The pandemic, disputes, recession, and inflation are just a few of the adversities that we all have to get through. But imagine what it’s like to be in logistics. It’s one thing for a company to keep afloat and another to advance. NUCO Logistics has not only done both, but they were also awarded the Ecovadis Silver Medal for their compliance in the areas of environment, ethics, labor, human rights, and sustainable approach to Shipping and Freight Forwarding. In this episode, President and CEO, Noushin Shamsili talks about the challenges that logistics are facing today and how recognizing areas of improvement and taking action can bring about more opportunities. She also gives insights on the importance of sustainability and shares the measures they’ve taken in their commitment to providing innovative solutions for their customers’ logistic needs.
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Innovative Logistic Solutions With Noushin Shamsili Of NUCO Logistics
I am speaking with Noushin Shamsili, who is the CEO of NUCO Logistics, a leading freight service provider to the chemical industry. She and I were talking about what’s happening in the supply chain, marine freight, and other things. I said, “Let’s get this on a recording so everybody can hear us.” Here we go. Noushin, welcome.
It’s so good to be on your show again.
Thank you. I’m so glad to have you here. Let’s jump right in. What is happening in marine logistics? Is congestion easing? We are a few years in from the craziness of COVID. Have things gotten better?
If you compare now with pre-pandemic times, I can tell you that nothing looks better comparatively. If we’re talking about 2021 compared to 2022, we can see some improvement. What we can see and most of the think tankers in the industry and analysts are talking about is that with the changes that are going on in our industry, we are seeing some light at the end of the tunnel.
Let me first be very clear that the actual light is not going to be seen anywhere before September 2023. This is the most conservative forecast for it. Even right now, we can see some changes in the industry. One of the major changes is the ocean freight rates. By that, I’m referring to spot freight rates, not the ones that are negotiated in the contracts with the steamship lines.
They have peaked at their maximum level. Some trade lanes have started to come down gradually. Some of them are coming up with that peak level a little bit later, but we are not seeing that much drastic increase in the ocean freights as we used to see in 2021, which was crazy and changing every fifteen minutes for imports and at least every month or month and a half for export shipments out of the US.We should all as a team, be smarter in our approach to our vendors and in conveying the information to our customers on a daily basis. Click To Tweet
In that respect, this is good news. What we can see is that ever since the news from Europe broke out about the Ukraine and Russia War. We have seen some concerns in the market and some slow down in the movement of the cargo, but it’s not at the level that it eases off the overcapacity of the bookings with the steamship lines. We are still seeing those rollovers of the bookings with the six steamship lines on certain routes, but not as drastic as we used to see in 2021.
Why do you say it’s going to take until 2023 to ease? What happens? What’s the magic there?
There are a few things happening at the same time, unfortunately. We are facing a lack of equipment, both in terms of dry containers and ISO times in the market. I’m only focusing on international ocean shipment for import and export. These are the equipment that I refer to. We have been seeing mostly a shortage of trucking and drayage for local deliveries. We then have very high freight rates and a lack of space available on the vessels.
All this should get corrected piece by piece in this puzzle that has created such destruction in the supply chain. At the same time, we have received the news about the very high profits that steamship lines have made during the second quarter of 2023, and we all know that there are some legal investigations going on.
Untangling all these parts of this puzzle takes a little bit of time. We have started seeing a little bit of a release in accepting the bookings from the steamship lines. Fewer vessels are skipping the ports right now. The improvements are there but it’s very gradual. At one point, we say, “We have a great plan for the booking. We have a couple of options, but then we lack enough drivers to be able to pick up the load at cargo.” The other times, the driver is available but the vessel has skipped the port due to being overbooked. When all these parts and pieces fall into place finally, it may take until September 2023. Again, I’m emphasizing the fact that we have seen improvements and a lack of increase in the ocean freight rates on the spot rate markets.
How has the economic environment in terms of inflation and potential recession affected freights and marine movements?
In terms of inflation, we can see higher trucking rates. There are very low trucking rates in the markets, but although they will quote you very low rates, at the time of loading your container and picking up the empties from the port, there would be a no-show or different kinds of excuses by the trucking company. If you pay the premium which was caused by the recession, then you would get your cargo moved.
We have an increase in the gas prices which has highly impacted domestic trucking. The same fuel surcharge has had an increase in ocean freight, and it’s trickling down the whole chain of the supply chain. Recession, not really. We can easily see that in terms of if I can see any signs of inflation or not. There’s a lot of talk in the market about it. Cargo may be slowing down in terms of import and export for a little while or 2 or 3 weeks, but then we see a higher increase the month following that reduction. Even if it is inflation, it’s going to be very mild and we haven’t felt it in our line of business yet.
