Global Trade This Week – Episode 119
What’s going on in Global Trade this Week? Today Trade Geek Pete Mento & Doug Draper of Inland Star Distribution cover:
2:36 -US Navy Pulling Back on Trade Protection
9:09 -Warehouse Construction at a 10 Year Low
16:38 -Halftime
30:28 -WTO Decreases Growth Target for Global Trade
34:10 -Uber Connect Now Has a Returns Program
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Keenan Brugh 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Doug Draper 0:09
And here we are another edition of global trade. This week. I am your co host that is blending in nicely to my backdrop here. My name is Doug Draper. I'm coming to you from Denver, Colorado. And my partner in crime on the other side of the great United States is one Mr. Pete mento. Hanging out in based on your background there, my friend on the great state of New Hampshire. How are you doing?
Pete Mento 0:34
Doing good, bud? Yeah, I'm home. And I'm heading to the West Coast later this week. But I am home screaming Where's Troy?
Doug Draper 0:43
He's all tied up. He had a rough rough weekend. So he decided to stay off camera.
Pete Mento 0:48
So taking today off, I can dig it, man. It's got a case of the Monday stud.
Doug Draper 0:53
I know, hey, you're going, you're coming out here to the West. I'm actually going to Pennsylvania tomorrow. And I traveling west to east. I don't travel as much as you do. But God bless you just burn a whole day. I'm leaving at 6am Like, the plane takes off the ground at 6am. And I got to cut through because I'm going to Harrisburg, Pennsylvania which doesn't have a lot of directs and I don't land to like 233 insane. I just it just baffles me that you just burn a whole day.
Pete Mento 1:26
The good news is when I head out that way, like I even though I leave in the afternoon, I still get there middle of the night, but I can still get a good night's sleep and hit that come back. You do. You do waste it you leave. In the afternoon you get home at midnight. And you're done. You're just about it. Yeah, I was
Doug Draper 1:45
looking at my schedule. I'm like, Oh, my God, and I want to go earlier, I will leave at three in the morning, if needed to get there. There's just not a lot of choices to get into smaller towns out in the East Coast.
Pete Mento 1:55
Experts cool though, man, do anything fun or just gonna go out there for work and head back?
Doug Draper 2:00
Yep, fun, or excuse me just work and head back. It's one of those deals where it's for a two hour meeting that's very important needs to be done in person. And it's basically two days of travel. But you know, that's that certain things in this day and age, you still can't do over zoom or team so that this is one of them.
Pete Mento 2:20
That's why we get paid the mediocre bucks, Doug, yeah, sacrifices like that.
Doug Draper 2:24
I like it. Well, speaking of mediocre this show is not mediocre Pete because we bring the heat every week, that was a pretty good transition. And so we'll just roll into your topic number one.
Pete Mento 2:37
Yeah, this is an interesting one, I watched a video from Peter Zion and I followed up by doing some research, some stuff from the usual suspects, mostly more right leaning think tanks, there is a it's it's probably like a five year effort now by the United States Navy to be doing less of their power projection on the shipping lanes. So we're a little more focused on, I would say, preparing for war, or preparing for defense than we were on regular maritime projection. The whole point of the old white fleet that Teddy Roosevelt put out there was to tell the whole rest of the world, you know, if we're gonna find out, I guess, and going all the way back to the old white fleet to now the idea of having a strong Navy is to protect the waterways, to make sure that we are able to export our goods, and to let other countries to be able to export to the US market. Our market makes up about a third of global trade, whether it's importing to the United States for consumption, or exporting to the rest of the world to keep Americans working. And right now, a lot of the vessel traffic around the world, let's face it, it's not American flag. And a lot more of the federal traffic is moving energy, energy to places from Russia, which we don't support right now. And to China, which again, we don't support right now on ships that are owned by Chinese companies, which again, we don't support right now. So you have a country like China, who is trying to maintain economic dominance, by not consuming a lot. Also by trying to maintain a lot of exports in the world who is a little shaky on the relationship with them? Because they haven't done a very good job of trying to maintain a lot of great friendships. That's not exactly I guess, like an equation for success. So the US has said, what's really in it for us anymore? What's in it for us anymore? To maintain the seaways for the benefit of people who really aren't our friends? So we're changing the way that we look at our United States Navy. Why would we spend so much money and waste so much time trying to make the the oceans safe for traffic, let's say for commerce for people who really don't have it in our best interests, particularly at a time when the Russians are doing everything they can to really be painful and hurt a lot of people. It really didn't do anything to them. Why does that matter to us that? Well, it matters to us, because of marine insurance than marine casualty, those big vessels that are worth 10s of millions of dollars are moving 10s of millions, sometimes hundreds of millions of dollars worth of energy. So imagine you're a ship owner, or you're leasing a ship, or you're the person that's moving all that oil, and you find out from the folks that are marine insurers, I'm not going to insure your vessel, and I'm not gonna insure your cargo. That's a big risk. So how do you feel about moving stuff that could be stopped by pirates, or could be attacked in a war zone? Probably not real good. And that might raise it to a level of risk that might make people think twice if you're in India, or if you're in China, about purchasing that product. And I think that could become a real problem real fast. And I'll be watching that one closely. Over the beginning of next year.
