Global Trade This Week – Episode 143
What’s going on in Global Trade this Week? Today Trade Geek Pete Mento & Doug Draper of Inland Star Distribution cover:
2:58 -UPS replacing Fedex for US Post Office
9:58 -Updates on the Port of Baltimore
13:37 -Halftime
22:44 - Second Wave of LogTech Acquisitions?
27:07 -FLPA Moving into a New Phase of Deeper Enforcement
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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
Hello everyone and welcome to Global Trade this week and it's happening a trade. We're going to talk about it now we're gonna talk about it we're gonna talk about we think it's gonna happen. I'm bringing the energy to you
Doug Draper 0:21
like that. You are hot and hot and heavy. Yes.
Pete Mento 0:25
And as always, my my intrepid partner, the kind of what were the two guys on on Lethal Weapon Briggs and acuity the guys named Martin Murtaugh. Yeah, the Murtada my breaks. I don't know which one will be which with us. Draper. Doug, how are you?
Doug Draper 0:44
I'm good. I'm good. Just hanging loose. Yeah, you know, I was thinking since it's, you know, important day, we got a little bit of a Eclipse going on, literally why we're literally why we're doing the show. So I needed to prepare. May be looking up here mid mid stride, so I figured I'd just break these out for a few minutes. All right, nerd.
Pete Mento 1:08
I've got my welding goggles. I think that should be enough. Yeah, I don't know. Enough. But Doug, you um, you look like one of the men in black like, you look like one of the guys that's here to or, or stork from Animal House. With the whole band, and he was one of my favorite characters in the movie. Yeah. I remember that guy. Moron. Yeah. But then a black if you had the little thing right now, you could probably make a software get everything buddy.
Doug Draper 1:40
Get it done. Yeah. Well, I can't be an old age. I can't really see anything. So I gotta, I gotta take those. I'll put them on for halftime. But
Pete Mento 1:47
yeah, we can't do something that points out how old we are. Doug. Right. Like every single week, it's, we talk about what hurts and what the weather's like. We might as well just be the old folks on playing checkers all day. But I got to trifocals buddy, are yours just readers? Yeah,
Doug Draper 2:04
mine are just readers. I got I got probably one of my backpack and one of my car. You know, I'm that guy that's got them all over the place.
Pete Mento 2:11
I can dig it. It's necessary, man. You know, I mean, literally heaven on your face all the time. You don't be the guy that has the ones that click in the front. I mean, don't ever do that to me. I'm talking about one. Yeah, I That's like having a pollster for your phone. I can't let that happen, buddy.
Doug Draper 2:31
I'm sorry. Yeah, I will not. I will not. That's why they're they're not fit frame. Maybe I'll have to get a pair of thick frame ones. But yeah. Anyway, I'll bring these out during halftime so we can be safe. Right? Safety first.
