Director of Tradeflow, Nic Beehler, talks through the history of trade data management, the legislation that brought massive change to the customs process, and how online management systems are aiding shippers today, when colleagues aren't always in the same space to collaborate.
Chris Parker: Hello everyone, and welcome to The Expeditors Podcast, where you can hear about front-of-mind topics in the logistics and freight forwarding industry, through the lens of a global logistics provider. I'm your host, Chris Parker, and today we're wrapping up our series on the visibility economy in logistics. So far, we've covered Cargo Signal and how sensor-based freight enables crucial in-the-moment decision making, how Carrier Allocation is changing the way shippers plan and secure capacity, Koho, and the empowerment of smaller shippers through online platforms. And today, we'll talk about Tradeflow and how greater access to current customs data strengthens supply chains.
Chris Parker: Returning to talk with me about this topic is the Director of Tradeflow, Nic Beehler. Nic, how are you doing? Welcome back.
Nic Beehler: Thanks, Chris. Good to be back. I must have done something right on my first try for you to bring me back. Thank you.
Chris Parker: Yeah. No, absolutely. It was a good chat last time so I'm excited to talk a little bit more deeply about Tradeflow too, and just how it ties in this whole visibility economy thing that we've been talking about.
Chris Parker: But, for folks who may not be familiar, could you tell us a little bit about yourself?
Nic Beehler: Yeah. I've been with Expeditors, it'll be 18 years actually next week which is, I guess, a little exciting anniversary.
Chris Parker: Oh, yeah.
Nic Beehler: Leaving the house, going out in the world as an 18-year-old veteran of Expeditors, I've been mostly within our Tradeflow group. I've held a few different roles within Tradeflow and a couple roles before Tradeflow.
Nic Beehler: Yeah. It's been a great career here. I'm excited to talk to you today, about this topic.
Chris Parker: Yeah, absolutely. Could you give us an overview of what Tradeflow is exactly? We're going to be talking about it a lot. What is it?
Nic Beehler: Yeah. It's a web-based software as a service, or SaaS for short, solution. It's a product that allows our customers to just get organized around all the different customs and compliance data elements. There's just so much to organize and then to hand off to your broker, your third party, your forwarders. Trying to do that with spreadsheets, with homegrown databases, it just doesn't cut it anymore. We have this tool that we offer and we sell to customers to get organized, to keep track of things because a lot of what they do is compliance and having that audit trail, that record of changes is really important today, really top of mind.
Chris Parker: Oh, yeah.
Nic Beehler: Yeah. it's something that we offer and it's a pretty flexible type subscription basis. Small usage, high usage, just really the whole spectrum. All different industries, too.
Chris Parker: That service can be cut to size, to the customer's need?
Nic Beehler: Yeah. We do offer different kinds of pricing, flexible, based on how much data you're storing, you're processing, how many users. There's different modules in the system, too. It's not one-size-fits-all, you might need one section but not the other and we can support all different shapes and sizes.
Chris Parker: Yeah. What about Tradeflow ties into your interests? Why is this cool to you? What makes you geek out about customs data?
Nic Beehler: Yeah. It probably started back in college, in the '90s, I had got an international studies degree. It was more like geopolitical studies, reading about the history of nations and regulations. I learned about anti-dumping in college there. That really interests me. And then, I got into some language translation stuff out of college and just wanted to really focus on international something. I didn't know what it was, it was language at first.
Nic Beehler: And then, got interested in logistics and the world of trade. That led me to Expeditors. And then, I got more interested in the technology side of trade and I got picked up to move to Tradeflow. I think it's been 13 years or 14 years now in Tradeflow, it's been fun.
Chris Parker: Yeah. But Tradeflow has been around for a lot longer than that, correct? It's been 20 years or so is what I'm hearing.
Nic Beehler: Yeah, we're coming on about 20 years. I think we launched our first customer in 2003, so I guess 18 years or so. But, it was definitely something that Expeditors created around the turn of the century or millennia.
Chris Parker: Yeah. What prompted that?
