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

So hello, everyone. My name is Justin, and I will be the host for today's webinar, ask Canadian experts. Thank you all for joining us today, and now I'll cover a few ground rules. Everybody is automatically all mute and your cameras are off. Most of you will have submitted any questions you have during the registration process. However, we still want to encourage you to submit any other questions you may have. You entice your new questions into the Q&A box at the bottom of your screen. But please avoid having questioned into the chat box as we may miss those. You can answer your questions into the Q&A box at any time, but we will be answering those questions during our live question period near the end of the webinar. I would also like to mention that some questions we received, we found to be a little bit specific to your company. So we'll be reaching out to some of you directly after the webinar to address those questions. As well, please stick around to the very end not only for the live question period. We will also have a few QR code for you to scan. One slide will include the contact information of our experts here today and the other will allow you to sign up for our communications, including future webinar invitations. Soon after the webinar, all of you that are attending this webinar will receive a follow-up e-mail that includes a survey. Filling out the survey will give you access to a copy of the slides used today. And with that, I will pass over to Steve Bunda, who is not only one of our experts, but he'll also be acting as a facilitator for today's session.

Great. Thanks so much, Justin, and good afternoon, everyone, and also good morning to our friends on the West Coast, and thank you all for taking time today and attending our ongoing webinar series. Today's session, a little bit different than our regular webinars where we concentrate on industry change and opportunities from a compliance and logistics perspective. So in today's discussion, we will be asking the experts an opportunity for you to ask our team of Expeditors Canada experts, your questions. And again, thank you very much for your feedback and the questions submitted. My name is Steve Bunda, and I'm responsible for the business development here at Expeditors Canada. So I would like to introduce our team of experts who will be providing answers to your questions. David Chadder, Transcon [Brand manager of Rail and Transportation] Manager; Corey O'Sullivan, Ocean Freight Manager, Mira Ivanova, Manager, Air Products, Robert Spitz, Customs Manager; Cara Weese Manager, Customs Border Operations and Justin Pavao, sales operation Coordinator,and thanks, Justin, for coordinating this webinar. So really, I was taking a look at our panel and I'm going, well, we've got a good 100 years of industry experience there. And probably adding me in there, we're probably pushing close to 150 or 200 year mark and no comments from our panel of experts. Thank you. So before we start, I know, Justin, you had a few housekeeping notes there. Again, the webinar will be recorded and a copy will be sent out to all attendees. And again, thank you so much for your questions. And if you have the questions, again, enter them in the Q&A box, and we'll do our best to answer them at the end of the session. All right, Justin.

Thank you, Steve. Now as a quick run-through for our agenda. We're after I'm done through the agenda. We are going to have our introductory pull. Then we will have the questions from the audience, which came in during the registration process. We've put all them together on our slides. We will get through those. Then we will address any live questions that you enter in throughout the webinar. And finally, our contact our expert slide, where, as mentioned, you have QR codes or you can scan to get the contact information for all of our experts. And with that, I think it's time that we start our first poll.

All right. First poll question. If you are a customer of Expeditors, which products do you currently use -- of course, a multiple choice. I guess, interesting results. Many customs folks on the call on the webinar today. Air, good to see Ocean and Transcon and good, good distribution -- all right. Thank you for that. So getting right into the questions. And right out of the gate, we, of course, have a customs question, and this one will be directed to you, Rob, Rob Spitz. How do I set up as a nonresident importer, very common question that we get all the time here.

