Eliminating Air Freight from Your Supply Chain

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Ryan Petersen

Alright. Welcome everybody. We are here live to discuss how to eliminate air freight from your supply chain, which, is very interesting topic for a company that operates, multiple seven forty seven cargo planes. I saw the Internet conspiracy theory saying something must be wrong with our air freight business if we are trying to help people eliminate air freight. But that's the kind of company we are. We wanna do what's best for our customers. We wanna help you save money. Nick, we think there's a lot of good reasons to use air freight. We'll show you some of those today, and we expect that a big part of this, a big part of your trying whatever you can do to eliminate air freight, and we wanna be partners in helping you that. So today, it's my my co host here is gonna come on stage now is Sona Manders, my pres the president of Flexport has been building this business, with me for the last almost fifteen years. And so a couple of housekeeping notes here. On your screen, you see a sidebar on the right side there. That's where you can submit questions. We're gonna make sure we have some room for q and a at the end. So go ahead and get your questions in there. I would love to have a good dialogue here. Also, over there, you'll see a tab called docs, and we're gonna you you'll be able to download the slides and, some other resources in there. And now, quickly, a brief legal note from my legal team. They tell me I have to do this, which is basically to keep in mind that everything here is based on current time, current situation, may not be customized to your business requirement. Reach out to us. We will help with your particular situation. Okay. Joining, Sona, welcome. We've got the let's show go ahead and show today's agenda. We're gonna kick things off. We'll just talk about why people use air freight, and then we're gonna talk you through 10 strategies for how you can reduce your reliance on air freight. And then lastly, close out, yeah, with some takeaways and and get some audience questions. So pretty standard. Go ahead, Tom. Take us away on some of these reasons why folks do this.

Sanne Manders

Yeah. And, yeah, welcome to to the webinar today. You know, not too long ago in in in forwarding, the dirty words was was air freight. You know, these days, the dirty words is tariffs, but air freight is is a very costly, item for for for most of you. So, you know, what is the reason we're using, airfreight? And, you know, honestly speaking, when you're looking at airfreight, it's kinda like a symptom. There's a lot of costs associated into it. You know? There's multiple customer meetings where I mean, where the question is how can we reduce our reliance on air freight. But it very often, shows deeper issues like forecasting issues, visibility issues, supplier unreliability, or planning issues. We'll talk to all those, today. But if you're looking at the market, and, you see how much of the air freight is unplanned, you typically see it's it's roughly 40%. On top of that, a lot is just in time, 17%, and you could count ecommerce also in that in that category. So that means actually that, you know, close to 80%, of air air freight is an indication of process inefficiency. So we'll talk about a lot of it today, how to reduce the process inefficiencies and what the tools are to to to help, get you in control of it. Couple of obvious facts, which we know, but just to to to state the obvious, it's expensive air freight, up to 10 times, the cost of of of ocean freight. Couple of lanes here benchmarked, but it's always between five or 10 times whatever the market condition is. The other thing, which we also know, it's not that great for the environment. 68 times, the carbon emissions versus versus ocean freight, also way worse than rail and and and and truck. So something, you know, you always get presented on your on your invoices from us, the footprint, but it is really a significant impact. That said, you know, you know, we're talking here about eliminating air freight, but we also know that the peak season is ahead of us. And, I don't want you to get scared too much like now, like, oh my god. What am I doing in the coming upcoming two months? You're lucky because airfreight is relatively cheap. We've seen a market, that is down in terms of demand as a result of the de minimis, ecommerce ban, and a lot of front loading earlier this year. So what you see here, on the left side of this picture is that especially on The US side, there's a 43% decrease in air freight, which then also translates, and that's the right side of this picture, to pretty low cost, in historical in a historical context. Right? The spot rate is 26% lower than year over year year over year. So that means that if you have some unplanned airfreight, which is 40% of all airfreight, this year is not the worst time to have an unfair, planned airfreight. Last but not least, before we move on, to the tools that we have at our disposal, you can always check our rates online, on the platform. Alright. 10 practical strategies to reduce your reliance on air freight. We're gonna talk about planning. We're gonna talk about network design. We're gonna talk about optimization, and we're gonna talk about how to govern this system if you don't spend too much on air freight. But let's get into planning first, Ryan.

