August 2023
Spring Lake, MI
EQI and Accucam Machining, a division of EQI, are excited to announce the unification of both companies under the EQI brand following the successful integration of the business.
The highly detailed integration work enables a unified EQI and its nearly 350 associates to deliver synergies across the enterprise and provide compelling advantages to our customers and supplier partners around the world. While much of the work was completed “behind the scenes”, with little to no impact to our valued customers and associates, the results have already been transformational. The full integration and unification of these two great businesses provides tremendous opportunities across the value-chain from Sourcing and Production to value added services and product fulfillment.
With the integration complete, a united EQI offers an unmatched range of expertise and production capabilities for line-ready metal components that deliver certainty to industrial equipment manufacturers in today’s uncertain world.
To learn more about The EQI Advantage, contact us today!
Phone: (616) 850-2630
E-mail: info@eqiltd.com
As anyone in the logistics field knows, a confluence of stressors continue to strain a highly congested and extremely delicate network. Ocean freight demand at all origins around the world already far exceeds capacity, with no end in sight to that demand. Congestion in one region, whether caused by demand or low water, can wreak havoc at other ports. Domestic rail congestion combined with container truck chassis shortages conspire to make dray operations a challenge everywhere. And that’s without taking into account the impact wildfires and other natural disasters have on supply chains.
From COVID-19 outbreaks to container shortages, from record demand to domestic rail congestion and truck lease walkouts, the ability to synchronize the network is all but lost. In this unprecedented environment, manufacturers are looking for ways to mitigate risks, keep their supply chain moving, and avoid production stoppages. Here are three strategies that can help.
Strategy #1: Secure Future Capacity Now Manufacturers can help assure their shipments won’t be impacted by booking freight as far in advance as possible.
Strategy #2: Evacuate Freight at Origins With the North American freight situation in disarray, manufacturers need to take creative steps to mitigate risk. Possibilities include:
Strategy #3: Gain Control Upon Vessel Arrival Risks abound in the domestic rail and trucking outlook across the US and Canada, with the overwhelming volume of containerized freight pushing the network to its limits. Assert control as near the ports as possible.
Choosing the Right Partner Can Mitigate Risks Strain on global logistics is such that any historically minor event can result in a significant negative impact. By securing future capacity, diversifying arrival points, and gaining control of freight upon arrival, US manufacturers can begin to mitigate the risk of production stoppages.
The right logistics partner can bring value-added expertise and management to your supply chain. EQI continues to secure capacity and safeguard the supply chain of some of the world’s leading OEMs. We can help you, too. Contact us to learn more.
Covid variants, extreme weather, and labor will continue to have a negative impact on all logistics operations as we head into 2022. Covid is again restricting air travel, which in turn impedes the air freight network. Much as forest fires did a few months ago, flooding in the Pacific Northwest has severely disrupted rail services. And labor factors are not trending positively. Operational planning in the near term should continue to be conservative in nature.
Here’s what logistics managers can expect in the near, mid, and long term from the containerized freight network.
Continued service volatility across the network should be expected in the near term. Empty containers are filling North American port complexes and makeshift storage yards along the East, West, and Gulf coasts. Expect empty container availability to deteriorate at origin, trending towards a severe constraint from now through Lunar New Year.
The normally positive impact of the Lunar New Year respite on US domestic operations will not occur this year. Where US port, rail, trucking, and warehouse operations have historically “cleared the deck” of volumes during the holiday, existing backlogs will prevent that benefit in the coming months.
The most significant mid-term factor impacting the freight network is the negotiation of the 2022 labor contract between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). The ILWU is keenly aware of the record-breaking earnings among steamship line members of the PMA. During negotiations in 2014 and 2015, rather than conduct strikes and lockouts the ILWU proceeded with systematic “slowdowns” designed to apply pressure to the PMA while decreasing the risk of the government invoke the Taft-Hartley Act (which prohibits certain union practices). Cargo owners today do not have the opportunity to diversify away from the US West Coast in preparation for any contentiousness in the process.
Given these factors, the ILWU walks into these negotiations with strong leverage. The International Longshoremen’s Association (ILA), which represents labor on the US East and Gulf Coasts, will be closely watching developments, given that its current contract with the United States Maritime Alliance (USMX) expires in 2024. Should a highly favorable agreement be reached by the ILWU, the ILA may consider a reaction well before 2024.
Forwarders are left with little leverage. The new ocean freight contract season will be the first of its kind, with all bargaining power in the hands of steamship lines. What little leverage remains with forwarders, having diminished dearly over the last 18 months, continues to slip away. Regardless of where rates may end up, cargo owners who do not have existing multi-year agreements or tried-and-true partnerships could be completely left out. Leverage held by steamship lines is such that cargo owners may also face a new reality of financial penalties for any unused bookings.
