 Hi, welcome to International Hawaiian Think Tech, where we showcase local import and export companies and the trade industry. I'm your host Cindy Matsuki, and today we're chatting with Amber Lewis from Hawaiian Islands Freight Association. Hi Amber, thanks so much for joining me. Hi Cindy, thanks for having me. So I'm super excited to share what your organization does. I feel like it can help so many small businesses if more people knew about it. So could you briefly explain what the Hawaiian Islands Freight Association is? Basically we're a non-profit freight association. We're a co-op. So we operate much like a freight forwarder. We do import, export, and we can pick up anywhere in the United States, even some of Canada, and we bring the freight in, bring it to our consolidation facility in California, and we load it onto an ocean vessel and bring it to Hawaii. Wow, so how did the association get started? Like did it start in Hawaii or on the mainland? It actually started in Hawaii and it's an interesting story. It's been around since 1963 and a group of businesses in the area kind of thought they were being charged too much for their freight. So they have a great idea to leverage all of their freight, their volume together, and try to reduce the freight cost. And that's how we got started. Nice. So similarly to a freight consolidator, I guess that's what you are, is that you, if you have less than container loads, then you can fill a container and then ship it and get the lower rate. Yeah, Haifa itself is a paper company. So basically we contract out all of our services. We have somebody that we work with, a trucking company on the mainland, all of our stuff goes there and then they consolidate it all together into the ocean containers, like you said. And yeah, we do less than container loads, but we also do full container loads as well. Oh, okay. So how did the benefits work for members? As far as the benefits go, there's, I mean, more than I can count, the biggest benefit I think is our annual rebate. So the way the rebate works is because we're a non-profit, at the end of every year, we give all of our profits back to our members in the form of a dividend check. So the other benefits that our members have is just using us as a resource. I mean, we work for you as a member. So basically we'll always fight for lower cost for you. We fight for you to get as much of your claims paid as possible. We can help with complicated logistic moves and just as a resource for information. Wow, that's all kinds of stuff. Yeah. So if I understand correctly, so they actually pay you as a service for the freight forwarding and the shipping. So it runs through you. Yeah, basically facilitate everything. So we do all of the planning and getting everything moving and then the bill at the end of the day will come from us. We put all together in one bill for you. Okay. Nice. And then where can they receive it? Do they have to go to the port or is it like a door-to-door service? No, we have to unload all the containers here at our facility. So then they deliver to wherever it needs to go from there. So we have delivery available in Maui, Kauai, Big Island, and Hanoahu. Very cool. And what is your target customer? Is it a small business or a large business or is it just people personal shopping? Most of our stuff is industrial resale type stuff. We do construction materials, commercial, not commercial. Basically construction materials, that type of thing, warehouse and stuff. Wow. And maybe about 80% of our members are small businesses. We have about 1200 members right now. Wow. And I guess construction hasn't slowed down at all. Yeah, construction hasn't really slowed down that much. Shipping has definitely slowed down. Oh, yeah? Yeah. The suit of the pandemic. Yeah. Do you think it's because, I mean, I feel like the need is there, but is it just the channels have slowed down or? I think what's happened is due to the pandemic, a lot of businesses, unfortunately, have had their clothes reopened and some of them closed their doors for good. So it caused a really big slowdown in the shipping industry. Now that things are kind of turning around, things are starting to pick back up again. But we are having some issues. We have a mascot. Oh, fun. Some of the challenges we're having right now is a slowdown, especially east of the Rockies, because we're short on, you know, all across the board, short on equipment and short on drivers. Oh, yeah? Yeah. So we're seeing a slowdown with that. Oh, so you guys have a labor challenge too, just like finding workers? Absolutely. It's mostly the finding drivers. Yeah. So there's been a driver shortage for quite a while, but with the pandemic, it's become worse. And then the slowdown with everything changing around because of the pandemic, it's like, it's so unpredictable. So it's so hard to know where the shutdowns are happening, who's shutting down next, who's opening up. So it's been really challenging to get the equipment where it needs to be. So right now, the equipment shortage is due to that. Wow. So what are your customers doing? Like, do you feel like there's been a slowdown in customer demand as well? Or is it just, they just have to wait longer? There has been a slowdown in demand as far as, because people are shutting down and opening back up. Some people for good. So obviously the volume is going to go down. But for the most part, those who are shipping are just having to wait a little longer to get their stuff. Okay. And has your organization had to make any changes during the pandemic? We have made some changes. I mean, even though stuff's picking back up, the biggest change, I think, because the way our business model is set up, when our volume goes down, our costs go down accordingly. So it didn't affect us that much as far as costs, because we keep our administrative costs low. But the main thing we did up to do is make sure our employees were safe. So we did the work at home initiative where we had everybody working from home, because we had the ability to do so. And then we did reduce our staff a little bit. But as far as changes