Ryan Petersen

Yeah. Well, the, you know, the first one and and maybe one of the hardest parts of the whole thing is gonna be demand forecasting, demand planning. I think this is gonna be inherently difficult for companies, especially smaller, newer companies that don't have as much historical data to go off of. But it's inherently difficult because you're talking about consumers and their all their erratic behavior. I'm very lucky to work in business to business where I get to deal with rational, logical people and not not consumers who I can't you know, you got fickle trends and fads and viral videos and all sorts of things that are very hard to predict. That said, you do have a lot of data more than ever probably in the history of business at your fingertips. And so, and it's incredibly important that you're you get good demand forecasting in place down to the SKU level. We're we're probably not gonna be the ones at Flexport to teach you how to do this, but I will point you in the right direction. We've come across a lot of great startups. One that I had, dinner with recently with the CEO of Ikigai Labs. They're doing, demand planning for lots of cool companies. I've also, seen Shopify Sidekick, which is their new AI for your Shopify customer. Their new AI chatbot actually does quite good demand forecasting. A lot of customers have told us that. And there are many, many other tools. The key here ultimately is that you build good sensing and ability to get gather data from your from your ERP, your sales data, your point of sale system, your ecom platform, your Shopify's, etcetera, to feed that into these models. Lot of models are off the shelf, and if you have a good data warehouse to be able to pull this data, get it into the hands of the model, you probably wanna triangulate this and hit it with multiple different models to get a SKU level forecast for each product. And and that's gonna be and then you wanna understand the value of the goods. Saundra's gonna talk us through that in a little bit of how that plays into safety stock modeling, how much inventory you should buy. But getting the demand forecast in place is first. This idea of segmenting your SKUs that we mentioned here is really about there's a lot of ways you can segment SKUs, but we we tend to see people do this on a profitability basis. So understanding which SKUs are absolutely you must not run out of stock because they're so profitable versus which ones it's okay to run out of stock that are less profitable. And feeding that back back into your model for for replenishment, is gonna be key. And you're knowing that your model will always get more accurate as you move up in hierarchy. So it's gonna be quite difficult to forecast an individual, call it a sweater, add an individual color, forecasting demand. But forecasting demand for all sweaters, it's gonna always be more accurate because the the misses at the individual level sort of average each other out as you as you roll up the hierarchy. So demand forecasting, lots of place to go learn about that, but it's gonna be a critical part of this. Now moving to the next slide, once you have a good demand forecast oh, actually, I did post this and I'll post it in the chat here. I posted this question on on, Twitter recently and got a lot of great operators posting me their answers of how they do demand forecasting. I'll go ahead and post that in the chat so you can get access to what your peers are doing, at least those who follow me on Twitter. Move to the next slide. Once you have a good picture of demand, obviously, your key here is matching supply and demand. Demand's gonna be stochastic, meaning random, and have a lot more volatility in it. Supply side should be much more deterministic. You've got how long does it take your factory to produce your goods. This is yes. There's volatility here, especially with a lot of the changes that have happened in the logistics and tariff environment, but overall, it's relatively predictable. But you've gotta be able to get good data about this down to the SKU level. And, for this, you really wanna have good supplier scorecards that tell you, okay, production timeliness, obviously, you've got your QA metrics in those scorecards, but you wanna have really good data as well on booking timeliness. Do they book the freight? Are they causing logistics delays? Are they releasing your cargo on time? We can help you at Flexport get this kind of data, but you want the supplier scorecard is is key for the matching supply and demand. You know, if if you place the orders on time, but your production lead times are are slipping and your your PO terms tell you it takes them ninety days, but it's actually taking them ninety five days, that's gonna lead to problems in your forecast, which will then require you to go ship air freight. So the more that we can get you really good accurate data on supplier scorecards, making sure that they're shipping on time and in full, the more accurate you can get. So FlexWare does provide great supplier scorecards for you, down to the SKU level for every product. If you're not using that, come talk to us. But many other ways to get good supplier scorecards in place is gonna be key for eliminating air freight. Next slide. Yeah. This will tell you a little bit more about, the the benefits of that order management system that comes with the supplier scorecards, gives you really good detailed level planning system to to feed that.

