out of the pandemic. China has relaxed its lockdowns. And so it's coming in strong. A lot of it is pent-up demand from the time of the lockdown. So there's a spike here but there are important vulnerabilities in the Chinese economy, particularly in real estate. So we're all watching China very closely right now. Those are the 2 that I would like to highlight, but you see how 2023 and then 2024, in particular, are moments of transition. A lot of it is stimulus checks are coming to an end. There's less disposable income for consumption. So people are feeling the pinch a little bit right now, right? And so when we think about what's going to happen, right? And we look at the United States, in particular, our view at Onyx is that inflation is coming down and will continue to come down and rates will take a little longer to come down, right? So let's keep that in mind, right? So inflation doesn't respond immediately to action by the government. It takes a little while because a lot of inflation comes from services. In services, you negotiate a contract once a year, once every 2 years, think about your insurance, right, as a personal consumer, companies also face the same thing. And so it takes a little while for an increase in interest rates to have an effect on inflation. So right now, we're at that uncomfortable middle. And the reason why we're talking about this is because what happens to shipping rates, right? And what happens to supply chains in gen, right? So in the short term, we see macroeconomic and geopolitical environment supporting an easing of bottlenecks and, therefore, of rates, right? Inflation is driving down demand and volumes, so less volume moving around. China is reopening, right? It's much more -- it's much smoother than anybody expected. And so you see an easing of the bottlenecks there. And the worst effects of the Russia-Ukraine crisis have already been incorporated in rates, right? All of those could have a different trajectory, of course. I mean inflation could prove a lot more resilient. China is reopening. There are still significant vulnerabilities there. And then Russia-Ukraine could escalate, right? But in general, in the balance of things, we see support for an easing of bottlenecks in shipping rates. In the medium term, though, there's possibility for an increase in rates, right? When you lower inflation and interest rates, people consume more. And so you have more volumes around, right? That feels natural intuitive. Companies invest more CapEx, right? So that picks up, especially big construction, automation, reshoring projects that companies have been delaying because of interest rates and financing being too expensive or too much uncertainty. Energy prices. If -- as China grows again, so you have a lot more consumption, right in energy, and therefore, prices go up, and then increasing nearshoring. One of the things that are happening right now, as you know, is that companies have already decided to nearshore. So they're diverting volumes into Southeast Asia, Mexico. So -- but can the -- the big question here is, can the infrastructure handle this, this additional volume that's coming in so fast. Or there -- is there potential for bottlenecks at least in the medium term, as countries adopt to this new reality. So that points -- in balance, there are many forces at play. But the way we look at this is that the balance of forces shows an upward pressure, if you will, on shipping rates. Moving on. So what does that mean for re and nearshoring? What are the trends that we're seeing here? Business leaders are concerned about political risk and are determined to reshore or nearshore. They are planning to invest. They're not investing to their full potential yet, but they're planning to, for sure. And -- but if you compare with 2012, which is at the bottom of the page, only 34% of manufacturers we're considering bringing manufacturing back to the U.S. That has changed. At the same time, we're still in a -- at a moment where investments, CapEx are slowing. Interest rates are too expensive. But this is just a transitory moment. As interest rates become more affordable, then investment picks up. We're still coming out of the dynamic. We still have a lot of prices to handle, but our expectation is that private business investment will really increase. We're going to talk about Mexico for a second, but thinking about other economies, India, even China, that's much more domestic investment, EU, Japan, United States. So lots of movement expected. There's a lot of uncertainty, though, as you can see on the right-hand side, that we still need to go through. Now what -- how does that express itself in the various sectors? So we took here a stab at different sectors, trying to cover as much ground as we can. Despite the slowdown, we already have a lot of projects announced. The interesting thing is that a lot of those projects are in Europe and in the United States, so reflecting nearshoring. And then you have markets where you see the bulk of nearshoring. Mexico here featuring very prominently in consumer products, auto, industrial equipment, food and beverages. This is not surprising. But it shows you the interest that's happening. We're seeing a lot on Turkey, United Arab Emirates, so the Middle East. And the interesting thing is that we don't see a lot on China. And that tells you something. In previous years -- this is for 2022 announced projects. In previous years, China was always #1. And so things are changing very fast. And so we already see -- if