Global Trade This Week – Episode 170
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Keenan Brugh 0:00
You're watching Global Trade This Week with Pete mento and Doug Draper,
Pete Mento 0:07
Hello everyone, and welcome to another edition of global trade this week, a very special edition after school special, special edition with both myself, Doug and our good friend Keenan, our kid behind the keys, and we had a bit of a scheduling miscommunication. I guess I wasn't going to be here, which what if I have known I would still be in bed, if I'm being honest. But I'm happy, happy to have three floating heads on the video this week, and excited that we all get to pick some topics and talk about them. Exciting. I don't know Keenan. I still don't I'm not used to being on camera. Just gonna be honest.
Unknown Speaker 0:44
Well, thank you. It's
Keenan Brugh 0:46
good to be here. I'm not used to having an after school special at 7am but here we are, and we're gonna start the day with an after school special. So
Pete Mento 0:53
are you in Colorado? Doug?
Doug Draper 0:56
I am. Yeah. I was just saying that both Keenan and I have like, three quarter zip sweaters with a collar.
Pete Mento 1:04
You're the finance bro look today. Yeah, finance bro.
Keenan Brugh 1:07
It's not a vest. It's not a Patagonia vest. No, no shade on Patagonia. Yeah,
Doug Draper 1:12
got it. I don't know what this is, but, yeah, it's fun. We it. Pete, you were out last week on assignment, and I got some miscommunication, but to the benefit of our listeners and viewers, you get a three, a three shot of rock and roll, a triple shot of rock and roll. Today, it's
Pete Mento 1:30
kind of like when you watch NFL red zone and there's three teams about to score at the same time. I'm sure it's overwhelming for people how exciting this is. So we got a lot to cover with three topics from three different people in a huge expanded halftime today. So I guess Doug, with that being said, Why don't you kick it off? Bill,
Doug Draper 1:47
all right, well, we always make some some fun references to TV shows or movies. And I know I've used this one before, but it is so relevant on this topic, it's the old Jan Brady Marsha Marsha Marsha on the wonderful Brady Bunch. But this is a take on EVs electric vehicles, and specifically to trucks, right? We've seen it. We've talked about it. How are the EV trucks going to play out into our logistics world? Right? And I think that we've been focused so much on long haul trucking, point A to point B. How do we get from San Francisco to Denver? There's not enough infrastructure all that kind of stuff, which is absolutely critical, not to mention rules, regulations and compliance that's coming down the road that may be unattainable for that right to have cross country. So it seems incredibly obvious and simplified, but there is a company that is getting the electric vehicle market, navoia, and they are putting all their chips in one basket related to electric vehicles, and they're focusing on La makes sense. They're focused on short haul drayage and local deliveries in the LA basin. And I was looking at this, and they're like, yeah, it is such a basic concept of how to deploy electric vehicles and electric trucks. I think it's pretty impressive. So, you know, trying to deal with the underlying problem, you know, there's this boom and bust cycle. Everybody's super hyped on EVs, and then it loses some momentum, and then everybody's got this tractor called Tesla and PepsiCo. Kudos to them. But they have a fleet that's mostly for show, and we're out there, so I'm interested to see this company, how they're progressing. And I think, just like electric vehicles were paramount, and now we're seeing EVs going into hybrids, right where you got the gas for the range anxiety, and then you got the plug in part for how to make yourself feel good is that let's not focus on the long haul. Let's focus on the short haul, the drayage, the local deliveries, the pickup and delivery, as you said, so it fits, it's economically viable for that market. It's not this huge footprint. It fits in the market, and the regulatory and environmental pressures, especially in California, are escalating. So here's a niche. So I'm giving a little shout out to navoir with what they're doing, and I think it will be a good model as simple and basic as it sounds. Pete, have you heard of this company, or do you have any take on electric trucks being utilized in that fashion. I
Pete Mento 4:43
hadn't heard about this until literally three minutes ago, but it does, it does make sense to deploy that way. We're struggling as an industry to find a place for electric trucks, and the the main reason for that we've talked about again and again, the weight of the. Truck versus the weight of the cargo, and how that limits your ability to make money and moving things. So it's difficult investment. So anyway, you can find a way to make it work. It's only going to make them less expensive and keep the technology evolving with it. I'm a fan of anything that does that, so I don't know specifically about this particular company, Doug, but what I will say is, if they're going to further the technology through adoption, mostly pushed by California law, it's best for everybody.