Doug Draper 5:55
Yeah. Very, very succinct. You know, the one piece that you brought up there at the end, which I think is more notable, is not the assets, right, you got the vessels and, and the patrol and the patrolling. Right, a lot of that can be done without having a ship that takes years to build and becomes obsolete as soon as it pushes out. But the so I get that right. You can control and and and provide protection, where needed and where you want, without having a vessel on the water. Right. Are they needed? Sure. Are they needed in the way that they were in the 50s and 60s in the Cold War? Nope. But the one piece that you brought up, Pete that I had not thought about? Was the pulling back of the insurance, right, in the impact that that could have. And I don't know where this is going. This is just a comment, right? I don't know where this could go. Is that will the seas become more lawless? Because the insurance is unwilling to follow the cargo and be part of a part of the cargo, hey, we don't have as many vessels, it's not in our best interest to go out there patrol areas that we don't have friendlies on either side. So we're stepping away. And oh, by the way, we're not going to ensure the cargo because that's a way that we can have economic sanctions. And then what happens to the seas? Is it the wild west out there? That to me is the bigger potential Holy crap, what's going to happen there? So the Swift, you know, the pen is mightier than the sword, so to speak. That may be one way to look at this, but I had not even thought about the insurance piece. Until you just brought that up.
Pete Mento 7:30
We'll consider this, Doug. You know, we live in the military age of hypersonic weapons. And Russia and China. They always comment on Doug, China and Russia have both. They've developed these hypersonic missiles that are so fast that most ship defense systems can't deal with them. So you launch these outrageously fast weapons that move at these hyper speeds that can take out a ship, you can take on a Navy ship, they can also take a cargo ship. Well, we built them to. And if you're moving an oil tanker or an LNG tanker, and it's going across the ocean, we'll knock it out. Not a big deal. Well, I mean, it's a big deal in naval warfare. But when you're a self sustaining energy country, like the United States, which we can become, again, very quickly, we don't have to worry about bringing in energy from some other place do we know we don't, but if you're Russia, or China, and you have a real serious deficit, about generating your own power, this becomes a problem quick, for us, not so much. And something we learned from the pandemic is the need for us to become self sustaining again. And I think that this can be part of a much broader, much deeper understanding about where this country is going in the future. And that is the ability for us in a crisis to be able to manage our own supply chain, through that through NAFTA, through Mexico, through Canada. And through our own self sustaining efforts, so we'll see where it goes. But
Doug Draper 9:00
yeah, yeah, good been good topic. Alright, so we're shipped the beauty of this show, Pete is that we just go on opposite ends of the spectrum with with some of our topics and so I'm jumping into warehouse and, and real estate, for lack of a better term, and I'm gonna try to compare how this was after the financial crisis of 2008. So I read just the other day that warehouse construction or warehouse starts, as its referred is at a 10 year low. So people aren't breaking ground and put in big boxes and buildings out there and in on land anymore. Obviously, the reasons is interest rates, material costs, labor, and then slow demand that we've talked about on the back half of of the craziness, the post COVID You know, the Great, the roaring 20s that we spoken about multiple times, but interest rates are primarily the big reason for that. So it got me thinking that you know, after the The financial crisis in 2008. How the home buying industry, okay, you got real estate, I'm talking about warehouses, but I'm referencing residential real estate and how companies that were building houses, individuals that would started companies to build houses, everything just shut down. Right. And there was probably eight, possibly 10 years, where there was minimal new construction going on with any, you know, residential, whether it's single family, multi multifamily, whatever it was. And then when things started popping, and you know, pre COVID, even, there is no inventory, there is no inventory, interest rates come down the COVID situation where people were trying to move out to the suburbs and kind of eject from from cities. And the real estate prices just skyrocketed to the point where they haven't really come back down. So my question and thought on this one is, is that going to happen with warehouse construction and commercial real estate? So I had a friend of mine said, here's what's going to happen. And and he's a professional in the industry. And I certainly am not related to that. I'm just creating the the, you know, the example that