you're asking yourself, how is nearshoring, what are the numbers? There's a lot of reshoring, a lot of nearshoring, Latin America and Southeast Asia, the numbers already show that. Now the interest in Mexico is increasing. Exports are increasing at about 6% year-on-year faster right now, but the U.S. share is about 80% of it. And so that share has remained stable. And it means that the structures around composition and destination of exports remain stable. We're not seeing a lot of change there. Whatever investment that's going on right now, and is already translating into exports, it's primarily for the United States and in the industries that we saw before. Now manufacturing investment by North American firms is increasing from 1/3 to -- from 1/6. FDI, meaning foreign direct investment. U.S. businesses now still the bulk. So the industries remain stable, but the interest is there. It means that a lot of what we're capturing, at least in this beginning of investments into Mexico, is increasing demand. We're not fundamentally shifting the structures that existed before. As economists like to say, we're capturing the delta. So whatever increases in demand or increases in volumes going to the United States, that's what we're capturing. So not a lot of fundamental changes yet. But as we saw in the previous slide, there's a lot of interest in consumer products. And a lot to come in terms of high-tech goods. Mexico making an appearance here, pharma and medical devices. There are challenges in what we're seeing right now. Mexico, in particular, but other emerging economies like Mexico are attractive because -- primarily because of fiscal discipline and cost advantages. So that fiscal discipline, that means that exchange rates are stable, that the economy is relatively stable attracts investment. Their credit risk is lower. When you see this fast monetary tightening, so increasing interest rates in the United States attracts -- makes foreign credit going to Mexico and others. So there's more investment available. And then within Latin America, Mexico is, at least at this point, at an advantage over other Latin American markets, in particular, related to economic and political stability. Lots of questions still on Colombia; lots of questions on Chile, Peru, Ecuador, even I'm Brazilian, in Brazil, lots of questions as well. And then you have longer-term challenges. This process is moving much faster than it did in China 30 years ago. And so it's really testing the infrastructuring markets. So we'll still need a few years to adapt and see investments in infrastructure that have been announced right now by governments around the world, how they will fair. There's a lot of know-how that exists in China that needs to be transferred. And I know that a lot of you see that day in, day out, you're sacrificing efficiency for long-term diversification and resilience. But that means a period of adaptation, even for the countries where this investment is going and the same story in Mexico in our estimation. Labor costs are rising rapidly as a function of supply and demand. And so there are a lot of questions here in terms of preparing yourselves for an environment where labor costs are not as low as they were before, but they're still competitive. Raw materials are still a big question. There's a lot of geopolitical competition going on there. And people even talk about the potential revitalization of mining in primary industries and developed markets. Europe is talking about reopening its mines. So lots of countries, including the United States, are talking about bringing back metals industries. And so that reinforces nearshoring and reshoring in particular. And then there's uncertainty in the big geopolitical issues. Our view on Russia-Ukraine is that this is a war attrition that will remain where it is for a long time. And a lot of it is because Russia, in particular, doesn't have any good options so far. It can't win the war, but it cannot afford to lose. So what it can do is to push for a continuation of the status quo or it can escalate. In which case, the risks to Europe into the global economy are incalculable. Now we see that as a low probability scenario, but it is a scenario. And so it's a test of who can carry forward this war, but there's a lot of resolve on the European side, much like there is on the Russian side. But for the Russian government, this is a survival issue because no Russian government has ever lost the war and survived. And then China, Taiwan being a big question here. We don't see that as likely in the short term, any sort of military action, but it is a perineal source of concern, particularly considering that 30% of the world's global trade goes through the Taiwan strait. Now when we think about infrastructure, illustrating that previous point about the challenges, we see a worsening of performance in the last 5 years in Mexico. So there's a challenge here in terms of improving the existing infrastructure and making investments. It's not impossible, but it means that there's an adaptation that needs to happen versus what one had before in China, for example, and improving infrastructure in places like Malaysia or India. Similarly, labor costs are increasing. Mexico is not alone in this, but it's something that companies need to be ready for, that the -- and it's a continuous process. This will continue to happen because there's a lot more interest. And where there's more demand, supply and prices -- so prices go up. But it doesn't mean that Mexico is not