Nic Beehler: It's interesting. It goes back, I would say, years before that. A lot of, I think, what drives customs and compliance comes out of the United States and the US regulations. It tends to lead or has historically led the world in regulating stuff. Maybe that'll change.
Nic Beehler: But, going back to the mid-'90s or early '90s, there was this legislation called the Customs Modernization Act. It was in 1993. We call it the Mod Act, for short. It was born out of this time when, going back into the '80s, where trade was exploding and there was just so much going on. At the time, a lot of the responsibility for admission of goods in the US was on customs, the customs agency. As trade was really just exploding and customs was also trying to push all this automation on the trade, on the community, to allow them to target enforcement of goods, you had this old way of paper processes, really analog processes.
Chris Parker: Right.
Nic Beehler: They wanted to modernize it, so that's why they called it the Mod Act. That shifted the responsibility more to the importers. By statute, it clarified that the responsibility for what you declare to customs is upon the importer of record and that was a big change.
Nic Beehler: So companies, importers who move the goods through customs, took that responsibility on, so then they knew all this was on their shoulders. They had to get organized, get their data together and whatever they tell customs, they're liable for that. And Expeditors, we've been around for 40 plus years and we wanted to take care of our customers, and we do all of the freight and customs work.
Nic Beehler: I think by the late '90s, you also had, of course, the internet had taken off. More and more web-based products were emerging, so you had this convergence where the Mod Act forced the responsibility on importers, technology was ripe for this. We, as a company, it pre-dates me, but as a company, we decided we needed to create a product that our customers could use to organize all this customs data like we were talking about earlier.
Chris Parker: Moving these processes further upstream, up towards the shipper, what kind of education had to happen for folks to get used to these new responsibilities?
Nic Beehler: Yeah. I think it's interesting because I used the term earlier, software as a service, I don't think that term existed in the early 2000s, as far as I know. I've done a little research on it.
Chris Parker: Sure, sure.
Nic Beehler: I think it was new for customers to look at web-based, or what we'd call cloud solutions today. I think there was some security concerns, do you trust the cloud and all that. That was a leap to say, "Hey, you can use this web browser thing and you can put your data there, and it's going to be safe, it's going to be stored, it's not going to get blown away." That was, I think, a technology leap that was occurring. I think it did take some education to customers, to understand that.
Nic Beehler: And then, the whole compliance. "Am I going to get audited? What happens if I get audited? How am I going to tell customs and other agencies what we were doing?" That's just this piece-of-mind factor, I call it, where you just know, "Hey, you can go to this system and it's going to tell you what that data was, at what point in time, who changed it." And how do you quantify that value? I don't know how you do, but I think that was a lot of education that we as a company, Expeditors, had to take at the time.
Nic Beehler: If you think well, in 1993, the Mod Act came out, and of course, that also introduced NAFTA, North America Free Trade Agreement, officially in the region. So oh, well eight to 10 years later, Tradeflow comes out, that's a long time. But, if you think about eight to 10 years back from now, things can move slowly in terms of our habits and our patterns of how we manage things. I still think it was probably early in the early 2000s, for customers to really embrace that role of being responsible for their customs data so I think that was probably still an education process that we and others in the community were still working at.
Chris Parker: You said that Expeditors, we wanted to take care of our customers so that's why we developed the system and brought a lot of this education to them. What kind of philosophies would you say led the approach to Tradeflow?
Nic Beehler: Yeah. I used the term earlier, software as a service. The way I look at Tradeflow is we're part of a service company. Expeditors, we put our service out there and that's what we offer to our customers.
Nic Beehler: So with our digital solutions like Tradeflow, it's really software plus service. It's the people behind it, it's the onboarding, making it easy for our customers to analyze their data, get it loaded. Once you're a customer, the support that we put behind it, we don't disappear. We have people that you can call and talk to. That's, I think, maybe what's distinct for us compared to others, is that there's that service component that sits strongly behind the software.
Chris Parker: Yeah. Yeah, for sure. All right, so I wanted to get a little bit more high level here and look at not just Tradeflow but other data management systems. As a result of the Mod Act, what were some of the problems that trade data management systems helped resolve?
