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The Role of Freight Forwarders in a Tech-Enabled World with Vincent Iacopella
65 Plays7 months ago
In this episode, Vincent Iacopella, EVP Growth & Strategy at Alba Wheels Up International, joins Host Brian Glick, CEO of Chain.io, to discuss:
- The evolution of apparel supply chains
- Mapping and predicting risks across your supply chain
- Navigating forced labor regulations, supply chain disruptions, and ESG
- How Forwarders can use new tech to create opportunities for customers
For over 30 years Vince managed global customer relationships in Transpacific markets with cross border imports and exports considered trade sensitive for USG agencies, such as CBP, FDA, and others. Vince works externally and within Alba on strategy and initiatives that drive value to mid-market and global customers through this approach. Vince focuses collaboration with US Government agencies, such as COAC, which allows the trade to align CBP policy commercially to the private sector, and the private sector to align their practices with long term strategic policy of government regulatory agencies.
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Transcript
Introduction and Vince's Background
00:00:04
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On this episode, we have Vince Icappella, who is the EVP of growth and strategy at Alba Wheels Up. Vince is a real fun person to talk to because he's been on the ground and done the hardest parts of the industry for the hardest verticals and has a really great perspective on customer relationships and strategic alignment from
00:00:31
Speaker
The progression he's made across his career to being a more senior person in a fast growing organization. So it was a real pleasure to talk to him and I hope you enjoy the episode. Vince, welcome to the show. Thank you. I'm glad to be here. So why don't we start with a little bit of an introduction and tell us how you got into the business.
00:00:51
Speaker
My name is Vince Iacopela. I'm an EDP of strategic growth at Alba Wheels Up, middle market, upper to middle market now, a customs broker and freight forwarder, also end-to-end supply chain. How did I get into this business? Having been a marketing and finance major at NYU, it was not a logical path to get to this point, but a great journey. I took a job at
00:01:16
Speaker
21 years old, grew born and raised in New York and New Jersey together and took a job to Los Angeles in 1987.
LA's Growth as a Trade Hub
00:01:26
Speaker
Went out West for some adventure and it was a great time to get to Los Angeles. All of the production was moving into China at that time, especially in apparel and garments. I went out there to work with Janelle Group and
00:01:42
Speaker
really, really big adjustment culturally, geographically out to be in LA. But what a time to be out west in the late 80s and early 90s as global trade was ramping up in the Pacific Rim. LA was really, in my view, at the time, LA was really like the epicenter, the connection
00:02:04
Speaker
culturally, geographically, and financially between Asia, the US, and really Latin America. So being in the right place at the right time, it was very exciting. So I think that maybe people who got into the industry when I did, which is maybe 10 years later, and definitely people who can in 10 years after that, have trouble picturing a world where it isn't obvious that LA was that center, but
00:02:27
Speaker
It sounds like when you got there, that was emerging, right? That wasn't the way it is today, right? Yeah. You know, it's a great point because it's a great point that you make because it wasn't obvious, right? You know, LA, I think if you came from back East at that time, LA had this, you know, this idea about LA was that it was entertainment and communication and some aerospace and global trade was kind of like really under the radar a bit, but it really was changing because of the manufacturing in Asia.
00:02:56
Speaker
Actually, how I really learned about trade-sensitive imports was that there were all these garment companies that were still back east who were actually now importing from Asia into the west coast. I had some cultural connections with these companies in the northeast who needed someone out west.
00:03:17
Speaker
managing the risks and the opportunities for the supply chain. At a young age, it was a great experience, but to your point, I think you're 100% right. It wasn't obviously happening. I'd say it became way more obvious in the early 90s and mid-90s. I think one of the things that has changed also in my career as I look at the back, also coming from that apparel space, but I'm sure this applies to other industries was I remember at the time people were like,
00:03:43
Speaker
Oh, why are you always going to New York if all the shipments come into LA? I said, the boats are in LA, but the people are in New York, right? Like the decision makers, but I don't know if that's true anymore. Things seem a lot more distributed. Yeah, I think that's right, because I'll use T-shirts as an example that were, first it was India, China, then Vietnam, and then in 2005, you get the Central American Free Trade Agreement and all that. You had customers call like, all right, we're doing T-shirts in Vietnam and China, and we wanted to go to Honduras and Guatemala. We wanted to work like China.