I just mentioned with with residential. But he said, what's going to happen is there's going to be infill into these major markets, the gateways, the LA's Chicago's Dallas, Atlanta's the northeast, if you own a warehouse that's 3040 years old, you're going to be in pretty good shape. Come on, come on around, because people are going to want to infill and what's available right now that I need. They're not going to go out into the suburbs, so to speak, they're going to find existing facilities that are that are already already built. And so it'll be interesting to see what will happen. The other piece is that I think second tier markets, and you and I spoke about this during the port strike when people were saying when LA was jammed, how people are going through the Panama Canal and secondary markets. On the east coast were really great again in favor. So I think in the warehouse business, secondary markets are going to continue to increase. So it's interesting, my whole point in this one, Pete is will commercial real estate follow? What happened post 2008 with the residential real estate, part of me says, Yeah, we're going to be in a bind in four or five years out, because people aren't building anything now. And part of me says, I guess we'll be okay. There's plenty of warehouses, we'll just infill and we'll pack in what we already have. But the lack of warehouse starts, and dramatic reduction in in construction with warehousing. We're not going to see it for a handful of years out, but I think there will be some level of implication.
Pete Mento 12:53
I have been listening to a lot of podcasts, and a lot of people a lot smarter than me talk about this, probably over the last couple of weeks. Seems to be like a topic du jour, man. The opinions are so all over the place, you know, you've got people who are saying that when interest rates come down, there's going to be this rush to start building warehousing. That there's going to be people who are going to try to take what's been like, like, you know, office structures and stuff, how can we convert this to warehousing and like, wow, really, you know, like, just saying like, like office space that's out in suburbia or office space that's currently zoned supplies, like how can I turn into warehousing? Okay, you know, and then other people who are saying that inventory is going to start to evaporate eventually and because of the way that that we are in this post pandemic world that people have gotten smarter about supply chains and it's not going to be as necessary. And then I hear this really good argument lately that e Commerce has made warehousing so much more important that that's going to maintain this kind of level that we're at now have this desire to consume warehouse was like if sounds pretty good, you know? Man, I got no idea like this is this is there are so many great arguments about this topic. That I'm I'm just in the muck in the mire on this one, the waters so dirty, I think I'm going to need to see when interest rates come down, and how people invest in it. I'm gonna need to see a little bit of traction on this before I can really get an opinion because I don't know what the hell I'm talking about and peoples whose people whose opinions I really respect on this. They all have such different opinions. Because I really liked that, you know, talking about the commerce side that really has changed so much about how we manage what we do with warehousing, you know, and how people need it more than ever in places that we never needed it before. But then I see how these big bulky warehouses have become so important in different ways. I'm just turned around and confused about all of it. But it seems like that's, you know, is Am I wrong? Or is big warehousing has just been so profitable for the past not even before the pandemic, people were printing money that had great
Doug Draper 15:17
warehousing. Yeah, well, but main thing of warehousing, from my opinion, it's a real estate play as well, you own it, and you're a service provider, you can really position yourself in a strong, if you're just tied to leases, which is where a lot of people are, and our company has some ownership in buildings, and we lease buildings. That's a whole nother a whole nother deal, because the ebbs and flows of the economy can really impact it. But I think, I think the secondary markets are going to be the winners and the beneficiaries of this because, like you said, with the E commerce, if you want to play in the Amazon space, or anything else in the two day shipping, that is, you know, kind of the standard now, you need to be in Salt Lake City, you need to be in St. Louis, Missouri, and things of that nature, even Denver, Colorado, and in that instance. So I think the third, second and third tier markets are going to really benefit. And the infill, like my friend had indicated, the gateways will take care of themselves. Well, interesting to see whenever the interest rates come down. Is it going to be a building friends frenzy again, or, or not? But you're right. There's a lot of a lot of smart people with different perspectives.
