This week we feature The Expeditors Podcast with host Chris Parker. The podcast shares observations, perspectives, and discussions on front-of-mind topics impacting the logistics and freight-forwarding industry through the lens of a global logistics provider.
The podcast returns and sits down with Vice President of Tradewin, Michael Bellezza, to reflect on 2021 and identify key lessons for the rest of 2022: resiliency, flexibility, creativity, empathy, and knowledge.
Chris Parker: Hello, everyone. And welcome to the Expediters Podcast, where we look at the logistics and freight forwarding industry through the lens of a global logistics provider. I'm your host, Chris Parker, and today's topic: top five trade lessons for 2022. Now, earlier this year, an article went out on the blog of one of our subsidiaries, Tradewin, and in there were some interesting points I wanted to expand upon here on the podcast. We'll look back on the last two years and see what these lessons can teach us for the remainder of 2022 and beyond. And with me today is a returning guest and the author of this article, Vice President of Tradewin, Mike Bellezza. Mike, how you doing?
Mike Bellezza: Thanks. Thanks for having me.
Chris Parker: Yes, well, it is a pleasure to have you back. Before we get started with these five topics and diving into them, I was really curious, what got you thinking about these five topics, and how did you arrive at these particular ones?
Mike Bellezza: You know, I think I was going through the Tradewin goals for my team into 2022. And this was early January; I think, when I was writing this. I was thinking about our group getting back to our fundamentals, getting back to a lot of those things that we just haven't been able to do in the last few years, like travel, see our customers, see our coworkers in person, give seminars. At that time, this is pre-Omicron, obviously, but I was really looking at 2022 in this really positive light at that time. That line of thought automatically brings you to this thought of, reflect upon, "hey, how have we changed?". How has our industry changed? I think, like any crisis, you have to walk at it and say, "what did we learn from this?". At some point, I think, we had to improve—me with my group, myself personally, the industry. We had to improve in the last few years. I think this idea of supply chain resiliency is really a key one. With any crisis, we all have to adapt, right?
Chris Parker: Yes, absolutely.
Mike Bellezza: We got to adapt quickly. And with trade, I think we've just been hurdling through so many of these challenges in the last, say six or seven years from Brexit, trade wars, chip shortages, worker shortages, there's capacity shortages, COVID. There's trade wars, and there's real wars, right? So all of these things are hugely impactful on trade. And so that particular mode at the time was, "hey, how do we change? And what do we learn these last couple years of the pandemic that were going to come out of this stronger?". And that was where my mind was at the time.
Chris Parker: Do you see these lessons as more retrospectives, or do you see them also as trends that are going to be long-standing for the years to come?
Mike Bellezza: I think a little bit of both. I make the reference a lot to pendulums. And I think of everything as this pendulum in the world that you're always trying to find equilibrium. For now, we've had a lot of change. Some of these things are going to take hold, right? And some of these things are going to swing back. I think supply chains are always going to strive for efficiency. And over time, we're going to find that equilibrium, whether it's stock or where we source, near sourcing, domestic sourcing, until the next change event comes. So I think that a lot of the stuff that we learned from the pandemic or any of these crises, frankly, we're going to take a little bit of those lessons forward. Some of them may certainly revert back, but we always got to keep in our mind, "what did we learn, and how do we be capitalizing on that going forward?'
Chris Parker: Yes, absolutely. And I think the pandemic has obviously been a topic that we've discussed on a number of episodes because that's an easy catalyst to point to say this is the cause of a lot of the issues that we're seeing right now. But as we'll talk about a little bit later in the episode, there's been, and what you've mentioned early too, is just even within the last six or seven years, as you said, there's been other of events and other things coming about that have really got things changing. So we'll talk about that in a bit here, but let's go ahead and start with the first one, which was resilience. Be resilient was your lesson.
Mike Bellezza: Yes.
Chris Parker: So I wanted to ask, since we've heard the term supply chain resiliency over and over during the last few years, has the definition changed at all, or is it settling into something? What's your take on what resiliency means?
Mike Bellezza: Everybody's going to define that differently.
Chris Parker: Sure.
