Global Trade This Week – Episode 140
What’s going on in Global Trade this Week? Today Trade Geek Pete Mento & Doug Draper of Inland Star Distribution cover:
1:23 -AB5 in CA is All But a Done Deal
7:37 -National Threat Assessment is Released for 2024
13:40 -Halftime
25:02 -Venture Global & LNG
30:35 -Contract Season Amid Much Uncertainty
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Unknown Speaker 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Pete Mento 0:10
And welcome to a both of us are here edition of global trade this week. I'm Pete mento. And with me, as usual, is my dear friend Doug Draper. Doug. Good morning.
Doug Draper 0:21
Good morning. Yeah.
Pete Mento 0:24
This is an early edition Pete hasn't shaved yet. And unfortunately for Doug, it met him on the West Coast getting in at five probably something in the morning to be on the show. So Doug, you want to talk about perseverance, dedication to the show? I really appreciate it, man. Yeah,
Doug Draper 0:40
yeah. Well, when I'm out in the People's Republic, it makes sense to do up early. So it is 6am. Where we are right now. And, you know, I'll self sacrifice for the betterment of the team on this one. So I don't mind. And as you get older, as you know, you just get up earlier and earlier, so
Pete Mento 1:00
many cups of coffee, Doug, is that when we did today, though, right here. I'm
Doug Draper 1:04
on my third. So my stomach is tearing me up right now.
Pete Mento 1:11
Bless you. But yeah, well, we have a pretty big show. We've got some excellent topics this week. And because I kicked off the show, that means Doug gets to present his first topic. So what you got, but
Doug Draper 1:22
yeah, so this one is related to since I am in California this week, I wanted to talk about Assembly Bill five, right, there was some rulings that came down last Friday. And for for you, folks that may not be familiar with a B five or heard about it in the last couple of years. It's basically addressing kind of employment status of truckers in the industry. So the gist of it is, is that employers that are hiring owner operators, and independents don't want the burden of having an actual employee, and the owner operators. If you take their perspective, at least some perspective, they don't want the burden. Or excuse me, they don't want to lose their freedom, so to speak, to be able to navigate and do what they want. And so there's been this dialogue, and I didn't realize the speed. But this law was passed in September of 2019. Right and went into effect, January of 2020. So this goes back pre COVID. As crazy as that sounds. So what transpired and why am I talking about this again? So on Friday, I'm gonna try to get all this right, the United States District Court of the Southern District of California dismissed the industry's long, pending actions and, and challenges, if you will, to this topic. So basically, the court said, We're done. We're done listening to you all of your discussion points. It's over. So basically, what that means it looks like AB, AB five is going to, to codify if that's the right word. And so what does that mean? The California trucking associations are Association and the independent owner operators, really like what are they going to do now? Right? They've kind of run their final, their final mile, so to speak, and are they going to be throwing more money at this to try to chase it? They've been doing it for four years. And the courts kind of said, no moss, we are done. Listen to this. So in dive in a little bit deeper. Pete, it's, what does that mean to you. And I, to be honest with you, from what I've read, and my personal experience, not a whole lot. Like I said, this has been going on for four years, it hasn't really been enforced, right. But if you're any major trucking company, you've already migrated to, you know, managing that, that that new ruling and pivoted away from it kind of absorb it and said it is what it is we're going to be compliant, even though the enforcement hasn't been there. And so what that does, is all of the bad actors, and the operators in the fringes are going to have to engage or shut down operations. So really, in the last four years, this bill has been on the table haven't seen a whole lot of dramatic impact to to the industry, some will probably argue differently. But for the general population, if you're in Chicago, Dallas, Austin, New Hampshire, the impact has been pretty minimal and it's going to be absorbed and I think this topic in this conversation is just going to ride off into the sunset. And here we are. So anyway, I think it's the end of the fight against a B five. And if you're a bad actor or playing on the fringes, it's time to come clean, and we'll see the only thing I could see Pete, this is my last talk. My last comment is there may be some smaller guys that are raising their hands and saying I'm out, I don't want to operate in a compliant environment. But I don't think there's enough of those to create any type of capacity issues out here. So anyway, 85 is an in the consternation is pretty much over after this really last Friday.
