Crazy Mountain Brewing Co. is crazy like a fox in understanding that, when it comes to exporting its fast-growing craft beer brands overseas, its expertise begins and ends at its shipping dock.
The Vail, Colorado-based company, which will register $2 million in sales this year, sends 20 percent of its total production of labels such as “Old Soul Strong Belgian Ale” and “Lawyers, Guns and Money” to Asia and Europe. The brewery recognized early on that it needed third-party logistics companies (3PLs) to help safely and wisely move its precious cargo across long distances of land and sea.
“We’ve pretty much gone through third-party logistics companies from day one,” says Crazy Mountain CEO and brewmaster Kevin Selvy. “We want to focus on producing beer. And we don’t want to kind of spend our time worrying about logistics or anything like that. We’re dealing with importers that are fairly well versed and familiar with how to get beer from A to B, so we kind of followed their lead of picking up the beer from our door and making sure it gets where it’s going safe and is treated the right way. If we were trying to go direct to retail or direct to wholesalers, it probably would have been a different story.”
Even with 3PLs in charge, shipping isn’t worry-free.
“We’ve seen about all of it,” Selvy says. “We’ve had to deal with all the joys of containers falling off a boat. And during the port shutdown in Oakland, we had a container of beer that sat there waiting for (the strike) to get resolved. It was a refrigerated container, but the power to it went off. The beer sat there in a 100-degree yard for a month. The beer was ruined. And we didn’t find out that the beer was ruined until (it arrived a month later). It’s not like we can shuffle to replace the beer there the next day. We’ve dealt with a number of challenges and we’ve learned the hard way how to do it and how not to do it.”
Crazy Mountain, which ships to eight European importers and two in Asia, works with three different 3PLs and generally accepts the logistics firm chosen by its importers—but not always.
“We have certain standards that need to be followed in terms of cold transport and everything being handled the right way,” says Selvy. “There have been a couple of times we’ve said we won’t load a container for this company or that company. Our importers understand our sensitivities in terms of the way our products need to be treated and they communicate that fairly diligently to their shipping partners.”
Every situation is different, so when does it make sense to use a 3PL rather than leave shipping to your foreign partner?
“I enjoy working with the smaller exporters because there can be a lot of trepidation in all of a sudden looking to go outside of the U.S. for marketing products,” says Transplace director of International Logistics, Mollie Bailey. “It’s always exciting and satisfying to be able to work with new exporters and help guide them through the myriad of compliance and regulatory issues. It can be super stressful; it can be confusing. There are lots of experts out there, and it’s hard for somebody that’s new to know that they’re getting good guidance from their providers.”
What’s to know? For starters, regulatory components such as the export filing. You have to arrange for U.S. inland freight to get it to the airport or port. You have to arrange the ocean freight, and then there’s the overseas customs.
“Unless the overseas buyer is taking up some of the seller’s slack, it’s rare that a U.S. exporter is going to be able to do everything on their own,” Bailey says. “For the most part, they’re going to want to work with a third party to hold their hand through all these different processes and requirements. If you’re shipping small parcels via FedEx, UPS or DHL, that’s one thing. But if you’re shipping pallets that are worth $2,500 or more, you’re going to have to be responsible for submitting data for an export declaration from the U.S. Shippers that do that themselves are usually big companies that know what they’re doing and have a really well-defined process. For the most part, a small- or medium-sized shipper won’t have the resources or knowledge.”
Cindi Bartlett, vice president of Global Business at Mallory Alexander International Logistics, says her goal with every small- to medium-size manufacturer moving into exporting is to make sure they understand how their entire supply chain will work from domestic to overseas—even though the idea of a 3PL is to give them less to worry about.
“It makes their transportation move smoothly,” Bartlett says. “We discuss their business as a whole: the beginning of the supply chain to the delivery point, what kind of customer they’re selling to overseas—or what kind of customer they’re buying from—and all aspects of the business. We can make sure that they’re sending their cargo with the right documentation, that they’re making the right choices when it comes to doing their contracts negotiation and that their product is going into the right port or airport. An educated customer is the best customer. And we need to understand their business and philosophy of doing business. Are they selling to a military base? What type of customer is their end user? There’s a lot involved. If we just say, ‘I’m going to pick it up and handle it,’ and we don’t know many of the details, that’s not a smart way to handle freight and international logistics or 3PL.”
That might be good for the folks at Crazy Mountain to know. For its next act, the brewery is putting together an importing company of its own in the UK because its sales volume there has grown big enough to where it makes more sense for the company to be its own importer.
“We will work with a 3PL manager to take the beer from our door here to our door over there,” Selvy says. “Whereas now we have an importer managing, we’ll start managing that ourselves.”