Mike Bellezza: What I think of it as is the ability to adapt your business in a crisis. And in some cases, it's being able to do it better or faster maybe than your competition. And in other ways, it's probably more about survival. If a crisis happens, how do you keep your business moving forward? And I think there's just been so many events. I would laugh. We talked about Brexit being like the biggest thing to trade ever. One day we were talking about the Trans-Pacific Partnership, and the next day it was like, holy cow, Brexit is coming. We don't really think about that now. Since Brexit, you've had COVID. You've had a multiple global trade war in a lot of ways. We've had a real war. We've had chip shortages. We've had worker shortages. We had a boat that got caught in the wind and got stuck in the Suez Canal. I mean, we forget about that sometimes. But it's been this kind of ever-rolling scenario of crisis around that. And I think that we're getting as an industry a little bit better with each one in terms of understanding our resiliency, and that's really been my big lesson. I've been talking about it for a while now. And every time I do, I feel like just another crisis comes. So maybe we need maybe stop talking about it. But I think it's really deep-seated now in a lot of these companies of things are going to happen, and we have to be agile, and we have to think about how we can be resilient and how we can be flexible and move forward with our business.
Chris Parker: I mean, the examples that you brought up, you're right. There are some of these I've already forgotten, especially like the Ever Given turning sideways.
Mike Bellezza: There's another one stuck in the Chesapeake Bay now here.
Chris Parker: Oh, no kidding! You can't make this up! And it's so random, just the events that come about. Taking all those into account, what would you say are some of the biggest boxes to check to ensure some semblance of resiliency?
Mike Bellezza: Yeah. I mean, we always say like, "Keep the freight moving."
Chris Parker: Yes.
Mike Bellezza: Above all else, keep the freight moving. I think the biggest one that most people look at is probably the sourcing side of it. What happens if a country goes down for whatever reason? Be it a pandemic, a political instance, a war, a natural disaster, whatever. What if it's a region? And do you have a backup plan? Are you commodity reliant? There's a lot of issues, a lot of talk now on lithium, on nickel, on neon, on chips. Are you really reliant on a particular, either raw material or commodity or piece or part? And is that something that you have multiple avenues of rectifying should something go down? What if there's a big political change from a tariff or a land war or something like that? Do you have that? I think that's the biggest one and maybe the most obvious one.
There's also systems; there's cyber, there's trade, there's near sourcing. There's all sorts of things that are in there, but these are all things that most people think about. I think stock is probably a really big one as well. And particularly if you're a big manufacturing area, where international trade in a lot of ways in the last, maybe 20 or 30 years has grown a lot. But it was also pretty predictable in a lot of ways. And I think we talked a lot about these just-in-time supply chains and very small buffer stock. Now it's like a just-in-case stock. It's much more prevalent where you have to be able to operate with a little bit of a buffer in your supply chain, so you don't have line-down situations, things like that. So I think that's a really big part of it. And trade compliance, I mean, that's what we do in particular and what we help our customers with. Does your company have the trade and the knowledge expertise to be able to make these changes and be resilient? And if you have that kind of human capital, you're much more agile. You have much greater ability to change. And I think that really helps the long way.
Chris Parker: Yes. And I feel that brings us up to this next lesson really nicely is be flexible. There's some obvious changes or obvious catalysts, but as we were preparing for this episode, you mentioned 301 tariffs and how they actually prepared the industry for what would happen with the pandemic in terms of sourcing strategies and taking those into consideration. So could you talk a little bit more about 301 tariffs and what kind of trains of thought, or what decisions had to get made as a result of those?
Mike Bellezza: You know, when we looked at the tariffs, and they weren't just the 301 tariffs. There was, at that time, there was a ton of tariffs floating around. There was China being the biggest, of course, with the US, but there were a lot of counter-tariffs, Canada tariffs, Europe, India. Everybody was taxing bourbon at the time. I certainly remember that! But the biggest restriction, of course, was really probably the US/China lanes. But those tariffs were high enough where it really pushed a conversation around new sourcing. And what does that mean? Where are the raw materials going to come from? What kind of substantial transformation has to occur for it to happen? Could you near-source it? If you didn't near-source it, what does that do to your transportation costs, to your customs duties, to your export controls? What kind of capital equipment do you have in Southeast Asia or maybe India, and could it be done there? And what does that mean?
The tariff and supply chain were talked about at that time, which was really important for us, and that it was talked at the highest level. And people in these companies, which supply chains had been, again, relatively stable for so long, I think they start to understand how unbelievably critical supply chain was to their company once it was threatened.
Chris Parker: Right.
Mike Bellezza: And that's when I think in the last four or five years, people really invested a lot more time and effort and understanding at these highest levels of what has to happen and where are risks. And one of my all-time favorite lines in supply chain was, it's Omar Bradley. And he said, "Amateurs talk strategy. Professionals talk logistics." And I think that was just so, such a well-put line. And all these companies realized once their supply chain was threatened how just critically important it was. And it really ramped up the discussion. And I think we were in a much better place when the pandemic came to understand what our options were, what could be done, how flexible could we be. And I think that's a big part of it is that flexibility.
