Global Trade This Week – Episode 218
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Doug, you're watching global trade this week with Pete mento and Doug Draper, hello everybody, and welcome to a another edition of global trade this week. My name is Doug Draper, I am one of the hosts of the show that we've been doing for, gosh, 200 and some odd episodes. If you divide that by 52 that gets the total number of years. We're super excited. But this show would not happen without my other co host, Mr. Pete mento, on the other side of the coast,
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my friend was shaken. Oh, not much, buddy. I'm I'm enjoying a nice Veterans Day Off. Thank you for everyone who served. And it's, it's, it's nice when you start a job and a week later you have a day off. Doug, I can't complain
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about that. That's called retirement. Whenever you have some Joe job on the side,
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that wouldn't be so bad, that wouldn't be so bad. Yeah, you're in your beautifully appointed new office there in in Fresno,
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yes, yeah. I figured I put a collared shirt on and got a big, fancy TV. We were saying that our corporate office moved away so it's no longer adjacent to the warehouse, and we took a sublease down on a law firm, or, excuse me, an office that used to be for a law firm, and it is stale, as far as like just big, gigantic rooms with tables and lots of fancy chairs, really long tables. The table I'm sitting at probably has nine chairs on either side, so you can fit like 18 people in this room. I'm looking over the camera. So anyway, it's a whole new genre. We're warehouse and freight guys by nature, right? So I'm used to, like walking out, opening the door, and you're in a warehouse with forklifts and noise and everything else. Here, I walk out and there's like a dentist office next door. So I'm trying to get used to it, but I don't want to be here a whole lot, because I need to be where the action is, which is the warehouse? I agree. Doug, yeah, I
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think we've talked about this in the show. I think it's weird that there are so many young people in our business, young like, let's say under 30, right? That have never seen like, a box, like, they've never, they've never been in a warehouse. They haven't seen a container. They probably haven't seen a truck being loaded and unloaded. That just seems weird to me.
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Yeah, yeah. You got to get your hands dirty, right? I saw a post the other day on LinkedIn that said, Hey, if you want to look at who the CEO is, or the good CEOs, or COO look at their shoes, because if they're polished on the front and the back, that means that individual is not in the warehouse learning more about his business. So I can't remember what post that was, but there's some credibility to
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that. Get your hands dirty, kids, get your hands dirty.
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There you go. All right. Speaking of getting hands dirty, this is where it happens with our show Pete. We start talking about global trade. This is a somewhat abridged show, so I think we just have one topic each. But let's get her going.
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Yeah, man, so last week was, it was like the Super Bowl, prom night, VJ Day, your wedding all together, all at once on last Wednesday, the fifth. So on the fifth, last week, the Supreme Court heard oral arguments against the tariffs. It was a very brave toy company that hired some very good lawyers, and they made it all the way to the Supreme Court. As you mentioned on the show earlier, these tariffs have been struck down by the two lower courts now, Doug, I have to admit this, I've never listened to oral arguments at the Supreme Court. Have you ever listened to them?
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Come on. Man, no, right. No, no, I've never.