Pete Mento 16:28
Well, I've always go to you for this stuff, Doug. So if you're, if you're equally a little bit turned around, and I guess it makes me feel a little better about where it is.
Doug Draper 16:38
Yeah, so cool. Well, I'm going to do the halftime show, because I like yours. I want you to jump on it. My halftime just a quick, quick snippet, but it's brought to us by a cap logistics. We can't thank them enough for giving us what I call the soapbox. Every week, we greatly appreciate it. And please visit cap logistics.com. So halftime Pete both of us have a little bit of a sports theme, but I'll let you go first.
Pete Mento 17:04
Yeah, I'll pull mine up now because I want to make sure I have you know exactly what's going on. I'm really fired up because it's Rugby World Cup. Happens every four years. Rugby is a great sport to a lot of fun. And much like the Soccer World Cup, you get a lot of real excited passionate. People watch it. Unlike World Cups, the last couple of World Cups, the USA didn't make the tournament. Because we're really bad right now that 15 is 15 is when you have 15 people to aside. We're pretty good at sevens right now, seven versus seven. But 15 is where it's at, man. That's the you know, that's the traditional game. And this has been a really great World Cup. So unlike the past years, streaming has allowed us to be able to watch just about every game live as it happens. I think every game live as it happens. So if you have Peacock, or you have Amazon Prime, you can watch every game in boys have been a great tournament. So the the Irish team right now has been extremely dominant, as has the host team France, and England, the nation that created the game has been excellent. We haven't seen the dominant player of New Zealand, who's sort of like the New York Yankees of rugby. Everybody loves New Zealand because of the haka. And most people love Australia as well because of their, I guess entertaining, passionate kind of loose, exciting play. But there's teams that people that learn to love rugby, like everyone loves Japan. And we love watching Japan, because they're the little team that can, and every once in a while they beat one of those big teams and, and we all sort of root for him. And what's wonderful about rugby is a lot of these folks, they play on professional teams together. So although you're playing for your your host team, your your your national team, you might play as if someone in France, you might play with Scotsman in Scotland and a team someplace else. So they're actually quite friendly with one another. And after the match, you'll see them all getting along. And so they're nasty as hell when they play each other on the pitch. But then after, because that's kind of how rugby is, you know, we're all very social with one another. If you've never seen rugby, please do watch a game. And it's looking like this could come down to one of the best finals that you're ever going to see. Because the teams that are dominant this year are teams like England, and Ireland and France and Australia. You could very well have some of the final teams being like England, Ireland, England, France, England, Ireland, Ireland, France, if you had like, France, England, are you kidding me? I mean, these are countries that have been at war for 1000 years. This this this could be this could be some of the greatest rugby finals ever. The play has been outstanding. It's been positively wonderful watch. And for those of you who've never seen it before, you can learn the rules in about 90 seconds. There's not a lot to it. And if you love football, you'll love rugby. If you love soccer, you'll love rugby, and if you just like to watch people who are incredibly athletic. You'll love rugby. So game moves quick. You only have to invest about an hour and a half, two hours to watch a game. There's no stopping the play. They start. They stop at halftime, they start again. And I think you really enjoyed. So do yourself a favor World Cup will be in America, I think in about 10 years, eight years. I know it seems like a long way away, but it's not. So please do give it a watch. And because you and Keenan are in Denver, the USA national team is based in Colorado. That's where everybody trains. The national team is there. And I know that it makes the tournament, but they are very good, particularly at sevens. They're incredible athletes. And I'm hoping that next go around, we'll be there representing us there. They're really good bunch of dudes too. And just one more thing. I'll say, Doug, our women's national team is incredible. So if you ever have a chance to watch the women play, they are absolute beasts out there. They're amazing. So do support women's rugby as well. And if you have a chance to watch collegiate rugby, give that a shout to.
