Global Trade This Week – Episode 187
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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 Global Trade this week. Coming to you live from the International compliance Professionals Association in Orlando, Florida, the most magical place on Earth. With me is my friend, Doug Draper, Doug, where are you today?
Doug Draper 0:23
I'm back in Colorado. Um, my travels are, are over for February or for, uh, yeah, March. I'm back in Colorado. I was laughing when you were saying that, because I don't know if there's 12, you know, this is good. I'm not going to say it, but 12,000 people. What's the name of the conference? Again, international, international
Pete Mento 0:45
compliance Professionals Association. There's 1000s and 1000s of us. We're so happy here. It's like the Comic Con dude. It's the one place you get to go where everyone accepts you. They understand you. You have conversations with people who understand your language, we could speak Klingon here, it's totally cool. Yeah, and, and we're the cool kids. Unlike a lot of other places that we go to, we're the cool kids. Yeah, I'm not going to be able to go more than five seconds without someone interrupting it, so just be ready for that. Okay, yeah,
Doug Draper 1:15
I you know what? I think you just nailed it there, the Comic Con reference, and Klingon speaking on that stuff. Well, hold
Pete Mento 1:23
on, Doug, to be fair, at TPM last week, it was the same thing. It's, it's like comic cons for transportation professionals. So don't get too cute, all right. It's not going to I'm just good, yeah, I know,
Unknown Speaker 1:35
yeah. GPM
Pete Mento 1:37
is massive, and it's super important, and I understand all that, but don't get it twisted. It's, it's still a giant transportation nerd festival.
Doug Draper 1:48
Yeah, yep. You cut out for a second, people, we'll make this thing happen. Can you see? Hear me? Yeah? Sure. Can, yeah. All right, I'm ready to go. Awesome. All right, well, let's just get this party started. Then with these topics, I know we're, we're we've been tight in time the last couple of weeks, and so I'm sure some of our listeners are excited to hear that. They don't get to have us ramble on forever. But you know what? I'm trying to think of the good intro here. I thought that Panama was just a kick ass song that Van Halen put out when I was in high school. But actually it's a big topic that you and I are both talking about this morning. So BlackRock and MSc. MSC created a separate division, and they're going to be purchasing the canal operations from CK Hutchinson for $22 billion ironically, you and I spoke couple, maybe a month ago about ck, and they are technically Hong Kong based terminal operator. But you know, the spin here in America was, you know, military influence. We're not getting a fair shake on the fees to go through the Panama Canal, and looks like something transpired to to make that change so the pine the Panamanian government still has to vote on it. That's probably a rubber stamp type of thing, but yeah, and oh, by the way, everybody says it wasn't politically motivated bullshit. Oh, sorry about that. Throat. I don't know. Like, nobody knew there was a problem down there until, like, six weeks ago, and then it was identified, called out, and now we're kind of running the show down there with MSC. It's just, yeah, it's interesting. So I don't know what's your take on that?
Pete Mento 3:41
Well, my take is very similar to yours, you know, you there's a great line by Stalin. Of all people, the strong do what they will, and the weak accept what they must. And I think this is an excellent situation where the weak and accepted what they must. There's, there's no way in our hemisphere we were going to let the Chinese control of that, you know, right? And, you know, I wanted to piggyback on what you were saying about the politics of it. It's the geopolitics of it, the geopolitics of it, right? The fact that such a large, massive trading partner like the United States was dipping their toe into Latin America, which, you know, when we do it, we tend to get what we want. And saying, this will change. And that's precisely what happened. It did change. You know, I had put down that on today's topic. I want to talk about the CNA, CD, GM, support of infrastructure. That's $20 billion is nothing to sneeze at. It would take you and I quite a while to get through that with concert tickets and Taco Bell, you know, 20 billion bucks. But these, these, this ocean company has said they're gonna put a $20 billion investment into infrastructure. What I think our listeners need to understand is the incredible amount of capital required to open ports, manage ports, operate ports, upgrade ports, to. Billion dollars is not a lot of money. When you look at it in that terms, it is. It means it's a lot of money, don't get me wrong, but $20 billion isn't going to make a dent in the infrastructure problems we have with our ocean trade infrastructure. I'm so happy to hear that we apparently have our arms around the issue in Panama. Go team, you know, winning, right? But if we're going to take a look at our own infrastructure, it's going to take more than $20 billion here's a hot take. Doug, yeah, I think the President is going to go to all of these ocean carriers that he's threatened to put a $1.5 million fee on every time that they that they visit an American port. And I think he's going to tell them, I need a similar investment from you. So now he's going to have Maersk and Costco and evergreen all shipping in $20 billion you know, you're talking about some real money at this point. You're talking about probably, you know, 100 100 and $50 billion now we're talking now we can actually get some infrastructure approved improved in this
Doug Draper 6:00
country? Yeah, no, I think you nailed it right there, right? Let's just get our foot let's get our footing set up down there. We meaning, you know, the US partnership with MSC, and then let's have other people assist, if not pay for all of the infrastructure. Like you said, 20 billion is a lot of money, but you're just gonna piss that away in a heartbeat. Not piss it away. I mean, it's not going to go as far as as anybody thinks. Maybe in our you could probably,
Pete Mento 6:28
you could probably improve and modernize one middle sized port pretty damn well for $20 billion you could, you could rework Savannah or or rework Portland or Seattle in a pretty incredible way with that kind of money, but it's not nearly enough.