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I've never listened to them before. And I gotta say, Man, I walked away like super impressed with these people, really, you know, because for the most part, you only hear about members of the Supreme Court through the news, and I gotta tell you, they were extremely well prepared. They asked very good technical questions. They were they were forceful in the way they dealt with the attorneys and the Solicitor General. But what really got me was you could tell how they were thinking, and they didn't come in there with a preconceived notion. They had real questions to ask these people. It was awesome, like it kind of makes me think, if there's another case I'm even kind of interested in, I might listen to the arguments again. It was that it was that interesting during the arguments. So the prosecution, which is the not the prosecution, the the defendants were the US government. They got up there, Guy sounded like RFK Jr. He had a kind of a gravelly voice, but he talked super fast because he had a lot to say, and the justices just interrupted him all the time with these great questions. One of my favorite lines that came out of it was one of the justices said, so, so it's a tax, well, no, it's a tariff. And the argument was made. Well, a donut hole is not a donut, but it's still a pastry. And that that I was laughing because I'm such a nerd, right? I'm laughing out loud. But the oral arguments, if you were to listen to them, most court watchers say that it sounds like the court agrees with the defendant. They agree with the importers. The problem is, Amy here, Amy Comey Barrett said at one point, so if we have to give this money back, it's going to be a mess, huh? It's going to be a big mess. So now everyone's saying, maybe what they'll do is say the old tariffs are illegal, but we're not going to refund your money. We're just going to let you not pay it in the future. Could you imagine that? I mean, I'm talking pitchforks and torches marching on the court if they say that. But it was made very clear that getting this money back is going to be onerous to the government, onerous to the Import community. I'm going to stick by my guns. The government's going to end up having to refund part of this will only be the people that did a suit. Will companies have to file a suit? I don't know, but I'll tell you this much. Man, $39.6 billion is now at play, and this has got everyone's attention. We'll probably get an answer about this, because they asked for an expedited ruling. We could get it next month before the court goes on recess. If not, it'll probably be February, March, and then I'll finally get to shave this stupid thing off my face. But you know, the good news is, man, for me as a trade nerd, it was so rewarding to hear these people talk about it. I've walked away with a tremendous amount of respect for the court. And yeah, it sounds like we're going
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to win. That's so let me ask you, this has nothing to do with the topic here. Can Can you listen in on any court hearing on the Supreme Court? Or was it just specific? I didn't realize that.
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Yeah, a lot of us had entered the lottery to try to win tickets to be there in person, but if you remember, there was a period where the President was going to go. So if the President went, that meant that two thirds of our government was in the same room. So they cut down the number of available tickets. So I didn't get a ticket, but if I would have shown up the day of it, I could have waited in line to sit because he didn't come, but I wasn't able to do that. But you can listen to any of them on the Supreme Court you can listen to the old ones too. On the Supreme Court website. They put up live the arguments while they're happening, and then you can listen to recordings
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after, yeah, interesting. Well, that's good to know. Don't know if I'll ever use it, but that's good to know. So the one thing that I've been hearing on the scuttlebutt a little bit is that there are importers that are underscoring how easy this process could be. Yeah, hey, I know it's going to get wacky. Could be arduous. The feedback that I'm seeing on some online is like, hey, everything's line itemed Anyway, not only the base tariff, but all the other fees and the fentanyl tariff and things that nature. So the identification of how much money is due back on per entry that is pretty easily identifiable. So think of a creative way for the distribution of the money back to the importer and not get too wrapped up in the wheels of government to try to figure out, what are you because you imported boots from Venezuela. What you know what? Let's deconstruct that and see what your refund looks like. Keep the refund process simple. A lot of people, a lot of importers, right, that are just raising their hand saying, it doesn't have to be complicated. And to your point, a little bit is better, better than than nothing at all. But you don't want to make the decision based on how do we deal with it? The decision is decision, and it should be made for merit and the reasoning behind it, right? And I don't think we say, well, if we go this direction, then to fix the problem, or not to fix the problem, the reissuance of money is going to be such a pain in the ass. Let's just not even make the right decision, whatever that decision is. So it's a Supreme Court. I know they get that right, but I think one of the things they could do is, how do you simplify this importers that I'm hearing and seeing online is like it's already line item. Just call it out and think of a creative way to expedite the refund process.