Chris Parker: All right. So moving on to our third one, empathy was something that you called out in this article. How has the business world been transformed? And what are some of the lasting effects that you've noticed when it comes to empathy, working with each other? What's the state of the community?
Mike Bellezza: I think it's pretty good, all things considered, in honesty. The interesting thing with COVID, I think, is that everybody struggled.
Chris Parker: Oh, a 100%, yeah.
Mike Bellezza: Everybody had to put themselves into everybody else's shoes. And it's more than just, I guess, COVID. We all are going through the great resignation. We're all dealing with the unstable political environment. We're all dealing with chip shortages. And again, global trade used to be so predictable, so reliable, and for a little while, it wasn't. Maybe it's still not. And the general sentiment, I felt in a lot of ways, was that we're all in it together. I always felt the importer or the customer, in our case, in the supplier relationship, I think got more collaborative. You had to be. You had to be more flexible. You had to be more creative. And I feel that in most cases, everybody had just a much more empathetic feel to each other and to work through a problem that maybe nobody had ever seen before. And the companies that have the most collaboration, they're the ones with the best supply chains, hands down. So I think everybody just did much better because of it.
Chris Parker: For Tradewin specifically, what kind of collaboration have you been seeing?
Mike Bellezza: From a Tradewin perspective, I think with everybody potentially being out or working from home, we all know everybody's dog's name now and who doesn't know how to use the mute button is always important. But I think we've worked better in a lot of ways together as a team. And with a team that we really haven't seen or met in person for really quite some time. And I think, by and large, there was that sentiment that, again, we're all in it together, and let's find a solution. And I think when I look up what all these different things, whether it's empathy or creativity or flexibility, they're all really intertwined. But it all starts with respect and understanding the challenges that are going on, whether it's our customer or our teammates. And what we can do on a situation to get the best result. At the same time, be understanding of the world just is different than it was six months ago, two years ago.
My old boss used to always say, "If we all pull on the same side of the rope, we're going to be great. Nobody can beat us." And I think a lot of people really understood that in terms of, hey, we have a problem, we got to work the problem. But we all got to work it together. And if we can, there's a lot we can do. And I think that was the one piece of the pandemic that I... If I could ask you for one thing to hold on to for a long time, I would say it's everybody being empathetic to the struggles of somebody else. If we all work together, we can get through this.
Chris Parker: All right, we've got two more left here on this next one. And you just called it out just a second ago. It was be creative. So how has creativity manifested itself? And what is important to preserving and maintaining a creative mindset going forward? To ensure that creativity is not just a flash in a pan that we're going to hold onto this idea, what would you say is important for that?
Mike Bellezza: Well, I think we had to do things differently. I mean, we saw some really creative things in supply chain. We saw people chartering bulk vessels and re-routing cargo. But I also saw a lot of very different systems coming online, a lot of new supply chain technology that's coming online, a lot of new ideas. These ideas, they generate in these times of crisis. And then we have to take them and push them forward. But decisions get made much faster. And I think a lot of solutions get advanced much faster in these times of crisis. And we just need to make do with them and keep pushing them forward, whether it's different ways of making goods, different ways of sourcing goods, putting up different teams to handle different things. There's a lot of really good lessons that we learned. We just got to keep those things moving forward as we come into, hopefully, into a time of peace, more predictability, I should say, really.
Chris Parker: Yes. More predictability is nice, but one of the things that I think about is predictability is what got us into this mess in some ways, right? The logistics world got too comfortable in some ways with relying on good old US/China lanes and stuff. Like nothing's going to happen there. But here we are with lots of changes happening.
Mike Bellezza: Yes, I would think so. I mean, I think things were so predictable for so long that, again, to my comment on the pendulum, people drive efficiency into it. And they drive cost down. And that left us with just-in-time inventories. I would say it, maybe put certain things in a bit more of a fragile environment. Single sourcing, single-source lanes, single geography origins. And that limited us. And that limited us in a lot of ways where we didn't understand how to source our multiple P places. We didn't understand the regulations involved in it. And the regulatory landscape in the last five or six years is really just; it's blown up in a lot of ways. There's a lot of new free trade agreements. There's been new tariffs. There's been new export control programs that are going around the world. You're seeing sanctions on a daily basis from a lot of different countries. Every time we see one of those things in the news, that's something that a company has to be able to react to and understand, and digest and put processes in place. And that takes time. It takes knowledge. It takes effort. It takes people to know what they're doing.