Doug Draper 6:46
Yeah? Well, this certainly won't be the last time we talked about this one, right? Like, well, not Blackrock is an investment, one of the most powerful, if not the largest,
Pete Mento 6:58
real estate, yeah, and investment, right?
Doug Draper 7:00
I mean, they know what they're doing, right? This isn't chance that, Oh, this looks like a good investment, right? So there's ulterior motives and things maybe not ulterior motives, because I think it's generally what we spoke about. But it's not the last financial play to get the infrastructure dialed in down there, which is what we need.
Pete Mento 7:19
And that's to your point. Yes, sir. Well, that brings us to halftime. Brought to you by our friends at CAPS logistics, yep, Doug, we've got some bangers this week. There's going to be some anger. I
Doug Draper 7:30
got a feeling, yes, so I'll jump in first. This is Monday after daylight savings time, right? So there's been a debate for years and years and years about the benefits of it. Why do we do it? Some people say it was related to the farmers. Some say it was related to energy conservation during the war. You know, other people are saying other things, but the bottom line is, however it came to fruition, it's here, it's now. And here's my take on daylight savings time, right? I love the fact that there is more light in the evening. You know, people get up, especially in the East Coast. Pete, my take being in the mid or being on in Mountain Time is that everything starts a little later. It's like a nine to five world and then a lot of activity after business hours. So number one, I like the fact that it's lighter later, right? I think there's value in that. And the other thing, I guess that's really my main thing, I like it. I like daylight savings time. I'd rather be in this time frame than than standard time. The one thing I want to call out Pete is all the things you see you see, and talk about, oh, the productivity of the US drops off X percent for the week following, and it's horrible. Then I'm like, That is bullshit. Has anybody taken a flight like in the last I mean, you went from California to Florida, right? You just jumped three time zones, right? You may be a little groggy, but your productivity didn't drop. It may have dropped from all the alcohol that's been consumed, but that's a joke. I hate it when people say, Well, we shouldn't have it, because the productivity of America goes, takes a takes a beating. So I don't know the last piece Pete is. I actually, this is no joke. I'm not even kidding. I moved our clocks forward on Friday night because I need a little extra time to to assimilate So, and I'll do the same thing in November, whenever we pull the clocks back. So anyway, daylight savings time. Do you have a comment? Yes, it's bullshit.
Pete Mento 9:41
I hate it. I hate it deeply. And for a guy that bounces time zones every week, I've been in California every week now, this would be my fifth week that I have to go back. Three hours, two hours, two hours, three hours, one hours, right? It is exhausting. It's exhausting. It's exhausting. Doug, I'm more. At 80 hour weeks right now. Don't even start with me. All right. So then on top of that, having to get up at 5am for calls at 8am on Eastern Standard Time, and then working until eight o'clock at night, having to get I'm gonna, I'm gonna lobby right now to make this work. Okay? What really pisses me up a daily savings time. Look it up. It's a real statistic. About 300 people die in America. The day is completely following that daylight savings time because of accidents that happen, anxiety and stress and heart attacks that are directly related to daylight savings. It's law passage, usefulness, ready for a hot take? Doug, yeah, I think we should, we should pull it China, one time zone. Whole country, one time zone. That's it, yeah, you just happen to go into work a little bit later when the cell comes up. I don't care. One time zone, no country. It's lived out its usefulness. All threshers and harvest equipment works in the dark. The hell with it. I'm over it. Wow.