00:04:13
Speaker
I'll get a week. He wanted to work like China. I think that further positioned the West Coast ports because there was this triad now. There was raw material from Asia going to Mexico and to Central America. The epicenter started to move. Maybe there was some finance in New York, but the operational part of it was moving to Los Angeles and the logistics part was moving to LA. I think that's right.
00:04:41
Speaker
So you're now few decades in several several. Why get up in the morning and keep doing this.
Passion and Relationships in Mid-Market Companies
00:04:51
Speaker
First, I love what I do. I love the colleagues and the friends that I've made throughout the industry that are very important. Our ALBA senior leadership team, as fast as we're growing, is still very much like a family group. I love the direction we're going.
00:05:11
Speaker
And also, hey, at this age, it's what we know. So that's one way to stay in. It is exciting, though. Why stay in? Good question, especially in light of everything that went on in 21. And you look at life and say, what's really important? And I think you want to feel that what you're doing is important and making a difference and having an impact. And I think global trade does that. And then so, yeah, I think it's caught the bug.
00:05:40
Speaker
It is. It's funny. Once you catch it, it's very hard to get out. You said something during your introduction. I think you sort of corrected yourself quickly, but I'm going to ask about it anyway, which is specifically to Alba because this ties back to my roots, but you know, you said mid market company, right?
00:05:57
Speaker
And Alba's not DHL. I don't think anybody's going to pretend otherwise, right? Or Schenker or DSV. What do you like about that? The size of that? Oh, wow. So I'd spent many, many years, 12 or 24 years at Genogroup before coming to Alba. I'm at Alba seven years. Very similar companies, similar verticals at the time, similar geography footprint, market footprint, LA, New York, garments, other consumer products.
00:06:25
Speaker
I guess what I like about middle market is that, from what I've seen from statistics, if you look at what's driving economies now, it's really these middle market companies. Job creation in California, for example, in 21, 22, and 23 was a lot of these nothing against Fortune 500 companies. We have customers that are. But the middle market companies are really agile. Alba is growing to the point where we're on the upper end of the middle market.
00:06:55
Speaker
on the cost of being a big company with the organic growth that we've done and with the acquisitions that we've done in the last three years in different verticals like semiconductors and f-rose and protein, first with the KSI acquisition and then with the John Steer acquisition.
00:07:12
Speaker
So middle market companies are more agile. I think they have their pulse to the ground of what's happening with our customers. I think that companies can keep that very valuable quality as they grow quickly. I think that's a challenge, but also an opportunity to keep that. And what's wrong with having customers that are in the middle market as well and helping those companies do well, strategically while in the market? I think it's a great thing. I think there's an intimacy.
00:07:40
Speaker
when either side is a mid-market company, right? Of the relationship, right? And that I remember working in similar companies and your customers knew who you were, not just like the logo, but like you as a person. And, you know, we were both, you know, just over at TPM a couple months ago. And, you know, like I've run into people that were my customer 25 years ago who know me, right? Who know me as a person, not just, you know, the color of the lanyard that I'm wearing.
00:08:09
Speaker
I think it makes a big difference in the quality of a career to have that. Yeah. I'll just add this if I can. The great thing about being on the upper end of the middle market and growing is that, look, you could keep all that stickiness and that really valuable insight to the customer strategy. Also, you could be the size to take the time to learn a customer strategy.
00:08:30
Speaker
learn what makes them successful and then align services and good services and products aligned to their success. You can take that time to do that at deeper dive. But now with the technology, you could have the cutting edge technology, the same shipment tracking, the same business intelligence. I think we've been leading in industry initiatives and pilot programs and
00:08:53
Speaker
growth initiatives that are tied to things like supply chain transparency and UFLPA, right, with our partnership with Measure. So I think you can have the best of both worlds now, where you have that familiarity with the customer, but also now you're firing at full cylinders on all the products and services, you know, best in the market. And I think that it's a very unique place in the industry now, we're both a possum. So I want to ask you a question about UFLPA and about Measure, but I'm going to take a second just to explain because not all of our listeners are trade nerds like you and me.
