Maximizing Partnerships for Effective Supply Chain Operations with CastleGate Forwarding’s Jack Echeverria

Full transcript

Francis Adanza

Welcome to the Down to Freight podcast. I’m your host, Francis Adanza. Our guest speaker today is an operations leader who has dedicated himself to business operations, transportation management and supply chain logistics management for more than a decade. I’m super excited to have Jack Echeverria, Senior Manager for Global Logistics at CastleGate Forwarding. Welcome, Jack. Thanks for joining us today.

Jack Echeverria

No, thanks for having me, and I really appreciate the opportunity to talk freight today.

Francis Adanza

Fantastic. So it’s great to have you here. To kick things off, do you mind telling the audience a little bit more about yourself and what you do?

Jack Echeverria

Yes, no problem. So I got into this crazy industry in 2008 with J.B. Hunt. I entered into their DCS division. And from there, just kind of got sucked into transportation. I feel like if you can make it the first 6 months, you’re kind of in the industry forever. So J.B. Hunt, great company. They really allowed me to expand my wings, taught me how to provide the best service possible in transportation. I worked there for 7 years in different capacities in their DCS division, their intermodal division, doing operations. I did pricing shortly for their intermodal product, which allowed me to get a better idea on why do we make the business decisions that we do and just to kind of expand my horizon and my skill set.

From there, I switched roles and went to a Class II railroad based in Jacksonville, Florida named Florida East Coast Railways, and I was there for 4 years. I was the director of their truck operations for the North region. So with it being a Class II railroad, we did have interchanges with the major Class Is to help facilitate solutions for our end user. While I was there, I ended up getting an MS in Transportation Management from the University of Denver and it did kind of expose me once again to more opportunities within the industry.

With Wayfair being an up-and-coming company, I did take a role with them in 2019 as a manager over their dray commercial aspect, and that fell into the CastleGate Forwarding logistics arm. Since then, I have taken on more responsibility of overseeing not only the procurement and the relationships with our dray providers on the international side, but also the ports and terminals globally for Wayfair and CastleGate Forwarding.

Francis Adanza

Well, it sounds like you’ve seen like all different dimensions of the supply chain and most recently at Wayfair. I think I’ve given them too much of my money as my house is furnished with Wayfair.

Jack Echeverria

That’s what we want to hear. So is mine. And I mean it’s a very unique service that we offer. And I think with COVID and the pandemic, it really accelerated the e-commerce industry. So I think people hedge to adjust how they purchase goods such as household goods. We were really set up for success with the way our leadership team was thinking. So when COVID did hit, Wayfair was able to really accelerate the growth because we’re set up correctly.

Francis Adanza

For those of the audience out there that haven’t heard of Wayfair or CastleGate Global Forwarding, could you provide a little bit of context of like the supply chain and how it all works and ties together?

Jack Echeverria

Yes, sir. So Wayfair is obviously an e-commerce business. We’re selling the product directly on our website. So we do have one brick-and-mortar in Massachusetts. We are going to expand the Wayfair brand to 2 more, I believe, brick-and-mortar stores. However, our main thing is that we want to connect our suppliers with the main customer base in North America, Europe and the U.K. So with that being said, we want our suppliers, whether they’re a supplier that ships maybe 20 boxes a year or they’re a supplier that is shipping 5,000 TEUs a year into North America and Europe and the U.K. We want to provide them the logistics arm. And that’s kind of where my division, my team, comes in that I’m part of. It’s the CastleGate Forwarding team.

So CastleGate Forwarding is a full-service logistics company, and we have a base in Boston, Berlin and Hong Kong. We’re on the international side of Wayfair, and our goal is to reintroduce these cost-efficient perfect orders that scale. And we try to equip our customers with the services and tools they need to really be able to execute in these challenging times. We are a digital freight forwarder, and we’re trying to just make everything more seamless for our provider.

Francis Adanza

Great. Well, thank you for that overview. It sounds like you do a lot with international partners. Given the scale and the magnitude of the supply chain that you’re working with, what are some of the things that you’re doing to streamline these processes?

