For someone who might not know Odyssey, why do you matter?
We formed 21 years ago with a vision centered around multimodal logistics. At that time, the logistics industry was fragmented, with different specialists handling each mode of transport—whether it was trucking, marine, railroads, or intermodal. However, large enterprises, especially in industries like chemicals, needed a cohesive solution that could integrate all these modes seamlessly. Our founding concept was to create a multimodal company with in-house experts across all transport modes. This allowed us to offer a holistic service that could optimize supply chain decisions, balancing factors such as cost, safety, and sustainability without being biased towards any single mode. Fast forward to today, and we are still executing on that original vision, but with even more capabilities.
Are you agnostic to which industries you focus on?
While we are agnostic to transport modes, our industry focus has evolved over time. Initially, we specialized exclusively in the chemical industry, a market we understood deeply due to our background. This industry was—and remains—complex, with high regulatory requirements and specialized equipment needs that many logistics companies avoided. Our deep expertise in chemical logistics set us apart from the start, making it a critical vertical for us.
Over time, we diversified into other industries that also require specialized knowledge, like the metals industry, where we handle carbon steel, stainless steel, and aluminum. If we can manage the complexities of chemicals and metals, we can certainly handle less challenging freight. That is why we also operate in the FAK (Freight All Kinds) market, though we focus on niche areas where our specialty can add value, such as navigating the Jones Act territories like Alaska, Hawaii, Puerto Rico, and Guam.
What are some of the key trends and changes you are seeing in the logistics industry, particularly in the U.S.?
The logistics industry is undergoing significant transformation driven by both organic innovation and external pressures. One major trend is the digitalization of logistics, which has traditionally been a fragmented and decentralized ecosystem. With thousands of players ranging from single truck drivers to large 3PLs, there's a wide variance in technological competence. However, the industry is moving towards greater digitization, driven by the need to standardize data and streamline processes. The challenge lies in converting the industry's unstructured data into structured formats that can be leveraged for AI and machine learning.
Externally, the industry has faced a series of disruptions over the past five years, starting with the US's tariff battles with Asia, which made companies question the reliability of long supply chains. The COVID-19 pandemic further highlighted these vulnerabilities, as manufacturing plants shut down due to labor shortages, while e-commerce demand surged. This imbalance forced companies to rethink their supply chains, leading to a trend of nearshoring and regionalization. Geopolitical factors have also played a role, with national interests prompting moves to secure critical supply chains domestically, particularly in sectors like EV batteries, medical equipment, and semiconductors.
Given that you have a bird's-eye view of the multimodal suite of logistic needs, what would you recommend to clients planning their future manufacturing investments?
It depends significantly on whether a company has already invested in Asia. China, for instance, has spent the last 30 years building a robust supply chain infrastructure, including deep water ports and massive terminal facilities, making it difficult to exit quickly. This established infrastructure is why many companies are adopting a "China plus one" strategy, keeping their operations in China but also developing alternate sources of supply in other Southeast Asian countries or India to mitigate risk. For companies without an existing setup in Asia, I would recommend looking into regionalization, particularly in regions like Mexico for the U.S. market. Mexico offers a relatively low-cost labor pool, good logistics infrastructure, and proximity to the U.S., which makes the supply chain much shorter and more manageable. This approach has been evident in the U.S. auto market, where many plants have been established in Mexico over the last two decades.
Are you noticing any reshoring or nearshoring hubs in Mexico and the U.S., and are you looking to increase your footprint in specific regions?
The largest crossing points between the U.S. and Mexico are primarily in Texas, with Laredo being the most significant for volume. As nearshoring grows, there is an increasing focus on expanding footprints in these key areas. Besides Laredo, Brownsville and El Paso are also vital road crossing points, while rail crossings are already well-established and efficient. In the U.S., 70% of goods move by truck, despite the importance and sustainability of rail. This is due to the convenience and flexibility of trucking, which remains the dominant mode of transportation in the U.S. While rail is crucial and intermodal rail is growing, particularly for its sustainability benefits, trucking's dominance continues due to its widespread availability and ease of use. We have invested significantly in intermodal rail, combining the efficiency of rail with the convenience of trucking, allowing goods to be moved more sustainably over long distances. This investment is expected to support growth in this area, especially as the industry seeks to shift some of that 70% of truck freight onto rail.
What impact do tariffs and potential port labor issues have on your operations?
Tariffs are a controversial issue, often acting like a tax that can lead to inflation by increasing prices. In the U.S., tariffs are being used to protect certain industries, such as metals, semiconductors, and EV batteries, from subsidized competition from countries like China. While this protection is necessary for maintaining a robust domestic manufacturing base, it requires careful management to avoid negative economic impacts. Another significant concern is the upcoming port labor agreement on the U.S. East and Gulf Coasts. The outcome of this agreement, due at the end of September, is crucial for maintaining seamless operations at these ports. If not ratified, it could lead to disruptions, which would have a significant impact on the logistics industry.
What does the future hold for Odyssey, given the current industry trends?
We have grown significantly from our beginnings in chemicals, expanding through 16 acquisitions to build a more comprehensive service offering. We are in the process of streamlining our operations into four operating divisions: intermodal, transport and warehousing, integrated marine logistics, and managed services. This restructuring will allow us to better leverage our strengths and deliver enhanced multimodal solutions to our customers.