As certainly, Steve, thank you very much. nonresident importer or NRI, as you'll see the acronyms, obviously, in customs. We live and breathe on our acronym. So it's another one to throw at from the webinar. Setup is very straightforward, not entirely easy but very straightforward. Really, you'll see as we kind of go through the key element is really just buffering in enough lead time. Most of the processes involved are very finite. There's a lot of lag just waiting. We were dealing with government agencies here, so they do move at the speed of government. You kind of hear that phrase quite a bit and can draw your own conclusions from that. But the key takeaway, the first thing is to get your importer ID or your business number as it's referred to. It's a 9-digit identifier with customs. They do have a suffix on there that identifies which government program that you participate in for any of our U.S. counterparts on the phone, that would be akin to your IRS number. Basically, you're identifier with customs, but also any government agency as well. You can kind of use it as a similar number for all types of programs, whether it's tax or payroll, et cetera. That is something that comes in 2 flavors. You could do it yourself online, the Canada revenue agency website allows for you to make that application online directly, pretty much fill in the blanks. They're going to look for information in relation to your importing name or you're legally registered. They take that information, and they will bounce it against your stage or province or country of incorporation, making sure they're doing their due diligence, checking out, make sure you're not -- your screen party, you're not any kind of naughty list, et cetera. It does take them approximately these days, anywhere from 3 to 5-plus business days to actually complete that. So sometimes, we're going to call on a Friday shipments in transit. It's approaching the border. You need to set up as a nonresident importer. That becomes very tricky because they don't really respond very quickly when it comes to that setup. We can stress urgency and say that there's a shipment in transit, but there's no guarantee that they'll turn that around. Additionally, you may elect to utilize a service provider such as expeditors to go ahead and set that up. Same process applies. We have a little bit more of a direct connection. There's a sort of broker portal, if you will, that we can go and somewhat expedite that slightly, but it's still stuck with that sort of 3 to 5 business day window. Now is this going to be ongoing business, not just sort of a onetime setup. What you want to do and consider is to register for the GST or goods and services tax, that's Canada's value-added tax that ultimately, we as a consumer will pay once we go into a retail location, a final sale type application. However, to ensure that it does get collected, they do start collecting that at the time of import. So with a few exceptions, and we're going to really get into you at this point, it's going to -- you're going to pay that 5%. So registering for that affords you the opportunity to get that back. So it does involve a very, very minor tax filing that is very rudimentary, very easy to complete, don't let that scare you when you hear the word tax. It's really just a wait and mechanism to actually refund those amounts back to you as a registrant. And you will need a bond for that. Small upcharge for that for the bond. It's really not that over-the-top in terms of cost. The only issue with that bond is it takes forever. They still have a backlog they've been clearing that they went through that was largely as a result of many folks registering as an Uber driver or a lift driver. So that had a huge backlog, and they're still cutting through that, believe it or not, years later. So it will take upwards of 6 months for them to get a number back for you. But that being said, they'll back date it. That doesn't stop anything. It's just more something that happens in the background. Now not to add a layer of confusion, but GST, that bond that I just talked about, that's for a nonresident importer. There's a secondary bond that relates more to the duty and tax being GST. So GST is kind of used twice, but it's really 2 separate things. Think of that nonresident one is taxes and the paid income tax and the GST bond for duty being more of that sort of import duty and tax. Getting that bond, which Canada Customs is making mandatory with the CARM R2 release in 2024. It would have been October, but 2024 now. That will be mandatory you're going to have to do this anyways from that piece of it. That turns around usually a bond, either through your own 3D company through customs broker, et cetera, generally about 2 weeks, you can get that bond. It does take customs a little bit of time to set it up approximately 4 to 6 weeks, and we're seeing that grow every month. So that's something that needs to be considered from that into things. Today's environment, the broker still has the ability to put it on their board. It's not something brokers really enjoy, but it is something in a pinch that if we do get an importer ID set up, shipments at the border, we can still get that processed but things to consider. So really, while that's all going on, of course, you're doing your standard set up items that you would with any type of brokers. So getting a custom power of attorney involved, getting all of your compliance information, HTS codes, et cetera, all the sort of universal truths that we all deal with as importers regardless of the country. That can be done sort of [intent] while we're waiting. You can see, as I said off the top, there's a lot of kind of waiting time involved in here overall. Once you have that information, ready to go, you have your business number at that point, you're pretty much ready to import. So that's really where you can kind of kick off your import activity at that point. And as I said, kind of pretty straightforward, is just really you're having to buffer in that lead time at the front end just to kind of cover all these little subprocesses or some processes from that into things.

All right. Thanks, Rob. Great... what's that.

In a nutshell.

Yes, yes. Yes. The NRI is very popular for us. And hey, an easy way for a company that does not have bricks and mortar here in Canada to take advantage of the Canadian marketplace for sure. So next question, Cara get ready for this. What changes are occurring related to the import and export of nuclear goods. Thank God, I don't have to answer that one.