Black Friday sales were down this year for the first time in history. Inflation is no longer “transitory,” according to analysts. Cash-to-cash cycles are already leveraged due to long transit times and global raw material and parts shortages. How will corporate lenders react to a downturn in consumer spending, and how could that reaction impact supply chains?
The long-term horizon may be the easiest to predict, with the upside of network consistency and capability. And that upside is not related to infrastructure investment by the government. Steamship lines have not demonstrated strong discipline in managing long-term capacity. Fueled by record earnings, new vessel orders are at historic levels. Once those vessels begin to come online in 2024-2025 carriers are more likely to resort to their old habits, where cargo owners benefit from price wars.
Many supply chains diversified origin footprints in response to trade wars with China. Following continued covid shutdowns, diversification continued. In addition, domestic and nearshore solutions have become more popular throughout the last 18 months. Should strong sourcing diversification remain in place, cargo owners can expect better consistency within the containerized freight network. New vessels are likely to be deployed to port pairs where demand is consistent.
As creative solutions have become the new normal for supply chain professionals, North American port diversification is more prevalent than ever. Combined with more diverse sourcing origins, and assuming the combination remains a reality, the overall ability of the containerized freight network to react to one-off events like weather, trade wars, labor agreements, or health pandemics, should be improved greatly.
In the meantime, EQI can help you negotiate the significant challenges currently facing manufacturers as they try to secure parts on time and on budget. Contact us today to find out how EQI can simplify your supply chain.
Virus outbreaks. Natural disasters. Vessel accidents. Geopolitical instability. Exceedingly high demand. Freight rates so high they would have been unimaginable only a short time ago.
The now-normal new normal, for supply chain operations, is not likely to improve anytime soon.
January and February saw US west coast terminals handling an all-time historic low (58.2%) share of total imports from Asia to the United States, while the US east and gulf coast terminals handled average all-time high percentages. In advance of July 1, when the existing longshore labor agreement on the West Coast will expire, beneficial cargo owners (BCOs) have diverted enough volumes away from the US west coast that terminal operations on the other US coasts are now constrained.
As demand for the US east and gulf coasts increases, steamship lines have boosted vessel sizes and added new services in these ports. Queues for terminals along these coasts now well exceed 70 total vessels. Shippers now must attempt to manage the same challenges on the East and Gulf Coasts that they’ve had to manage on the West Coast for the last 12 months.
Covid outbreaks in China (and the government’s response to them) are causing havoc to landside origin operations, with vessel queues climbing daily for China ocean terminals. Whenever this current covid crisis finally untangles, the whiplash effect on North American terminal operations will be significant.
The now normal is an environment where supply chain design, team members, and partners must acknowledge that further disruption—whatever the cause—will continue to unfold. The effects of such disruption in the now normal, including the financial costs of moving freight, are exceedingly painful. Planners should continue to plan conservatively. Any freight arriving ahead of conservatively planned transit times should be considered an upside and not a signal of an improved containerized freight network.
North American port productivity has proven not to be the singular pinch point in the end-to-end network. North American landside operations including domestic rail, domestic trucking, and domestic warehouse operations must become more efficient on their own and in concert to benefit from any singular nodal improvement at origin, on the water, or in domestic terminal operations.
Should demand cease, virus activity disappear, and steamship capacity become fully realized, the end-to-end network is still 12 months from anything resembling the old normal. In the meantime, EQI is helping OEMs navigate the now normal to secure parts on time and on budget. Contact us to see how we can help simplify your supply chain.
Today’s supply chains are more complex than ever and continue to be impacted by the pandemic, natural disasters, geopolitical challenges, trade disputes, and other risks.
Successful management of a casting supply chain requires a defined step-by-step process; metallurgical and casting design expertise; sourcing and logistics experience; on-the-ground management of a global network of foundries; and flexible fulfillment solutions. For many OEMs, that means contracting with a trusted supply chain partner.
EQI takes a proven approach to manage the global casting supply chain for our OEM customers. Contact us to learn more.
One of the world’s leading construction, forestry, and agricultural machinery OEMs has been an EQI customer for years. When the Fortune 100 manufacturer found that their existing supply chain wasn’t keeping up with demands for three parts, they turned to EQI for the solution. Ultimately, EQI was able to meet the OEM’s customer demand while lowering its total cost of ownership.