Pete Mento 2:44
Safety first, well done, because I opened the show, which we won't talk about how often Doug forgets who's opening the show. That means the first topic, my friend is yours. So you got going pal? Oh, there
Doug Draper 2:59
was some news on this last week. And it's a little bit of Par. So we haven't done parcel in a while. So I wanted to bring that out. So you may have seen you know who's who's, who's flying the mail for Uncle Sam. Well, for 20 years it was FedEx. And starting in first part of q4, it's going to be ups so UPS is replacing FedEx as the provider for domestic air cargo for the wonderful US Postal Service. And like I said, FedEx has been doing that for 20 years. I read the new contract has a base agreement like five years, which means they could extend it. I don't know what those extensions are. But FedEx is out on September 29. UPS is in on September 30. So my advice to all the listeners is if you're moving parcel during that time, no matter what anybody says that it's going to be a streamline transition. The answer to that is no it's not. So be prepared if you're shipping stuff through the post office that last couple days of September. So I'm gonna take this in three parts Part Number one, FedEx, what did they get out of it? Right. So ups or USPS, in the last couple of years has migrated more towards taking product out of the air and putting it on the ground. FedEx has some cost initiatives, as you may have seen where they're trying to minimize their fleet. Get rid of older planes talk about their, their pilots, right. So that leaves a lot of air capacity, which is not good with the post office taking stuff out of the air and putting it on the ground. So FedEx it's time to ditch the old aircraft button up the fleet reduce. The one thing Pete that they're probably going to do is they're going to be reducing the lanes that are service because if the post office had buoyed some markets were made, they fly directly into Fresno, for example. I'm just using as an example. They may not do that and service it via ground from from a gateway in San Francisco or something so that x is like hey, man. You're not bringing stuff to the to the to the air. Right? You're moving more stuff on ground. That's not really our forte, we're out. UPS has an awesome ground network as we know. And it's also not siloed. You know, FedEx has the air business, the ground business that they acquired from RPS decades ago. It's still siloed. And UPS is not. So they can, you know, dance with the changes of the post office, so they can support the ground. UPS as volumes with Amazon are down. I mean, I don't know if you've noticed, I seems more and more Amazon drivers in my neighborhood making deliveries. So they're pulling back. And then UPS uses a lot of short posts where the final miles delivered by the post office. So hey, we're using your services. We need we have a void to fill with ground, and your ground volume is increasing because you're pulling stuff off the planes. So so it's kind of a win win. And the Win Win Win is here at the post office, they get to continue to talk about cost cutting measures, efficiencies gained under the guise of a government acronym program. That means absolutely nothing. And the same conversation will happen with the post office next year or next year or next year. So you know, I don't know the post office just is what it is. The benefits are FedEx and UPS. And I was so pissed off my last comment about that not pissed off, but I was like, Okay, how I looked at destroys compensation Postmaster General, I have to admit, it's pretty okay. Right? He's making like, 400 grand, he gets a few bonuses in there. But he's definitely, you know, half a million dollars as far as compensation. So I can't lean into the government that much. But, you know, I don't know, the post office is what it is, you know, how I feel about it. But I think it's a good pivot for, for two companies. And I'm excited to see what happens, but, you know, q4 that the ship better be right whenever the holiday season kicks in. But anyway, I think it's a win win for everybody. That's been the general comments that I've seen in the paper. So have you heard about it, you got any comments or take on it?
Pete Mento 7:09
Now, the first thing I noticed when I was looking up articles about this for today's UPS saying they've got to hire something crazy, like 300 pilots in order to deal with it, which is incredible. The second thing, you know, because I am team post office, Doug, I was looking to see how big this contract was. And I didn't find anything that specifically called it out. But it really led to what you were just talking about. So thank you for setting that up. The Postmaster General doesn't make a lot of money and has a tremendous amount of sway and say and what goes on there. Like imagine the CEO of of a free company of a similar size, making 400 grand a year. It's, it's probably the worst paying job I could possibly imagine, in our industry is being in charge of the mail service. So bless them. As far as the transition goes, Man, I got no idea. I can't imagine having to be in that meeting, as ups and what you had to present to them saying, here's how we're going to make sure everything goes just fine. Yeah, that's got to be a tough situation. But then it got me thinking, Doug, who else was in competition here? Right? So there's UPS and FedEx and I guess maybe DHL, but like, Could you imagine if Doug and Pete walked in with like a flip chart and a pointer. Were like, here's, here's how Doug and Pete air freight are going to pick up this business and make sure that it transitions just fine for the US Postal Service. And we're gonna have competitive rates. Do you have any plans? Absolutely not. Do you have any ground network? Nope, none at all? Do you have we have to, but we work really hard. And I got a hell of a Rolodex. I'll call some people up. We'll get some employees real quick. Just let you trust the little guy. Right?
Doug Draper 8:50
Yeah, yeah. Interesting. This topic will be brought back up again, when the start of q4 happens. So what's going to
Pete Mento 9:00
happen? If everything goes fine, because my posts my Postal Service, my guys, the Postal Service, didn't drop the ball.