I would rather have Rob's question, please. All right. So within the nuclear imports, they are actually regulated under Health Canada and under Health Canada a subset would be nuclear. So they are through the Canadian Nuclear Safety Commission but all of that ties back to Health Canada, which ties into the single window initiative. Many, many years ago, before the single window initiative was live. All of these type of entries had to be so emitted paper. So a paper hard copy of licenses, et cetera, had to go to CBSA. And as we all know and experienced in the industry for a long time, that took a great deal amount of time. So within the single window, they've now incorporated nuclear. What you need to remember is that when the broker is having to transmit the data, for anything that falls under the CNSC, they must include all of the elements and that includes the license, and it must be attached to the actual entry that's being electronically submitted. So we have the ability to attach an image, which we would do with the license. A couple of key points. There must be a very clear and concise description of the goods on the paperwork as well. So when the driver shows up at the border or any other port of entry, the CBSA officer that is looking at that paperwork can determine exactly what the product is compared to what we have transmitted. The importer and broker must also validate that the specification of the material being imported matches the authorized import on the CNSC license attached. So again, detail is very important for not only the importer, but us as a brokerage community as well. The UN DG, which is the United Nations dangerous goods number must also be transmitted. So if you haven't given that to your broker, it must be on the documentation. All of these elements, including the details such as quantity, country of origin, value, et cetera, are required to be submitted to CBSA and they get transmitted to Health Canada nuclear, the CNSC as well and they must be within their hands within 1 hour prior to arrival of the driver hitting the border. This is to ensure that they can do, of course, their security and risk assessment. If I can stress anything, it is imperative to have a conversation with your broker, especially if you're with Expeditors, please talk to me before importing or exporting any type of nuclear goods. The last thing you want to do is just show up at the border with these goods. They are very complex shipments to clear. And without the proper information ahead of time, they will be held up at the border. We were very fortunate as a company to be part of the testing with single window and CBSA to include the nuclear products, and I can tell you that it is very specific. So any little detail that is incorrect is going to get held up for a very long time.

All right. Thank you, Cara. Very complicated. So basically, if you have this commodity, call Cara. All right. Next question, Mira, it's an air freight question. And the question is, what is the current impact to cargo movement with -- from the situation in Israel?

Thank you, Steve. So we seem to be getting this question a lot this past couple of weeks. The situation at present is extremely fluid and it changes day by day. I'm sure you guys all read the news. The airport in Israel remain open. However, they're experiencing many staff shortages for obvious reasons. So that is a concern in terms of operating there. The majority of the international carriers have suspended their flights to and from Israel. The local airlines, EL AL and Challenge Airlines CAL have committed to remain operational and service the local market there. We also have some freighters operating out of North America into Tel Aviv as well as out of Tel Aviv into North America. Locally here, Air Canada suspended their flights. And today, they announced that the suspension will continue on until at least November 15 -- they chartered some passenger flights from the region just to move people out of the country, but they stopped doing that as well because the demand slowed down. The pricing obviously has gone up significantly, both on the inbound side and the outbound. So if anybody has any cargo moving into Israel or coming out of Israel, it will take some time. And obviously, you will see your expenses increase significantly in comparison to what the pricing was even a month from today. The flights to and from the neighboring countries of Israel have not been impacted. So everybody is operating as normal. And just an additional side note, not only to cargo specifically for -- or from Israel, the fuel surcharge because of the situation happening there is expected to continue to increase. So we will probably see some significant increases in the fuel surcharge in the near the next few weeks, even months -- and that's the short answer.

