Unique Logistics International Inc (UNQL)

[il_10]

Basically because supply is artificially suppressed - there was a shift away from a lot of the smaller freight ships to the big mega ships a few years back, but they won't move unless they're fully loaded. A lot of the little ships were retired, it's hard to get space, and COVID has made getting the ships out and around a lot more risky, so the steamship lines are charging higher prices.

There's an upper limit on what you can charge for shipping before the guy in Atlanta selling low cost Chinese gadgets decides he's in the wrong business - the steamship lines are already basically at that price point, so 3pls can't make as much per container as they used to without losing customers - so there's a lot of competition to get the container prices as low as possible. Fuel surcharges and other things make freight volatile, so a lot of the time you end up locked into a contract where you lose money on half of your containers and make the difference up on the other half.

a 3pl like UNQL passes through most of the cost - they make their money by setting up the move, clearing customs, tracking, working with origin ports to get stuff loaded, etc. The bulk of the revenue that you're seeing is going straight through from the customer to the SSL.

They're not working hard for 100 million, they're working hard for the revenue that isn't just a pass-through charge, which is considerably less. This kind of operation can easily be done with 10-15 people if they have a good database setup.

Still, 3pls are money printing machines, and 100 million would be in the tens of thousands of containers per year if you're just moving freight on boats, so these guys already have an established customer base and I expect they'll continue to grow.

I'm loaded up here, for what it's worth.