Doug Draper 21:04
Yeah, well, infinity Park is what you're speaking about. It's right in it's right in the heart. It's in a it's in a location called Glendale, Colorado, you know, it's just one big area, but it's pretty close to downtown and I have had been there. It's a pretty amazing facility. So I know exactly what you're talking about. And the last question I have on this beat is like who's the beer sponsor? That's one of the most important who is sponsoring a bunch of guys out there just beating the crap out of each other. You got to have a beer afterwards. So who's not a beer sponsor?
Pete Mento 21:34
I believe this year, it's still a twat. But here's the funny thing about that, Doug. So France is one of the countries that allows beer consumption during the play. When in England when you go to a match, they don't serve beer during the match. So you'll go drink before the match and you'll go drink after sometimes you can drink at halftime, but they don't allow for consumption during the play. France however, does allow it when it was in Japan, they did allow it and the French were not prepared for the for the Mad consumption. rugby fans usually play rugby. And we are functionally alcoholics. There's no other way to put it. So you've got at the start start to France is massive. I think it holds like 100,000 people. So you have 100,000 And they're playing all over France. So they're, you know in Dijon and Leone or in Cannes, they're everywhere. So you have all these rugby fans that are coming out to watch these matches, and they are they are drinking beer. And the French were not prepared for this. So they're running out of beer like halfway through the first half. And they learned their lesson. So I think throughout the tournament, they've they've gotten smarter about making sure there was enough beer for it. Yeah. France apparently has the the rugby fans have been excellent about behaving themselves. There has not been a lot of bedlam. Unlike rugby, soccer World Cup, which apparently there's, you know, there's usually a lot of bad behavior from people who, you know, there's a lot of bad blood with soccer, from what I understand. There's not a lot of bad blood with rugby. People. People tend to really get along pretty well. We don't we don't take it that seriously. There's not a lot of nastiness. I will say that. When it comes to the UK fans, you know, Scotland, Wales, England and Ireland. They all get along exceptionally well. When Scotland played Ireland over the weekend, Ireland gave him a good beaten, but the fans afterwards because they'll pretty much just hate the English. When it comes to the Celts. They partied very well. I had a lot of friends of mine FaceTime me from Saturday's game, but when they play England, yeah, there could be some blood after that. But other than that, no, man, it's just a really fun party. I wish I was in France right now. I really wish I was in France.
Doug Draper 23:40
Yeah. Well, I can't see your passion for the game at all. In the last five minutes.
Pete Mento 23:45
It's the best I went to I went to when it was in the UK. When one of my really close friends Eric and I went to New Zealand, England together. And it was one of the highlights of my wife. So when the World Cup comes to America, I'm going to be taking weeks off at a time to go watch again quickly in Colorado. They'll be playing wherever there's a grass football field. You'll be seeing them play, they'll be playing at colleges, and it's going to be so good for the sport because Americans are going to watch it's gotten very popular in high schools and in colleges. It's so much safer than American football. You don't see the same injuries. Were very respectful on the pitch. There's only one referee that is one rep. So you've got these six foot seven 280 pound dudes that run like four 640s You know, I mean, they're if they if our football players started playing rugby, we would own that sport. Like Tim Tebow would be all globe. If he just played rugby. Jalen hertz would be like the greatest of all time if he just played rugby. But I think people will come and watch it and be like, how have I never watched the sport before? You just gotta give it one shot. You learn
Doug Draper 24:49
what I'm looking forward to it. Maybe I'll catch a catch an episode or an episode a match of pitch. I don't know what I'm saying. That's right. So, so my gears is great.