Jack Echeverria

Yes. I would say the last 2.5 years, it’s forced companies to change how they view partnerships, so to speak, how they engage with suppliers. So what we’ve done on the CastleGate Forwarding arm is that with it being the international aspect. The global supply chain has been a mess. People in the industry always thought about the hiccups in the long term and we’re striking or there’s blank sailings. But it’s been so significant over the last few years that the public attention has been drawn to it a little bit more.

The challenges that we’re facing and how we’ve adapted is just strengthening our partnerships. I know it’s very cliche to say we want to be partners. But even before the pandemic happened, we had a good vision of what we wanted to be and we knew it started with partnerships on the supplier end and our vendors. So with that being said, we’ve engaged more with our vendors at service to drayage. We’ve engaged with the ocean carriers that obviously get it from Asia into the market that we service. We’re working with the ports and terminals to come up with solutions that maybe aren’t really unique to a large BCO. However, maybe solutions that we never thought of that we could execute now because our volume continues to double almost every year.

So we’ve really focused on those partnerships, along with finding providers that believe in tech like we do. We are a tech company at heart. We do know that where we are now is not where we’re going to be in a year. It’s not even where we’re going to be in 3 months. So we do want providers that could keep up with us on the tech front, along with thinking outside the box. The way we get the final product to yourself or me when we order something, it starts with us on the international side. And we know to streamline everything, you’ve got to invest in tech. So the partnership is important but also finding providers that have a great vision on planning the tech capabilities.

Francis Adanza

That makes a lot of sense. I think sometimes the word partnership is thrown around pretty loosely, and you end up engaging in businesses that truly aren’t a fit for one another. So as you think about like this partnership model and you stress on the importance, what are some things that you can do to screen for whether or not someone is going to be a good partner for you before you really assign contracts and start doing things and then having to fix a lot of broken things that might have been avoided if there was a better evaluation process or criteria.

Jack Echeverria

I would say the most important thing is having open and transparent conversations, explaining to your provider why do we need something in particular. Maybe we only need it short term, maybe we need it long term, but really engage with them and let them know this is what I’m trying to solve. This is what I think. Can you execute on it? If you can’t execute on it, why can’t you? And what is an alternative that we could provide our suppliers? I would say transparency needs to be number one and also just seeing yourself. In the end, we’re working with these providers on a day-to-day basis. You tend to talk to them even more than your immediate family. So you need to build a relationship that’s not only centered around work, but it’s going to be beneficial to both sides.

Our goal is to make it easier on our suppliers to do business with us. I want my partners to feel the same way that maybe they’re not interacting with the supplier, but they’re interacting with me. So if they can make my life easier, it’s going to be beneficial to our supplier. And we could also drag down any operational inefficiencies that whatever the ocean provider is experiencing, the ports and terminals, where we’re seeing imports surge. There’s only so much land the ports and terminals have along the coast. So what are some unique solutions. Everyone is transloading right now. Everyone is trying to get on the rail.

But how can we be on the forefront of it? So we’re already executing on those unique solutions before the next catastrophic event occurs. So just having really honest and open conversations of where we are, where we want to be, what solutions we’re looking for and how they could partner with us.

Francis Adanza

As you think about some of the most recent partnerships that you’ve landed, how is technology? You mentioned that technology was a key piece of that partnership alignment. Can you share an example of certain technologies that you found very beneficial to any of the partnerships that you’ve recently done?

Jack Echeverria

Yes, I would say, at least on the dray side, especially EDI capabilities, you need to work with us. So we’re selling from — we’re going to be doing anywhere from this ocean contract that’s 70,000 TEUs globally. Next year, we’re looking at 120,000 and 130,000 globally up to 250,000. So getting the information that takes out maybe somebody else that could focus on exceptions is very important to us. So EDI connectivity is important to us. API connectivity is important to us. So we’re seeing that more on the ocean side, the API side, but we are working with carriers that know that. Right now, we’re working on EDI, but the next step is going to be API.