Doug Draper 5:27
Yeah, cool. All right, absolutely. You got comments on this one?
Keenan Brugh 5:33
Yeah, it kind of reminds me of how different alternative fuel vehicles, especially in the pressurized hydrogen, or sometimes even the natural gas compressed type vehicles, they end up doing better in applications where it's kind of a fleet shorter distance. Maybe it's a waste management in a certain region. Maybe it's just this little facility over here, because then they can do the infrastructure to recharge it. Then, yeah, to your point, they're not going the super long distance where they can't compete with the energy density and weight carrying capacity ratios of gasoline or diesel. So yeah, we'll see. And if there are extra tax incentives or just regulations, hey, if you want to operate on the West Coast ports and do this sort of things, you have to have electric then maybe those tax policies or regulations will help to your point, Pete, make it financially feasible in the first little bit, then maybe they can make it more effective if they prove their case and win over other economic situations decision making at ports around the world that don't have those policies in place. So we'll see. Yeah,
Doug Draper 6:40
cool. All right. Well, I don't know. Eeny meeny, miny moe I'm trying to figure out who should go next.
Keenan Brugh 6:46
I'll go first, just so we can save Pete for last. All right. Sounds good.
Doug Draper 6:51
All right.
Keenan Brugh 6:53
One thing I saw reading around researching for this was an update on the Francis Scott Key Bridge in Baltimore. Hadn't seen any updates on it in a while, and I'm just curious, having not seen too many situations like this, I saw a headline number of 102 million, and was shocked, because that seemed very, very low. That number one, oh, 2 million is actually just going to the US government, specifically the Coast Guard and the Army Corps of Engineers, and it's not a done deal yet. There's still ongoing lawsuits with the families of those killed during the incident, and then, as well as the city of Baltimore, with the cost of the bridge that's not touched at all in this 102, as well as then all the financial impacts that hit the whole Baltimore area, tons and tons of businesses and individuals. So we'll see what the overall number is. I saw the 102 and was aghast at how low that number is, because 102 million isn't what it used to be here in 2024 but it seems like that's just the first decision. Something is moving, and there's more to be decided. I don't know if you guys have heard any updates, or, similar to me, hadn't heard about this at all, or have different expectations of how this is going to go and play out.
Pete Mento 8:03
I spent most of last week in Maryland, so I was actually, I was on the eastern shore, and then all through northern parts of Maryland, and then in York, Pennsylvania, it came up a lot, you know, it's one of those things talking about the weather. When you live there, it's like, Hey, how about that bridge? You know, and hearing that people don't expect it to be fully operational again until 2027 that was a realistically, I guess it's not, it's not that that off if you think about rebuilding that bridge. But I'm waiting for the other shoe to drop on economic inputs from the state of Maryland. I'm sure they're going to get sued by all kinds of parties, probably the Longshoremen they're probably going to get sued by carriers, by freight forwarders. The whole world's going to come after these guys. And limiting their liability is very difficult to do with the way that maritime laws are set up. And now, the more they look into it, the more it appears that it was the allegedly the carrier at fault. You know, they had not done what they should have done to keep that vessel safe. This is going to be a multi, multi billion dollar settlement by the time it's all done, and it will have reached into all kinds of different pockets and put money in the hands of people and try to make them whole again, try that have been impacted by this. So, yeah, I thought the same thing. 100 million like, you know, there are major league pitchers that get paid that. That's not that much money, but, but it was, it was, it was, when I look deeper into it, I realized there's a lot more happening.