Pete Mento 5:25
So like you said, I've been hearing a lot about this for a while, but I didn't realize it went back to 2019. Now, the many of the trade symposiums I go to this is a topic that's brought up, it's brought up because of the difficulty we always have in finding people to move cargo. And believe that for one thing, the the union's want their piece of this, right, so the teamsters behind it, but then second of all, their hopes and the requirements of larger trucking conglomerates to have the ability to control their workforce. I think what was always brought up to me when we would have these conversations is particularly when it comes to labor and environmental laws, or safety laws, California generally leads the way. So California will put something in place, it'll have its, you know, its toddler stage where things aren't quite going the way we thought that they would. And then it'll turn into something that is enforceable, actionable people can live with. And what folks were worried about is this would end up being a national issue, that it would end up popping up in other places. And for us in the logistics industry, you know, a problem with this in New York, or in Houston, Seattle, these other major port cities, it's very much on the minds of folks that are still watching it, assuming that eventually this will roll out to the rest of the country. I haven't heard anything. And when you sent this I double checked. I don't know of any other pending legislation, or even really proposed legislation of this type outside of California right now, certainly nothing national. But I guess we'll all be watching it very closely to see what the next shoe to drop is. And if it will be other places. So, you know, in the spirit of the show, we always worry about what's going to happen next. I think if this does settle down into something that they can enforce, and they can actually get people to adopt correctly, it would not surprise me if in other large Teamster controlled states like New York, like New Jersey, like Pennsylvania, you saw something like this pop up there as well.
Doug Draper 7:21
Yeah. Yeah. That's an excellent point. And not thought of that. What's the ripple effect? So we'll we'll we'll see. And obviously, with your research this morning, you know, the community being pop up? So
Pete Mento 7:32
not yet. No, no. All right.
Doug Draper 7:34
All right, brother, what you got.
Pete Mento 7:37
Every year, the the consolidated US intelligence services, put out a report that is for domestic consumption. So it's, it points out the areas that the US government, through all of their analysis, through all of their work in the shadows, and a lot of it not in the shadows done, wiped out and wide open, brings up what they believe are issues that Americans and the American government should be concerned regarding threats to the economy, our way of life. And that that national threat assessment is a 40 to 60 page, pamphlet, it's not book. So it's a report that goes into what we should be concerned with. And this year, there were a couple that really have a lot to do with our business. One of them is the threat to cyber to American ports. It was a a much brought up issue. Inside of the report. Human trafficking across borders, the introduction of goods through the borders illegally, whether that be drugs. You know, it could also be contraband goods, like drugs that are coming in, that aren't necessarily the legal drugs that are supposed to come in. But it got a lot into the technology side of our country, and how much of our infrastructure regarding technology they believe is at risk because of its origin being Chinese. And that's why you're seeing this sweeping movement through executive order by the President to do things like we have to replace all the cargo cranes in the country. And, you know, the government estimate is that's about an $80 billion job, the private estimate as it's closer to $200 billion to replace all of these cranes that we rely on, because there was technology that was found to be, you know, questionable or troublesome through the threat assessment. What else that the one of the one that came up there that I thought would be interesting was the human trafficking aspect because so much of it is done across borders. If you haven't watched on Macs, they have a reality show that covers Customs and Border Protection, and the work that they do on the borders. It's really good show. On one particular episode. They have a woman trying to bring a baby across the border. She doesn't have any pictures of the baby on her phone even though she says she sees it on a weekly basis. She doesn't know the baby's exact birthday even though she says she's the baby's aunt, and what customs finds out is the same day He has been tried to be trafficked across the border on a number of occasions. So people have emigrated to the US legally illegally, who knows, and the baby had not come with them. So they've been trying to smuggle the baby into the country. That's a much nicer story than what normally has happened is that individuals are forced across the border from other countries in order to go into forced labor situations, or into sex trafficking. And they see that as an extension of the narco terrorism, they see that as an extension of the financial opportunity for a lot of these bad actors. It's an interesting report. It's not a long read, it just hits the highlights, but I think all of us should be reading it. Because where this assessment goes, like we talked about California, a lot of times regulations and proposed regulations will actually be adopted from the text of this report. So I suggest everyone read it, and get yourself educated on what we might be doing with regards to intelligence and regulations going
Doug Draper 10:53
forward. Yeah, yeah. Yeah, peruse that this morning, whenever you had shot that over and you know, you get the state, bad actors, China, Russia, North Korea. But the one thing that popped was the disruptive tech and the cybersecurity. That was one that caught my attention. And this one was interesting to me. One of the call outs was private military and security company. So I don't know how that would be a threat assessment other than maybe they're referring to a situation going on down in Haiti. Related to that I had not seen that one before. Because I did checkpoint Korea 22 report and I didn't really see that one called out to the level it was this go around.
