July 21, 2020 (Courtesy of the Jacksonville Business Journal)
In March, instead of preparing for Christmas as the company normally would, Far East Brokers was scrambling to get PPE to desperate hospitals.
There was still significant demand for goods during the pandemic, Far East CEO Morrie Zimmerman (pictured above) said: Those demands simply shifted from retail splurges to basic necessities.
The Jacksonville-based company works with several grocery store chains and food retailers, so Zimmerman said they stayed fairly busy. However, as the pandemic spread, it warped supply chains and imposed new regulations on goods, making it extremely difficult to acquire goods in high demand like personal protective equipment.
“It’s a huge challenge just to get the product, whether it’s the factory where it’s coming from or the transportation system,” Zimmerman said. “And then, still trying to maintain that service level that you want, it’s been somewhat crazy.”
The ripple effect of the Covid-19 pandemic could extend into the winter months. March and April is normally hectic as businesses place orders for Christmas, but imports backed off from those plans as the virus hit.
“They couldn’t really organize themselves to make a plan for Christmas when they couldn’t get paper towels to the shelves of their stores,” he said.
In addition to their typical work, Zimmerman said Far East Brokers also took on new clients that were struggling to navigate the market amid the pandemic, including Baptist Hospital and other health care organizations.
Far East has sourcing and people on the ground overseas that they were able to leverage to help the hospital systems get products. While many were rushing to market to get supplies and others were trying to capitalize on the sky rocketing demand, the real struggle came with dealing with changing regulations and the surging cost of transportation.
Because ocean carriers were out of the question given the urgent need for PPE, air freight rose 10 to 15 times its normal rate and regulations on imported goods changed ceaselessly.
“It turned into being a lot of extra business but at the same time, we got a lot of product to market that was very much needed,” Zimmerman said.
It expanded beyond even those who initially reached out. Soon, Zimmerman was getting masks and gowns not only for hospitals, but for their regular customers, schools, churches, sporting events and government offices.
The Far East business model is to bring product in directly from overseas, without any middlemen which proved to be an asset when distributors and suppliers inventory dried up and prices ticked up. Zimmerman said they were still able to get the product at reasonable prices and on efficient timelines.
“So we had to send people into these factories to make sure they were in fact making our product,” Zimmerman said.
Without that organization, it would’ve been hard to avoid scams that forced businesses to prepay for goods that didn’t exist.
Another challenge: Typically, air freight will come in on commercial planes, but when travel came to a screeching halt in March, prices rose for air freight as capacity diminished.
“It was kind of like starting a new business in one of the worst environments you could possibly do it in,” Zimmerman said.Now, Far East Brokers is using technology to have virtually showings of their merchandise instead of hosting people in their showrooms. Customers are selecting products for next Easter from their own homes. It’s easier to have more people involved in the decision making process, but instead of coming to Jacksonville for two days to mull over product, customers are now being forced to make decisions in a matter of hours.
However, from a long-term perspective Zimmerman that he believes they’ve built a lot of new relationships and created a new arm of the business that could exist past the pandemic.
“We realized that we built a business model here that served big retailers; supermarkets, drugstores. We work with folks who are on razor thin margins and buy very big quantities,” Zimmerman said.
But as they began working with people who did buy that way, they realized they could work with others with the same structure and systems in place.
For now, Zimmerman said he’ll be watching consumer behaviors as they start to change. Not only as consumers start to buy non-necessities but as they turn to online avenues rather in-store, as well.
Having customers like Winn Dixie and Publix has helped keep Far East Brokers busy — but many retailers have struggled to fulfill the demands of their customers for specific products. Getting the product to stores has posed a greater struggle than any one expected.