Doug Draper 9:25
Yeah, yeah. Well, I think, hey, my two cents is ditto and ditto, right? It's, it's crazy, in this day and age, that 102 million, which is an insane amount of money, it's like, really, that's it, you know, I think that there's so many entities, you know, I won't be, you know, say the same thing over but everybody wants their pound of flesh. There's a lot of entities impacted. Everybody's gonna go after it. So this is tip of the iceberg type of stuff. So we'll have to see
Keenan Brugh 9:53
one follow up comment on this, just to kind of look future forward. Pete, love. Hear your insight having some merchant marine background and Doug, want to throw this out just to bait you a little bit with the unlimited liabilities that this company is facing, because it's not just going to be the 100 2 million. At what point in the future will carriers, owner operators of these vessels, switch over to more automated driving? You may know what level of automation is already on these ships, and you have to have decision makers. But could there be similar to the arguments I've heard around Tesla or other electric vehicles that can drive themselves eventually? Will the insurance demand that there's automation and robots driving compared to a human that I don't even know what the part they messed up in preparing and doing that, they're still going to have to be humans, unless it's all the Tesla robots doing the maintenance. Yeah, I guess kind of prompting out there, when is automation going to limit the liability? And then these carriers are going to, well, we have robots doing this.
Pete Mento 10:53
It's already very, very, very, very automated. So, I mean, very, very automated. You, you, you get on on a watch right now, from what I understand, again, and there's so much capacity for automation, because you're going in one direction for the most part, for a day or two sometimes, you know, it's, it's incredible where the problem comes in as things break, and until these robots are able to make repairs, and who knows, maybe they will one day, it's, it's going to be very difficult to completely eliminate people on it. I do foresee a world where ships in the future, maybe when they when they make the Safe Water buoy, you know, when they're 20 some odd miles off the coast, you take more of the people off, like, there comes a point where someone comes to the helicopter and takes people off, or they leave with a harbor pilot, and then there's a very limited crew who's there to deal with catastrophe, but when they come, they'll port of where they're gonna arrive. Same thing. You know, there's like a local group that comes on there, but I think that's a more realistic level of cargo that's going to be highly automated than aircraft and trucks. It could happen pretty quickly, and it wouldn't surprise me. It's just the fact that crap breaks on a ship at sea all the time.
Doug Draper 12:00
Great insight, yeah, I think the harbor pilot right? I didn't realize this until I don't know one of the shows we were doing research on, but they got a local for I'll just dumb this bet down being a landlocked kid from Kansas. Harbor pilot jumps on the boat, takes that final mile in because he knows the nuances of the port and the time of day and and everything else. So I don't know if that would ever change, because I'm sure that's a union gig and tied to it, but I could see once you get out of that aspect the port, you're in the open waters, just flip a switch and autopilot. It sounds like it's a lot of that's already there. If
Pete Mento 12:34
most kids when they were 17 or 18 knew that they could one day be a harbor pilot, maritime academies would be flooded with applicants. It is, it is the, it is the best, paying, best job. I think you can possibly. I have a lot of friends from school that are members of pilot associations, and then making seven figures, plus, you know, a year working maybe two weeks on, and then two weeks off, or a couple days on, and a couple days off. It is a very, very difficult job. They earn that money. You know the when you're out in the open seas, hell, I could still drive one of these things. But when you're when you're bringing it in, the tides, the wind, the weather, things that are happening all around you, other vessels moving around. It's a very, very difficult job. And I don't see them going away anytime soon.
Doug Draper 13:19
Last comment, if we're getting half time. I was just thinking, I picture that like the dude from Big Lebowski, right? It's just this, this guy with all this knowledge, he's just kind of hanging out. Hey, Timmy, we need you to take care of things. He walks out, smokes a grit, throws it on the ground, jumps in there, does his job in two seconds. And he's, he's just like, legend,
Pete Mento 13:42
right? Yeah. Well, imagine these guys get on a little boat, and they drive it alongside the ship, and they throw a ladder over the side, a rope ladder, and then the, you know, the waves are moving. So you get the pilot boat on the right timing. People die doing this, and you got to jump on the pilot ladder, and you're halfway up the ship where the pilot opening is, and then you bring it in, it's, it's crazy people that do it. They work for free for a number of years, learning the ropes or very little money, with room and board. You got to know your crap, man. And you have to be very calm, because crap happens all the time aboard the ships. You have to be insanely confident in your ability to bring this in. It takes. It's a very special person that kind of job? Yeah,
Doug Draper 14:21
there's a movie in there somewhere. Probably, uh, probably, yeah. I
Pete Mento 14:26
don't think I've ever seen a harbor pilot depicted in a film before. It's a good point.