Yes. No. It's critical, and thank you for that, Mira, Absolutely. Next 2 questions, I've got them. Okay. So as a nonresident importer, as Rob mentioned earlier, the program, we have an FTZ, can we move CIDA goods into the FTZ, then ship the goods to Canada and can we claim the duty-free status. Great question because we're starting to see an uptick in this inquiry where you have an FTZ and as a U.S.-based company, you do have an FTZ. And as a U.S.-based company, you're going to be supplying Canada for the product. And right now, if it's not in an FTZ, you're going to pay the applicable duty into Canada. But as you know, or you don't know, Canada has many trade agreements with countries out there today. One is CIDA,Canada European trade agreement and the other key one is the CPTPP, and that's a Comprehensive Progressive Trans-Pacific Partnership, Trans-Pacific Partnership where the U.S. backed out of that back in 2017. So essentially, what we've seen is product that moves into the U.S. And it's combined from a supply chain perspective with product that is destined for the U.S. But that Canadian content, which is, of course, destined for Canada is going into the FTZ and from the FTZ, it's moving in bond to Canada on a 7512, correct me if I'm wrong, there of, but 7512 transit and exit bond. And then on entry into Canada, we can claim the preferential tariff duty free as it is deemed that the goods are technically in transit as it goes through the FTZ in the U.S. So we're working with clients today on that program. And particular note, especially with footwear and clothing manufactured in Vietnam. We see a great deal of these commodities coming in from Vietnam, and you can take advantage through the CPTPP duty-free status. So really, with the footwear and clothing, it's the highest rate of duty is essentially at 18%. You're saving 18 points on that product coming into Canada. So to answer the question, yes, we can do that. All right. So the next question here, it's regards to nonresident importers, again, and what are the obligations around the forced labor prevention reporting starting in 2024. It's fluid. And I had to make some notes here because this is really custom's key initiative with CBSA. I'll say next to the [current program] and it's scheduled to come into effect early next year, and it's imperative that importers are aware of the impact on the supply chain. I've put together some high-level notes here, key points on how to prepare for the program. But the unfortunate part is here. Unfortunately, there has been no official guidance, 0 guidance from the organizations here in Canada, federal organizations like Canada Board of Services Agency on the steps that a company must take to satisfy the app. So importers will be required to file public reports on measures that they've taken to address and prevent forced and child labor in their supply chains. And they will also need to consider the following steps. And again, we don't have a lot of detail on it from CBSA. Their biggest issue is how are they going to manage this at the front line, the border services at the ports of entry. It's a challenge for sure. But you need to consider a risk assessment and supply chain mapping as the act requires entities to identify and report the areas of its supply chain and operations that present a risk of force and child labor. Drafting and revising policies. Many businesses are updating their policies, including their code of conduct and also the supplier code of conduct. Supplier due diligence in terms of condition requires entities to report about the due diligence processes in relation to a forced and child labor. Trading, of course, businesses will need to report on the training provided to employees on this -- on the forced and child labor. We're really looking towards our team, our customs group in the U.S. because it's really front and center in the U.S., and it has been for years. And our teams in the U.S. have been working directly with U.S. CBP. And we know that both customs administration, CBSA and CBP will be exchanging information on this forced and child labor. So we are working close with our team state side. And as we get more information, we'll be pushing this out to our clients.

Steve, just wondering, I do hear a couple of conferences that CBSA may be asking for reporting from 2023 from importers to be submitted in 2024. Do we have any more information on that? Or is there nothing that's been really discussed at this point?

Yes. At this point, we don't, Cara, but I'm glad you mentioned that because I wanted to make a note that there are 2 very important meetings coming up in 2 weeks and at the end of November with the Brokers Association and I.E. Canada, and we will have the key representatives from CBSA that are managing the forced and child labor situation, and we will definitely get some information if I'm going to push it out to everyone by all means. All right. The next question, it's -- this is for Corey. What will the impact of the St. Lawrence Seaway strike have on my cargo.

Thanks, Steve. So I'm sure everyone has seen or read something with respect to what is happening with the St. Lawrence Seaway situation for those moving containers through the East Coast, whether it be Halifax, St. John or obviously in Montreal with cargo continuing west into, obviously, Ontario region or further west. The impact of the Seaway strike will have limited to no impact at this point on any container traffic. Container traffic into the Port of Montreal and operations are operating under normal conditions at this point with truck traffic and rail traffic moving under normal conditions. With that being said, the St. Lawrence Seaway strike situation does have a heavy impact on a lot of bulk commodities, whether that be steel or grain. And that is typically servicing any of the Lake Ontario areas through the well in Canal into the Ohio Valley and then into the Lake Erie region. That being said as well, the canal typically does close for seasonal closures from December through to March. Closures typically depend on what the forecasting and temperatures do look like. But the canal, again, is closed for about a 3- to 4-month period each and every year. All that said, and again, we're talking St. Lawrence Seaway between the of Port of Montreal. The Port of Montreal with respect to the MEA or the Maritime Employers Association, are still under negotiations for a new contract, which currently is set to expire on December -- December 31, 2023. So for those that are moving container traffic to and from the Port of Montreal suggest reaching out for some contingency plans in setting up accordingly as the negotiations as much as they're -- they're ongoing. It's 2 months away from that due time. And to be quite honest, going back to the St. Lawrence Seaway negotiations. The government is heavily involved with this, and I'm sure will be some form of precursor to what the negotiation and the government impact will look like come negotiation time come end of the year.