with our association, I think that's really the main thing. We also reached out and, you know, like we always do, tried to get lower rates to be more competitive and, you know, try to take some of the sting off of the whole pandemic in a whole. Yeah, I mean, I've been reading how shipping rates have just been climbing and climbing. They do. They do when they have. I don't foresee as long as the pandemic stays steady. I mean, who knows, but as long as the pandemic stays steady, and what you're going to start seeing moving forward is that all of the equipment issues are going to start working themselves out because the shipping companies are really diligently, you know, working to get equipment to those areas to try to even think out. So you will see things picking up. And as long as everything stays stable in that, you know, aspect, the only increases, big increases you should be seeing moving forward are just our general increases that happen every year. That's good. That's a good thing. Do you guys work consistently with the same shippers? I guess there's a limited amount that come to Hawaii, but how does that work? Do you have contracts or are you just shopping around and getting the best rates that you can? We do mainly work with PAsia and Mastin for our incoming freight. We do full containers through PAsia. Most of our LCL goes through Mastin right now. So we do have contracts with them We do, when we're doing full container loads, we send a request out to both so we can try to get the best rates. As far as the mainland shipping goes, when they're picking up your freight, we send out a quote and try to get the best rates that we can get. All of our stuff that we, like all of our pickup rates and all of our delivery rates here on the island, we don't mark up. So we give you all of those that cost. Wow. That's amazing. How do you guys, so there is something that you take for just administrative costs for your staff and to keep everything running, but then everything else just goes back to the members? Right. Yeah. So we try to keep our costs very, very low as much as possible. In the history, at least since Jan's been here, she's never raised our rate because of administrative cost increase. So whenever we have an increase, we basically try to be as creative as we can to try to account for that increase, or we try to absorb it. So we've got to make sure our bills are paid, the steamships, when we ship, we have to pay them and within 30 days or however many, whatever their terms are. So we do need to have the money up front, but if we are in a good place and we can absorb the increases, we do. Wow. So maybe could you just walk me through like say I'm a new customer and I'm just, like my business in Hawaii is just starting to scale and so I need to start shipping things or I'm starting to export. Like what is the process that I should go through if I wanted to become a member and how does that work? To become a member, it's really easy. Just give us a call. We can send you the membership packet. You fill it out to your $50 and you can start shipping immediately. You can ship as a non-member. You just wanted the benefit of the rebate at the end of the year. So your shipping will go towards the other members. And it's only $50. That's so crazy. $50 one-time fee and then you're a member for the life of your business. So once you get your membership started, you can contact us and either schedule your pickup or you can ask for a quote and see where we're at cost-wise. And so basically I just let you know, okay my supplier is here and this is my shipment and you can let me and then that's it and then you'll take care of everything else. Yeah. Most of the time we have you call directly to the terminals because that way it's a lot easier to relay information directly rather than third party. So people ask me all the time to schedule their pickup for them and I do forward the stuff to the terminal and get it facilitated but it's pretty easy. You can either contact us for it or you can contact the terminal directly. I feel like the people that we work with at the foreign trade zone, I mean just some of the stories about shipping, it seems complex. And then maybe that includes the stories about working with suppliers as well or your buyers on the other end but just like shipping seems like a complex thing or maybe it's easier just because it's domestic. Is it all domestic for now? Shipping is complex because there is a lot of different avenues, there's a lot of things to learn, things are changing often. The domestic shipping isn't quite so bad but the best advice is just to gain as much information as you can especially here in Hawaii where everything is important. So your shipping cost is a huge cost when it comes to your pricing so it can be the difference between whether you can stay competitive or not in your field so it's important to to gain the knowledge to understand or at least if you cannot if you don't have the ability you know if you don't have those resources you can reach out to help and our association will you know whatever resources we have available to us we give to our members. That's great. Do your members ever get together? Like do you have any member events? We do actually we have an annual meeting every every year in April. It's a big luncheon so you know all the board members are there and we give speeches you know the GM will give a speech and and let everybody know where the how the year went and you know we give the free lunch just as an added benefit for being a member and you know being able to put faces to everybody. Yeah I mean I missed like just the networking like having in-person events and then even though you listen to the speeches it's more like meeting all the other small business owners and talking about yeah. That's really great. Yeah so right now you're providing service to just the mainland or did you say you go international you do international shipping as well? Currently we're not offering international. We are looking to to maybe eventually get into that. It gets really really complicated with international so we're going