We are seeing that across the chemical industry that there’s a recognition of inflation. It’s a fact. We are potentially in a recession and that depends a little bit on what market you are in. By and large, the executives and others that I talk with are saying, “They are not seeing an effect. They are not seeing dramatic slowdowns and reductions.”Companies just want to know that you are aligned with their vision of sustainability and what services you offer or who your vendors are, and what kind of opportunities you provide. Click To Tweet
Some of that is coming. There are some experts out there that say, “Hang tight. It’s coming.” With the second quarter earnings calls that have been happening, there has been a number of companies that are saying, “Maybe it’s going to be better for the year than I thought it would be.” We have got a lot of mixed messages in the market right now.
That’s exactly what I hear in most places.
You talk about companies that will have a booking. They think they are secured but maybe not. What’s going with that, and then how do you help your clients navigate that environment? It’s a challenge. When you’ve wound up all the pieces. You’ve made a sale. You think you’ve got the freight line to how you think it’s going to go, and then you are surprised. What’s your advice on that usually?
We’ve learned a lot in the past years during the post-pandemic time. We have realized that we should all, as a team, be smarter in our approach to our vendors and in conveying the information to our customers on a daily basis. This means that what we have learned is that now when we are asking for tracking rates or when we are asking for ocean freight rates, we do ask the vendors, “Would this weight bring in a confirmed loading and space? Yes or no? Would you confirm that you will load the cargo and pick up the container in a timely manner as it is mentioned in your dispatch?” They said, yes. We would then go ahead and place the order with them.
One of the advantages we used to bring to the table was becoming very competitive. If the cargo that was being exported or imported needed to be a competitive rate for the freight. Nowadays, that is completely out of the question. It’s not about how low you can go. It’s about the fact that, “Can you move the cargo or not?” That’s our main focus.
One thing that we always mentioned to our customers is that we’ve got to have options. Even if we are working with your service contracts, we have to have plan-B that in case the steamship line did not pick up your cargo or your booking got rolled over for three weeks down the road, then we already have a 2nd and 3rd option that we can immediately shift and get the cargo moving. It all comes down to how quickly you need your cargo to be exported or being on a vessel, whether it’s importing to the US or exporting to the US.
You are right. Everybody has found that in the last couple of years that they need more options rather than fewer options. At one point, across the industry, it was, “Let’s manage our suppliers and service providers and have fewer that maybe have a bigger impact.” Coming out of the pandemic, we are all seeing that having more options is better. More service providers, more potential suppliers, and more potential customers because there are so many moving parts that are going on. Let’s talk about sustainability. NUCO received its EcoVadis rating for the very first time. Can you discuss the process and what led you to pursue that for NUCO?
Sustainability is a very new concept for NUCO. We have been officially introduced to sustainability and the subject matters that it covers and entailed in 2021. The way we got exposed to this concept was by the fact that NUCO attended a mentorship program by the pharmaceutical company AstraZeneca. In one of their monthly conversations with our mentors, we were asked about our sustainability programs.
All these manufacturing companies, especially in the space of pharmaceuticals, have targets for 2025 and 2030 that if the vendors are not active in sustainability, then they will be removed from the list of their vendors. NUCO was intending to get through the door through these pharmaceutical companies and realized, “We have done nothing for sustainability.”Sustainability is not only for companies with production or manufacturing facilities. Click To Tweet
Fortunately, through this organization, we were introduced to a consulting company that can help services based on their products to go through bringing up the procedures, and all the terms and conditions that are required to even be considered by EcoVadis to become a sustainable company or to be rated.
We got in touch with that company and they helped us tremendously in going through all our procedures, what is in place, and most of these were in place. The language was different. We have not posted many of those procedures in our missions, particularly, in terms of equal opportunity for employment on our website, which they advise that we should do.
With that, we started the journey towards getting rated by EcoVadis. Six months later, with the hard work of the team that was mainly working on this with the consulting company, we got everything in place. We submitted our application and three months later, fortunately, we were awarded by EcoVadis a silver medal, which is a very good rating for a first-timer.
The fact of the matter is that it does not end there. As they call it, it’s a journey. This was just the first phase of being rated by EcoVadis. Our journey has three stages and we have just finished stage one. We are now working again back with our consulting company to work on stage 2 and stage 3, which has been defined in the pulse report initially when they evaluated NUCO.
That’s basically what our customers want to see. The big manufacturing plants particularly in Europe want to see that you are doing something about it and you are addressing it, even if you are not traded, even if you have not achieved the gold medal, that’s fine. They just want to know that you are aligned with their vision of sustainability, what services you are offering or who your vendors are, and what kind of opportunities you provide.
It’s interesting that it took until 2021 before it became a topic for you. In a lot of the bigger companies across the chemical space, sustainability has been a topic for a while. To such a certain degree, it is surprising, and yet I was at an event with a group of smaller chemical companies, and we talked about the importance of ESG and sustainability to your customers. Surprisingly, 80% of them said that their customers never asked them about this.