Doug Draper 10:55
Well, you're you're tired, Pete, because you travel so much, all things being equal, right? Moving a time zone or two time zones. Hey, I'm not saying you're not tired, dude. Your schedule is insane. It's just amped up to the 10x since January 21 for sure. But it's your work schedule that creates
Pete Mento 11:19
your thanks for man. Split on that time zone. What? Thanks for man Thanks for mansplaining that to me, dove, you know you live my life. You live my life. You go through what I go through. So thank you for letting me know you know that that's exactly what's happening. And when I started traveling to Europe in a couple of months, right in Asia, that will be a big deal, right? Just going to be a seven, eight hour time swing. Well, I have never worked so hard and been so miserable in 31 years of doing their trip than I am right now, and on Monday, when I woke up and I realized I'd lost today, I lost an hour's sleep. I wanted to kick a hole through the dry water. So yeah, this is probably the wrong year to ask me, maybe last year I would have been a little happier, but I don't know. But no, I don't care if your sunshine. You know, after sleep patterns. It's stupid. One time zone. Let's just start acting like the rest of
Doug Draper 12:04
the world. Wow, that's a bold statement. Is that a rabbit was with crossbones on it on your
Pete Mento 12:08
shirt? Cycle bunny. Fabulous brand. I encourage everyone to check them out. Excellent brand. Yeah, nice. What's that my halftime is gonna is really pissed me off. Doug, there's no other way to get this so as it's been mentioned a couple of times here, I live on airplanes. I'm constantly in airports. So I treat myself. Doug, I spend the six 700 bucks, whatever it is, every year, and I get myself the lounge access, because American Express doesn't have an agreement with American Airlines. So I treat myself. I get myself that lounge access. And yesterday, I realized that I had to re up my, my membership. So I'm at Dulles Air National airports, and I walk in there and I like to re up my, my, my access. Oh yeah, of course, sir, listen before you do, but I show you the American Express city banks are if you if you get it, then you'll be a medal for a year. Thank you. Well, I don't think you understand so it's the second time. The second time, I don't think you understand the benefits of this. I mean, if it's 75,000 miles on your first purchase, you'll have free access to $700 savings. And I said, I really appreciate that, I really do. But I have no need for a credit card, and I don't really care about some additional benefits. And so he takes out a little card, and he puts it on the desk and goes, let's just take a minute to read this. And and I looked at him, and I said, I will not. Do you have any idea what my time is worth? I feel 600 bucks an hour, and do you have any idea how much money you're wasting that I could be in there and cheering emails on? He said, I just, you know, I think it's important, but that's the fourth time. That's the fourth time he's tried to sell me this. And he said, Okay, just kind of your credit card please, and I pay for it. Now, if it had ended there, Doug would have been fine. He hands the card to me in my face, in my face, and says, I really think you should read this, because you can still get a refund of this. And I said, Why don't you try doing what you're supposed to do, which is, check me into the goddamn club, take my ticket and let me get some coffee. You know, be great if American Airlines stopped acting like a bank. It stopped acting like like a resort. It stopped acting like a cruise line, and that's like a goddamn airline. Now, there's a line behind me now, and I don't care, Pete's going full. Pete mento, yeah, so that's five times you've asked me to take a look at this, and five times I've had to tell you no. I said, Have you heard of the term consent is feeling real uncomfortable right now between me and you, I railed on this guy, Doug, no word of a lie for 10 minutes. Wow. 10 minutes. He got both barrels of angry Pete winter, and I wouldn't let it go. And then I wrote a long angry email last night to American heroin. Listen, get my flight there on time. How's that for something to ask for? It never seems to fucking happen. You. That's number one. Number two, I'm the highest tier you can beat the American Airlines, right? If you should upgrade me. Every once in a while doesn't seem to happen all that often. I was beside myself. So I want to give, I want to give a big raspberry to my preferred and only air carrier, American Airlines. But wasted so much of my time yesterday trying to sell me a credit plan that I and no one else, needs 25% interest rate. It's like Ursu, for God's sakes sorry, I told you I was going to get fired up. Doug, I'm really angry about this. I
Doug Draper 15:34
know, sorry about that. I had some other things to say on this, but I'm going to scrap all that. Because the one thing that got through my mind when you said the guy went twice, I'm like, okay, third time I would have asked if this guy was in freight sales,
Pete Mento 15:48
work for a freight forwarder, and if he had not see if he wants to come over and and make some money. Because that's impressive, that classic, because I couldn't let it go. It Go. I was on Reddit last night. It turns out people get a bonus. These employees of American Airlines get a bonus for signing people up for credit cards. They get bonus for taking people's bags and putting them on the putting them in the bill of the airplane instead of letting you carry them on board. They are financially bad. Don't be incentive. I'll show you the behavior. So this guy works there. I'm gonna see him again, and I can't wait to make his here miserable. He's gonna wish to vibe if he was on the desk.