Nic Beehler: Yeah. It's continued since the '90s and even the last 10 years, it's just this explosion of data elements you have to manage. Again in the US, we saw it in 2016 with the rollout of, they called it the Single Window Initiative.
Nic Beehler: The whole idea, in a nutshell, was that it's not just the customs agency that wants to know about your data, it's all these other agencies like FDA, Food and Drug Administration, they have their own data elements they want to know. So it just feels like, every year, there's more and more data elements from different agencies or existing agencies, wanting to know more about your goods.
Chris Parker: Sure.
Nic Beehler: More about your suppliers. And, that's got to live somewhere, somebody's got to determine that, you've got to store it and you've got to get that to someone, probably a broker, logistics provider of some kind. It's just this march forward of more and more data that you have to try to keep track of, to get it across the customs border.
Nic Beehler: So then, if you think about here it's 2021 and we look back several years, the US-China trade wars and other regions, US-Europe in some cases too, it really made it front-page news, for the first time in a lot of cases, where a lot of people noticed. A lot of C-suite-type executives noticed what was going on. That predates the pandemic, so we started having this disruption with, "Oh, my duty rates suddenly went up. Now, let me shift my sourcing." People start looking to other regions to source their goods, and now you're analyzing obviously the distribution costs, the freight costs. But, what does it mean for my customs processing? Is there a free trade agreement that's going to reduce or eliminate my duty?
Nic Beehler: That was just new challenges that emerged, even before the pandemic, tied to those trade wars.
Chris Parker: So with the increasing amount of data needed, there's just an increasing amount of questions that you've got to ask yourself.
Nic Beehler: Yeah, exactly.
Chris Parker: There's a lot more complexity.
Nic Beehler: It's kind of a choose-your-own-adventure. You knock down one door and there's 10 questions. And then, there's another door in that room to another door, and it just never stops.
Chris Parker: Did the Mod Act speed up digitization, or bringing things into this digital age? You made it sound like it was such an analog process, very paper-driven. What kicked off this move to platforms?
Nic Beehler: Yeah. I will say, I feel a little weird commenting on the Mod Act, I was a pimply-faced teenager at the time, to be honest. I do find this really interesting and like I said, I got interested in college in this and I'm happy to have the career in this space.
Nic Beehler: But yeah, I think it was. I've talked to people, like Ted Henderson in our company. If you ever get to talk to him, he's just this wealth of knowledge on customs. I talked to him earlier this week and he was just sharing what it was like, and how things were just stuck in this old, analog space, and customs trying to push the trade forward and digitize stuff. Yeah, I think it did initiate this digitization of processes. And again, with the internet coinciding with that at the same time, it was these nice two things, these two streams coming together.
Chris Parker: Yeah. Yeah, absolutely. Looking at today now, what would you say are some of the issues or points of failure that the pandemic has revealed in your space?
Nic Beehler: Yeah, there's several. I'll focus on three though, just to keep it organized.
Nic Beehler: I think what we saw, across the board everywhere, a year and a half ago, say March 2020, you put a timeframe on it, we suddenly shifted of course to remote, virtual environment. One thing was that you couldn't just lean over and ask someone a question anymore.
Chris Parker: Right.
Nic Beehler: Or, tell them something. That 30 second, one-minute type interaction. Communications just moved to be more asynchronous. Maybe that was email or maybe that was more sophisticated. We started to see a need for these platforms to manage your activity, like a work board type approach, work queues, making notes, elevating the status of something up to the next level, assigning data, approving data, getting it out to where it needs to go. That just took a leap forward, it had to, suddenly. That was the first thing.
Chris Parker: Yeah.
Nic Beehler: The second thing is that, think about it from a manager perspective and you have a team, and you have these stakeholders you're managing, is just keeping track of what everyone is doing. It's harder when everyone's disbursed.
Nic Beehler: In our product, in Tradeflow, it keeps this history of the changes. It tells you who updated something and you can assign data to a certain person. It gives someone who's trying to report up to others and share the status of things with others, it gives them a place to keep track of that, to keep track of their team, try to stay organized [crosstalk 00:14:50].