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I agree this could be done so easily. They go into the automated commercial environment, ace the system that we all share. They identify anybody with a chapter 99 number that paid these tariffs, and then they say to the importer, show us that you paid them right. Go to your broker, ask for your statements, show us that you paid them, and then once that's done, issue a refund to the import of record number. Maybe it takes them six months or eight months, but I think what I'm doing here is I'm assuming the government wants to work which they don't, so they want to have everything brought to them in some wrapped up package that they'll probably deny if there's one digit off left or right. And you know, you can see why I think Doug, what we have to remember is the government is not known for unclutching the cash that they have taken from us, and not to get political. You know, big believer that taxes are onerous in these taxes in particular, they're going to fight tooth and nail to keep this money. And so it's up to us as an import community, whatever, like, remember that game mouse trap, where you had to set it up and, like, the ball, whatever silly mouse trap game they set up to get our money back, we need to do it. Can't let them get away with it. You're just done to us. Yeah, that's
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valid. Very valid. All right. You want to jump into halftime? You want to talk about my topic? Yeah, we can
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do halftime. We could call it overtime and do it at the end, but I guess we'll do halftime. Brought to us by our friends at CAP logistics. Yeah, Cap Logistics is what runs this show, makes it happen, if you're kind enough to make it happen financially, even lone us their their least talented producer, Keenan, who manages this force every week, and sometimes tries to sit in and take over for one of us, and miserably fails and falls on his face. But we do think capitalistics for all their support, and I suppose for Keenan too. So Doug, you want me to go first? You want to
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go first? I'll get this going, right? So I saw that the MiG McRib is apparently back in the news, right? And I started thinking, and I don't know why these two things came together. I was just like, You know what? The freaking McRib and the band Journey are kind of like one in the same right? Because, yeah, because they go on these farewell tours that just never end right? How many farewell tours have you had journey? So like the McRib has come and gone multiple times. This is the last time it's coming all that kind of good stuff, and it keeps popping back up. And same thing with journey, I literally in Fresno just yesterday, they're doing a farewell, farewell tour next summer in in Fresno. Now Fresno, I don't have any bad things to say about it, but it's a tier three city, and the fact that they're honking their songs at this level, this late in the game, they're really, you know, the McRib and journeys, they're the same thing. So I did, I did a little work on the McRib, and then I'll leave it at that. There is a website that's called McRib locator, and I pulled it up, and if Keenan has the ability to work his production magic, or maybe I'll just put it in the in the show notes. But look, literally, I pulled it up this morning, and you can see where the McRib because they're not rolled out all over the country yet. And there's a little pop up that could say Pete mento, on the 11th of November, at 1059, bought a McRib at this McDonald's at this location. It's real time, and it shows you where everything is. So there's a Nick Nick rib, you know, website, they're really similar to journey in the sense that they always seem to come back, but it's almost like a meme stock to some degree, right? I mean, bring it back a little bit, then pull it back and all that kind of stuff.
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So Well, scarcity drives desire, right? I've never had one Doug of you?
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No, no, I have not. And the last thing I'll say about it, I just, I jotted down a note. So it's some guy that was a chef for McDonald's, chef in quotes, had some barbecue in South Carolina in the mid 80s. And he's like, this is awesome. I need to make a sandwich. Show it. It's ground pork shoulder with some of that smoke, liquid smoke is basically the two ingredients. Now, pork shoulder probably has a lot of other ingredients in it, but that's it. And then they make it wavy so it looks like it's a rack of ribs, but yeah, I've never had one to answer your question.
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There are certain food things like that. The Shamrock Shake, people get excited for that as well. And the McRib, I've never had one. I can respect people being crazy about it. That's cool. But you know, first of all, how dare you malign the great culinary artists at McDonald's? I am. I'm a fan of McDonald's, but as I've said earlier on the show, Burger King has my heart, so I will not, I will not poo poo either brand. I think they're both delightful. But if given the choice between the two, I'm going to go Burger King. And number one for me, because of my Texas roots, will always be Whataburger. You know, this is going to be controversial, but in and out, burger can just go in the garbage where it belongs. Okay. All right, we'll just leave it at that. People, people are like, some very angry comments for me saying that, except for the Texans and people from Oklahoma, they're gonna agree with me. Yeah, that's true. Cool.
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All right. Well, that's what are you bringing to the table on
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this halftime So, yeah, we timestamped this. So it is Veterans Day today, and thank you again, everyone who served. And I wanted to talk about war movies done. So for me, war movies are in two categories, old war movies, new, new war movies. So my favorite old war movies probably come. No surprise, a lot of Navy stuff in there, but I'm a big fan of a couple in particular. So Kelly's Heroes, one of my all time favorite movies, the Dirty Dozen. I love that movie, but the biggest one is going to be midway. Midway is an incredible movie about the Battle of Midway. It's very long. It's epic. It has these incredible actors. Love those three movies, newer war movies. Again, probably no surprise Saving Private Ryan, positively, absolutely incredible film from start to finish. I absolutely love platoon. Just an amazing movie. And then, because I grew up in the 80s, Top Gun, Top Gun. I went to a Maritime College in the 1980s and early 90s. And everyone I went to school with it seemed like wanted to fly an F 14 and, you know, shoot down MiGs. And I'm pretty sure that half of that student body could recite the movie from start to finish. And it was always coming up all the time quotes from Brugh So Doug, do you have any favorite war movies, old or new?