Pete Mento 11:38
If you dig deeper on that, there's there's actually three things they're concerned with. The first is there are a number of corporations that they hire their people out government contractors, many of them are veterans, former military, special operators. And these are people who are heavily armed, heavily trained, and heavily motivated to, you know, do harm. And they could very easily be used in what they worry about being, you know, a civil action in the United States. The second is that many of them are sent out on the behest of foreign governments for security work. And that security work is almost always approved by the US government. But what if they were used to destabilize something where if they were used for a side of an argument that the US isn't necessarily associated with. And then the third, let's mistakes, people that are in another country who might be harming civilians, who, you know, might might do harm to the way of life in a foreign country that isn't necessarily in line with the goals of the US State Department. So they're very concerned with all three of those things. To the credit of these government contractors we're talking about. They're they're heavily regulated, you want to talk about compliance, man, I mean, they they really are deep into their compliance rule. And at this point, they have not had any negative actions that I've seen that have been reported that would fall into those three categories. So it's, it's it's a notion of concern. I mean, the threat assessment is done, things that could go wrong. So I'm writing a report right now on the damage that will be done to the US economy. If an oil tanker were to be scuttled. In the one main dredge line dredge line that goes in and out of Houston. you disrupt the oil, not just oil, it's all petroleum. you disrupt petroleum refinement for about 35% of America's energy just by doing that. So these threat assessments are very real. And those threat assessments are an important part of how we take action to do the next thing.
Doug Draper 13:39
Interesting. All right, well, that brings us to one of my favorite segments of the show which is halftime where you and I can talk about whatever we want. We bring interesting topics to the forefront that have nothing to do with our industry. But are fun to bring up and of course that's brought to us by cat logistics. We appreciate their their support, putting us on the air every single week so thanks to cap logistics visit them at cat logistics.com You we always say this who wants to go first.
Pete Mento 14:10
I'll go first because I'm obsessed with your topic ever since you two idiots introduced it to me so the all starts so recently I decided to buy a much larger television. And I as you know guys, I love movies and I love TV and I love sports. So my television isn't a is a window to those worlds and my last TV was very large it was 65 inches but now I'm buying even bigger one so I'm going to buy a 75 inch flat screen. And what I always thought was a hindrance to doing so as the price I was wrong. You can go on Amazon right now then you can buy a 75 inch smart television for K for less than $400. The The deeper I went down looking into this and researching it i I learned that a 32 inch smart television cost less than $100. And that's good size television. Right? So the average American home has at least one of those right now. And what does this have to do with my favorite topic trade a lot. So if you look at old television shows, it will give you a window into what trade was like at the time. So the first one I always give is Leave It to Beaver Leave It to Beaver. For many of our listeners, viewers, they've never seen it. They might know what it is, but they've never seen it. Leave it to Beaver was an insight into the American the ideal, highly unlikely, but ideal American Family Life of the 1950s. And Leave It to Beaver, if you look at the set, if you look at what's around, much of it is domestically produced, much of it is handcrafted, much of it are things that came with the house, or they were home goods that were probably purchased from an American manufacturer. And if you look at the technology in the home, the things that were high end technology, they had the nicest television you could buy at the time, which was an 18 inch black and white television. And it was in the father study. They had the highest end of appliances that we're in the kitchen, which in today's parlance would be revolting, but they had them all there. And most of it was made in America. Fast forward. 