Chris Parker: Sure, sure. Yeah.
Nic Beehler: I think the third thing, maybe more of a technology focus, is just we saw that having a web-based solution was really helpful. I don't think that a lot of companies' networks were really primed to handle the sudden spike in volume of activity. I think we saw it at our company, is just all these people coming in with the VPN, trying to get through the network. I talked to customers that, they're using an old Access database, trying to go through their network VPN, it's super slow. Just having a web-based solution, hopefully, you had it in place already, or spin one up like Tradeflow really quickly, and it was just really easy. You could use it off the network, still secure, secure login and all of that. I think the SaaS systems were really built for that, with a niche focus to get them quickly implemented, and not constrained by the network and the technology.
Nic Beehler: It's been interesting. I think we've all, as a society, taken these leaps forward. And now, being back in person again and it's this new energy. I'm enjoying it personally and seeing faces I'd only seen on video for a while. Yeah, now that we're coming back, I guess into the analog space, these things that we learned for systems and collaboration in the last year and a half, two years, I'm really hopeful that these are going to carry forward, and that we're going to take those learnings and continue them on.
Chris Parker: With changing consumer behaviors, the sourcing strategies changing, more trade wars, more tariffs coming about, there's a lot going on. What would you say, with a trade data management system like Tradeflow or the others out there, what can importers do to be more proactive or productive with the timings? While they're waiting because their cans are out on a ship that's in line with 70 others out there, what can they do to be more productive?
Nic Beehler: Yeah. I know it can be all cliché, but the whole control what you can control. That's something that we really stress is yeah, you're right, Chris, you can't get that ocean container through the port any faster probably.
Chris Parker: Nope.
Nic Beehler: There's not much you're going to be able to do, there's too many other constraints. We were talking earlier about the single window and what FDA needs, they need to know about all these data elements, who's the supplier, what's their registration number, and I think that's an example we've seen is just be ready, have your customs data ready so that when it's your turn to process your entry, you're not the bottleneck. That's something you can control. You can get that data prepared upstream.
Nic Beehler: I think it really is easy to let that slide. It's like you're just trying to stay afloat. You're calling carriers, you're emailing your broker, your suppliers, et cetera. That data prep stuff can slip because it may not be top of mind.
Chris Parker: Right, right.
Nic Beehler: But, it is a good time to refocus on that because the last thing you want to do is not be ready with a fully prepared set of data when it's your turn to get that container off the ship.
Chris Parker: And it's a very preventable delay that doesn't have to happen.
Nic Beehler: Yeah, it's totally preventable. I do know people are busier than ever and stuff, so I'm not saying it's easy. But, being organized, having a system, knowing the status, who's working something, all that can really help to be ready and be organized.
Chris Parker: Yeah. I want to tie this back to this visibility economy topic that we've been covering for the last four episodes now. Visibility is such a popular term in the logistics industry these days. When you hear that word, what do you think are the main blind spots within your space? Where is it most crucial?
Nic Beehler: Yeah. I think visibility to a lot of people means visibility, where is my freight on a map, or at what event or at what stage. For me, I will say in my space, visibility is more about where is my data, who has it, is it complete, what data am I missing. That might be I need something from my supplier. I need to know, for instance, there's a lot of focus now on forced labor and analyzing the sourcing, know your supplier, what they're doing, who they're employing so you need to vet your suppliers. You probably have a lot of questions for them, and then about your goods as well, like we talked about.
Nic Beehler: Just visibility, to me, is visibility to those blind spots and that means asking questions, it means having a place to store the answers to those. And then, a bit on completeness of my data. Visibility, am I 80% complete, am I good, am I 100%. So that's, to me, what I think of visibility and visibility economy is yeah, there's the physical side but the digital side of your data that lives with your shipment. It's traveling on this parallel path. I think more about that, personally, in this question here.
Chris Parker: The higher the quality, the better.
Nic Beehler: Yeah. It's like you don't know what you don't know also, so the governments have all of their information they publish, different agencies, so you need to keep track of that, bring stuff to surface. And yeah, it has to be high quality.