00:09:24
Speaker
So UFLPA is the Uyghur Forced Labor Protection Act. And so that's a requirement that the US government has put in that basically says that if you're bringing in product from certain parts of China or product that may contain products that are from certain parts of China, that it's going to be basically assumed that it was made with forced labor, unless you can prove otherwise, which is a dramatic shift and has caused
00:09:50
Speaker
the need for a lot more understanding of tier two, tier three suppliers, even tier four and down, which is all sorts of problematic for companies.
Regulations and Supply Chain Mapping
00:10:01
Speaker
And people are trying to bring tech to the solution here because you can't, as you go orders of magnitude bigger, you can't just do supplier surveys six layers down your supply chain. It's not a thing. So tell us a little bit about kind of how you guys decided to partner here and
00:10:16
Speaker
Why not just go back to your customers and say, hey, this is your problem? It's been a journey in answering that question. We've been on this quest for about seven to eight months. We have a huge wearing apparel, an accessory vertical, vertical industry and our customers and obviously a lot of cotton.
00:10:31
Speaker
That's where this started with cotton. We had a lot of tech companies that asked questions, semiconductors that similar questions, and we went into meetings in the first quarter of 2023. This was identified by many customers as the top issue on trans-specific trade that they were dealing with. At first, we went into it like, okay, how could we be an asset in de-risking this?
00:10:54
Speaker
and how could we be an asset in the supply chain for compliance and due diligence. We learned is that we were new a company called Measure.io that participated in the Customs Tech Expo in Q1 of 23. We started discussing solutions with them and how to bring that commercially to the market and wanting that to the next and we're in a very deep partnership with them. We are offering it widely on the market.
00:11:22
Speaker
getting back to how and why, this really is a compliance and supply chain disruption issue. Then you obviously dig a little deeper and it's a huge ESG human rights issue. It has components outside of business, outside of commercial concerns as well. Just to go up a step, you look at the race to supply chain mapping, there's more than just
00:11:50
Speaker
the forced labor. People are mapping. They're going to start mapping for carbon emissions. They're going to start mapping for geopolitical disruption. The mapping process itself seems to be coming out of TPM, which I know you were there. You saw how many customers talking about mapping and then vendors talking about how to solve for that.
00:12:11
Speaker
I also think you can tie the mapping process going forward to the use of advanced data making predictions about risk and that's what we like about this album measure is useful to make predictions about the rest which is required and it's also useful in the event that you have some disruption with the customs hold other tools the importer can use so.
00:12:32
Speaker
Yeah, I think for what we're seeing coming out of the customs meetings in Philadelphia last week and TPM that this stuff is kind of here to stay. Yeah. So you're not an IT person. No. And we just talked about a lot of tech and a lot of words. So this has had to have changed, right? Cause we used to run paper, like when you started and when I
Technological Adaptation in Supply Chain
00:12:55
Speaker
started, we used to run paper to customs, right? And your bills of lady would show up in pouches.
00:13:00
Speaker
All of these files and folders, as a leader in a business now, do you consider everyone an IT person now? How much of your day is talking about tech? I think I survived doing this because I never talk about the tech. Going back to the 80s, I'm going to try and bring it back to where we started.
00:13:21
Speaker
You know i was never the guy who had the files on my desk auditing the seventy five oh ones i was kind of the person that was getting all the really bad files lots of problems with the drop all tests for i wear was failing fda or the waterproof garments were not really waterproof.
00:13:38
Speaker
I really always focused on what the commercial impact was to the customer for some of these issues. I think that, I'll just speak for myself and our team, I think we're most successful when we're talking about the commercial impact of these things. When you hear me talking about these things, I always tie it to, how does the customer use to tie it to the tech? How do you use the product of what that tech created to de-risk in your commercial environment, in your operational environment, in your compliance environment?
00:14:08
Speaker
I just feel safer there than in the tech discussion if that makes any sense it's actually really healthy because it's also a really good way to like filter out a lot of bullshit right because if people come in and they're talking about the tech and that's all they can talk about.