competitive versus, for example, the United States. But what it means is -- and the same is true depending on the skill sets. Highly skilled labor is also growing in terms of prices and costs at around the same pace. So I'm going to take a step back here and talk a little bit about medium and long-term dynamics and priorities. As I said before, we're going through a period of adaptation. Production sourcing and transportation costs will increase as new locations adopt. Infrastructure. I think if I were to put a point in your radars, and to think about and to incorporate into your planning to raise internally, what should you be thinking about? It's as you get to know these new sourcing locations, if depending on whether how much experience your company has with Mexico, but it takes at least 5 to 10 years on average for a meaningful improvement in infrastructure. You can have short-term improvements. But a structural change takes time because understanding the direction of, for example, nearshoring trends takes time to filter through investments. Labor policy and labor costs, up 30% from just a year ago. Now a lot of this is also a function of automation and improvements in productivity. You could see an improvement in productivity because there's more know-how going around. But those also take years. And automation projects, which are investment projects, also take years to bear fruit. So there's a little bit of expectations management here, and I'm sure a lot of you have seen this. Utilities as part of infrastructure, but also something to keep in mind, electricity prices. And then last but not least, I think it's important to think about there's more regulation flowing from free trade agreements. ESG, environmental standards are part and parcel of the CPTPP, for example. New generation free-trade agreements have extensive ESG chapters. So certain sensitive inputs, primary inputs, in particular, forestry products, wood, chemicals, a lot of new regulations coming up that we need to think through as we think through our supply chains. And adapting to shifting policies in countries with elections every 4 years. Some of you have a lot of experience in this. Some of you are seeing this firsthand, but there's an element of policy uncertainty that goes with elections. And so really paying attention to the agenda of different candidates to be able to understand where is this adaptation going? Where infrastructure investment is going? So you have a better sense of for example, changes in modes, in logistics performance across different elements of your supply chain. We're seeing a lot of planned investments in Southern Mexico, questions around Northern Mexico. We hear that a lot from customers. So things to think about. And then longer term, I think you may be already experiencing this that really, it's not just one model for nearshoring and reshoring, but several really. Some industries are growing much faster. And what they have in common is that they have large players with a lot of know-how in globalizing their footprints. They have a lot of experience in moving production and sourcing from one place to another. Intermediates, light and heavy industry, auto, there's a lot of experience here. We're seeing suppliers verticalizing and trying to globalize together with you. And then we also see a lot of Chinese investments. So Chinese companies are nearshoring as well, if you will, building a lot of industrial parks, including in Mexico. So there's a certain level of pragmatism here. Now that adds an element to the context of U.S.-China relations. It's not just products coming out of China into the United States, but also that element of Chinese companies in nearshoring as well. Then you have value and mid-market apparel. Here, we see a lot of desire to test new frontier markets. So there are lower entry costs in terms of -- there are costs there for sure, but lower compared to other sectors, a bit of a faster ramp-up. There's strong know-how in terms of establishing new sourcing relationships, and you have larger players, large retailers sourcing globally. Here, we're seeing a lot of interest in Central America as well and North Africa. And then upmarket in luxury. This is where a lot of the difficulties we're hearing from customers. There's a longer transition here. It's harder to find suppliers. It's harder to transition know-how. A lot of them are working with their suppliers to bring them to these new markets, including Mexico. But their know-how is limited in Mexico. So they themselves are learning. So -- and there's a lot of interesting training suppliers in pulling resources to do that. So we see that it's an interesting complex and mixed picture moving forward. We can be sure that costs will increase and the potential for bottlenecks, but it's part of responding to a new geopolitical world. There's a lot of uncertainty, a lot of risk, as you can imagine. Around the world, lots of conflicts. So diversification makes sense, nearshoring makes sense. Mexico makes total sense as a market, but there's a period of transition here. And as we trade efficiency for diversification and resilience, that mid -- messy middle that we are at right now. And it will continue in terms of expectations. It will continue for a few years until we steady the ship. But it's going much, much faster than it ever did for China in the '80s and '90s. So it's an interesting process moving forward. Thank you.

Thank you, Fernanda. Now our CBP officials will share the Laredo update for today. Thank you.