Also integrating our systems with their systems, tracking and tracing. So we know where the driver is on a map. So we don’t have to go through the dispatcher of the dray provider, for instance. We actually have the technology that integrates with ourselves. Geofencing. Do they have geofencing? So instead of the driver having to use some sort of device, whether it’s a phone or ELD, we know once they arrive to our supplier, and we could then correspond that information or we could transfer that information, I should say, from the trucking company that we use internally, digest it and put it into the format our supplier wants.

So those are the key things we’re looking at, especially on the dray side, is this is what we need now. This is what we’re looking for, and this is what we want. I would say we’re very fortunate to have a very strong engineering and tech team. They come with great industry knowledge, so they understand what we need. So I think that’s also something positive that we’ve seen on the CastleGate side is that we hire individuals that have been in the industry for a long time. They understand what tech is needed. And we could use their experience along with our operational experience to build a product that should exceed anyone else’s expectations.

Francis Adanza

That’s a lot. It just seems like you’ve deployed a lot of technology not too long ago. If we were to dig deep on one of those that you mentioned, is there any particular lessons learned that you could share from any one of those solutions that you’ve implemented with partners?

Jack Echeverria

Patience. I think, right now, everyone is trying to come up with a solution. With tech especially, and I’m not a tech wizard, you’ve got to be patient. There’s going to be bugs, a lot of the ask that maybe ABC or like ourselves may have. It may take some time. What we need and what the carrier could provide, maybe it’s just we’re speaking a different language, so to speak. So I would say patience and getting to know your partner is the most important thing.

Francis Adanza

Well, thanks for that, Jack. Switching gears a little bit. Let’s talk about the international supply chain and some of the things that you’re seeing. Are there any trends that you’re seeing that you could maybe share with us?

Jack Echeverria

I would say the biggest trend I’m seeing is everyone is always trying to put a date on when things are going to get better. I think everyone’s going to have a different perspective, whether you’re on the broker side, you’re on the port side, you’re on the BCO side, you’re on the trucking side. Everyone is trying to say this is when it’s going to get better. I don’t know if that’s even really a reasonable prediction that people could give. I know people are always asking me internally and externally, what are you seeing? You’re with Wayfair. You’re with CastleGate Forwarding. What are you guys seeing on the international side? There are so many unknowns.

I don’t think people really understand. Why was there such a rush for people to buy products? I don’t think we really — we don’t even understand it. I mean from the home goods side, I get it. People were working from home, you need a desk, whatever. You’re sitting in your house so you want to kind of do products, and that’s where Wayfair came in. We could get the products. It makes sense from our side. But from looking at other industries in that — it’s that imports are up. They’re not letting up. Drivers, in my opinion, not only do they go into different segments that they don’t have to deal with the ports and terminals or the international side. They have a lot of skills. People are building houses. They were just doing a lot of projects is what I’m getting at. So the drivers that we’re maybe not utilizing their time, having to maximize their 11 and 14 hours a day, they went into other industries where they can make the same amount of money and have less aggravation and see their families.

So I would say the one call out is I don’t know if anyone really knows when the pandemic or the effects of the pandemic are going to let up. However, you need to be prepared. There’s labor issues. So how are we going to utilize our equipment? How can we give our providers, our dray cares, our ocean providers, how can we give them better visibility of our incoming volume so they could prepare better? And that’s where tech comes in. How can we streamline it where it’s not Jack sending an email and somebody needs to review everything that’s possibly booked by the OEs? How can we just hook up with them on a technology front to send them the information? How can we provide better on the water reports for our dray providers so they can make sure they have equipment in the correct positions for us? So on and so forth.

So when is it going to end? I don’t know. That’s a big trend I’m seeing now, especially with TTM coming up. Nobody really knows. You just got to prepare for what’s coming along. So that’s one trend. And I think the other trend is people are more willing to think outside the box and maybe pay a little bit more for an upfront solution. Because in the end, I think for me, personally I could speak, there are some solutions I had available. But you’re afraid to pull the trigger because you kind of see the figure before you actually execute on it. But with demerge increasing, per diem charges, so and so forth.