00:14:24
Speaker
then there's probably no business thing there, right? There's probably not a lot of value. And what I love what you said about the paperless, I remember when I was on COAC on the Customs Operations Advisory Committee, which advises customs at Federal Advisory Committee that advises customs. I remember everything was about ACE. Remember, everything was going to ACE and
00:14:44
Speaker
a lot of brokers and forward and say, wow, I'm not going to have my paper release anymore. I'm not going to have my 3461, you know, and there was all this anxiety around not having that paper. And I think, you know, to your point, sometimes change could be slow, you know, because we all might be attached to what we're used to doing. And I think that one of the things I've noticed in my journey
00:15:09
Speaker
is that the pace of change as it's accelerated, the people who have come into the industry in the last 15 years or 10 years, they don't hold, even the tech that they use, they don't hold as tightly, right? So whether it's you just take something like Slack or Teams, like today, nobody can think about how they can function without some sort of group chat for their company. But if something new came out tomorrow,
00:15:33
Speaker
you know, this latest generation is so used to having switched from like eight different social media platforms. Yeah. They're just okay. Like that. And it took me a while to learn this. My big lesson was talking to a warehousing company several years after getting out of the warehousing business about they, you know, they, these new robots or whatever. And it was like, well, how do you get the guys on the loading docks to stop smashing them? Because that used to be a problem whenever we would put tech in the scan guns, we say they would commit suicide. They would jump in front of.
00:16:02
Speaker
the forklifts and kill themselves, right? Because the team didn't want to use it. And they said to me, they said, that's not really a thing anymore. The people who are entering the workforce now, they're just used to change. Change is the only thing they're used to. Tying that back, though, what do you wish you could impart on people who are coming in now? What's some of the wisdom that you wish you had? Oh, my gosh. OK.
00:16:27
Speaker
Oh, boy. I think in the late 80s and early 90s, I would say going back, I think there's a balance. It's okay to be ambitious, but a little bit of patience works too. I would say, well, one, let me start. This is just life and career. You got everything at that age. You just don't know it. You have everything at that age and just enjoyed a little bit.
00:16:55
Speaker
And because when you get older, you realize, wow, I would have known then what I know now. Enjoy the beginning a little bit. I think we get wrapped up in ambition and the rat race and your career. So enjoy. And secondly, I'll use myself in my own personal example would be that we got to balance ambition and patience. Ambition is good to be in a position early or young, but
00:17:21
Speaker
you know, maybe we don't have the wisdom. We have a lot of technical models, but maybe we don't have the wisdom. So I think balancing nothing wrong with being patient. I think it's proven to be a marathon and that you sprint in certain spots. You need to sprint, but I don't know if that makes sense. It does. I've actually heard this over the last couple of years from several different executives, some on this show and some more privately, you know, who have come to me and said, or we've been chatting and said, you know,
00:17:50
Speaker
Why can't some of my younger employees stay in the same job for three years? Don't they realize that you learn things in year two and three that are different than the things you're learning in year one? You know, it's the not letting the sauce simmer,
The Value of Long-term Job Tenure
00:18:03
Speaker
right? Like you get all the ingredients in the first year, but that second, third, fourth year is when you learn the flavor, right? And how to really make the sauce.
00:18:11
Speaker
You can't see me because it's a podcast, but I'm nodding vigorously to what you're saying because yeah, you never thought of that example, but that explains a lot what you've explained there about that.
00:18:22
Speaker
What keeps you up at night now? What are you worried about for the industry? Boy, coming out of 22 and 23, I think there was a consensus that, OK, we didn't leverage tech and data enough in 21 and 22 to avoid port disruption, or we didn't leverage advanced data enough to reduce the margin tension costs. Coming out of 22, that was it. But what's new is this obviously geopolitical issues.
00:18:49
Speaker
you know, as supply chain resiliency. And now these ESG issues, very serious issues like forced labor, you know, I like to say that everything that's a threat can be an opportunity to a company depending on how you deal with it, right? So I see this, you know, these are threats to our customers, our customers see these as threats. And the opportunity is, okay, how do you mitigate that risk? Like, could you have to, you know, how does we as Alba mitigate it? How do we help the customer mitigate the risk?
00:19:16
Speaker
And so there's some really troublesome things out there, but there's also solutions, right? Creative solutions. Maybe because we have AI and tech and so much tech that's readily available, we can deal with these issues like no other folks prior before us,
Risk Mitigation and Future Growth in Global Trade
00:19:34
Speaker
maybe. Maybe you're the tech guy.