1970s The best example I can give you is the original Bob Newhart Show. i i would you call when you watch them all at once I binge I benched. I benched the original Newhart Show that came out in the early 1970s. All the way through, it's brilliant. It's very funny, it still holds up today. And if you look at the apartment that Bob lived in, it's a testament to the importation of relatively inexpensive Asian imports, mostly from Japan, and from China. Much of the home goods that he had, the homework that they had, the way they dressed all the polyester, the bizarre colors that were engaged, that all had to do with the importation of very inexpensive goods. Those television shows, tell Americans, what a upper class therapist someone who clearly makes money lives in an urban setting. It is very chic, what their home is supposed to look like. And it caused a run on a lot of home goods. Today, very similar. It's unlikely you're going to see a television show where the family engaged does not have a large, flat screen television doesn't have many of the electronics that we see today. Those are place today. Back in the days they weren't. But now people place products and television shows. So I know it's a long winded way of saying this. But if you want to get an insight into the American consumer mind, just watch a little popular television. Watch something that's happening now. And if you really want an interesting insight into trade, watch The Bob Newhart Show and watch a little bit of Leave It to
Doug Draper 17:51
Beaver. Nice. Yeah, browns and different shades of yellow. I think were popular with Bob Newhart, from what I can remember. I was a wee lad back in the day, but for some reason when you talked about colors, that's what kind of came to mind. Yeah, that that ugly avocado
Pete Mento 18:07
green, and that the baby crap brown and the, you know, the wilted butter yellows knew that that's from my parents house. I remember the absolutely revolting colored green couch that we had with my dad's matching recliner. You know, I don't, I don't know why those colors were popular. But they were. And then all of our cups were these plastic tumblers. Then they were green and yellow. I mean, everything was just this absurdly revolting color in the 1970s. But it was all important and it was cheap. And my parents wanted to look stylish in their home. Yeah. Lots of Tupperware brother. Lots of Tupperware? Yes,
Doug Draper 18:50
of course. All right, man. So this topic
Pete Mento 18:54
before you start, Doug, to you, because from the moment you started talking to me about it, it became something I can't get enough of. I just can't believe this frickin story is.
Doug Draper 19:07
Yeah, it's crazy. So what I want to talk about is an event that happens annually. Started in Nederland, Colorado, which is up the canyon from Boulder. So it's where the hippies went when they wanted to escape escape boulder when it became too mainstream. But there's a gentleman named burrito. More stole MLRS T. o el. I think I'm pronouncing that right. So this is this dude from Norway. And he died of I think it was a heart attack and his relatives, his daughter live in the Netherlands. But he was into cryogenics. Right. And so they shipped his body over to us. He initially went to Oakland, California and then his daughter and his son wanted to get into cryogenics and so they brought him to Nederland, Colorado, which is this hippie town. I don't even know how many people are there, maybe 1000. It's outside of a ski area called El Dora. And they put this dude on ice because they wanted to save his body and he was in a tough shed packed with ice. And he was there for 20 freakin years. Right shed a shed.
Pete Mento 20:22
Not a medical facility, not a hospital, not a morgue. He was in a shed, the shed.
Doug Draper 20:28
Yes, a tuff shed. It's a brand to USF shed tuff shed. And they kept in there. And the irony, the irony is that there was actually a law in Nederland that said you couldn't save animals and freeze them. But they had this grandfather law that basically said, yeah, it's all right. This guy's been here for a while. So go ahead and keep them frozen in a shed. Right. So the community was aware wasn't like they were hiding this. Everybody knew. Hey, there's Brito. He's over in the shed don't mess with them. 20 years, the dude was in a shed for 20 freakin years. So
Pete Mento 21:06
this is where it is nice. Right? Packed with ice. Yeah.