Working multiple steps of the 360 Approach in parallel, EQI quickly ramped up the program, putting key elements in place even before a purchase order was signed. Given the close working relationship between EQI and the customer, the EQI account manager recognized another challenge the OEM faced — the exorbitant cost of air freight to get parts delivered on time.
EQI found capacity for the new program within its one-of-a-kind global foundry network. Today, EQI mitigates risk for the OEM by producing the three different part numbers at four foundries in two countries.
With EQI personnel on the ground in partner foundries worldwide, EQI gets parts qualified quickly. Ongoing quality is assured by having team members positioned onsite. The EQI account manager suggested a private terminal fast vessel alternative at a much lower cost than air shipping while saving time compared to ocean freight. With the multiple-country approach, EQI can adjust for supply chain disruptions, including holidays, tariffs, strikes, and other unforeseen obstacles.
EQI manages all aspects of the value chain, ensuring the right part arrives at the right place at the right time. Product is available within a day of the customer’s location, providing demand flexibility and predictability.
EQI’s new sourcing and logistics program provided the customer with a consistent flow of parts and $330,000 in savings. Utilizing four foundries in two countries mitigates risk for the customer, while EQI onsite staff ensures quality and provides risk mitigation the OEM had previously lacked.
EQI’s flexible, common-sense approach enabled the team to avoid process hurdles and act quickly to meet the customer’s needs. Using the 360 Approach, EQI account managers recognize unmet needs and provide solutions for every aspect of the customer’s supply chain.
One of the world’s leading lift truck manufacturers has long relied on EQI for on-time delivery of high-quality counterweights. Through collaborative dialogue, the partners found a more effective means of distribution, saving the publicly traded Fortune 500 company more than $500,000 annually.
The EQI team is always looking for ways to add value and reduce costs for its customers. Since the program’s launch more than ten years ago, the counterweights had been received and inventoried in Chesapeake, Virginia, and distributed via flatbed truck to one of the customer’s manufacturing facilities in central Kentucky. Even though the program was well-established and continued to deliver excellent results, the EQI account manager proactively examined the logistics part of the program looking for potential cost savings.
EQI developed and quoted a cost-savings plan to receive containers and manage inventory at a Cincinnati warehouse and ship inventory via flatbed truck to the Kentucky facility.
A few years later, EQI analyzed the customer’s warehousing and fulfillment costs and proposed opening an EQI-managed warehouse just a few miles from the manufacturer’s Kentucky facility. This facility allows the OEM to decrease inventory while increasing overall order flexibility.
The new logistics program enabled EQI to provide the customer with $500,000 in annual savings (and even greater annual savings as shipments increased in subsequent years). EQI earned the OEM’s coveted Supplier of the Year award in recognition of substantial savings.
EQI staff are onsite at the warehouse and are able to deliver the right part at the right time. Thanks to the quick response time provided by the EQI warehouse, the customer is able to reduce working capital by keeping less inventory on hand.
The opening of the EQI warehouse coincided with increased demand, which caused annual shipments to more than double. EQI had no trouble providing for the increased capacity, which resulted in the customer yielding even higher-than-forecasted warehousing and fulfillment savings of $200,000-$300,000 annually.
When a local foundry announced its imminent closing, it created a major headache for a large forestry equipment manufacturer. For more than a decade, the OEM had relied on a single domestic foundry for the production of the feed wheels needed for its signature forestry heads. The manufacturer bought a stockpile of parts, and based on a recommendation from its parent company (a Fortune 500, U.S.-based OEM and long-time EQI customer), contacted EQI to take over the program.
Over the years, the manufacturer’s long-time supplier had developed a proprietary material for the parts and changed the product specifications, so the original product drawings provided to EQI were no longer accurate.
EQI needed to develop an entire start-to-finish program for the new customer quickly.. EQI professionals went to work applying its 360º Approach.
With no time to spare, EQI staff metallurgists successfully analyzed the product material characteristics. They identified what material would meet the exact high-strength and wear-resistance requirements of the part. EQI engineers completed process solidification modeling to design a robust production process. Drawings were updated to reflect the actual materials and specifications needed to replicate the parts the customer had received.
EQI looked to its one-of-a-kind global foundry network, determining the most capable and competitive fit within its network, and then assured product conformance with our team on the ground at the foundry.
EQI not only restored the OEM’s supply of critical parts after the closing of its long-time supplier, but the new program has saved the customer approximately 30% in total landed costs in the first year.
With an unparalleled global foundry network, EQI provides dual-source risk mitigation the OEM had previously lacked. EQI is also able to expedite shipping as necessary to manage an unprecedented post-pandemic increase in demand for the customer’s products.