ECCO President’s Letter to Customers

April 13, 2022

Dear ECCO Customer:

ECCO’s commitment to you and your success has never been greater, however our BRAND PROMISE of being “faster, more flexible, technical, with quality assembly services” has never been more tested.

Today, we see a very broken supply chain from our suppliers’ missed deliveries to tremendous delays with shipping and logistics companies moving our products, to the overburdened and congested ports working tirelessly but ineffectively, and finally to the local truckers trying to get that last mile of a load delivered.  So, this letter will serve three purposes.

1. I want to apologize and ask for your patience right now. We have your material on order, sometimes even here in North America, but it is an inexact science as to when that material will show up so we can complete your build for you. And when it does come, be assured our team is hustling to get it processed, assembled, and immediately out to you.
2. We need to temporarily add a 3.5% transportation surcharge to each shipment beginning April 4, 2022.
3. I also want to inform you of what we are doing, and what we can do collaboratively, to move forward and get your products to you on time and in full quantities.

Tackling items 2 & 3, we are working hard to investigate better, more dependable shipping methods to more effectively mitigate risks of products being delayed at SEA awaiting space, in port caught at the bottom of stacked containers with no power to control the crane’s reach to our container or queued at a CFS with no control to move up the line.  And SEA rates have risen dramatically in the past year+ as reflected below. This means making daily decisions on whether to ship by SEA with its inherent risks or to ship products in by AIR at almost 4X the cost of the inflated SEA rates.
March 2020 update via KOCH Maritime:
“Ocean rates (35-50 days) are currently quoted at $4.2usd/kg while Air (5-7 days) is at $11.2usd/kg. Expedited Air (concierge and door to door 3 days) is up to $15/kg.”Each of these rates have risen approximately 400% in the last 12 months.
-John F.

So, while AIR is best right now, we cannot sustain those expedited costs. And, realistically, nor can anyone that wants to stay in business. This is being framed as Force Majeure by most of our suppliers and ECCO agrees. What we can do is extend our standard lead times further out so you are provided more realistic delivery expectations and then you can update your system accordingly to allow for earlier ordering (your ECCO Account Mgr. can communicate that detail by Mfr. and Product Family). Additionally, we are adding the transportation surcharge for the inbound material on standard shipping, and we can offer to fly in material that specifically affects you, but we will need to add an additional surcharge representative of the delta between SEA and AIR rates. This will also be charged as an added line item given its temporary nature. If you have additional suggestions, please reach out directly.

Thanks, as always, for your support – and good health to you and your loved ones as we navigate this together.

Yours Truly,

Bernard J Gizzi

President