We will never forget when Ron Labac and Mike Scanlan of FedEx supported and endorsed our application for credit in 1993 and our first schedule had us supporting FedEx to every destination. By the end of 1993 we had secured IATA registration and this allowed us the benefits of expanding our horizons. For the first two years, every night we followed our freight to the airlines to make sure we went home knowing we had done everything possible to ensure the consolidation would ride as booked. We love the challenges that moving over size freight brings. Our very first shipment on FedEx was a forty foot long packaging machine ex Monroe, Louisiana that we shipped to Melbourne. Because of the weight and dimensions it took all our powers of persuasion (and Peter’s intimate first hand knowledge) with the loadmaster to center load the freight with spreaders. We won! The twenty-six tonne machine was three days after dispatch being installed at Coca Cola’s plant.

Fast forward to 2007 and Peter convinced Qantas to divert their freighter into Nadi, Fiji to drop off a twelve tonne spool of cable ex N.Y. to meet a cable laying vessel held up in port eagerly awaiting its arrival. Tony Feist, now our VP Special Projects approached us with his dilemma while working for another forwarder. CII made the impossible happen and while the shipper and consignee were ecstatic that 24 hours later the spool was being loaded on board the vessel in Lautoka, we received not one word of thanks from the forwarder, apart from Tony being over the moon. The rest is history. Tony decided to join a company that put a can do spirit mingled with unbridled passion into everything it does.

When we negotiated with new South Pacific entrant Air Pacific back in 1994, we promoted the service as “Coconut Express”. Back then we had a competitor in the name of Patrick Keelaghan. His life was tragically taken from him some ten years ago and we still mourn his death. Patrick was a character in the truest sense of the word. For a few weeks our twice weekly fax broadcast was full on about “Coconut Express”. Patrick decided he needed to counter this nuisance promotion so he faxed everyone around the airport, “No, we have no coconuts today. If you want some, use the competitor. You can sit under a palm tree in Fiji enjoying eating it while your freight is also stuck there. If you want your freight to arrive as per schedule on a prime carrier better that you ship with us!” Dealing with a competitor whose passion matched ours actually brought so much more fun into our everyday lives. Imitation is the greatest form of flattery and with the one or two motley competitors in the marketplace today, watching and copying our every move, we still yearn for the days of Patrick Keelaghan. Without going head to head with him in those halcyon first five years, that burning desire to provide great service with a passion would not still be in our veins today. What a shame there has been not one competitor to even come close to Patrick.

Our team is a little larger today, but Pete and I rest happy the culture of our company is engrained in every team member. Examples; Graham Burford our VP Global Sales elects to travel Sundays when visiting out of town customers, so first thing Monday morning he sees his first customer. Pete and I don’t expect that of him. That is what he elects to do himself. The man is driven by passion to pack as many productive hours into each and every day. Both Mike Castro, VP Operations and Lyne Enzweiler, VP Admin arrive at work at seven every weekday morning. And they don’t leave at five either. Both will burn “the midnight oil” if there is still work to complete! The same can be said of Greg Melissinos in N.Y. and Christian Calderon in Atlanta. Thanks Pete for helping us build a company we can all be proud of.

At CII, we are bracing ourselves that what happened in December will carry through for all of 2009. In January we made some virtually unpalatable decisions. We had to cut our overhead to match the gross profit of December and this we did. We believe our business in 2009 will be at the most 80% of 2008. For the first time ever we laid off 20% of our staff, reduced benefits and some of us had to also wear a 20% reduction in salary. Although, politicians tell us small business is the backbone of America’s economy and President Obama is going to help our small business by granting loans through the banks, this won’t happen for non-asset based companies like CII. Banks just don’t lend on receivables, a balance sheet showing a significant difference between assets over liabilities is the only criteria banks will look at. CII even in its best years never produced a pre-tax profit of 5% on revenue. So for us anyway, we must look within to survive these tough times. We have to work doubly hard at making sure our receivables remain minimum 90% current. This we are striving to do.

Sometimes when I hear negotiations taking place with the airlines, I cringe at how tough the team is. We know the gross profit percentage margin now must be higher than in 2008. We hold on to the philosophy that we can only negotiate with the airlines when we actually have the freight on the dock. If we marginally cost a shipment, then we have to work harder pinning down the carrier to a rate where that booking becomes a profitable shipment. This strains or stretches relationships to the limits, but we know we must remain profitable in order to survive. We scrutinize and double scrutinize every shipment be it 50kgs or 500kgs. I only wish we had adopted this policy sixteen years ago, but when times are good, it is easy to fall into the trap, “We will make it up on the next shipment.”

In spite of all the doom and gloom we may face in the months ahead, we will remain focused on our niche market, the South Pacific. For us to expand our services/destinations into the unknown could lead us into trouble because it will distract us from the “main chance”. 95% of our business is export airfreight, with 80% being the South Pacific. We are convinced that there is still opportunity for us to expand into Australia especially and already we have conducted one sales campaign and next month another executive will be spending two weeks in BNE, SYD and MEL knocking on every door leaving no stone unturned.

What we are doing at CII is probably similar to what is currently going on within the industry. If we had decided to do nothing and bury our heads in the sand, our doors would close before the end of the year. I believe it may be at least two years before we see a pick up in the global economy and when that happens, I think markets other than China will see it happening first. As far as America is concerned I think European trade will grow back to the levels of the eighties and nineties and I have absolute faith in the South Pacific. Central and South America may replace China as the source of supply for textile piece and finished goods.

I believe the small to mid-sized forwarder has the ability to weather the storm over its larger rivals. Just as President Obama has placed faith is small business to play a major role getting us out of this recession and not big business, I will make a bold prediction now and say there will be two large multi-nationals to go broke and be out of business before year’s end.

For smaller forwarders down under we have created a user friendly web site www.m8sr8s4fr8.com and Peter has already reported this tool has been greeted with huge acceptance. That old cliché “thinking outside the box” certainly has merit and it is in these difficult times when innovation can really make a difference. All through our sixteen year existence the CII team has worked hard at being cutting edge even though it has been from the same base of business. While we have looked at other opportunities to expand our business, we have never lost sight of our major market, the South Pacific. Although we have experienced exponential growth in our short history, over 80% of our revenues are still derived from exports by air to Australia and New Zealand.