Doug Draper 14:30
Well, next show, we'll have to figure out who would play that role. Oh, me,
Pete Mento 14:35
100% like, chubby, gray hair, bit of a smart ass. Yeah? I would be perfect for that kind of, yeah, that's not the job. I would be very bad at the job, boys, but I could definitely do the movie. The people that I play on, yeah, the folks that I know that are harbor pilots. They're, they're very special, elevated kind of professional. They're, they're really amazing.
Doug Draper 14:59
Well, I'll be. The one to take us into halftime, brought to us by CAP logistics Keenan, who's part of that team, pushes the buttons and makes us look good, and it's awesome that he's here the What's that? Is it, though?
Pete Mento 15:14
Would you say awesome?
Doug Draper 15:19
Yeah, we both got our quarter zips and our callers and stuff. Man, we're we're like brothers from another mother. Anyway, halftime brought to you by CAP logistics. Thanks for their support, Pete, but you got, well,
Pete Mento 15:34
ours are a little intertwined, but mine has to do with horror movies. So it is the Halloween season, I, myself am not really a horror film kind of a guy. My daughter and her friends love them, and one of the things that they love to do is to watch the classic ones that we had as teenagers. Doug so when we were in high school and we would see Friday the 13th, and, you know, all those films that were Halloween and all that crap, they think they're hysterical. They don't think they're scary at all. They think that they're maybe a little tense. But there's nothing about them scary because they grew up watching like saw, you know, watching gory, terrifying films that I refuse to watch. So my question is really two part, what is your favorite scary movie, you know? And there's ones to me that I think are funnier more than they're scary. And then what is the one that scared the hell out of you the most?
Doug Draper 16:28
So the one that was, I'd say Amityville Horror was a pretty good one, and the other one was Poltergeist, because it was just, and I think I made mention that on a show, but that one, Carrie Anne that freaked me out, freaked me out. So those would be my two. Keenan Keenan,
Keenan Brugh 16:48
yeah, not super into the horror, even the jump ones. Sometimes the comedy is not enough. Tried to watch some Jamie Foxx, like down on his luck. Vampire Hunter on Netflix, a couple years old type of movie, and you could tell it was funny, but they were also doing, like the body contortion like, sick, weird movements, like we couldn't make it past, like three minutes into it, even though I could tell it was going to be funny, not, not my cup of tea. So yeah, even though I grew up with those saw and hostile, those movies are awful. I don't want to watch those ever again a pit of needles. Like, why? No, no, and like, with hostile, yes, human trafficking is a thing. Do I want to watch it as entertainment? No, to me, the peak type of Halloween movie is spooky, but mostly funny to your point, and not like, actually bad so like the mummy Brendan Fraser, 1999 peak Halloween movie.
Pete Mento 17:42
That's a great movie. Yeah, I loved scary movie.
Keenan Brugh 17:46
The comedy. That's funny. Yeah,
Pete Mento 17:48
it was very funny because it was goofy. They didn't want you to take it seriously, right? And then I'm with you. Doug Amy valhar messed me up. I saw it way too young and but my the scariest one for me is the exorcist. I really, hated that movie, and I've seen it a number of times. And every time I do, I was like, this is not scary. I'm like, I don't know why. It just scares the hell out of me, man. So I will not be spending what I guess is now called spooky season. You've wrecked that to these people. I will not be watching any horror films on my own. I'm sorry. No, that won't
Doug Draper 18:19
happen. Well, Keenan and I are going to tag team this one, and like, like I said, or like you said, it's all related to the holiday spirit. So Skelly, s, k, e, L, L, Y is a hot seller, and I know every single person that's listening to this show has seen one. It's the 12 foot skeleton that's Sold at Home Depot, 300 bucks. Everybody's got one. It was originally supposed to be 10 feet, and they dropped to, like these speakers go to 11, type of thing, and they bumped it up to 12 feet, and it's everywhere. That's one of the best selling items in Home Depot anytime during the year, any commodity, anything. And I have certainly seen them all over the place. I didn't know if you guys have seen it. You got kind of a funny comment on Keenan, but 300 bucks like, I don't know where you put that thing. I don't know it's made of plastic or whatever. You fold that thing up and stick it in your basement or your garage, you're going to pull it out. It's going to get all messed up. But I guess if it's a skeleton and you snap a bone, you just tape it up, and maybe it looks a little a little more creepy for next year. But have you seen those? And what's your take on them guys? Go ahead. Keenan, absolutely,