Doug Draper 21:08
And I to be honest with the story doesn't get into like, did they replenish the ice on a daily basis or whatever. But there was a human frozen in a shed in a community that everybody was aware. And the leadership actually had a grandfather clause because everybody was cool with it. Right? I mean, how bizarre so this is when it gets even crazier. Right. So there was a point where they decided to move him to Estes Park, and you may have heard of Estes Park. It's that gateway in the Rocky Mountain National Park. So they decided to move him because it was a little bit more secure. And they moved them to the Ice House in the Stanley Hotel. And the Stanley Hotel is the if you see God I just spaced on the show on the movie with the Shining. Shining. Yeah, when you look at the shiny in that old hotel that's that's played after, or around the Stanley Hotel. So they moved a frozen dead guy into the Ice House of The Stanley Hotel, which is the backdrop for one of the craziest horror movies of all time, the shining, is now upside down, submerged headfirst in liquid nitrogen, which is in the basement of the Stanley Hotel. And so what do you do to remember and celebrate you throw a party, so frozen dead guy singular, and it's actually a party for burrito. And that was this past weekend, bands booze, the whole nine yards. And it's crazy. This story is baffling. A guy was frozen in a shed in a small mountain town full of hippies for 20 freakin years. And now he's upside down in liquid nitrogen in the hotel of one of the craziest horror films of all time. I mean, you can't even you know, life is stranger than fiction. It's unbelievable. So check it out, do some more research on frozen dead guy days. It's an annual tradition. Oh, and the last thing, all this was happening in like the early 90s. This isn't back in the 40s or the turn of the century. This happened in our generation, which is just baffling to me. So check it out Google frozen dead guys days, they have a whole history of the of the of the event. It's crazy.
Pete Mento 23:26
couple comments here done first, I think we need to take a look at the zoning laws of the great State of Colorado. This is perfectly fine, and that they were able to move them someplace. It was also perfectly fine. Second, I talked about a t shirt I saw in Providence this weekend and said where charm meets neglect Providence, Rhode Island. I think Doug your T shirt should say where legal weed meets the McCobb. Colorado, I've seen videos of the festival that they have for frozen dead guy. It's really like joyful. There's, it's a it looks like a really good time. They have all kinds of games that they do and contests and I would imagine that there's probably a lot of the devil's cabbage being smoked there and just people seem to love it. So I don't know of another regional or local festival that's quite as messed up as what you have in Colorado. So see what you will about marijuana. Maybe Maybe it's not a gateway drug, but it's definitely a gateway drug to playing around with dead bodies. So Thomas, you got a weird statement? Yeah,
Doug Draper 24:30
I'd encourage everybody. The folks in Colorado have definitely heard of this. If you're not in Colorado. Check it out. It is truly a bizarre celebration for sure.
Pete Mento 24:40
Doug, I'm going on record Do not freeze my body. Okay. I want that on video. I'm good. Yeah, me. You know, I'm okay. I don't need to be on liquid nitrogen. I don't want to come back. I'm good.
Doug Draper 24:52
Yeah. Thank you. Roger. That note the cell got it covered. So
Pete Mento 24:58
all right. All right. So back to our topics. Doug, what do you got for the next topic, though? All right.
