Back two or three decades ago, we supplied US and Canadian hospitals and clinics with dialysis supplies.  Of course, our product was superior.  (We would never deign to provide anything less.)

And, over the course of time, we found it possible to supply our products worldwide.  We were able to parlay our logistics capabilities, extending them from tractor-trailers to shipping containers.

Within a short order, we were supplying a container load a week to the Far East.  (We shipped multiple container loads to Europe at once; the freight rates were lower, and our partners had the storage capabilities to handle that.  The Far East partner had more limited warehousing.)

The trick was producing an extra 4000 gallons a week of our product, along with the regular demands of our West Coast (Long Beach, CA) distribution.  And, then, loading the container and getting it to the Port of Long Beach to make the ocean voyage.

There were problems when the ship hit rough seas and was delayed a few days.  But, those problems were something our partner had to work out.

The trick to our business, however, was that the freight- the cost of a container load of our product was just under $ 4000.  Which added almost $1 to the cost to the end user.  We worked it out by splitting the profits with our partner (roughly four bits apiece).

(Our freight costs in the US averaged about 1/2 to 2/3 that value- 6 to 8 cents a pound or the equivalent of $ 2400 to $3200 a container- delivered directly to a customer, and not just to a warehouse, which meant additional delivery costs.)

But, if we were still shipping our product now, we’d be dead in the water.  Literally.  Since a container to the Far East now comes at the princely sum of $ 20,000!  That makes freight $ 5 a gallon- before the costs of the product itself- and way more than its value to a potential customer.

But, that’s only part of the problem.  Because the transportation costs get topped off by extra fees- like those imposed by Customs Authorities, or if it takes one more than a day to load the container.  Vendors used to deliver containers to us and let them sit for about a week.  Now, they want a few hours turnaround for the containers- or they impose fees. Some carriers (Wan Hai Lines and Hapag-Lloyd have been attempting to charge shippers fees when they won’t accept container returns because they have no space.  At least the number of container ships in the queues at Long Beach have dropped from more than 100 to about 80.)

Looking at these new fess, it;s clear we never would have been able to grow our business worldwide in this economic climate.  And, we fear this is hampering lots of our international growth.

Not to mention destroying our supply chain logistics.

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