Nic Beehler: If you're going to vet a supplier or you're going to approve a product record to move, you've got to trust it. You've got to trust that you've got good information at your fingertips. I was talking about forced labor, but there's also just general sanctioned parties and the restricted party list, they always change. You've got to know that, if you approve a supplier or you approve a customer, you're doing that with high-quality information.
Chris Parker: Right, right.
Nic Beehler: That it's high confidence behind that.
Chris Parker: Yeah. You need to know where everything connects, you can't just afford to have a blind spot and say, "I didn't know that it was passing through this concerning party," you need to know.
Nic Beehler: Yeah.
Chris Parker: Have full visibility, really.
Nic Beehler: Yeah, for sure. Yeah, it's visibility of the party, visibility of your goods. Yeah.
Chris Parker: So going forward, what behaviors or processes do you think the pandemic will have permanently changed for systems like Tradeflow? What lasting impacts will the pandemic have?
Nic Beehler: Yeah. One thing would be, I talked a little earlier about the technology constraints we saw when we went remote all of a sudden. I don't see people trying to go back to or newly set up a lot of internal network-type systems that they know they are going to be highly relied upon. Some companies are staying hybrid or remote, so for sure in that case, you want to make sure you've got a system that you can get to easily. But, even companies that are going fully back in the office, you're going to be traveling at some point again soon. If you're working out of a hotel room or on a plane, you want to be able to get to your system pretty easily.
Nic Beehler: I think that's a pattern, that we're going to loosen that tie from company homegrown networks and look at these niche products, SaaS products that they fill a specific need and they can be pretty easy to implement. So I think that trend is going to continue.
Chris Parker: Yeah, absolutely. Ultimately, how do we get the data to go along with you, wherever you need to be.
Nic Beehler: Yeah. And obviously, trying to connect things and that takes work, but connecting whatever you're doing is connecting that with your third party.
Chris Parker: Aside from that, what else is on the horizon for data management software? And, what do you think it would need to do for customers?
Nic Beehler: Yeah. I think we saw it before the pandemic with the trade wars, customers, suppliers, everyone forced to adapt quickly there. And clearly, we saw it with the pandemic, again, forced to adapt quickly. That seems to be a theme. We don't know what's around the corner, what's the next thing that we're going to have to adapt to.
Nic Beehler: But looking at 2022, I don't think that the situation's going to change drastically.
Chris Parker: Sure.
Nic Beehler: There could be some other challenge that comes across. Maybe companies are moving goods more domestically so that's a new challenge. You're not clearing customs, but you have different challenges.
Nic Beehler: I think just being able to adapt to these changes, having the mindset of this is not the exception to have to adapt, this is more the norm, the rule. And, whatever systems, processes you can put in place to be organized, to detect early ... You may not be able to predict a change, or regulation or a disruption.
Chris Parker: Because who can do that?
Nic Beehler: But, see it early when it happens.
Chris Parker: Right, right.
Nic Beehler: And probably, just have good relationships, too. Good relationships with your whole supply chain so that you are taken care of. Your logistics provider can help you out, your broker can help you out. I think relationships also are really important.
Chris Parker: Being exceptions ready is the name of the game.
Nic Beehler: Expect it, have that mindset. We're in the problem-solving business, embrace the problem I guess and go out and solve it.
Chris Parker: Just go with the flow, man.
Nic Beehler: Yeah, for sure.
Chris Parker: All right, Nic, well it was so good to have you here. If people want to get in contact with you to learn more about Tradeflow or to talk with you about your thoughts on customs data and its role in the visibility economy, where can they find you?
Nic Beehler: Yeah, probably the best way would be on LinkedIn. You can find me on LinkedIn and connect, be happy to connect with new people. Message me to connect, we can always talk more. Happy to always set up calls, one-on-one calls, if someone's interested in our product, what we offer, always be happy to explore that with someone.
Chris Parker: Absolutely. Thank you so much for your time, Nic, really appreciate it.
Nic Beehler: All right. Thanks so much, Chris.
Chris Parker: I appreciate it, Nic. 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.