All right. Thank you Corey, next question to Dave Chadder. Can you explain the flow process to perform a Canadian export to the U.S.

Thanks, Steve. Yes, in order to answer this, I'm going to break it down into 3 separate parts. So the first part is going to be, do you need a Canadian export declaration -- if we're talking about regular freight or general freight, it doesn't require a specific license or a permit, a Canadian export declaration also known as a B13 typically only applies to shipments over CAD 2,000 in value and shipments that are not going to the use United States. So why am I mentioning this in this context? There are 2 very common trucking situations that do require a B13, starting out [NPA] shipment going to Mexico. Very frequently, shipments going to Mexico. They're stopping in Laredo, they're moving in bonds or they're going to one of the other exited ports from the United States. If you've got a commercial invoice that lists a final destination in Mexico, even if your transportation and responsibilities terminate in the United States, you're going to need to a B13 if that shipment is over $2,000 in value. The second situation you run into is very similar. If a shipment is going to -- from Canada to an airline or an airport in the United States and it's being onboarded to a different country, you're also going to need a B13 in that situation. Second thing you need to keep in mind is the U.S. customs entry and everything really starts here with making sure that you have an updated and correct commercial invoice, -- just like any entry you're filing into Canada, you're going to need that for an entry into the United States. You're going to want to make sure it has a ship or ship from address in Canada, a ship to address in the United States. You're correct, HTS codes, description of goods, the value and the currency. And once you've got that lined up, the key thing is you're going to need U.S. customs broker. And one step you need to take is to determine which party of the transaction is going to be the importer of record. It's going to be the importer of record that selects the customs broker and getting this right is going to make sure that you have the correct information to give to the carrier across the border. Finally, getting on to the transportation. When it comes to truck transportation, you want to select a carrier, you're going to want to primarily think about whether you wanted to be less than truckload or LTL or a full truckload shipment, just some of the advantages and disadvantages of both situations. Less than truckload is going to be slower, and it's going to be a lot cheaper generally. So if you've got more time on your hand, it's not as time sensitive and you've also got a very small order, it's going to be much more cost-effective for you to go at a less than truckload option. On the full truckload side, you've got a really tight time line, something is very urgent. It's really high value or you already have a large order from over 20 pallets, you're already going to be going down the full truckload side as well. So just to tie all these different parts and together, you need to determine if you need a Canadian export declaration. You're going to need to make sure you have an updated commercial invoice and correct brokerage information. You can pass that information along to the carrier that you select. They will send it to the U.S. broker, the broker will file a U.S. customs entry. Once the entry is filed, the carrier is okay to go ahead and present the order at the border and from there, deliver the order safely and on time for you. Thanks, Steve.

All right. That was a great day, very thorough. Next question. This is for you, Mira, is the aero market experiencing any capacity constraints, are you seeing delays with cargo moving into or out of Canada?

So the aero market has been relatively stable throughout this whole year unlike the previous couple of years during Covid. Typically, this is the time of the year when we see an increase in demand to an extent where the demand exceeds the available capacity. However, this year, the market continues to remain relatively flat. From an export perspective, there is plenty of capacity available due to the increase in passenger flows and the additional flights that were introduced to the market. The airlines are planning to reduce the flight frequencies for the winter months. This is typical for the winter season just because like people travel abroad. However, even with that, we do not expect this to have any negative impact on cargo movement. So there will still be enough capacity available based on the existing demand. From an import perspective, the market is a little bit more volatile. We see an increase in import demand for sure, especially driven by e-commerce out of China, which is a big topic of discussion right now. Some of the Asian carriers like Korean Air and EVA Air added additional capacity and freighters to support with the increased demand into the Canadian market. So overall, the airlines manage the demand very well, and we have not experienced significant issues or delays with inbound freight as well. And we don't expect any challenges until the end of the year or 2.