Pete Mento 24:59
I love it. So,
Doug Draper 25:01
so my, my, my take is, there was the Chicago Marathon this weekend, and I am not a runner. But I certainly know a lot of people that like to travel and I've heard, so don't get pissed off if you're a runner on this thing is that the Chicago Marathon is one of the easier marathons to travel to, and participate because it's flat, right? There was some horrific things that happened a couple of years ago when it was really hot. And I think there was a handful of people that actually died. But as far as marathon goes, I understand it's flat. It's pretty good to travel to and if it's one of your first marathons, that would be a good, a good place to go. But there was this Kenyan, and I'm gonna make sure I get his name, right. It's Kelvin. Kip them KIPT un Kelvin, kept him from Kenya, say that three times fast. The dude almost broke two hours to run a marathon, it was two hours and 35 seconds. And, again, I'm not a runner. But it's amazing that you could do 26 miles in just right at two hours. I mean, breaking the two hour mark will happen within the next year. I mean, this guy that just he's run three marathons. Three, right? That's it. And he just crushed the world record this past weekend in Chicago. And it's unbelievable, I never thought and looking at the pace that you have to maintain the conditions that braking two hours to run 26.2 miles would ever happen. Which leads me to just the fact that the human mind over matter, the strength of passion that the human body can achieve so many things that we would not think possible, you know, the the four minute mile barrier that was broken, you know, decades ago, in swimming, to break a 15 minute 1500 mile and swimming that got blown away, and it keeps getting faster and faster. It's just amazing to me. And one of the demarcations I think is pretty impressive, even though I'm not a runner, is when we break to men, or excuse me two hours to run a marathon. It's gonna be like, What are you kidding me? Gonna be unbelievable. So I had to call that out. Even though I'm not a runner. It's impressive. And it should be talked about on this podcast.
Pete Mento 27:20
We talked about we talked about runners before, like, we talked about the Olympics, just how it's amazing, you know, track and field is so wonderful, because it's just the human body against the clock. It's awesome, you know, and just there, these athletes are just so incredible what they have to go through. And now with all the drug testing, you know, you just know they're eating while they're training while they're taking care of themselves. And you go out there, and everything just has to be perfect. And the first thing I thought of when I saw that this morning was you know, when he crosses the finish line, he's like 30 seconds. Are you kidding me? Like what? Over 26.2 miles? Like what little tiny thing could I have done to just shaved off those 36? But then like what little tiny things over 26.2 miles did he have to shave to get to that, that number and now he's gonna have to spend the next couple more marathons to try to shave that stuff off. It's amazing, man. It's absolutely amazing. And it's, it's inspiring. I think that's why I love sports so much is I'll never I ran a half marathon a couple years and a couple years ago, was like I don't I don't want to try to remember how long it took me but me and bed Bidwell he's a CH Robinson now we ran it, you know, I remember crossing the finish line, my legs locked up at like 11 and a half miles I thought it was gonna cry. It hurts. So bad cramps so bad that I across the finish line, I felt great. You hear about these people who do this stuff, the amount of of preparation, the amount of of nutrition and training, someone's going to break it. And then someone's going to do even better. And that bar is going to keep going down. You talked about that four minute, mile, mile boss had Expeditors points out that no one thought it was going to be physically possible, like your body would explode or something. And then people a couple of weeks later, I guess, did it even faster, like the next person did it, then the next person did it. Someone had to break that barrier before they did it. And I think that's what's so inspiring about it is that there are people out there that are able to and willing to make the sacrifice and to show us just what we can accomplish. I think it's wonderful. You know, I went to the Air and Space Museum in DC recently, and I stood there in front of Neil Armstrong's moonwalk suit is right there. It's right there. And then behind it you know as quote one small step for man one giant leap for mankind. And I'm sure Kenyans like it was all a set, you know. You see the Gemini capsule you see the Apollo capsules. You see your good gardens busted Soviet you You sent to us. And you just think these are people that they did it. You know, they they did it. And it's inspiring. When we think of all the little things that we we try to get through on a day to day basis. These are human beings that did it. I just think that's beautiful, man.