Keenan Brugh 19:39
I have seen them. My neighborhood really gets into the Halloween season and starts putting up decorations very early. So we've we've seen them around for a while now. They are massive, and the desire is real. I hear the demand for our household to get a 12 foot skeleton, or not only one, but. Two, because once you have two, you could create all sorts of activities and imply playing badminton or whatever. You could rig up two and get the attention and pass on a little bit of seasonal enjoyment. There we currently have a skeleton, but alas, it's only five feet, and it's nice, but it's not as impactful as a 12 foot one. So the five foot one is made out of polypropylene. I don't know if you guys are into plastics, but that's the best plastic, where it's not estrogenic and things for like food, safe stuff. It's also very high temperature proof. So it could be out in the sun being a skeleton in Colorado, where I'm sure it will get baked pretty hard, but yeah, it's strong. We'll probably end up getting some at some point in the future. This also tied into I don't have the numbers in front of me, but I've been seeing Halloween as a holiday is now growing as far as shipping comes in, and I wonder if these giant skeletons are a part of that, as well as all the other kitchen decorations and things moving in, but apparently it's becoming more of a shipping holiday, which is, you know, normally more associated with the big Christmas peak type stuff. But apparently Halloween is on the up and up. Yeah,
Pete Mento 21:12
it's madness, man. I had a friend named Keith Wolford. He lives out in western New Hampshire. He starts putting up his decorations like in August, and people, people come from all over New Hampshire to check out his, check out his Halloween display. And it's, I mean, he has to have spent hundreds of 1000s of dollars on,
Doug Draper 21:31
are you serious? Yeah, yeah.
Pete Mento 21:33
It's, it's, it's like local news covers it. It's out of control. It's out of control. Screws up traffic. And it's his, it's his thing, like, it's his thing. I've never seen the Skelly before. I just looked at it a moment ago, 12 foot tall with big, spooky eyes and Brugh. You know what? It's reasonably priced. It's like 100 something bucks, right? It's not that expensive. In
Doug Draper 21:57
my research, they were pushing 299 so well, if you have the
Pete Mento 22:02
it took me one Google search to find knock off versions that you can buy on temu. So just saying, you know, they're, they're out there. They have a five foot model and a 12 foot model, which could also be fun. Keenan, you could have like the 12 foot ones, who are clearly in charge, and then the five foot ones, they're like little demonic soldiers all around to me. I could, I can see how that could be a lot of fun. I don't want anyone to ever ring my doorbell, ever like you ring my doorbell. I'm just gonna say, come back with a warrant and I'm gonna go back to whatever I was doing. Don't, don't ring my door. So I don't really care for trick or treaters at all. I want to live somewhere where the idea of coming to my house terrifies them. So that will be, I will not be decorating with skellies in my front yard, sorry.
Doug Draper 22:49
Well, we'll just leave it at that. That's the happy note of Halloween that he brings to the table. Brought to you by cap, logistics, we appreciate it. KB, we appreciate everything you do for us. So we're gonna end this thing with us. Doug appreciate what's
Pete Mento 23:03
that? Doug appreciates everything that Keenan does for us. Of course,
Doug Draper 23:06
he he's got the dimmer switch, man. He could just say these guys are a bunch of assholes, and just dimmer it off, and then it goes to the test pattern, like it did way back in the day, test pattern.
Keenan Brugh 23:17
Or just the what's fun too is the implied swearing. Just add in some beeps over all different things you guys are saying. You could just change the context. It's fun.
Doug Draper 23:26
Drop some in there already.
Keenan Brugh 23:31
I probably should. Well, this,
Doug Draper 23:34
my comments on this last one are just going to be a tirade. Anyway. Pete, you we're gonna do one topic, we're gonna do your second topic, and then we'll go from there. So fire it up, man.