So good afternoon, everybody. My name is Javier Vasquez. I'm with the Customs and Port Protection. I'm the Assistant Board Director for the Laredo port of entry. And I want to thank Expeditors for inviting us and allowing us to -- allowing our team to talk about CBP and how we have grown as far as commercial crossings. So I'm from Laredo. I've been here 32 years. The Board Directors also from Laredo and our Assistant Director of Field Operations, Mr. Armando Tavares also here from Laredo, Texas. So we've already gone through several stages in the trade environment. First, we went through NAFTA, now with the USMCA and now it's still -- we're nearshoring. So we've been able to see the amount of cargo crossing through Laredo. As you know, Laredo is the busiest in-land border crossings for commercial trucks in the nation and processes about 40% of all land, imports and exports between U.S. and Mexico. Trade operations is responsible for 2.7 million commercial trucks with an import value of $181 billion. So that's one of the main reasons we can't afford for this bridge to have any type of disruptions going Northbound or Southbound. So our daily average as far as crossing through to Laredo, we have World Trade Bridge. We process 7,500 trucks pretty much as an average daily. And the Columbia Solidarity Bridge processed 3,000 trucks crossing through there daily. So historically, the Port of Laredo has had a 3% and 5% increase for quite a few years, but we noticed this difference in FY 2022 that our numbers went up 8%. And that's equivalent to Mexican Customs, so we share a lot of the data with them, and they also had an increase of 9% going into Mexico. So some of the stats that we've seen for this year comparing our FY '23, 6-month period, we've already seen an increase of 7% at World Trade Bridge and Colombia Solidarity Bridge has seen an increase of 6%. This year, we're thinking we're going to surpass the 3 million trucks that we -- that are going to cross here through our commercial lanes. The previous year was 2.7 million. And I'm thinking for this year, it's going to be more than 3 million. So that's a big push. Laredo has 49 bonded warehouses, 46 foreign trade zones and 5 container freight stations. Approximately 74% of the arriving commercial trucks are laden with cargo and 26% are empties. And I'm just talking about the Northbound, and this is for both World Trade Bridge and Colombia. Something interesting to talk about is that the Southwest border, and I'm talking about San Diego, California, Arizona, New Mexico, and part of Texas being El Paso, having their own field office. For the Laredo field office -- sorry, for the whole Southwest border, there's 102 commercial primary lanes. The Laredo field office, which oversees the ports of brownfield through the real Texas, there's 53 commercial lanes. Laredo port of entry has more than half. We have 27 commercial lanes that we can use to service the trade stakeholders. It's interesting and it's a big number for Laredo. So now with the new projects that the city has as far as the expansion of World Trade Bridge. So the City of Laredo in Mexico, the state of Tamaulipas, there's plans to add a second bridge spend right next to World Trade Bridge. So that bridge span is going to add an additional -- and as you can see on the photo there, it's going to add an additional 8 lanes going Northbound. That's all Northbound traffic will use the new bridge. That other bridge, which currently has 8 lanes, they will add 2 more. So that one is going to have a total of 10 lanes. Two of those planes will be for the fast, that lanes that we have outside our facility. And the other 8 will be for Northbound going into Mexico. So that's how we're preparing -- that's how the city of Laredo is preparing. We prepare with the manpower, but the city has set plan, and they have a projected completion date of December of 2027. Still a long ways to go, but those are part of the plan. At the same time, Laredo is already talking, as most of you probably already know, a bridge 4, 5, that's an additional bridge. It's going to be located in the South Laredo here in Laredo, Texas, which is greatly needed. One thing that I do -- that we do talk during the -- our meetings with our stakeholders because mostly, we have brokers meetings in Laredo that we participate. We have carrier meetings. We have Mexican Customs meetings with the stakeholders in Mexico, which includes carriers and the Mexican Customs brokers. And we also have meetings with Index Maquiladora on the Mexican side. One of the things that we're trying to tell them is that the bridge is open from 7 in the morning to 12 midnight. The only issue that I see there is that the usage of the bridge, the usage of the bridge is only from 10 in the morning. That's when we start seeing the traffic pick up until 7 p.m. So there's plenty of other times hours that we can use a bridge so that we won't have some of those wait times. And that's something that we've been talking to the stakeholders that, that's one of the issues that we see of not taking advantage of the whole full hours from 7 in the morning till midnight. If that were the case, then our traffic would cross more efficiently and smoother. But I understand that there's a culture and that at certain times, everybody starts their operation and we start getting few trucks during the morning, but they all start at 10 till 7. That's something that we're trying to address. We can't change cultures, but the opportunity is there to use the bridge. So now that they're going this bridge span, hopefully, that culture changes and they can take advantage of using the hours -- for those 17 hours that we have opened. And also, I want to mention that the World Trade Bridge is going to have a new technology, that's the multi-energy portals. As you can see there, World Trade Bridge has one right now in a secondary environment. But the future, which is going to be this year, 4 of those machines are going to be added at pre-primary. As you can see on the left screen, the 4 machines are going to be located there. Each machine can handle -- it's a drive-through. Each 1 can handle 100 trailers per hour. What does that mean? What it means is that a lot of those trucks aren't going to be offloaded anymore, because we're already looking at the merchandise and we're looking for anomalies. We're looking for undeclared merchandise and illegal drugs that are being hidden in legitimate cargo. So that's going to help the importers in savings, less offloads, plus once they're cleared from the X-ray, the primary officer will know that it's been cleared or has been referred to secondary. If they're cleared and good to go, they go straight to our exit gate, and they're gone. So that's 1 of the things that we're doing to prepare for this tsunami of trucks that's going to come into the U.S. because of nearshoring that we're preparing for and numbers that we've seen the increase. So that only alleviate a lot of the referrals into secondary times that are there waiting to be scanned. And that's the way that we're going. That's how CBP is going through the whole process, not just in Laredo, but other ports. But there is great importance for Laredo to have those machines. The sooner the better. So during the construction phase, we are going to experience some delays because they are going to have to shut down like 2 lines in that area where you see the rectangular for the X-ray machines. On the right, what you see there is the NII control center. That's where the offices are going to be inside adjudicating the images that are scanned here at primary. So now I'm not going to take any more time. I just want to share some of the statistics that we have and some of the initiatives that we're conducting at World Trade Bridge. But now you'll see -- you'll have an opportunity to see what Colombia has and what our railroad has. So I'll turn it over to the supervisor, Cindy McCorkle, to continue with this presentation. Thank you.