Yes. So Mira, if there's an increase in demand, does that relate to higher rates?

In most cases, yes, that was typically the case in the past. So if you have -- especially if the demand exceeds the capacity available at the market yes, that would be the next step where the airlines will increase their pricing. But in this case, the demand that has increased still is way below the capacity that is available on the market. So even though we have seen some price increases from certain regions of the world, in general, the pricing has remained quite stable, and we expect that to continue throughout the rest of the year.

Okay. Thanks, Mira. All right. I'm just watching the clock here. Next question, Cara. What are the challenges faced by the brokerage team for border crossing from Canada to the U.S. and vice versa?

Thanks, Steve. I can actually answer for both sides of the border as I deal directly with our U.S. offices as well, and we discussed these constantly together. So what I did was I decided to take the top 3 because those are the 3 that we see the most, obviously, on both sides, collectively. So the #1 issue that is seen both in Canada and the U.S. is incomplete databases. So anyone who on the call who has ever gone through a transition with Expeditors Canada knows that this is a very hot topic and one that I am usually discussing to quite length on our transitions. A complete database is so imperative to ensure that your truck is just running smoothly across the border. We need to make sure that we have an accurate HTS that is attached to your part in the database with the broker. It's also very important to understand and have attached your single window code. So you'll hear me talk about the single window initiative over and over again, and that is basically all of the PGA information that is stored. So that's really where we see the most issues. There's just not enough information on an invoice to determine the classification but more importantly, to determine those single window codes. It's extremely important to get those right upon importation, the first port of entry, there is no way to go back and correct those after it is actually released. And the single window initiative ensures that the PGA, the partner government agency has everything they need to do that risk assessment prior to the import coming into Canada, right, keeps all of us safe as Canadians to make sure the products we're seeing are the ones that are safe for us to consume or to use. These elements should never -- I cannot stress this enough, should never be picked by your broker without your guidance. Unless it's a one-to-one match, which is very rare. There are a couple of PGAs where it's a one-to-one match. It really needs very little conversation, but still a conversation that we will have to say, we just want to make sure this is accurate and it's a one-to-one -- so that's extremely important. The second issue is we see incomplete paperwork. So just in complete paperwork in general, it could be missing a value, an origin. All of these elements are required for transmission prior to importation. So again, without these elements, the broker cannot transmit the data that is needed for release of your goods. One of the final issues we see, believe it or not, is timing. So it is important to ensure that your broker has the information needed to obtain a release, including carrier powers estimated time of arrival as much upstream as possible. And I will talk a little bit about this on another question that incorporates David Chadder's team in Transcon to tell you how that actually benefits us. But this allows the broker to not only key in the data, but ensure that CBSA and any PGA involved has that 1 hour prior to the driver arriving at the border. The ACI or advanced commercial information from the driver must also be submitted 1 hour prior. And a lot of times, the drivers are calling the brokerage firm because on the invoices are billing, they don't have a good enough description to transmit for their ACI. So they will also get a reject on that when customs just can't decipher what the goods are. So just saying medical equipment, it's not sufficient. They actually need to give a better description. And then that allows the CBSA to do their risk assessment screening prior to the arrival of the driver and not once he arrives. So I hope that answered at least the top 3 -- there are a lot of challenges for importers today. You're just looking at so many changes. There's been so many changes that have happened. And if we look at the industry over the last 5 years, really, the whole industry has been challenged, right? We've been challenged with Covid with data, with cyber issues within the industry. So there are a lot of elements that are affecting importers, and you're going to continue to see those with, as Steve mentioned earlier, the reporting that is going to be needed, any type of new program that CBSA brings on is always a challenge for the importing community and the brokerage community as well. So in ending, because we're speaking of challenges and after this year, next year brings on a new challenge, which is the final release of CARM Phase II. So with this, I'm going to ask everyone a full question, and we are going to answer the many questions on CARM that we received prior to the seminar. So if you wouldn't mind answering, have you registered on the CARM client portal in preparation for CARM. And you have via the ask. No, but we are in the process of doing so, no, I don't believe we need to do so. And no, I do not know what it is or how to do it. So this is exactly what I expected to see because I think like all of you, we have -- I feel like we've been talking about CARM for 10 years, but we really have not , but the majority, 81% are ready and prepared. So very small percentage. No, and I don't know what it is or how to do it and that's okay too because I can tell you we have an expert on this call who knows CARM inside and out and is probably as tired of talking of CARM are you are about hearing about it. So I'm going to hand it over to you, Mr. Bunda.