If we would have maybe been a little bit proactive or had a little bit more of an appetite for risk, we would have saved ourselves money. But the unknown is so great right now in this environment. You just have to do what you think is best, and you can’t really dive into data too much. I think in a previous segment that you guys did, there’s so much data out there, you really need to dissect what is useful, what is not useful, short term, long term, what can I use and just make the best decisions you can.

Francis Adanza

Definitely. So you briefly touched on the driver shortage problem. And if we go back to your days at J.B. Hunt, it feels like this has always been a top 3 problem in the industry for the past 15-plus years. And for those points that you made about people leaving to get into different segments like home building and other things, as you look at the technology landscape, do you see any solutions out there that could actually help solve this problem?

Jack Echeverria

Yes and no. The driver base has always been an older generation. The issue, I think in my mind, that you saw is that as technology continues to evolve, the older driver base, they didn’t want to do ELDs. They didn’t really want to like mess around with handheld devices to say something delivered. That is the way of the future. It’s already here. Teaching an older generational truck driver how to use an ELD, I mean a lot of responses I got when I was dispatching is, you know what, I’m here to drive a truck, Jack. That’s what I’m going to do. If you want all this other stuff, go find somebody else.

It’s kind of a little bit more extreme, the driver shortage just because a lot of people aren’t going into the industry. So you’ve seen in companies like J.B. Hunt, I could speak to Florida East Coast Railways where I did the trucking part. You’ve got to treat drivers with respect. I don’t know if the general public knows how much work it goes into driving those trucks. It’s very mentally fatiguing and physically it is. And people are saying physically? You’re just sitting on a truck. You’re getting in and out of that truck multiple times a day. You’re hooking up trailers. You’re messing around with your fifth wheel. There is so much more that goes into it, that people understand that we need to do something.

So the automated trucks, really interesting idea about how are they going to operate in city settings, the Northeast in particular. With me being in Buffalo, New York and working in Boston and whatnot, I mean the streets are very narrow. And the city landscape was designed when we weren’t putting in 53-foot trailers in a semi. So can the autonomous trucks, can they get into that? Is it going to be more on a convoy, but you have the rail? Can the rail system adapt and provide better visibility? I think that the biggest issue with the rail right now is similar to the steamship side on the international side.

The accuracy of their ETAs keep getting worse. The rail side is environmentally friendly, but we need a better idea of when the containers are in together so we could get them off the rail hubs. If you’re only getting a day of notification plus one, it’s very hard for a trucking company to execute, so you’re putting more stress on your dispatches because you just had 50 containers arrived that you’re expecting 2 days from now but the train was more efficient. They arrived. That’s where technology needs to provide better ETAs. The connectivity between a large provider in a railroad or steamship, they need to continue to work on that communication.

Back to the driver, so I mean, what I’m trying to illustrate is there’s so much stress and these drivers are at the mercy of what we’re doing on our side, what the BCO side is doing, what the trucking company is doing. In my opinion, we need to continue to go after a different kind of workforce. Maybe alighting people with certain skills, sharpening their CDL at 18, have a mentor program where maybe you check on it more frequently because of that, providing them a better quality of life. I think a lot of people are getting away from that OTR segment and they want to be home daily. Even with iPads that you can talk to your family. When I travel, after so many days out on the road, I want to see my kid. I’ve become accustomed to seeing them on a daily basis.

Same thing with the drivers. It’s a very hard industry. We need to, one, educate the younger workforce on the technology to make their life easier, and we need to educate people once they come on. You just can’t teach them how to drive a truck and throw them in the rig and not show them how to work the Qualcomm to their benefit. There’s a lot we could do to make the industry a lot more attractive.

Francis Adanza

For sure. You’re spot on with all of those points. And now this leads me back to partnerships because I don’t think it’s any one company’s problem. I think you mentioned that it touches so many different people. There’s so many influencers. There’s a lot of dynamics to this. So when you take a step back and you look at some of the partnerships in place, like how does an industry actually provide that education that you talked about, create that incentive that people would want to do this and make it like an attractive role that people actually want to get out and do? Because there is good pay, a good livelihood, quality of life and all of those things that you touched on.