Doug Draper 16:34
So well, give the guy a break. He's doing his job, right? You rail the once. Just give him, shoot him a pads and walk on by next let's go around. Do you know maybe
Pete Mento 16:43
next time, Doug, you're right, I'm going to try to sell him custom brokerage and air food. Hell yeah, he doesn't need it. I'm going to sell it to a menu. All right, what's our next topics? Yep,
Doug Draper 16:56
yep. We'll keep this party moving forward. Mine's related to air cargo, right? And everybody's talking about how it's dropped off. It's this low start in 2025 and this was actually a comp or a topic of mine a couple weeks ago that we didn't get a chance to talk about because of all the tariff changes and everything that have become priority on this show. But you know, here's the deal with first quarter we talked about, it's the quiet period. And you and I begin in in February, we're like, this seems to be the silent period, because it is had, you know, freight volumes and things have gone very, very quiet. So, like, listen, all right, you got q4 it's going to go bananas, for obvious reasons. You got Lunar New Year, which I believe happened a little bit earlier this year than in the past. So that had a little bit of an impact right out of the gate of q1 and I think everybody just needs to kind of relax a little bit, right? I think it's too early to see if, if the 301 and the de minimis and all those things are going to have an impact, right? They were off, then they're on, then they're off again, now they're on. So I think people are going to stay the course. If I was a business and I was taking advantage of the de minimis rule, I would be full bore, and I would be operating as long as I can in that environment in the back, coming up with a plan B, for sure, but I'm not changing my strategy. So I don't think this is consumer buying habits changes. I think it's just the natural evolution of q1 and how things are slow. And I really think that the Lunar New Year coming a little bit early had an impact. But, you know, you shouldn't really, you know, don't freak out, right? Well, the capacity, so last two things on this, right? So the capacity is outpacing demand, so I think that's going to be beneficial. If you're using this service, it's going to be cheaper, right? And the other thing is, people are not going to sign long term contracts to get their product from A or B, they're going to be a little hesitant. They're going to wait and see, right? But until that, the concept of taking advantage of the minimalist, so fast fashion, all that kind of stuff is not going to really change a whole lot, because there's too much fluctuation. Don't sign a long term contract. Keep your business moving forward in this model and come up with a plan B. That's the transpired for q1 in my opinion, I
Pete Mento 19:27
agree, Doug. I don't remember if it was you who sent it to me, but someone recently said to me, patience is less expensive. No, panic is more expensive than patience. Yeah. And I think this is another excellent illustration of how just freaking out right now it's not going to get you anywhere. I look at a lot of very large e commerce clients, and they're taking the route of patience. Well, we'll take advantage of it while we still can, but we're going to work with our providers, and we're going to work with our partners to find a way to manage what the future is probably going to look like. Right now, if they're all being honest, nobody knows. And who wants to bet a multi billion dollar, multi million dollar, whatever the case may be, line of your services might maybe overcompensating anytime and planning is probably the last thing you should be focusing so I completely agree Doug. And one thing you mentioned about the air freight, there's going to be opportunity out there for people, serious opportunity to renegotiate rates like that, once this all changes, as people begin to convert more collaboration free. So it's just a great time to collaborate with your providers and have a long conversation about what could be I thought, yeah, collaborate
Doug Draper 20:33
with partners. Pete, not more than five minutes ago, you're about to rip somebody's head off at the American Airlines.