Sanne Manders

Cool. Let's go to the next strategy. Shift from just in time to just in case. A lot of products, can be predicted, more more accurately, and you don't necessarily have to you can actually allow yourself to have a lot more in stock there. What's important here is to go through the following exercise and, define what your inventory strategy is per product. First of all, it's important to, define, you know, how you do your inventory replenishment. But the most important step is here is, like, what is my safety stock? How much do I how many days do I wanna have on hand, in my fulfillment center at at at at every moment in time? And then do an assessment, what is actually the cost of it? You know? If I increased my safety stock as inventory holding cost there, how does it actually compare, to my, to to to my logistics cost and specifically air freight cost here. Well, obviously, we always need to know that if you don't have stock, that's the most expensive stock, because you can't sell it. So you always wanna be a little bit on the safe side. But there's a good analysis here to go, through and define, you know, what is my just in time, versus just in case scenario. And the way we do that is, through this analysis here on the right side, which basically looks at your total logistics cost versus your holding rate. And what the graph in essence says is that what the holding rate, which is the holding cost over your inventory, value, if the holding rate is low, which means that it's not that expensive to keep that inventory in, in in your fulfillment centers, we really recommend we recommend Ocean because you can actually allow yourself to little to stock up a little bit more. Or if the holding rate is high, you know, if you have high value products, we recommend Air because then all of a sudden the holding rate becomes extremely expensive. Now what all goes into that holding rate, that's a little bit more complex, and we have that here, in in in in a relatively simple overview. But, of course, it's the cost of capital. Right? If you're shipping iPhones versus, you know, low value widgets, there's a big difference in the cost of capital here. Right? It is, of course, the the labor and the warehousing cost, but there's also things like scrapping, obsolescence, insurance, theft, etcetera. It all goes into the holding cost. So you have to get a good overview of your holding cost and then compare it to your, to the value of your goods to get to the holding rate. Again, our team here can help you with those things, but it's a little bit of a data exercise and and and figuring out, what your what your holding costs are. Let's go to network, design and and optimization. Ryan. Yeah.

Ryan Petersen

Yeah. That well, I think the key here is you're feeding that data, and we talked about in that model that he just showed that graph was air versus ocean. But the reality is you have you have other options here. And you may, a lot of times ship LCL, less than container load, as a pallet pallet level shipping where you're not able to fill a full container. One thing that we see over and over again is companies that are shipping a lot of less than container load, should be can sometimes they look at that and go, hey. This less than container load is very slow. It's actually pretty expensive, and so they'll rather ship air. The less than container load networks of the world often are run by third parties, and the cargo may sit in warehouses without great system. And along the way, waiting for other cargo to come along so they can fill the container tends to have slower transit times. And so people do, like, are are a little scared of LCL as a result. Well, there's a couple things you can do. One is, there's a couple things you can do besides ship air freight. One of which is combine multiple LCLs and fill your containers. And that's what we call a buyer's consolidation where it's the concept here is it's your own container, but it's multiple factories of LCL loading it up. Another thing to do is use a premium LCL product where it's going direct and it's gonna leave no matter what on a schedule rather than sitting around waiting for other people's pallets to fill it up. So those are couple other options that are available to companies. You go to the next slide. You can see there's, there's also multiple types of air freight. And you've got this direct air freight, which will go, yeah, right between the two closest airports to you. But at typically, air freight, it's worth trucking it to a hub where you can get more density. Your the the the the way to lower air freight cost is to mix dense cargo and voluminous cargo, and that tends to take place at these hubs. And there's you really wanna work with exports in air freight because there's a lot of weird things. Like, during parts of the year, Bali, the resort town in Indonesia, is one of the major air hubs in the world. And you think why? There's no cargo being produced there. But in fact, 50% of the world's air freight flies in the belly of passenger planes, and there's a lot of passengers flying to places like Bali or Honolulu. And the air cargo industry has figured out, oh, okay. We can use these as consolidation hubs bringing cargo from other places. So there are that's sort of gonna be a deferred air service. It'll be a little bit slower, but may save you a lot of money. So understanding, you know, working with experts who can help you figure these things out, and you also have multiple types of ocean freight. You've got they call it a fast boat. In fact, the boats are usually slower than fast boats because they're smaller, but they do go direct. So express ocean services that don't make all the stops that a typical ocean service would make going direct from port, in Asia all the way to a port in The US can shave quite a bit of time, especially when combined with landside services that can be much faster and and, yeah, put it on sort of an express rail or a hotshot truck. So you can get if you look at that bottom those bottom two rows, fast boats save you, what, twenty ten days on a ten or twenty days, on and a door to door, and it ends up being not that different than deferred air. So being able to really understand your different options and not just think so simply air versus ocean, there's a lot of middle ground there. And by the way, more I met a really cool company that's making card air cargo blimps that, who knows, maybe someday we'll have a third option in the middle. And we do offer all these through our instant pricing service on if you're a Flexport customer, you can just even if you're not, go on there and check our rates. It's a quick way to do some simulations and figure out what things will cost you.