Doug Draper 9:07
The post office didn't have to do anything. They don't have to do anything. drops the ball, it's going to be ups and then they'll say FedEx didn't transition to correctly but the post office doesn't have to do anything. What
Pete Mento 9:17
happens if it goes just fine? Are you gonna apologize live on the air? No, I'm
Doug Draper 9:22
not because the post office didn't do anything.
Pete Mento 9:28
You have got a couple of like, you just droves. The postal service you are gonna hate them forever.
Doug Draper 9:34
That's another topic. I don't dislike any individuals within the organization. It's just the premise the fact that they have so many opportunities so many times year over year over year to better themselves and they don't do anything about it.
Pete Mento 9:48
Deliver. Boy did they deliver duck? They just deliver.
Doug Draper 9:53
Yeah, all right. I'm getting all fired up. Now. My throat is getting scratchy. So what do you got for your first topic?
Pete Mento 9:59
More of updates on quarter Baltimore. So last Tuesday, I was driving from wasn't Monday I remember I was driving from DC up to New Jersey to speak at UCSC. And right before I got into the harbor tunnel, man, you could see it all you could see the the damage to the branch. And then what looked like, you know the Deathstar, right when they're like, that's not a moon, you're looking over there and, and you're like, Wow, is that like another city now that's the ship, it's so big on the horizon. I mean, I've never even set foot on a ship that big in my whole electronic craft carrier. But I mean, I've never seen anything that big in my life. And it just brought it all into scope really quick. But over the course of last week, just some updates on Baltimore, the first and probably the most important, is the Department of Transportation. And the White House have both said that, from what they're hearing, from our friends at the Army Corps of Engineers, this will be weeks, before they're able to have regular vessel traffic again. So they're saying probably at some point, actually, in this month, we'll start to see regular vessel traffic here, they have opened up channels for talking barge, so that they can get material through, they can get building material, salvage material scrap material through construction work through, but still no ships going in and out. But another thing that was brought up is it's going to take a long, long time to get this bridge built again. And they're they're dealing with it now, I don't even think they understand how they're going to design it, or they're going to use existing parts of the infrastructure, whatever the case may be, but it's going to cause a pretty ugly delay for for travelers that that are used to going up and down the East Coast. And, you know, three to 1000 people a day. That's a lot. So I have a feeling that we'll get Congress moving again, long before we get people moving again through that part of the world. But there's your update on Baltimore.
Doug Draper 11:49
Yeah. Interesting stuff. I liken it to being out here in Colorado, you got dia, the third, the third, the world's third busiest airport, then you have Colorado Springs, which is, I don't know, 70 miles south, 80 miles south. And when they divert planes, from Denver, to Colorado Springs, it's like, okay, cool. That's great. But the infrastructure in the springs cannot support it. Right. So they're just moving things around? And how do you reposition the plane? How do you get people up there? How do you get cargo? I think the same thing is gonna happen. The two the two topics, number one is, how are they getting trucks north and southbound through that area that have nothing to do with international trade and are coming off boats, it's going to clog the remaining arteries? And then number two, how do you reposition it? As far as okay, we're going to send all these chasis to this port, or we're going to put all of these trucks and all this equipment? Who's gonna pay for that? Who's gonna pay for the repositioning? Who's going to do all the nuances of moving the support to move offload containers? And so it'll be interesting to see who's, who's pointing at WHO and who's paying for it, that'll be a big pissing match for sure.
Pete Mento 12:58
He's gonna be a lot of that Doug, thing's gonna be a lot of pointing and everybody running as fast and as far from any liability as possible. So one way or the other, the US taxpayer is going to be holding a heck of a bag and some forgiving with us. It's just it's just got to happen.