A lot of companies are at risk, thinking that the fact that nobody has asked them about it yet makes it okay. As you say, when we think about sustainability in its broadest sense, 2025, 2026 and 2030 are all critical years and they are coming quickly. The other piece that you talked about is that you found out that you had already had much of this, and that’s true as well. People across the industry and companies recognize, “I’m already behaving sustainably. I’m already doing all of these things,” but it’s also the aspect of capturing it in one place and following the right language. Every rating and protocol has its own nuances and language, and then being more transparent about it is critical.
When you mentioned that it was only until 2021, which is what I said that we came to understand the importance to assess sustainability was that I personally use the thing that it is only for the companies who have a manufacturing facility or they have a production. We are a service company. We do not produce anything. We do not distribute anything. We use the steamship lines and other tank operators in order to move the chemical cargo internationally.
What caught my attention was the fact that in every industry, whether you are a service provider or consultant, you have to have these procedures in place and be aware of who you are working with, who your vendors are, and are they also in line with the commitment to assess sustainability? I thought, “We are reducing the number of coffee pods that we are using in the office, so we are a sustainable company,” but that was a lot of things obviously.
There is a lot that other companies can learn from you with that. It is easy to assume that since you are not manufacturing anything, you are exempt. In the current marketplace, no one is exempt. You’ve gone through this whole process and it’s a continuing journey, as you say. What does this do for you and how was NUCO planning to leverage this?
Unbelievable. Two of our major VIP clients who have manufacturing plants also in Europe during this process coincidentally sent an email from their European entities to all their vendors across the world and asked them what their policies are with regards to sustainability. We were already in the process of working on it and getting rated by EcoVadis, which we’ll report to them. Once you get rated by this organization, you can reach out to the other members and let them know that they can see your rating, and therefore they can choose you as your vendors.
I’m pleased to tell you that through that portal of EcoVadis, not only have we been connected with those European entities and they know that we are a rated company, therefore, we receive inquiries from them directly, but here we have had the opportunity of opening doors to the pharmaceutical and manufacturing funds. We have been working with them in a couple of capacities with their European, American, and Texas-based clients to offer them our services. It came in handy at the right time.
One more tool in the toolkit to help with your business. I’m super excited to hear that and congratulations for making that happen because it was a big effort for you and NUCO.
Thank you. I wanted to take the opportunity to tell you that I watch each and every episode of The Chemical Show and it’s very informative. It is an amazing and very professional way of talking about different aspects from packaging to sustainability and distribution. Thank you for bringing this tool to our daily life in our crazy lives in the supply chain.
You are welcome. It has been a fun journey and having amazing guests as you help. I appreciate that. What’s next for you and NUCO as we look out towards the end of 2022 and into 2023? What’s on your horizon?
The top of the agenda is to continue working on phase two of sustainability which has been scheduled. My team is already busy working with the consulting company in achieving that. In addition to that, we have been working on a few big projects for a couple of years that we think are going to be finalized by then, but this means that we have to hire more people in NUCO and be structurally ready for those projects to come on board.
Hiring is a little bit of a challenge for us these days. As I understand it is for everyone else. We are looking for highly skilled people who live and breathe the supply chain. They love the excitement. They love all the cancellations that they can get, and then turn it around as a challenge and make it work. We are building a stronger team in NUCO by hiring people and getting through the next 3 or 4 months in the most productive way for our customers to be able to move their cargo.
I’m looking forward to brighter days in 2023 when some of this eases up. We hope. Thank you so much for joining me. I appreciate you sharing your perspectives and being part of the show.
It’s my pleasure. Thank you so much for having me.
You’re welcome and thank you, everyone. Keep following and sharing, and stay tuned for another great episode.
About Noushin Shamsili
Ms. Noushin Shamsili is the President and CEO of NUCO Logistics with over twenty five years of experience in Logistics’ industry. NUCO Logistics is FMC-OTI licensed NVOCC and Forwarder in United States. NUCO is also a woman-owned and operated Freight forwarder certified by the Women Business Enterprise National Committee (WBENC) and Women-Owned Small Business (WOSB). Prior to establishment of NUCO Logistics, Noushin worked in different capacity for international logistics’ companies in Middle East, Chicago and Los Angeles. Early on in her career.
Noushin had realized that there is a niche in the U.S. market for a freight forwarder company with extensive knowledge in Chemical products that specializes in shipment of products (Hazardous and Non-Hazardous), in Isotank, Flexibag, Dry Container, LCL cargo as well as arrange for Customs Clearance and documentation (such as Certificate of Origin and Bill of Lading) and to provide cargo marine insurance and consulting services in International Trading on “Letter of Credit” with banks as well as related document management. With that philosophy in mind, Noushin struck on her own and started NUCO Logistics, Inc. in August of 2008. Noushin has earned a BA in English Literature and has continued her education at institute of Chartered Ship Brokers (United Kingdom).
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