Sanne Manders

17:28 - 19:04 And by the way, if you're not a Flexport customer, you also can find it on the Internet these days. Just type it in on Google, and you'll find our find our rates. Let's go to, the next strategy, which is supply chain optimization. Ryan was already talking a little bit about it, about consolidating into into a buyer consolidation. But the key here is, like, if you're looking on the left side of the picture, there's a lot of POs. You're not producing those with, one supplier. You're most likely having multiple suppliers in multiple locations. It's kind of like a hard problem to figure out how to consolidate these shipments in in or these POs in the best way. Well, we've built a, tool for that, which is called supply chain optimization. And what it actually does is across a geo catchment area within a time span, it actually optimizes your freight consolidation. And and what it does do is it gives you different options. It will tell you like, hey. These LCL shipments can be combined to a buyer consolidation, which effectively saves you the deconsolidation time, and it will also be faster. It can also tell you, it's like, hey. You gotta split the PO in an air freight and an ocean freight shipment, which means that the air freight is to replenish or the ocean freight is then or the ocean freight is to replenish, but the air freight is to immediate, the immediate needs. So there's a lot of options here when you look at the data. And we're offering this now to all of our customers, on their, you know, last year of data. So talk to your account manager, and they will help you, understand what the options were to to look at the optimization of your supply chain.

Ryan Petersen

Yeah. We're really sort of the future too is to be able to feed more data into these models. The more that we can get accurate data on your cost of capital, your margin, make sure we're getting that segmentation that you do upfront of head SKUs or super high value SKUs versus the a b c, the the less valuable SKUs. Those will feed because the the the top SKU should always get just move. Right? And maybe just move by air freight. And the ones that are lower in your, value hierarchy can be held for a couple of days to consolidate and generate cost savings.

Sanne Manders

Yeah. And all these rules can be set in our supply chain optimization. Right? How big you wanna make the geo catchment area, how long you wanna wait, etcetera, etcetera. So, a couple of strategies that we've seen, from our customers and, is is number one here on the left side is consolidate air shipments, for a deferred air service level. You see the example here and how much it actually saved this customer. You know, 25%. So it really, makes sense to consolidate those airPOs and and and and put it into a deferred service. So, essentially, what happens here is over a longer period of time, let's say a week, all the POs were basically consolidated in one location and then flew as a larger shipment across the globe. The other thing we already talked about is ShiftAir to Premium Ocean. It's a massive cost saving. Although premium ocean is expensive, it's not even close to to to to to airfreight. And last but not least, what we already talked about is the buyer consolidation, moving multiple POs into into your own box. We see savings up to 15%, which is essentially by, you know, reducing your LCL or filling up your FCLs just more. So there's a lot here in terms of supplier con in terms of smart consolidations, to save money, but it requires the data. And, you know, we've built a nice tool right now. You should ask your account manager in the QBRs to to run through, through the scenarios that you have. Cool. Next one.