Doug Draper 30:15
Very cool. All right. Well, let's move on to the second half, obviously, halftime by brought to you by capital logistics, appreciate their support cap. logistics.com. Pete, I open so you get, what's your second one? Here? Brother? You go.
Pete Mento 30:30
So second one. Hey, Pat, on the back to global trade this week, we're right again. The World Trade Organization had to readjust their numbers for where they felt the global trade growth would be for 2023. And wrong, they've had to adjust it down by 50%. So they're their number for global trade growth was down, they believe it's gonna be point 8%. Earlier this year, in the show, when we were looking at the numbers, we're like, Oh, you are you guys are so wrong. Be ashamed yourselves with these numbers when you all smoke in the crack. And turns out we were right. Global trade growth is way down. A lot of that has to do with our our friends over in China are just not able to hit their growth numbers not able to hit the export expansion numbers that they had set for themselves. Another big part of that, of course, is inflation. Inflation is just kicking people in the behind, all up and down the globe. It's not just here, it's everywhere. So the inability for people to consume to the degree that is necessary to expand trade is just a lingering problem. And it will remain a lingering problem. So the problem I have with this, Doug, is they've still got these insane numbers for next year. But they're talking about 2024 Like inflation suddenly just going to go away. Like next year. Inflation is just going to take a holiday. Like Oh, yeah. Oh, so 2024 Still looking great. We're keeping 2024 right where it was, because Santa Claus is going to come and he's going to deliver to the Fed some magic inter nine deflationary issue, and deflation is going to go away, mysteriously. It's all gonna be great. Yeah. So they haven't adjusted the 2024 numbers or 2025 numbers at all. And that's why I wonder man, like maybe finally at 50 something years old. Maybe I should just finally admit that all these pro prognostications that people make are just utter and complete. Humbug. I think it's time we just do it. But
Doug Draper 32:29
yeah, yeah. Well, what's the incentive to change things a year and a half out? Right? There's the forecast. They throw it out there. I don't want to backtrack quite yet. I mean, who knows? The thing that happens, this is unrelated to that topic to some degree. But the speed at which things change and pivot is so fast right now, if you look, and we spoke about the, you know, the roaring 20s, the 2020s, post COVID. And how that was just, you know, Robert, everybody's is eating and gobbling and consuming. And in 1920, that was like, seven or eight years before the Great Depression happened, right? And the roaring 20s 2020 That was like, 18 months. And things dramatically changed. So what happens in 18 months from now could be just, I don't even know it could pivot things just move so fast that providing visions, two years out is is poppycock. Like, what's the, there's so much that can happen between now and then, where 7550 years ago, it would take years, a decade to make change. And now it happens within a matter of months. So I don't I then surprise me that they're not changing for 2024 2025. It's easy to come back and say, Oh, things changed a little bit. Now. We're going to adjust it. So
Pete Mento 33:45
how was I supposed to know how? Well you you take so much pride when your stuff accidentally is right. Yeah. On this show, whenever I speak, you know, I gave a speech last week where I was the first to admit, I mean, there was crap. I got wrong on the pandemic. Oh, minute. I didn't know this stuff I got right. You know, I'm not gonna sit there and beat my chest about how brilliant I was. I got crap. I got lucky. What are you gonna do?