Doug Draper 25:03
So this, this caught my attention, and that the topic title is, who the hell is venture global LNG. And what I was saying Pete is we are fixing to find out. So I am going to pull up some information because I don't want to screw it up, right? There's my frozen dead guys. So this is a a company that this is their kind of mantra, right? The world needs clean, low cost energy, which can be a complement to renewables. And it's time to provide plentiful North American gas to allies and friends around the globe. So this is a company that's becoming vertically integrated. And now they're bypassing some of the distributors of their natural gas, which are some of the big companies that you and I would would think of which is Exxon shell, things of that nature. So they have they are building three plants out on the coast of Louisiana. And they are taking the gas, right, so liquid nitrogen looked into a little bit, right, so you got a gas pipe that comes in, they turn it in, there's these plants turn it into liquid, and it compresses it to like 600 times the amount. So you, you know, just add water, so to speak, and the liquid turns back into gas to the equivalency of 600 units, right. So gas comes in, they liquefy it, then there's another pipe that takes it to the port where they put it on vessels, and then they sell it across the world. So they this venture global, they are building the plants that liquefy it, they're building the pipe to the terminals that then load it. They are now building nine vessels. I think they're building in Korea. So they're going to own the boats that are going to sell it to a countries across the world. And they've decided that yeah, we're not going to really sell this to Exxon and shell and those guys, we're just gonna go direct and take them out of the middle of it. So these big energy companies are super pissed, because they're not meeting the demand that they had been guaranteed. Venture global is like, whatever, we're moving forward. So they're in all these lawsuits. They're building all this infrastructure that's costing billions of dollars. And they're just moving in their own direction and doing their own thing. So, you know, the premise, pretty legit, you know, they're spinning it to say we want to bring a renewable, or excuse me, low cost energy that's clean to support renewables. And we're going to distribute it and sell it to people all over the world. So I guess the premise is, is good Anya, but I think they're gonna burn some bridges with some large multinationals in the energy field. But anyway, look them up. It's some really smart guys that are investors, lawyers have access to capital and know how to raise money. So anyway, I don't just came across my feet. And I'm like, What the hell's going on with these guys? Right. But I think that they're going to be in the news a little bit more, whether it's for controversy, with lawsuits, or whether it's their mission out there to bring plentiful net North American gas to the world. So I don't know if you've heard of these guys, or what's your take on liquid natural gas. So
Pete Mento 28:28
LNG is something I follow very closely. For work into this, I say, Hell, yes, God bless you. This has a lot to do with American exports, and American Financial, and technological power, we are exceptionally good at getting the most out of anybody out there when it comes to refining, getting a hold of, you know, transferring natural gas. And second of all, it's a, it's an excellent source of energy, as you pointed out, that is cleaner than many of the types that we use. One thing to keep in mind here is the ships are wonders of modern technology. You're talking about moving basically a massive hydrogen bomb all over the world. And to do that in a really safe environment every day, they come in and out of the port of Boston. I mean, they're there. They're gigantic. And they're odd looking, they have a huge dome over the top of looks like a half a half a bubble. And to do this in such a smart and safe way is amazing. The other half of this is we've been trying. We the American government has been trying very hard to get other countries to build ports to receive natural gas. It's so expensive. So it's one of these trade offs of do we continue to bring in petroleum through our infrastructure that already exists? Because we can't make the investment or do we make a huge investment right now that will pay dividends off? This company has taken out that middleman. We're going to make the investment. We're going to find a way He is to make sure that we can do that, particularly for allied nations to the United States, so that they won't be dependent on the petroleum and the energy coming from I don't know, Russia as a great example. So I applaud all of this. I think this is a fantastic idea. But I agree with you that there are some very powerful corporations that also have their own integrated infrastructure, who are going to see this as a threat to their way of business. So it'll be interesting to watch. And I think there will be some infamy that goes along with it.
Doug Draper 30:29
Yeah. I love that term to describe this infamy. All right. Let's bring it home.