Ryan Petersen

Well, you know, everybody's got talking about tariffs and lot most of our customers, probably most over the last, really, nothing new, but the last eight years have last even more have been looking to move manufacturing away from high tariff regions into low tariff regions, and those are changing dynamically every day. We've got a great tariff simulator. I think the industry best, it's at tariffs. flexsport. com. People even it's open to the public. Even our competitors are using it constantly, and it will help you figure out where where what is build your sort of landing cost simulator. And what we're in what we're also showing you, if you actually tap one forward here, you'll see people aren't noticing. But at the bottom of the tariff simulator on each page, it actually shows you for that HS code using real data, what are all the sources of this product, be at which countries are producing this product. And between that and tools like importgenius. com, there's a lot of great tools out there for you to look at alternative manufacturing locations for your product. Of course, the number one way to eliminate airfreight is to produce close to to where the products are sold. You produce in The United States. You're probably not gonna use any air freight. We have a lot of companies, now shifting production to Mexico. Yes. To save on tariffs, but even as much so is to reduce the transit times and allow them just to use trucking to bring the product up and that helps better match supply and demand. They don't if they do have a stock out, they can just replenish really quickly without having to use air freight. Because the ocean freight from Vietnam and a truck from Central Mexico into the middle of The United States, actually, that's about the same price. It's not that different. But the transit time is dramatically different. And that allows you to better match supply and demand, not having to allow you to carry lower safety stocks and not have to use air freight so frequently to to hit your replenishment goals. So between our pricing tools for the price of air freight that we have in for our customers, we have to do simulations. It's instant pricing. So just go ahead and check prices between any two locations. But, also, with this tariff simulator, you're able to build really a full landed cost calculator. I think you'll see us in the, in the near future, kinda package that together as a true landed cost simulator to help people do these planning exercises. But you have most of the tools already there at your disposal. So, yeah, check out tariffs. flexsport. com if you haven't already.

Sanne Manders

Yeah. And by the way, this is equally, the the the the case for Europe, right, where you see, Turkey, Morocco, Egypt coming up as production hubs, very quickly. Alright. Strategy seven, optimize your packaging. This is very often overlooked, as a lever, and that's why we wanted to, to to to put the attention here on it, specifically on the air freight side. Well, you can read here, you know, all the things that you can actually do. You know, we'll send you this presentation as well so you can actually go through the details, later. But, to give you a great example of a customer, and I won't name the customer, but they were spending 6 to 7,000,000 a year on on on airfreight. We help them through a variety of levers that you see here, supply chain optimization, packaging, etcetera, to save around 2,000,000 a year on this. But 400 k out of that 2,000,000 was driven by this lever, Optimizer Packaging. So this is 20% of that of that opportunity, and it's very, very often overlooked. So, you know, this is this is definitely something that we recommend you with a packaging consultant or with your factory to look into and see see what's possible.

Ryan Petersen

Yeah. And that that one there of sturdy cartons to make sure your freight's stackable applies really to ocean freight, air freight, and every kind of logistics is, you you you'll you'll be able to ship a lot more if you can stack double stack.

Sanne Manders

Alright. Governance. You know, now we've seen a couple of things, to, to improve, you know, or reduce your reliance on air freight. It's also important that you're actually managing for it, because the thing with air freight, it's pretty addictive. And every time every year you make your budget and you say, like, I'm not gonna use air freight, and every time at the end of the year, you say, like, oh, I used a lot of air freight. And that's you know, again, it's the same root causes like planning, supply you know, your suppliers not being reliable, etcetera. So what are the tools that you have at your disposal to actually, you know, improve your governance, improve your processes to make sure that it actually that you can stick to your plan? Well, number one, obviously, is is is is the visibility. You know, we've already mentioned it, but order management is the key to it because order management allows you, to manage your supplier cargo ready dates, get some production milestones, but it also gives you directly from that moment, the SKU level visibility. So you know what's in the pipe in terms of your products. Then, obviously, anything that's, you know, we've always been standing for real time tracking, because real time tracking allows you where to see where your inventory is. You're you're not moving boxes. You're moving products in boxes, so that allows you to see where those products are, and give you a better, you know, through ASNs, give you the opportunity to tell your customers, right, hey. I can't deliver today, but I can deliver in two weeks. So it's kinda like, you know, you're not out of stock. You know? You will be in stock in two weeks, and you can actually give that promise to your customer. But you also have to hold your counterparts in the in the company, you know, you know, responsible and accountable, for for for playing their part in this end to end supply chain.