Doug Draper 34:09
Yeah. Cool. All right. So my topic. I'll be quick on this one. And I've I've talked about it a little bit, but I just saw an article about Uber connect, now has a service and I think it's called return a package as basic as that is, but they're getting into the reverse logistics and the E commerce returns. Business everybody's trying to find the sweet thing. How do we reengineer the reverse logistics so we can get product back into an area warehouse or something that can be resold again, and my take on that Pete is there are certain things that absolutely need a fundamental reverse logistics program, high value things, medical science, things of that nature, but for the the average Joe that drives most of the returns, which is I don't know Buy one purple, red or blue. So I'm going to buy all three of them knowing full well, I'm going to return to that. Don't try to reengineer what's already there, we got to blow it up. And and and totally change it. And my take on this beat and I've said it a few times, is once the product is in market, do not let it leave, find other ways to sell it, repurpose it, or donate it to some degree, right? I'm not saying you got to push all this Lululemon stuff to, you know, to homeless people or things of that nature. But once it's in market, keep it there think of creative strategies to to resell it. Right, it doesn't make sense to take a shirt, or a blouse or a pair of pants and move it back to the supply chain with the cost involved the handling the way labor is it's not getting cheaper. Keep it in market. Right. And then you got the Uber guys and I think it's great. I'm I'm I'm a fan of Uber, I have nothing bad to say about Uber. But you're going to show up to return a pair of Lululemon pants, and they're just going to give it to you, right? And they're going to be duct tape and a package and you can't figure out if it's right or wrong, is it broken? Do I have all of whatever I'm supposed to be returning, and I gotta go pick up some other people. So I'm gonna throw it in the back seat or my trunk. And it's going to be two or three days before I get to an area that is convenient to return it. So I think they just they we need to blow up the concept of a reverse logistics for general merchandise that's purchased. And I will say that Amazon and Kohl's in my opinion have come up with a brilliant strategy where you can take your Amazon returns to a cold store, they basically click a couple of buttons, they scan a barcode that you print from your home, then they give you a $15 or 15% 20% credit and when you walk out the front of the store because the the returns is always in the in the very back by the bathrooms, you got to walk through the entire store, you're going to buy something. So the you know, the initial mile, if you will, and the return is handled by the consumer, they're physically taking it somewhere. And that that's a brilliant idea. I think there's more creativity of how do you keep stuff in market. But my whole point is that Uber is trying to help an existing model, what needs to happen is a disrupter to come in and change it. And my solution is keep the product in market, once it gets there, do not attempt to pull it back out to resell it because you're just throwing away money. So kudos to Uber for coming up with with a solution. But we got to blow this thing up and really think about how we manage returns in a different way.
Pete Mento 37:43
Doug, how dare you? First of all, I mean, all
Doug Draper 37:47
right, the I didn't use the term bogus either. So we'll keep it at that. So
Pete Mento 37:52
how dare someone who doesn't work for McKinsey or Boston Consulting Group? You know, how dare you speak such words? You know, I mean, what were you thinking, you've just stopped some large consulting group from charging a.com company $3 million to create 500 PowerPoint slides to say something so obvious. Going to a Kohl's department store and dropping off your stuff. While you're on your way to target to pick up your, you know, your toilet paper and your eggs, or whatever is very convenient. Or when you're going to Whole Foods using the they have these machines now where you just you hit your scanner on your phone, they give you a label, you put in a bag, you stick it in their little drop box, and you're on your way. I think that's meeting the customer halfway. It's a little bit of my time. It's a little bit of your technology. Everybody wins. You need to have a little skin in the game when you're the consumer and you bought something. I think that's fair. Okay. And there needs to be convenience, which that is, but there needs to be an understanding sort of like a contract between the consumer and the seller, that we need to be both a little inconvenience. I think that's fair, okay. And the idea of all these companies now like you said, Lululemon Lululemon has a lot of, of actually call them like, outlet stores, you know, all over the country now, that the ability for us to clean disinfect products, put them back out on the shelf relatively close to where they were return, and sell them at a discount so that you're actually making money on that return. It's exactly what you talked about. What's the problem with that? There is absolutely nothing wrong with us trying to find a way to make this resale profitable for the company that got it to you in the first place. And that gave you a chance to see whether or not you liked it. The consumer needs to take some responsibility for the fact that ecommerce is so convenient. Maybe not popular with my customers, but at the same time, it's probably not so popular with the consumer as well. Gotta find some little grandpa Yeah, it'll be interesting. It'll be alright. Well with that, some great topics this week and a hell of a halftime we want to thank everyone who watches the show and listens to the show, particularly those of you that tell all your friends and keep our subscriber numbers up, and especially to our friends at CAP logistics for their support, financial and otherwise, of the show. really do appreciate it. And that's going to be that for global trade this week. Thanks for Keenan back in the booth, keeping it all going. Thanks for my co host, Doug Draper. And we'll see you all again next week for another Saturday edition global trade this week.
Doug Draper 40:31
Yeah, that's a good one. Do you guys thank you
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