Jack Echeverria

It starts with the BCO, the NVO. The term you use, user partnerships, shipper choice. We take that serious. We have individuals that have dispatch trucks. We have individuals that have worked on the steamship side, dealing with the delays, dealing with the customers. Why is my product not here? Why is my ship out in the San Pedro Bay for 30 days? Having those experiences, you could translate into a better experience for whatever partner you’re working with, so to speak.

So for us, it’s having the facilities on site where when a driver needs to do a live unload, they have somewhere to go relax, get out of the truck structurally. They have an area to use the facilities’ restrooms. They have an area to heat up their food. We treat them with respect. They had a very hard job. So does at the docks. People in the warehouse, I mean there is a labor shortage. So how can you make it better for them?

But that starts with me too, making sure the truck driver is showing up at a 10:30 appointment, not wasting labor. But in the end, you have to have a human element. You’ve got to put yourself in their shoes and think about how you would feel and how can I make it better. Is there a ceiling of what I could do? 100%, but just being a good partner listening to the trucking companies we use. What do you like about this facility? What don’t you like about this facility? What can I do? And what can I not do? What can you do? It’s not all about pay. And everyone thinks you could just throw money at the issue. It’s not. It’s about the experience.

And there’s a lot of opportunities for truck drivers, for people like me new to go, maybe make a little bit more money. But if I’m happy in what I do and I have a passion and I work with people that care, that could change it. And it starts with partnerships and understanding that. Our core trucking companies, they know what their drivers want, and they could communicate to us. And I could send that to our network management team. I could let our sales know this is what we need. The suppliers may be floor loading. But if we could somehow palletize it, we will see a decrease in accessorials. The driver will be happy because he’ll get more terms. It’s very simple, but the hard part is the human element and getting the correct information from people and being able to communicate it to internal and external partners.

Francis Adanza

For sure. Well, I definitely don’t envy the set of problems that you have to solve and the things that you’re working on to make a more resilient supply chain. As we wrap up, really, it sounds like you have a lot going on. But like what’s next on the horizon for you and CastleGate and/or Wayfair?

Jack Echeverria

It’s growth. I believe in this. When I started, we’re doing about 13,000 TEUs. We’re going to be doing some of our 80,000 TEUs within 2 years. Our goal is to be up to 25 million on CastleGate Forwarding within 2 years, 3 years max maybe. We do see an avenue for us to continue to grow. And we do provide a very good service. We have a really good sales team. We have a good account management team. We are just set up for success. Our main goal, especially on the procurement side and the carrier relations side, is just finding partners that can continue to grow with us.

I take the partnership very serious. We’re not the easiest company to come into our portfolio because once we do find a partner, it’s all or nothing. It’s blood, sweat and tears. So as long as you’re willing to put in the work I am, I will work with you. My goal is to grow every carrier within our portfolio to the point where they say uncle, no more. And then that’s where people need to continue to engage with us. A lot of times, I think some people have seen it. We are busy. We do get pinged a lot. I will get back to people. My team will get back to people. My team continues to grow. It’s just patience. Patience is a key right now where it may not be today, it may not be tomorrow, but I may need help in 3 weeks. I may need help in 3 months. I may need help in a year.

People have to trust me that I’m good for my word, but I also — my main objective is to grow my carrier base, make sure that I kept my word with them when we were having those long dialogues. And they know if CastleGate Forwarding says something, if Jack Echeverria says something, whoever it is, we always keep our word. And I would say integrity is important in this industry. It’s a very small industry. You never know who you’re going to meet down the line. So our objective is to continue to grow, find carriers that could scale with us. Any negative exposure we may get that we’re doing everything possible to provide our suppliers an avenue out of it or expose them to as little liability commercially as possible.

Francis Adanza

Awesome. Well, thank you, Jack. I really enjoyed this conversation on partnerships and how you’re leveraging technology to align them.

Jack Echeverria

Yes. No, thank you. Really appreciate the opportunity to speak with you today.

Francis Adanza

Absolutely. Can’t wait to have you back. Take care.

Jack Echeverria:

Great. Thank you.