Ryan Petersen

And actually, these are really important one that a lot of companies overlook, and you wanna have a really strong probably a CFO should be really strong here. And if not CFO, COO, but someone to make sure that the KPIs are aligned. And, you know, you see a lot of air freight happening where merchandising teams don't have the air freight cost in their p and l, but do have the ability to make an air freight decision because they wanna get the product in to to so they don't lose sales. And getting your right KPIs, the right incentives in place internally can be super important that I've seen this over and over again where you're just like, one, show them the show them the data. They'll probably make good decisions, but put it into their compensation or put it into their KPIs that they're using. Like, if you're gonna ship air freight, the person making that decision to ship air freight needs to own the cost somewhere in their p and l. So don't don't underestimate the value of incentives. I think that's one of the key lessons in all of business.

Sanne Manders

And similar for your for your external partners, right, your suppliers. Right? Measure their own time performance and make sure if they don't stick to their own time performance that that feedback loop is closed and, you know, in the worst case that they are paying for the for for the for for for the airfreight there where things are going wrong. But which brings me to the next thing is, like, have very clear rules on when to use airfreight. Right? You should use it. You know, we've talked about planning. We've talked about the ABC analysis. You should use it for the most critical time sensitive components. But you have to put very clear written rules in place, and you have to track whether those rules are being, followed or not. Right? So here on the right side is an example of one of these, tiered shipping policies, that, that, you know, we abstracted it, but, from one of our customers where they basically went through the type of inventory category and said, like, you know, what is the demand that we're expecting for this, and what is the shipping policy that we're mandating, from from our merchandising teams? Last but not least, verify. Right? You can you can trust, but you have to verify. Right? Eliminating air freight is not a onetime project. Right? Every year, this this this conversation, surfaces up again, And you will have to keep on piloting. You will have to keep on reviewing, where can I reduce? Take some risk here. Right? Where can we test this, in small quantities? And, and honestly also celebrate. Right? I think on the, you know, here on the right side, you know, for hope most of you are familiar with our, insights builder, in in in in in the platform. You can actually ask your supply chain about airfreight. You can ask your supply chain, make an overview. Right? Where we used air freight in the last three months. And, well, great example here. This is our demo account, so no confidential information. And, apparently, supplier Feng Nian is not, very compliant. Right? Well, then you can actually ask a follow-up question. Right? Were these delayed car, cargo ready dates or you know? So there's a lot you can do with our insights builder to get to the insight, and to verify whether your policies are, being followed. Key takeaways. And I'm gonna do this quickly because we just ran through all of them. But what I want you to remember is, plan ahead. Right? It's not only the demand forecasting. It's also, install order management, to make sure that you have a good hold on your supplier and what your supplier is doing, on on on on the on the timeliness of the cargo ready. Design your network. Right? There's a lot possible there with multimodal solutions. There's a lot possible with, with supply chain optimization, which is the, next one. And again here, and and, you know, it it almost sounds like a pitch, but let us help you here on the supply chain optimization. And then last but not least is the governance. Right? Set the rules, but also review the rules, and make sure that you, check the data whether you're actually sticking sticking to those rules. Let's jump to questions.