00:19:37
Speaker
Well, you know what? Time only marches forward, right? So they'll get dealt with one word. Right. This is right. Let me give you a short answer to that. I think disruption, you saw it in the labor, simple things like the labor contracts. What is your ability, you and your customer's ability to plan four or five years out for budgeting
00:19:57
Speaker
for contingencies, for resiliency. I think this is just the new normal that we're in. Whether it's potential labor disruption, ESG issues like forced labor. Again, a huge opportunity is tech, but maybe there are some unintended things with tech too that you have to deal with in the business. We do tend to cause as many problems as we solve. It's how we keep ourselves employed in tech.
00:20:24
Speaker
Sorry. There was a very popular question on panels in 2018 and 2019 that then we all got busy with the pandemic. The question kept being now it was like essentially now that everything's easy and perfect, what's the role of the forwarder? Right. Like what is the role of freight forwarders in a tech enabled world where you're not shuffling all this paper on your desk all day.
00:20:50
Speaker
What are your thoughts on what's the value prop going forward? Yeah, that's a great question. I remember back in 2010 and 2011 when COAC and all of the trade groups were like, what is the role of the broker and the role of the customs broker? And just going back to the basics, working on that with some folks,
00:21:10
Speaker
The customs brokers are one of the most regulated folks in the supply chain. I think that's a good thing. More regulation for brokers is better. It creates a very special spot. We're the only folks that legally can be an agent for the importer, but we also have an obligation to CBP. We're in this special spot from a regulatory point of view.
00:21:31
Speaker
It's funny, when I explain that to attorneys that don't know trade, they're like, oh my God, you guys crazy? Why are you in that position? But I think it's a great spot to be in. And that was the role of the broker. I think you're onto something with this role of a forwarder. So go to panels.
00:21:47
Speaker
I know you and I have been to the same events. You go to the panels in 2023 and 24, and again, the race to mapping, the race to map this thing out, to know your chain. I think that there's an opportunity for freight forwarders to really, it was always the brokers who had the upsell opportunity or the ability to bundle services, to add this value add. Perhaps we're going into phase where the freight forwarders can do that with some of these things.
00:22:17
Speaker
like mapping stuff like that. Yeah. I mean, I had a meeting recently with a company who I'm not going to name, you know, and they were large, large, large guy can't not have to hear what I'm about to say. Very, very, very large company. Right. Like we all have their products at our house kind of large. And they're like, we don't know how many shipments we move every year. And they have so much direct carrier activity. Right. And I was like, that's part of the role of a forwarder is to be able to tell you back
00:22:45
Speaker
things about your own supply chain from the perspective of someone who does it all day, every day. And it's a big part of what we see with the tech when we bring it to companies like Alba and other companies is this ability to aggregate and normalize and bring this data together and give it back to the shippers in a way that they can consume it. And it's almost like you're just giving them their data back to them, which sometimes feels a little like you're not doing much.
00:23:11
Speaker
But there's an expertise in how to give it back in a way that it tells a story in a way that helps them plan better and do that forecast. That has a lot of value. Yeah, let me add a layer to that. No pun intended. So imagine all that. And since the beginning of time, we only had visibility to the first tier, right? Most customers could only see that overseas seller of the goods. So imagine what you just said now having to go down upstream suppliers to tier two or tier three or tier four to huge tasks at this point.
00:23:41
Speaker
What are you excited about? I'm excited about the opportunity of all the things we discussed, right? Because from these challenges coming out of COVID, you got all the FMC, you know, Ocean Shipping Reform Act, right? You got the FMC ruling on detention in the merge. So you get these remedies that are fixing some of these issues. I'm really excited about the growth in our own company and in the industry and the trajectory that Alba's on is very exciting. It's an exciting time to be at Alba at this time. Very fortunate.
00:24:09
Speaker
Then I'm excited that although there are all these challenges, we see opportunities to fix these things and to alleviate some of the impact of the uncertainty out there. I think that's very exciting. With partners like yourself, you're the tech guy, you can correct me, 25 years ago, you tried to do everything yourself. Now you have these great partnerships that you can just multiply your impact by partnering with people that are much better at it than we are.