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Yeah, I got one of each when I was when I was a kid. I can't remember when enough to pull this movie Up, but you remember the big red one, awesome movie. I didn't know anything about war movies, and somehow I stumbled across that, and I was just drawn in. You know, the character development, all that stuff. I'm not a movie critic, but for some reason that one resonated with me, and I obviously enough that I'm talking about it today, but that that would be, I would put that in the old category, and then the new category, save it private Saving Private Ryan. Now that there was a lot there. But the thing about Saving Private Ryan is that opening beach scene, oh my gosh, unbelievable. When I first saw the movie, I was just mesmerized. I think it's like 18 minutes long, and it's just non stop you're in it the way they filmed it. And all the things that make that movie Great. That to me, that scene, the opening scene, incredible, is absolutely, you know, incredible. So those would be the two save it, Private Ryan, and then the big red one.
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So play tone is Tom hanks's movie company, and I don't know what it is about World War Two. Maybe there's someone in his family, I don't know, but he's obsessed with it, right? So Saving Private Ryan, incredible Band of Brothers, the TV show that was him. They just did one about B 50, not 50 twos B 17 on HBO. He did greyhound. He's just done a ton of and every time he does it, there's this very sympathetic view of the people that are fighting. It's not always heroic, and I really do love that. But as far as the Big Red One goes Doug, at some point today. I think it's on TBS, but they play it every year on Veterans Day. So if you've got, I think it's like, what, three and a half hours or something to spare today, you can sit down and watch it. I don't know where it's streaming. Anyone who hasn't seen the big red one. Positively fantastic movie from start to finish. Really, really good stuff.
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Yeah, yeah. Good. Good. Topic, good halftime topic. So yeah, brought to you by CAP logistics. We talk about them all the time, but literally, we would not be here for the last 200 and some odd episodes without those guys. And so it's greatly appreciated. That's why we call them out every time in the show. Cap logistics. Com, all right. Pete, so I'm jumping into mine, and I'm going to take if listeners go back, I think this was literally the very first show we ever did. I remember, I remember being in cap logistics studios right there. I coasted media division. I was literally in there, and we talked about a service called buy online, pay in store, bopus, right? And I was just chiming about that, that acronym. And I think at the end of the show, I literally put a pair of sunglasses on and had some guitar, and I was pretending like I was Johnny Cash singing about focus or something. I don't even know if you can get access to the first episode of the show, but I think it was the first or second one. So we've joked back and forth about how acronyms and everything else with all kinds of different logistics acronyms. Anyway, I was in Home Depot in Vail, Colorado this weekend, returning some stuff, and on the wall behind the returns desk, it was beat bopus, P O, P I s, B, O, P, I S, and a big arrow pointing one direction. And I was like, What does that stand for? And they're like, oh, it's I knew what it stood for, but I want to make sure that those guys knew. And you, oh, buy. If you buy it online, you can go pay for it down the way there. So Lopez, so that leads me to believe the new one that's going out, as far as acronyms, is buy, now, paid later. Now, it doesn't flow off the tongue as well as focus, but I started, you know, we all know about that. I use that service to buy my ski tick. My ski pass every year, because if you pay in a certain way, you don't pay any interest on it. But the Buy Now pay later is, i. Uh, extremely popular. It is a substantial amount of what they're expecting consumers to use to buy their holiday holiday gifts. The feedback I've received, or the article I read was up to 40% 40% of the crap that we're going to buy over the holiday season is going to be with buying. Buy now, pay online. And unfortunately, a lot of that is the younger generation that may not get the concept of that. And the other piece I was talking to Keenan on a couple weeks ago is that people are doing buy now, pay later for food, right? And I'm not talking about SNAP benefits and stuff like that. I'm talking about you're on your couch and you're watching the Big Red One or whatever war movie. You're like, I don't want to get my ass up to make a sandwich, to grill it, you know, to make a PB and J and grab some sauce and chips. I'm just going to order it and buy now, pay later. But the concept of that is getting down to the level of purchasing food because you get too lazy or the convenience is so great that it's hard to overcome. Buy now, pay later is could be a huge detriment to the economy, specifically to the younger generation. And our kids are square in the middle of that generation. That makes me really, really nervous. So although bopus was kind of fun on episode number one, in all seriousness, this is a little scary as far as the speed at which this has been adapted with the younger generation.