It's -- I was really excited to see what the full results were because when we actually first started our series of webinars on CARM. We asked that question, and it started at 30%. And next one, it went up to about 50, and then 65 and now we're at the 80% mark, which is fantastic to see people on the program. All right. Okay, I'm going to handle these questions, and we're coming up to the 45-minute mark here. Is there a reason why these ones are in green or maybe it's making me green because we've been talking about CARM for the long time. So are there any updates on the time line for the CARM implementation? Yes, you should know. We have updates almost on a monthly basis when our friends over at CBSA. But the most recent one is, of course, May -- I believe it's May 13. It was R2 to be rolled out in May 13, 2024. And was initially scheduled for last change was October 16, but that has now been pushed out. They're still going to have a release of CARM in on October with the testing, the CBS testing phase. So it has been rolled out. We're still working with CBSA on the testing. It's important. We do the testing to see where we stand for their actual implementation date for May of next year. Next question, what does a customs manager need to prepare for C-BAM? Well, we're looking at that, and I'm going, well, maybe they spell CARM incorrectly or it's possibly one is talking about the business account manager. So when an importer or service provider registers on the CARM client portal you by default become what is known as a BAM, a business account manager. And that business account manager has delegation can have delegation of the 40, where they can include somebody from another department to be part of the current client portal. And I'll give you an example. We see the majority of the registrants for the CARM client portal. are from the compliance and custom side. From there, it's in their best interest also include somebody from the financial side, the ones that are going to be paying the duties and taxes. And CBSA actually said that they want to see at least 2 representatives from an importer be registered on the CARM client portal. Now again, for the person that did the initial registration by default, they become a BAM, a business account manager with delegation of authority , and they do then delegate somebody from their finance group as another BAM or believe it or not, a PAM, which is a program account manager. And really, the difference is that they can only deal with the payment side of the current program. So that's where it is on the C BAM. And if that's not correct, if I didn't answer your question, by all means, please reach out and we'll do some further investigating on it. Next question. I'm a nonresident importer. Do I still have to register on CBSA's CARM program. Well, all importers regardless if you're a Canadian IOR or a nonresident importer, you must be registered on the CARM program. And lastly, can we still use our brokers [indiscernible] import into Canada. Obviously that's supposed to be the #1 question that we get. And the answer is no, you can no longer use the customs brokers bond. Importers must have the proper security and bond in place with Canada Customs. And with that, you can facilitate payment directly to Canada Customs by pushing the funds to customs by the last business day of the month or recently, they've included what's known as a pre-authorized debit, a pad program where customers can essentially go into your account and pull the funds based on your monthly statement of account. Okay. Justin, next slide. I think I answered all the questions there. All right. This is for you, Corey. Do you anticipate any delays in the import of goods into Vancouver this winter or to inbound rail transportation from the West. Pull out your crystal ball for this one, Corey?

Okay. Yes. So for goods, obviously, going into Vancouver, staying in Vancouver, winter conditions, obviously, shouldn't have any real impact. With that being said, this time of year and kind of through the winter always kind of provides a time frame where the winter season, the coal, the snow, et cetera, kind of has a pretty significant impact. With that said, both of the domestic rail lines, both CP and CN have announced their winter scheduling plans. And like most years, they essentially cover the basics in a very simplified manner. Essentially, what happens is, from a train standpoint, the trains get shorter, the trains move slower and all of that is an effort to maintain a safety protocol within the network, not to get too deep into the engineering of it. But the shorter the train and the lighter the train, it has an impact on the braking system. So once temperatures hit a certain area of cold, the braking systems do not respond as quickly as they do under kind of normal circumstances, which is again a reason why from the safety side of things, trains are shorter. Trains are slower, et cetera, just to maintain safety. So all that does is if there's fewer containers moving in land, they stay at the port, builds up a little bit of congestion. So again, just getting back to the ultimate question, will there be delays and do we anticipate them based on kind of that little summary. Yes, they are seasonal and they are expected to occur. Thanks, Steve.