INSIGHT ON: Shipping & Logistics – Planes, trains or big boats

Posted on Sep 2, 2014 :: Insight On , Shipping & Logistics
Sean P. Johnson
Posted by , Insight on Business Staff Writer
The Arthur Anderson loads up at the Port of Green Bay. Photo courtesy of Port of Green Bay

The Arthur Anderson loads up at the Port of Green Bay. Photo courtesy of Port of Green Bay

Brian Madigan readily admits he is not your “standard shipping” exporter.

“The tough thing for us is that everything we make is different,” says Madigan, who is responsible for business development and process sales at FEECO International, Inc. in Green Bay.“The things we make can weigh thousands of pounds and don’t exactly fit into the standard shipping container.”

But that hasn’t stopped FEECO from becoming a worldwide distributor of its custom-built equipment for industries as diverse as mining, paper, fertilizer and chemical processing.

Indeed, the company has been exporting almost since its founding in 1951.

These are not the kind of items you can drop in a FedEx box and get there overnight.

“We once shipped a rotary granulator, one of the largest we built, to Namibia,” Madigan says. “We had to truck it to a port on the Mississippi, ship it by barge to New Orleans and then by ship to Namibia.”

Not your standard delivery by any means, but the question of “How do I get it there?” is one of the top issues companies must deal with when they begin exporting their products, says Brad Schneider, export development manager for the Wisconsin Economic Development Corp.

Lee Hoffmann, FEECO International’s vice president and general manager, stands in a giant rotary ore drum manufactured by FEECO for use in mining. Photo by Shane Van Boxtel/Image Studios

Lee Hoffmann, FEECO International’s vice president and general manager, stands in a giant rotary ore drum manufactured by FEECO for use in mining. Photo by Shane Van Boxtel/Image Studios

Schneider works with companies throughout Wisconsin interested in identifying export markets for their products. While there are unique challenges to selling and delivering products overseas, those hurdles also represent valuable opportunities for Wisconsin companies – opportunities that some companies miss out on because they don’t have the time or resources, he says.

“A lot of our companies are small- to mid-sized and the people who run them are already wearing multiple hats,” Schneider says.

But exports were worth more than $23 billion to the Wisconsin economy, according to 2013 WEDC statistics. Increased exporting is seen as an important part of growing the state’s economy and creating jobs. A 2013 U.S. Commerce Department study on exports found that every $1 billion in exports supports 5,590 jobs nationally.

Of the $23 billion exported by Wisconsin firms in 2013, nearly $7 billion was industrial machinery, a sweet spot for hundreds of companies in the New North region.

Then again, Wisconsin is located pretty close to the middle of the country, which means getting the products from here to an international customer will take some logistical effort.

Essentially, you can send it by truck and rail – if your customer is in Canada or Central America – or airplane or ship.

“We are in the middle, so generally you will need to get it to one of the coasts by truck or rail,” says Tom Baron, an associate planner with the East Central Wisconsin Regional Planning Council who worked on a global trade research project in 2012. That research was later used to develop the Global New North Initiative to provide information and expertise to companies considering overseas markets.

While both the Port of Green Bay and Austin Straubel Airport have international capabilities, there are drawbacks, Baron says. The Port of Green Bay does not currently have facilities for multi-modal container shipping, which means much of its cargo is handled by bulk carriers. That’s great for raw materials, but most finished goods are shipped by container.

A multi-modal transfer facility has been identified as a top need for the port, but there are currently no specific plans to develop one.

Austin Straubel’s international status is largely for passengers. Most air cargo is routed out of airports like Chicago’s O’Hare International. A truck or rail connection to one of those airports is usually more practical.

Air is faster, of course, but it is generally more expensive than rail, truck or ship.

There are other factors to consider as well. Schneider says cost, delivery schedule and payments can appear overwhelming, particularly to a smaller company without expertise on staff.
Rather than tackle those issues themselves, most companies will use the expertise of a third party known as a freight-forward company, which handles the logistics and paperwork of international shipping.

“They can handle all of the ins and outs, because it’s probably going to be different depending on whether you are sending the product to Mexico or Germany,” Schneider says.

Madigan is quick to point out that FEECO works with a freight-forward company, which means that he and others at the company can spend more time working on their core business. That includes marketing and selling overseas, which makes up about 50 percent of the company’s business.

“I think it’s a real testament to what is possible for a Wisconsin company,” Madigan says. “There is no disadvantage to being located here. Exports are a real growth area.”

 

Interested in starting to export your product? Make sure you educate yourself on the opportunities and challenges. Several agencies offer helpful information on the details of international trade:

» Global New North Initiative – www.thenewnorth.com/strategic-initiatives/global-new-north

» Wisconsin Economic Development Corp. – inwisconsin.com/exporting

» Export.gov “A Basic Guide to Exporting” – www.export.gov/basicguide/index.asp

Want to learn more about international shipping and logistics?
Lakeshore Technical College will host an International Logistics and Transportation seminar from 4 to 6 p.m. Sept. 16. The seminar is part of the Lakeshore International Networking & Knowledge Exchange.
Register by email to: [email protected].