Pete Mento 30:36
Last topic is It's a frustrating topic, Doug, and I like to predict things we like to talk about what we believe is going to happen, and then we fall on her sword if we're wrong, and we do a happy dance when we're right. But this is a tough topic because we're just coming out of TPM, the biggest conference, maybe in the world for logistics. And the TPM Conference, is when everyone gathers, and they discuss some pretty big topics, one, what's capacity going to be? Like? What's what decisions are the ocean carriers going to be making to manage that capacity? How will they be putting their resources out there to deal with issues of global trade, they also talk a lot about rates, let's just be honest, right? People go to TPM, to find out what direction transportation rates are gonna go. And this last TPM, was a lot about uncertainty, it was a lot about not being able to understand regional conflicts, not being to really easily predict where the global economy is going. So there was a lot of uncertainty that came out of it. What's unfortunate for shippers is we still have to buy space, we still have to sign contracts, and signing those contracts and buying that space. You want to do it for a position of knowledge, you know, inconsistency. Having having chaos in the market, it's great. When you're the one who's making money off that chaos. It's terrible. When you're the person who's trying to, you know, point your finger on the dartboard about where you think prices are going to be. So large BCo beneficial cargo owners are in one of the most difficult seasons of contract negotiations ever. Prices are increasing. As we've all seen, the West Coast has had a real revival, as Doug predicted, and these ocean carriers are riding today's numbers in today's infrastructure, with an expectation of there not being any change. However, many shippers ever since COVID, they don't want to invest too much in what's happening. Now. They want to play spot markets, and you want to talk about a volatile time to play spot markets done. We don't know what's gonna happen in the Red Sea. We don't know what the cost of bunkers going to be. So all that bath, that bunker adjustment fee, it could go wild over the course of the next contract season. So there's people out there that are going to be winners, because they they made a good decision about what to buy, and what to keep on the stock market, and people who are going to be losers for doing the exact same thing. And it's going to be hard for anyone to do a happy dance. Because I think it's going to be difficult for anyone to say, I knew what was going to happen. I don't think any of us really know what's going to happen. So we're doing the best we can with the information we have now. And it's been a very volatile contract season because of
Doug Draper 33:18
Yeah, yeah, for sure. I can see, and I'm not in the thick of it with the contracts. But I could simply say, Here's your base rate, right, we'll give you a swinging deal on the base rate. But you will surcharge surcharge surcharge that's unknown. And that's just kind of what it is. So you're going to place a little bit of a gamble and hope the world doesn't pivot and direction that's going to negatively impact. But the one thing I love about this right is the two points I was going to make Pete the one that you already did. So I'm going to keep it brief. There will be winners, there will be losers, right? I'm sure that's the same every contract season, but the volatility is going to make that a little bit more disparaging, right, it's going to be a little bit greater, there will be really good winners and really bad losers. But it all goes down la baby, it's prime time the West Coast is going to crush it. This is another statement for that. because interest rates are still high, you want to get access to your to your freight and your cargo and your commodities as fast as you possibly can. I'm going to borrow or I'm going to make smaller quantities. Because I can only borrow so much money, because I can only afford the interest rates on the money I'm borrowing to purchase my goods. I need to sell that ship as fast as I possibly can stop it on the West Coast, give me access to it, and then I can sell it. There's capacity in LA. The infrastructure is there. And just like the Lakers in the 80s Baby, it's going to be primetime in LA you're going to hear more and more about it. It's going to be back to where it was pre COVID And one of the beneficiaries of this is going to be the West Coast primarily Los Angeles and Long Beach Ah,
Pete Mento 35:00
something people are talking enough about Doug is a pending strike on the east coast. So, you know, we just went through all of that on the West Coast. Yeah. So there is some certainty there, you know that labor is going to show up. And I think that also helps the west coast and pretty significant way. And the other thing I wanted to mention on this topic is two people in this industry. One of them's a really, really good friend of mine, Scott Kelly, he's an expediter. And then our Ben Kaufman DSV. These are guys whose lives are spent, you know, in in quiet conversation with the carriers, trying to understand where things are going. And I think one of the most stressful jobs and all of freight forwarding is having to get out there, stand up in front of 10s of 1000s of people and say, This is the rate, this is where we're going to buy at, because this is where I think we're going to be profitable. And it's going to be hard to do that in the 2024 25 season is going to be a tough, tough year for it, man. But I'm full of hope and prayer. And I'm sending positive vibrations to anybody who's out there having to deal with the situation, because I've had to do it. And I can tell you, this would be a really, really difficult year to do it, buddy.
Doug Draper 36:09
Well, that's a good stopping point to place closer on this week's edition of global trade this week. As mentioned, cat logistics makes it all happen. And we really appreciate them. I think on my post I say Namaste, truly believe that and truly want to say that again. And Pete as always, I think we talked about television, frozen dead guys, regulation legislation, ocean freight, and I think we checked all the boxes related to global trade. So as always, pleasure chatting with you today. And we will see everybody next week on another edition of global trade this week. Peter, thanks Blockstack we're on screen buddy. All right. See ya.
Transcribed by https://otter.ai