So when things are predictable for so long, yeah, I would agree with you. Maybe that makes you a little, makes your supply chain a little more fragile. That's why we have to take these opportunities and these lessons and keep them moving forward. And maybe that's how you get to that last one of knowledge. The last one is be knowledgeable.
Chris Parker: Yes. And so finally, being knowledgeable. And I'm sorry to cut you off here. I wanted to say that I found this one the most interesting because it was the shortest of the five lessons, but it seemed like it was the most important because in there, you gave the sense of resiliency, creativity, empathy, and flexibility with those powers combined they create a captain knowledgeable supply chain professional. So why is this one so important? Could you expand on that?
Mike Bellezza: Yeah, well, again, I think it's hard to undervalue human capital. So in a crisis, whether it's this one or the last four or five, everything's moving much faster, and everything's moving with more urgency. And I think that happens with our personal development as well. A lot of our growth, our personal growth, comes from experience and experiences that we're having right now. And I think that we're getting so much more thrown at us that we're growing at a faster rate. And when we get past all of these, for the next crisis, you want someone with the experience to have gone through this and to understand it. So in one way, I think you can't undervalue knowledge of people that are going through this. But at the same time, at a personal level, I'm growing much faster. I'm changing much faster. I'm adapting personally. There's so much less predictability that you have to be able to read more, absorb more, grow more, learn more. And you can't be complacent. I don't think that anybody's had the luxury of complacency in the last couple years, at least not in this industry.
So I think if I was to wrap up all those things, the people that want to have that resilient supply chain, they have to be, run and peopled, and handled by people that are flexible and creative and empathetic. And that's ultimately how you succeed in 2023, 2024, I hope.
Chris Parker: So you mentioned professionals that, they've been through it, they've experienced this, and that's how they've become knowledgeable. How do we cultivate a hunger for knowledge within our own organizations to stay hungry for that kind of stuff?
Mike Bellezza: Well, right now, things are coming at them so fast, I think-
Chris Parker: You don't have a choice!
Mike Bellezza: A lack of choice. Their plate is full, and they got to eat. But you got to look for the right people. Inherently, I think most people want to do a good job.
Chris Parker: Sure. Of course.
Mike Bellezza: Ultimately, people do want to learn more. They want to be challenged. And so, I think if you can find the right people within your organization that have that hunger for curiosity, they're the ones that are going to be able to grow in a situation like this. They're not going to sit back on their heels. So finding the right people, instilling it, always try to learn something new. And I think if you could find the right people that do that, your organization's going to be top-notch. There's just so much to learn right now.
Chris Parker: As we bring this to a close, I was curious for you looking at 2022; what do you think are some of the takeaways that you're already seeing now that we're a good few months into the year?
Mike Bellezza: I think that I've learned, maybe most importantly, is that I don't know what the future's going to be. And we're not going to make forward-looking statements here. If you went back, go back to November, go back even earlier, September; COVID is starting to ramp down, and if you say-
Chris Parker: And it shot right back up.
Mike Bellezza: ...what's going to happen? Hey, 2022 is going to be the year, and already we've seen, hey, the Omicron virus is there.
Chris Parker: Yeah.
Mike Bellezza: We've seen a land war in Europe. We've seen China's Eastern seaboard going through some lockdowns. We've had a lot of things that have occurred that we didn't expect, see or predict. And maybe that's the key. It's that the future is unclear. And if anybody tells you differently, he's trying to sell you something. And we just have to be prepared for what that is. And we have to be peopled with experience that can help us navigate something that we just don't know is around the corner. And we got to be prepared, and we got to be resilient.
Chris Parker: Mike, thank you so much for diving a little bit deeper into your article. I think there's a lot of wisdom to pull from each of these five things. So I really appreciate you taking the time. If folks are curious and want to discuss more about this with you, or just get into contact and learn more about Tradewin, where can they find you?
Mike Bellezza: They can always find me here in Boston with Tradewin. It's firstname.lastname@example.org.
Chris Parker: Cool. Excellent. Thank you so much.
Mike Bellezza: Thank you, sir.
Chris Parker: Thanks for listening to today's episode. If you've got any questions or want to learn more about today's topic, check out the show notes for more information. And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter, or simply visit us at expeditors.com. Take care, and I'll see you next time.