to have to get a specialist on board to who has some experience in that area but it's not out of the realm of possibility. We try to bring as much services as we possibly can. We do air freight but it's mostly domestic. Oh okay and you use like you use um any of our local carriers for air freight? Yeah we use specific uh specific air cargo and aloha air cargo and then we also utilize that extra some of our stuff to express items. Wow that's really interesting I mean that's amazing I think that's a great service. We are going to take a quick break. I'm speaking with Amber Lewis from the Hawaiian Islands Great Association and this is International Hawaiian Think Tech and we will be right back. Hi I'm Rusty Komori host of Beyond the Lines on Think Tech Hawaii. I was the head coach for the Punahou Boys Varsity Tennis Team for 22 years and we were fortunate to win 22 consecutive state championships. My show is based on my book also titled Beyond the Lines and it's about leadership creating a superior culture of excellence and finding greatness. I feature a wide range of amazing guests who share valuable insights about how going beyond the lines leads to success in everything you do in life. I'm looking forward to you joining me every Monday at 11 a.m. Aloha. Thank you. Hi welcome back to International International Hawaii on Think Tech and I'm your host Cindy Matsuki and today I'm speaking with Amber Lewis with the Hawaiian Islands Freight Association. So Amber we were talking about how people can come to you with their shipments and I know that there's a lot of potential for things to go wrong like either you get the wrong items or something happens during like things are damaged or lost and then I remember that story that was I think it was last year that one container ship lost almost 2,000 containers. I can't even imagine like full container loads sitting at the bottom of the ocean. Yeah yeah so is that I mean do you have other horror stories about shipments going wrong and what can people do? I think that I think that one of the worst things that can happen with your shipment is that it doesn't arrive and nobody knows where it is. So in those cases where like it goes overboard which isn't a common occurrence but it does happen. I think it's important to have certain safeguards in place to make sure that if something does happen to your freight that that you're covered. So what can people do like how do businesses protect themselves? So I think that a lot of people don't understand as far as claims and loss and damage goes in the freight industry. You know you get in that state of mind where you know you broke it then you have to pay for it and unfortunately that's not how it works in the freight claim world. So the most important thing to know about freight claims is insurance. Insurance files, ensuring your freight files back on the person who's shipping it and not on the actual carrier. Most carriers have limits of liability. So in most cases a carrier will have pennies on the pound of how much that they will cover and that's the maximum that they'll cover. So if you have something that's like high value freight let's say it's a $50,000 piece you might be looking just to get a couple hundred dollars on it if you just rely on the freight forwarder themselves to go through the claims fund for your loss. So insurance is very very important. So do you provide insurance or do you help people find insurance and do you have to get insurance per shipment? You do have to get insurance per shipment most freight forwarders. I know we have an insurance company that we work with cargo cover who does marine insurance. Most places most freight forwarders will have somebody that you can work with. I do believe there's outside brokers you can use too. Okay and then what's important about how they file the claim like after if it's lost or if things arrive damaged? The one thing you want to do is document as much as possible. So when you receive your freight you want to yourself or train your employees that they want to inspect every part of the freight. Make sure that the peace count is correct. Make sure that every little tear or if there's a corner of the box crushed you want to notate all of that on the driver's copy of the cruise delivery because any of that that could indicate that there's mishandling or maybe it got banged around a bit. If they don't have that information on the driver's copy a lot of times they want to prove your claim. So it's really important to take photos when it arrives if you see that there's anything that's amiss. Once you've taken the photos and broken down the freight if you see that there is damages you want to take more photos and then contact the carrier right away and let them know that there is a claim. If you've filed insurance you also want to contact your insurance agent. Wow so how did but then I guess I could see there's multiple people that have touched your product right there's the trucking and then there's then there's the freight consolidators and then there's the shipper and then it comes to Hawaii and then there's the trucking and so like does the insurance company kind of figures that out or yeah so I see the claims for our company the way it works is everybody's kind of trying to cover their own self. So if they're all inspecting the freight when it comes in and they're notating any damages going we didn't do it. It wasn't us. So that's kind of works in your benefit because then you can kind of go down the line and have a good idea of where the the damage might have happened. When you're filing an insurance claim usually they'll do that for you you don't have to worry about any of that. Just know that once you receive the freight that you would need to make the appropriate you know notation. Got it. The driver's copy. Yeah the driver's copy. Yeah that's important. So then the trucker if they were unloading the container and they they did see damaged like the boxes or the crates would they actually note that down when they pick it up? Is that how that works? Yeah if they see damage they note it down because they don't want