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I agree Doug so I full remember very well my mom going to Montgomery Wards, Sears, right? JCPenney and putting things on a layaway. You know, she'd buy a couch, or whatever it was, and then over the course of seven or eight paychecks, she'd go in every week, she'd put some money toward it, and then once it was paid for, we got it at home. That was pretty common in my house for most of my life. The thing about that that was bad for retailers was the inventories still on their books, and so they stole that inventory, and although they were bringing money in, it wasn't transacted as a sale until all that money came in. When you buy online and pick up on store, it's like they can instantly, you know, book it as revenue. And then what we're learning now, if anybody goes on Amazon, a lot of the purchases, I don't even know how low it goes now, but you can pay it off over 2345, installments without any interest, but they just they hit your credit card with it. They're booking that revenue at the time that they sell it. Because the revenue is out, they have a promise of future revenue. The likelihood it's not going to get paid for is relatively low. So they're pushing this to get people to buy things that are more expensive. You know, have it now? Is it any different than a credit card? Well, I suppose it is in the fact that there isn't any interest, but you're paying for it in those increments, 1234, what's scary is people are buying things that they really don't probably need this way, whereas credit for very long time was for detrimental, you know, catastrophic issues. My heater broke. My air pump, my AC pump is gone. I need a hot water heater. I'm going to pay for this over 1224, months. I need a car. I can't afford to buy one. I'm gonna pay for it for whatever. 72 months that that isn't the case anymore. And I'll tell you, Doug, you've, you've threw me a softball with this, right? We have a, we have a current argument coming out of the White House that we should have 50 year mortgages, wow, zero, which is common in Europe, but not so much here. That would allow people to buy much larger houses, which they probably don't need, but they're not going to have a whole lot of equity in it over time. You know, the interest is front loaded. You're only going to save, like, on a half a million dollar mortgage. It's about $300 less a month at the current interest rates. And you know, are you going to die in the next 2030, years? That means that there's not a lot of equity for you to leave to your children, and the bank's going to own that house. So having stuff is fun. Right before we had our meeting, I was showing you guys all the fucking helmets I've got sitting behind me. Right? It's what I do. I collect helmets. I resell them. I make money off make money off them. But you don't need a lot of this stuff. And learning that and embracing it. Hate to sound like the hippie I am, right, but
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you want to have more have
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less. So this is dangerous, Doug, it's really dangerous, and two guys that make their money in transportation probably not the best position to have, but I think from just a human standpoint, it's pretty scary to think that we've made it so easy to just buy, buy, buy,
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buy, buy. Yeah, I'm hoping at some point we could have three days of peace and music, right, which I wouldn't even say, if anybody's watching the show and paying attention, you'll get that joke. But yeah, agreed, it is scary. It's a whole nother conversation that we could have at a later date. It's not really global trade, but it is trade in a sense that we need to keep it straight
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adjacent our ability to impose these tariffs, our ability to. You know, be so important on inland ocean routes our air freight, it all comes from the fact that America is the world's single largest consumer. And if you took every credit card in this country and laid them flat on top of each other, they would go 38 miles into space. We are a consumption economy, and that drives trade, and now we're trying to find new and interesting ways to consume man. And I'm telling you, it's, it's terrifying.
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Good, good explanation.
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How's that for ending it on a downer? Right? Talking about war movies, and, you know, the first 18 minutes, man, everyone gets blown up. And then we're going to end it with like, I'm wrong, going to hell in a hand basket because, but we do want to thank our friends at CAP logistics and Keenan back in the booth. We want to thank all of you for subscribing, listening, showing up week after week. Tell a friend you know, there's plenty of room in this party for everybody. And Doug as always, man, thanks you for being the CO hostess with the mostest. And we'll see everyone next week. It's happening in global trade. We're gonna talk about see you, buddy. Excellent. Take care, guys. You you.
Transcribed by https://otter.ai