Doug Draper 13:14
Yeah, yep. Yep. So cool. Well, that gets us to halftime brought to us by CAP logistics. The audience can't see but but Keenan is right there with us every day pushing buttons, pulling levers. I always say pushing levers, but it's pulling levers and making this happen. So we can't think cap logistics enough for giving us the platform. And they bring us halftime So Pete, you want to go first? You want me to dive in?
Pete Mento 13:37
I'll go first. Yeah, so my halftime is like, there are a lot of times to my sports related. I have a lot of sports related halftimes Pro, but this one's about boxing. So when I was a kid growing up, I don't know about you, buddy, but I would watch a lot of boxing on my pop. And then later on my grandfather. It was a big sport, you know guys bid on it. Plus, we grew up in the era of Muhammad Ali, and Sugar Ray Leonard and Holmes and Hagler and just big huge personalities that were so fun to watch. You also know I'm a massive MMA fan. That mixed martial arts, which is really taken a bite out of the backside of boxing. Well, ever since these whack job YouTubers started smacking each other about the head. Boxing has kind of made a comeback also because it Tyson fury you know, there's a lot of big names in boxing again. But it's the celebrity matches that cracked me up except for the latest. So, Doug, I'm sure you know, on Netflix this summer. Mike Tyson. I think it's Jake Paul, Jake Paul. are getting in the room. Mike Tyson I think will be 57 years old when he gets in there. I don't think that the Pol boys even 30 yet. And Mike Tyson has given up a significant reach. And he's a big boy but this other kids bigger. I I've been watching him workout. And I know that hidden mitts is no way to really tell a fighter. But it 57 I would still not step on my Tyson sneakers. That guy looks like a monster. And I don't know how it's going to turn out. I've no idea how it's going to turn out. But I'll be watching that with one thing in mind. I want to see Mike Tyson. Knock the soul out of this kid. I think he's annoying. I can't stand him. I respect him for what he's done. You gotta respect them. But I would love to see an old Mike Tyson get back in the ring. And just absolutely Molly whopped this kid in the next month. How do you feel about old men fight young men for money on Netflix? Well,
Doug Draper 15:39
I did that this weekend. And last. I'm kidding. I'm joking. But I think everybody wants to see Tyson come come in and handle his business. And I've seen those videos. He's been posted on Reddit and YouTube and stuff. And he is a bad man. Yeah. Yeah. Again, what? July?
Pete Mento 16:01
I think it's July. But you're you remember, when we were kids? you tuned in to watch the mike tyson fight and like 30 seconds later, it's over. You know, I don't think it's going to be anything like that. But I gotta feel a Mike's gonna bring hell this poor kid. So we'll see. Yeah. Cool. All right, what you got first, Doug.
Doug Draper 16:21
All right. Mine is somewhat related to well, it is related to space and the moon. And I saw last week that there is a decree or request coming straight from the Oval Office, if you will, to have a coordinated lunar time. And I think it's going to be called like LTC. But they want to basically put a time zone on the moon. And they want to do it because they want private space companies and countries to be synchronized that are in the celestial industries. Which I think is just This is stupid. I don't understand there's only a handful of people that are up there. As far as but let me rephrase that. There's nobody out there right now. And I just, I don't maybe I kind of get it if things come around. But I saw that and I'm like, isn't there a whole lot of other things that we could be focusing on down on Earth? That would, you know, energy would be better used? And then I dove deeper, and the Department of Defense is working with companies about developing a railroad on the moon, to transport goods across the lunar surface. I'm like, what, what? Come on, like, Are you kidding me? That's 50 years away. I don't understand why that's, I don't understand why this is happening. I don't understand why it's important. And let alone the Department of Defense focusing on how to build a railroad on the moon. Come on. It's We're better than that. That's crazy.
Pete Mento 17:59
Shake it at this guy at this point. Yes.