Ryan Petersen

Yeah. Well, actually, it's worth calling up, that we do have two weeks from today on October 14. We we will be rolling out Flexport's next technology release with a whole bunch of new tools for getting you better transit time, visibility on each trade lane down to the SKU level, a lot of really powerful stuff that you're gonna see from Flexport that I wish I could share today, but we gotta we don't wanna steal our own thunder. In two weeks, we're doing a big technology release at our customer conference forward. The conference is sold out. I hope some of you in the audience are gonna come join us, but we will be live streaming parts of it. Definitely, the technology launch will be live streamed and available. You'll you'll see it from us. So come tune in there. We're gonna keep building in this area. I think lots and lots of what we wanna do over the coming years really is be this hub for data, for intelligent decision making, for out turning a lot of these difficult decisions over to algorithms. The algorithms have existed really since the nineteen seventies even, but the the ability to feed them real time data to make live decisions is is something that's relatively that's basically never happened, and that's something we wanna be the bleeding edge on is to help you guys in that regard, getting great data down to the SKU level so we can just execute at a high level, lowering cost to every, every part of your supply chain. So, yeah, we've got a few q and a questions here. Start with this one from Kyle. Kyle Hodges asks, does order management work with third party planning tools? And the answer is absolutely yes. Everything in Flexport works really well with your own data. It's all API driven or EDI, whatever you prefer. So we can feed data into any planning. So that's exactly what we wanna do. We've got our order management system will get you great supplier scorecarding and try SKU level transit time data that you can then feed that the supply side of the picture. We wanna be the best in the world at feeding that into your model. Demand side, we're gonna point you to other direction of great companies and off the shelf white papers and models and things. That's a black art that we're not the experts in. But if we wanna be able to pair those two things up together, supply and demand, and then help you understand your working capital, understand the various, other variables that go into that model to determine your replenishment rate, your safety stock, and and then, therefore, your order method of air freight versus ocean freight. So we yes. Absolutely. I'm not I'm not familiar with sing is that singly? Yeah. I'd love to love to learn more about that. But, yeah, we can plug in any plug the data into any any place you want it. We'll pipe it to you. So, Kyle, we'll connect offline on that one. What it's on there. This is a good call out. We mentioned ExpressRail as a fast ocean plus ExpressRail. You wanna address that question? What are the carriers on that are offering this service?

Sanne Manders

Yeah. So so, typically, what you see is that those services are, offered by the fast boat, options, which is carriers like Madsen. CMA has this Eagle, EXX, services. Zim, offers those services, and they are combined for intermodal points with, guaranteed drill. It doesn't mean that the you know, again, like the boat, the the train doesn't run faster, but you get a guaranteed spot and you also get, let's say, a very short transit time from the from the from the ship to the to to the to the railcar.

Ryan Petersen

That's the main thing. Is it eliminating the container dwell at the port and just getting it loaded on that train right away and hot shot it out, to the final destination.

Sanne Manders

And very often yeah. It also very often comes with guaranteed capacity. Right? So it's not that you're you're not gonna get rolled on your rail transit.

Ryan Petersen

Mhmm. Yeah. So, you know, it's it's actually very interesting. I mentioned, hey, that the ships don't go faster. They go slower. That's something I I I was not intuitive, but in naval architecture, a larger ship goes faster. You know, like, you think, like, the little speedboat would go the fastest, but, actually, it's the opposite. The long the longer if you wanna be longer than the than the amplitude of the or the amplitude of the wave, I don't know. I'm not a naval architect, but that's what I learned. So, yeah, bigger ships go faster. But the bigger ships, in order to fill themselves up, have to stop at so many ports along the way that their transit times ends up being slower even though their speed is faster. So you're looking for these fast express services, we should call it, not fast boat, but it's going express direct from from port to port. And we've got, incredible database of all of this to help our planning systems. We can walk you through what those tools look like. And at some point in the near future, we're gonna make them customer facing because we have the best data in the world. Albert, I think this is a great call. Oh, sorry. Go ahead, Tyler.

Sanne Manders

No. No. I was gonna read out reading out the question from Albert. We're rolling out a company wide global air policy. Please provide some examples of an effective policy. And, you know, my first answer would be, you know, our air freight team can help you, with this because that we have a lot of customers that have effective policies. But, Ryan, what was you wanted to chime in on this one?

Ryan Petersen

I was gonna read it today, and I think it's a great call out. Let's publish one. I think we can publish some good examples of what that will look like and what's the what's the best practices look like. So stay tuned on that, Albert. We can we'll we'll reach out to you directly, but I'm sure others are interested in this. You'd say a really good idea just to publish on our on our website is, like, here's a good example of what a an air freight policy that's effective looks like and when to use it and put some of this some formulas and content from this, presentation in there. Josh is, asking the best question of all. Not shipped with Flexport yet. What's the best way to speak with us as well? Good news and bad news. Good news is we're available to talk to you anytime. Bad news is, Josh, we now are gonna hound you to the end of the Earth to make sure that you guys start shipping with us. So thank you for attending today.

Sanne Manders

Great. Well, that concludes it for the for the questions, for now. And, you know, we wanna thank you for joining our webinar, and we will be sending the presentation to you. This recording will also be available later, for for you.