Pete Mento 23:46
So for me, I have a lot of conversations these days about, if there is a dramatic increase in tariffs out of China, we're hearing anything from 30% to 60% under a Trump presidency, what are we gonna do? What are we gonna do? Well, the outcome of most of these conversations is, we're going to Vietnam, Cambodia, Indonesia and Malaysia, and we're just going to sling it. You know, I appreciate the enthusiasm, but the problem we have now is there's not enough ships calling that part of the world. There's not enough aircraft leaving that part of the world. The ports are not of such a size and scope that they can handle that, and now what people are seeing as they are even now moving production these parts of the world, they can't find space on ships. Their stuff's getting rolled. The prices are significantly higher than they are to China. That it's getting harder and harder to get this stuff into the country because of it. This is one of those unintended consequences of increasing tariffs to try to push people towards more politically aligned countries. It's all well and good until you realize you can't get your crap out of the
Doug Draper 24:47
country. Yeah, yeah. I've heard the same thing about India, right? Lots of lots of labor, lots of people live in India, and everybody says that's new. I've even made comments about the growth of India. I think the. Words for like, Don't sleep on India, right? But the infrastructure is the same thing. You know, you can't just drop I mean, think about rerouting air freight from dia right, from Denver's airport or any large metro area, and you're going to send it like Colorado Springs, right? And you just don't have it. I mean, there's a lot of examples of major airports and smaller ones within an hour or two. Sounds good. Hey, the weather's bad in Denver. Let's land all this stuff down in Colorado Springs. No infrastructure, no revenue outbound to reposition. You can't get enough freight in there. So if that's a like and kind analogy, you're spot on in the effort to do the right thing. The capacity of where we're going for sourcing is not at the level that we have out of China. So 100%
Pete Mento 25:51
sure. I certainly hope that ocean carriers reposition themselves to be more effective, and they probably will, but that still means the port has to deal with that. So you're going to have congestion one way or the other. It's going to end up having to fix itself by increasing the infrastructure of that country in order to deal with the outcome, which India has been working really hard to do, but they're
Unknown Speaker 26:12
still not there. Yeah, yeah.
Keenan Brugh 26:15
I've definitely heard quite a few companies and people talking about, whether politically or even costs now, as China is no longer as low cost as it once was. People looking to make their supply chains more resilient, lower the cost all that. So I have heard a lot about Vietnam and Cambodia, but yeah, that's interesting. It's all kind of coming to a head now where that shift has maybe been so fast, where maybe some carriers have adjusted, maybe they can adjust. But yeah, to your point, Pete, there's physical limitations on port sizes and things, and if there's a dramatic shift in demand there, they might not have the time to build not super aware of the ports and what they look like in Vietnam and Cambodia. I know they're already exporting, but I doubt they're as big as the ports in China, which Shanghai, Hong Kong, are massive, so they're probably not that level. Yeah,
Pete Mento 27:05
my advice to people is sit down with your Ford or partner and say, we're thinking about doing this before you do it. I don't, I don't know if the transportation person will be asked about it. It's probably someone in procurement who's like, we're moving to Vietnam, and then six months later, you learn about it. But sit down with your transportation partner and say, how will this affect us? Give me an idea. Six months, 12 months out, what the costs are going to be like. Walk me through it. Talk me through it, and then hopefully you can go back and have a civilized conversation with someone about about how complicated it'll be to get
Doug Draper 27:36
it out. Yeah, yeah. Well, I think that's it. That's a great topic to have our listeners make some comments whenever they see this post, because lots of comments, ideas, suggestions. So it's a great way to end with that advice, Pete, that you just, you just dropped on us so that, you know, I can't believe it. I'm looking at the clock. It's like 28 minutes, and there's three of us talking, and it's under 30 minutes. That is amazing. Kudos to you guys, and kudos to all the listeners out there. We appreciate you tuning in to global trade. If it's happening across the world, you just got a good dose of it on this show, we're going to be talking about it. It'll always have a forward leaning perspective. We're going to talk about what could and what will happen, not what did. Those are the hacks. Those are the people you can always talk about what already happened. We put our necks out there and talk about what's going to happen. So that's it, gentlemen. Keenan Pete, thanks so much. Hope you have a great week.
Pete Mento 28:31
Take it easy, buddy. Happy Halloween.
Doug Draper 28:33
You too. Thanks. Take care.
Pete Mento 28:35
Knock on my door. See you.
Transcribed by https://otter.ai