This is Supervisor Cindy McCorkle from World Trade. I just want to also touch base on our new fast lanes that were opened this February of 2023. And as you can see on the screen, this will be the new additional lines, therefore, that gives us a total of 6 fast lanes. And of course, these are for members that are safety pad and fast shipments. And we're focusing on the fast [ lanes ] to use this -- the new constructed lanes. And 2 additional lanes are still being utilized in the interior import life, and those are used for our fast empties and any inspection, agricultural products or inspections that are for Mexico, they'll still use those lanes. This is another view of the project. And it's one -- it's a one-stop, it's primary and exit gate at the same time. So they don't have to commingle with other shipments and go through our import lot. Once they appear there, in primary, they're into the commerce of the United States. I wanted to also talk about the unified cargo processing. Laredo is the only port of entry that has them all at the airport at the rail and in the truck environment, meaning World Trade and Colombia. And we work alongside Mexican Customs. There's a few pictures of them working alongside with CBP. The new I-94 process, we are seeing -- we were innovative. We are adapting with new technology. Everything is online now. We don't take any cash transactions here on World Trade. Everything is paid online. The process is the same as for the traveling public. It's the same thing for the truck drivers, and that expedites the process. We have a fast, free and secured trade, fast enrollment center on World Trade. We have been having our reach events to attract more applicants. And since then, for the past 6 months, it has surpassed the enrollees compared to last year by 56%. And there's a total of 1,130 applicants that have been enrolled here at World Trade, and we will continue having this, our reach event. And there's some information there for the FAST office. In case you have any questions, and we'll have to know more about the program, we'll qualify it with us, and they can feel free to give us a call or an e-mail.

Hello, everyone. I'm Margie Garza. And CBP team at the Laredo Rail national bridge processes 44% of all seen in rail traffic, processing approximately 27 trains daily, each of which contain 130 railcars. We've got 2 carriers in the rail environment, that are Union Pacific and Canadian Pacific, Kansas City. Prior to the merger with Canadian Pacific Railway, Kansas City Southern proposed, approved and initiated the construction of the second international railroad bridge, which is the image that you see there on your screen. The groundbreaking ceremony took place in October 2022, and construction began March of this year. The second railroad international bridge will be built on the East side of the existing bridge and is projected to be completed by August 2024. CBP is currently testing a flexible windows pilot program that began last month in April in preparation of the completion of the second railroad bridge to facilitate the uninterrupted movement of trains, maximize the utilization of the railroad and reduce inactivity on the current bridge. And this is a short snapshot of the current construction project that is being done at the railroad bridge to be able to build that second international bridge. This will increase the throughput of train -- commercial trains. So we're going to be seeing an increase of that next year around this time. We've got the team from the Columbia Solidarity Bridge, they're going to be presenting their part of their presentation.

Good afternoon, everyone. Thank you for the invite. My name is Raul Romero. I oversee operations, all construction activities; most importantly, the construction of our multi-energy portal x-ray system here at Colombia, Laredo. 31 years ago in 1992, Colombia was first opened. Currently, all hazardous material cargo is routed through Columbia Bridge, where CBP maintains a hazmat containment facility. Approximately 160 hazmat shipments are processed here daily. With the age and growth of our port, we have found a need to repair and make improvements. The City of Laredo has recently completed repairs of the expansion joints of the Columbia Laredo bridge, as seen on the screen right now. CBP is repairing the roadways, arriving to our primary booth. And the road was inside their import lot. CBP has also added more lighting to improve the driver visibility at night. Colombia is currently installing 2 multi-energy portal systems or MEPs, which began on January 11th of this year. Okay. Cindy, can you please...

Yes, it's there.