Doug Draper 18:01
You know what, that's, I don't know. And then my wife this morning. And I told her, I would bring us up on global trade. And she said, Hey, do you know that the Eclipse today in the right areas is going to be a total eclipse for four minutes and 27 seconds? And she said, you know, the song by Bonnie Tyler, Total Eclipse of the Heart, four minutes and 30 seconds. So I'm thinking that that is no coincidence that, you know, the music industry in the 80s. And celestial space really knows a little bit more about each other than you may think. So, you know, crank the song feel good about it, but 427 and 430 It's too coincidental not to have some sort of connection.
Pete Mento 18:47
Wow, Doug, you are pretty irritated. Alright. Yeah. I think you take first of all, you know, it's thinking like that. If people everyone thought like that in the 60s, we wouldn't have global political and economic and military dominance as a country. We wouldn't have Tang or the way that we rap Pop Tarts. out there. You got you went to Colorado, which is one of the hotbeds for aerospace, one of the hotbeds for space exploration. Again, I'm gonna I'm gonna Greta you have this one. How dare you? How dare you. This is so important. And we aren't we are decades away from being on the moon. But we're, we're yours. If you haven't been paying attention to the companies that are going to be 3d printing landing pads and 3d printing housing up there. The idea is to make it our launching point for Mars and it's a brilliant one. Having a time zone there. Sure more important things to worry about. But this is the future of mankind. Doug, this is you need to need to embrace the future. Alright, it's okay. It's okay that the world is going to human beings are going to be interplanetary before you die. And you just need to come to grips with that baby and you live in The state where some of the best, biggest, most exciting work is being done. So you should be proud as a Coloradan of what's going on in space.
Doug Draper 20:08
Yeah. Yeah, well, I'm super excited about a railroad track on the moon. That's super important to me right now,
Pete Mento 20:15
you're gonna have to get all the mined materials from one place to another. And that's probably how you're going to do it. You wait to go to Mars, dude, you'd like to go to Mars, and they start bringing back all these rare earth materials that they're just going to find kicking around like beach sand. It's going to be a different way of looking at the world. Telling
Doug Draper 20:31
you watching too many episodes of for all mankind. That's that's
Pete Mento 20:35
the deal with that on based on science, baby. Oh, based on science. Yeah.
Doug Draper 20:39
Yeah. All right. I'm kind of Debbie Downer today. So maybe we should. Okay.
Pete Mento 20:43
Are you excited about the Eclipse? Because I'm, I mean, I'm, it's so it's interesting. I don't Yeah, I know. I know. Amanda, don't wear those give me something darker. That's not dark enough?
Doug Draper 20:54
No, it's trust me, it's dark enough, is an excellent book.
Pete Mento 20:58
I do. I'm not suggesting anyone look directly at the Eclipse now or ever. Okay. But there is an excellent book called The marriage of the Sun of the moon, which goes into non chemical ways that human beings have expanded their consciousness throughout time. And one of them is looking at, at eclipses, they're saying that, you know, ancient Nick, the Mayans, the Aztecs, Egyptians that they used it to alter their, their consciousness. Other chapters in the book eating spicy foods, mangoes, Ayahuasca, mushrooms, the list goes on and on. But yeah, there are people who are going to be looking directly at the Eclipse. Because they think that they're going to trip when they look at it. You go for it, man. I'm blind enough. I don't need anything to make it worse.
Doug Draper 21:44
Yeah, agreed. Well, yeah, literally, it's happening right now as we are we are taking care of these. Remember,
Pete Mento 21:51
we're we're somewhere in New Hampshire, it'll be in totality and a big part of the state of New Hampshire. But
Doug Draper 21:58
Virginia. So yeah, four minutes to just focus on the four minutes and 32nd song, not the 427 of the
Pete Mento 22:05
clips, never liked that song. Don't like it now.
Doug Draper 22:08
I listened to it. My wife and I listened to it this morning when we're getting ready to to get jazzed up. So
Pete Mento 22:15
I don't like yeah, just. I don't think I've really repeated. I don't like overly repeated courses. And she must say, Total Eclipse of the Heart like 700 times in that song. It's not it's not for me, buddy.