to get blamed for it. Got it. I see that makes sense that's good. Yeah okay yeah that's so important. I think people would just be freaking out and not thinking to like document everything. Most people don't know and it's not that it's not that the thing was in damage it's not that they're you know trying to get one over but unfortunately there's a lot of carriers out there that'll look for any loophole to not pay you your claim. So you really want to be prepared and make sure that you're making all the right documents you know notations and document everything. So that way you have the highest chance of getting paid out somehow. And does the insurance cover most of the value of your goods or does it depend on you know what kind of coverage you get? So it'll depend on what kind of coverage you get. It works a lot like a car insurance right? So you'll have a deductible or no deductible if you want to pay a little bit more depending on you know what insurance company it is. And you write down the value of it and then the freight value and then they'll cover whatever they feel is is necessary or whatever if it's a total loss then they'll look into that and you'll have to prove how much it costs you. So one thing they won't cover what people don't understand is how much that the resale value like how much they're going to sell it for because there's you know you think well I'm out all of this money now because I can't sell this but they only cover how much you need for it. Oh I guess that makes sense but that's tough yeah because as a business that's a big loss yeah we got it. So like for example the one container ship that would be a complete loss right and you know what happened. Yeah and those are the easy ones because you know what happens there's proof that it happens because that's such a big loss I would imagine that the the steamship would use their you know file their own insurance plane to cover it. Got it so the insurance company that you filed with would go after one and then they would have to cover it. Yeah and the one thing that we put in place for you know it's most important insurance to cover on the higher stuff if you have the lower stuff sometimes it doesn't make sense because if you have a $500 deductible but your items only $200 then it doesn't make sense to get the insurance right but our company covers up to $500 on anything that happens over the ocean. $500 per shipping unit so for pallets for peace if it's loose for anything that was damaged during transport in the ocean or our negligence. So we created because you know the carriers they don't want to pay they point fingers at each other so we created a claims fund where all the carriers pay in that we work with and then when things happen if they're pointing fingers at each other we can cover you still out of a claims fund so that creates an extra an extra added bonus and in coverage protection. Oh that's really good yeah especially for small businesses I mean even small amounts could be huge hits right yeah absolutely. What do you see as some of the biggest challenges for Hawaii companies that are shipping? I think some of the biggest challenges with you know any company is rising freight costs when costs go up it's difficult and you can't do anything about it. No in here in Hawaii it's even worse because everything has to be imported so the freight costs I think there's also a challenge with space like we're in a small area there's not a lot of warehousing space for the small guys so they don't get the benefit of being able to buy and bulk and get those discounts so that's where we try to step in and we consolidate everything and try to get a lower price that's why we were created. Hey we should cross market we have warehouse space so let your customers know. Do you foresee the shipping rates eventually coming back down or do you think they're going to plateau and just where they're going to keep going up? They fluctuate you know honestly it's always up and down yeah it's always fuel increases and then the cost of fuel goes down and it goes back down and every year there's a general rate increase so it goes up but I mean I've seen it at one point we were up to six dollars a cube I think and right now we're at five something so it does come back down and fluctuate. We go up and down with the steamship and then like I mentioned before if we can absorb the extra increase we will. Oh that's really good would you have any advice for somebody starting out as a business and starting to import or export? I think the the best advice is to learn just you know get a good grasp on purchasing and shipping practices and what avenues and lanes you have available ways you can lower costs because you know like I said that's that's the difference between whether you can price competitively you know competitively or not is that great cost. Exactly oh that's great and I think your association would be huge to kind of manage like that initial hassle of getting your goods just the logistics. Yeah we always we always ask our members to use this as a resource I mean sometimes there's these complicated logistical moves and you know people don't know where to start because they don't know you know what all the lanes are and and how to get something from from here to there if it's big ugly great stuff like that so we always ask that you just give us a call and let us work it out for you we can tell you which ones are going to be fastest which you know lanes are going to be the best price and you can make decisions from there. That's so great I'm excited to let people know about your organization. Thank you. So I think we're going to leave it there we've been chatting um we've been watching International Hawaii on Think Tech and today we've been chatting with Amber Lewis from Hawaii Island's freight association thank you so much for sharing your time with me Amber it's been great talking to you. Thank you so much for having me. Yeah thank you very much and thank you to our viewers for tuning in I'm Cindy Matsuki and we'll be back in two weeks with another edition of International Hawaii. See you next time. Thanks.