Pete Mento 20:39
They're not my partners. They don't ask me for any input. No, they picked me on a middle seat an overnight flight from LA to DC. They're not my partner. They're not my partner.
Doug Draper 20:49
All right, I don't want to get you back into that mode, so let's wrap this sucker up with your last topic. So
Pete Mento 20:55
one of my favorite episodes ever in the show was when you dropped a focus on you dropped instead. It could be an amidst metal band. It could be it could be a rarely contracted African disease, but it's not. It's buy online, pick up in store. I was like, COVID when you started talking, yeah, it was. And if you think like, I'm a big fan of babies, I'm a real big fan. I'm a big fan of going online for my grocery store, making my entire grocery order. I pull up to Harris Teeter in Virginia, and they open the back of my jeep. Then it's all there. They just dump it in. It's all paid for. It's ready to go. It is exceedingly rare that they make going to save. I mean, maybe one out of like, 50 times they've ever missed one friend. And I'll tell you what that third Peter, where I go, we send someone to my house to drop it off. It's like, we're really sorry that this is about your laundry detergent. We'll be there in 10 minutes, right? Like, fabulous, you know, and other places along, Best Buy target, right? I'm a big fan of things. The newest one is this, buy in store, deliver, at home their business, right? Buying store, delivery home. So I'm at the Paul and fat guy store a couple weeks ago, and I'm buying new dress shirts. And really liked this, Ralph Lauren, but they didn't have it in my size. So I said to the guy that was helping me out, can you do me a favor and see if I can get it in my size and run I said, Oh, absolutely, I can barely I said, Okay, I can have there for you in two days. And so I paid for it two days later, perfect shows up, wonderful. And I said to him, how often does this happen? He said, We don't someone's size. It happens a lot. We look around you, for God's sake, talents. That guy still, he said, but that people actually take us up on it pretty rare. Did most folks kind of want to try it on? They they're concerned that it's not the same quality where the case may be this intent, but I don't think that that's necessarily across the entire spectrum of retailers. So I started looking online. That's generally the case. There are some follow ups of different like consumer electronics. Apparently, people will, if they take a look at something, if they have the exact model, they will have it delivered. But it's pretty rare that people take folks up on this buy in store drop a delivery home model. And I'm wondering if it's a psychological thing, or what the deal is. If people are just in full shockers, it's not happening, then judge, yeah, what's your, what's your take on, on buy in store and deliver it on?
Doug Draper 23:31
Yeah? Well, it's a fun acronym, but I just don't see, like you said, the practicality of it right? Focus. If you remember that episode, that was one of the first ones that you and I did together. I bet it was episode one through 10. And I think I put a pair of sunglasses on and had a I think Keenan had, like a guitar, because I used to do this show in their studio. Anyway, I love that, and I'm glad that you remember it. But buy in store, ship to your house, I like why you went to the store. Just put it in your car, right? I don't understand kind of how that would work, so other than a cool acronym, I don't know it's not going to catch on in your situation. I get it. You're right there and they don't have what you want. That's the modern day version of layaway, right? But I'm going to go into the store, purchase it, have it in my hand and then say, go ahead and ship it to my house. I don't
Pete Mento 24:29
take us home, buddy.
Doug Draper 24:30
All right. Well, that's it. You're in a lobby at the dolphin resort somewhere in Florida, and so we got to let you go, man, you're busy, busy, busy. And obviously, the last couple episodes of global trade this week have been short and sweet. I'm sure some people love to hear that. Some people like our banter. But we can't thank everybody enough for joining us week in and week out. We try to make it entertaining and fun and educational, for lack of a better. Term. So thanks everybody for joining the show this week. I want to thank cap logistics for making this sucker happen. And until next week, there will be a lot of global trade that will transpire in the next seven days. And we look forward to talking about it having a forward looking perspective. And I think that's the longest part of this closed piece. So I think I'm done.
Speaker 1 25:20
All right, buddy. Good cheer. Buddy, have a great week. Thanks.
Transcribed by https://otter.ai