00:24:37
Speaker
It's always funny to me when I go into a freight forwarder or a customs broker or a 3PO warehousing provider and you go into their IT department as a software company that sells sort of an infrastructure service to them, right? Like what we do with the data movement and data is very strategically important, but it's down in the weeds a bit. And they go, oh, we can do that ourselves. You know, we have all the technology to do it and we don't need you, right? We often hear that from the IT department.
00:25:07
Speaker
And what I want to say back to them, though it would be impolite is, isn't that what your customers say to your salespeople all the time? I can book with the carrier. I have a phone. I can call 1-800-American Airlines and get my cargo on a flight. What do I need you for? And it's the same pitch. It's, yeah, you could, but why would you? That's not your area of expertise. We've invested, from either perspective, millions of dollars in getting good at this.
00:25:37
Speaker
And the other thing I do say back to them is you also could build your own power plant, but you choose to purchase the electricity. You choose to operate on yourself too. It's not a question of like, if you're going to outsource a service, it's at what level you're comfortable stopping. And over the 25 years, the level of that water has risen, right? So, you know, when I started in this, the broker I work for had basically in-house developed software running on an AS 400.
00:26:06
Speaker
All the servers were in the building, and one of my jobs was I came in in the morning if it snowed, because I was the only one who lived close enough to the office to walk there in the snow, to hit an A-B switch and dial a phone so that what was, I guess, Archima Chemical at the time could get their entries, dial up modem connected from RAs 400 to theirs to send the data across.
00:26:30
Speaker
But we didn't build the AS400, right? IBM did that. We didn't make the phone line. Bell Atlantic made the phone line, right? So there were layers that were outsourced. The thing that wasn't commoditized yet or wasn't ready to be outsourced was writing the code for the customs brokerage software in 1981 or 1979. Whenever it was a little tip for anyone who ever goes to buy customs software, any person of that generation will tell you they were the first ones to file electronically. Everybody was the first one.
00:26:59
Speaker
It's a great thing amongst that generation. But we, over time, switch to package software. That mainframe in that company does not exist anymore. We went to package software for the accounting first and then for the brokerage. And then we said, oh, all of that, but we still have to build our own web portal. And then eventually you go, okay, well, you know what? Maybe I don't need to build that anymore. So I would say you kind of pick one thing to be amazing at and build and buy everything else now. That's sort of the world we're in.
00:27:29
Speaker
But it's no different than literally automotive companies in the turn of the 20th century building power plants so that they could power their factories. And then they went, oh, this is stupid now. There's a reliable grid of power. So it's an evolution.
00:27:45
Speaker
Yeah, just to add something to that, think of the speed we have now because of the partnerships. You might have tried to build something 20 years ago internally and now look out how quickly you can get to market or solve an issue with an offering and with the partnership. So yeah, I definitely agree. Cool. Before we wrap up, tell me just a little bit more about what you're excited about with Alba and what you guys have coming up next.
00:28:11
Speaker
Yeah, you know, I'll reiterate that I think, you know, we're very excited at obviously what the partnerships we've made in, you know, obviously with our fast growth organically and through acquisitions as well. We're excited that the growth is aligned with our strategy and the trade sensitive end of the market.
00:28:31
Speaker
which is those verticals that have multi-agency jurisdiction, those verticals that require a stickier approach, a deeper dive into knowing the customer's model. We're really excited that we're able to grow aligned with that strategy, excited for the future, more news to come, and excited to really drive the value to the customer where you have business intelligence,
00:28:57
Speaker
We have some newer products and services coming out. I think we're very excited about our partnership with Measure as we previously discussed, really getting traction with that and the apparel industry with microchips and other industries where we're adding that value on top of the value you're already providing. Excited to have fun doing it as well and enjoy doing it. Awesome. Well, thanks so much for being on the show. I really, really enjoyed chatting. This was awesome. Thank you so much.
00:29:30
Speaker
Thanks again to Vince for an awesome chat. So much fun to talk to people who really have been through the wars in this business. So if you want to know more about Alba, about Measure, about Chain, we'll have links for everybody in the show notes. And thank you very much for listening.