Doug Draper 22:29
Yeah. All right.
Pete Mento 22:31
That was halftime, brought to you by our friends at CAP logistics. And, again, don't look at the sign the proper eye protection, everybody. And Doug, we got first fourth, third, or third topic. Yeah,
Doug Draper 22:45
so this one, I'll keep it super short. But it started as when I chatted with you guys earlier was going to be about logistics technology and how during the pandemic, there was so much money being jumped into that, and everybody wanted the next great thing, and it kind of tanked a little bit after, after COVID. And I saw that blue yonder had isn't a spot to acquire one network, right? One network essentials, I think is the name of the company. And it's couple of tech guys that are coming together and, and everything else. So my initial topic was hey, is this the start of more acquisitions in the tech industry, but then I started diving a little deeper and blue yonder. So he hears the term of this year, and maybe even 2025 is value chain, not supply chain, value chain and given visibility to producers, shippers, users, you know, across the whole spectrum. And blue yonder is actually owned by Panasonic connect. And Panasonic Connect is owned by Panasonic, which is a $46 billion company with about 250,000 employees. So all this money with the acquisitions they've been doing lately is all coming from, in my opinion, it's all coming from Panasonic. And they're going to continue to grow and the acquisitions that whether it's going to be blue, yonder, or, or other subsidiaries of Panasonic, but they got to plan. And because all this is not happening within the ecosystem of 17 miles away from Silicon Valley, kind of going under the radar. But I think you're gonna see a few more acquisitions of blue yonder, which is really Panasonic, trying to maximize their engagement in the supply chain. And if you looked at Panasonic connect, and their board of directors, every single person on there, except for the CEO of Blue Yonder is from Panasonic connect or Panasonic. So, here's my projection Pete There's already a partnership between blue yonder In project 44 And I think that you're going to see an acquisition of project 44 They're going to, it's going to be bought. And you spoke at the operation stimulus a couple, you know, gosh, 10 years ago, and jet McCandless who started Project 44 He was also a speaker. He doesn't know me, but you know, I he won't remember me. But anyway, that's the take is that I think Project 44 is going to be acquired by blue yonder, which is really Panasonic. And Pete, I wrote this down. So I had chat GPT to a press release. So here's the press release of blue yonder acquiring project 44 Blue, yonder leading provider of digital fulfillment solutions, announces the acquisition of Project 44, a global leader in advanced visibility and supply chain orchestration, great word, the strategic merger brings together blue yonder has expertise in predictive and analytics and Project 44 is cutting edge transportation visibility platform, empowering businesses, NDN supply chain optimization, yada, yada, yada, blue, yonder blue yonder reaffirms its commitment to driving innovation, and delivering unparalleled value. So that's the press release, that's going to happen. And it's going to happen within the next nine months, in my opinion.
Pete Mento 26:20
Well, look, I think there's gonna be a lot of these acquisitions, I think that now that the money is drying up, there are going to be people who are going to try to cash in while the getting is still there, let alone good. And given the amount of investment that has been made over the past 10 years, there's some fantastic technology that just hasn't found its way to market. I think that companies that have found the way to market are going to gobble it up as the cash crunch happens. With regards to Project 44, it's fascinating. I don't think that it's the panacea everyone thinks it is. But as they begin to do more of these strategic acquisitions, maybe that's what it becomes. But I'll tell you this much money, someone's going to get super rich off these ideas, half of which never worked in the first place.
Doug Draper 27:02
Well, as long as you're on the positive side of that, then it's all good. So yeah.
Pete Mento 27:06
So my last topics pretty quick. The force protection Labor Act, for compliance in America has become one of the driving focuses of customs and border protection. It's also really turned into what I can only describe as a very effective product project or effective enforcement action by CBP, where it's doing what they want it to do. It's stopping Americans from doing work with these foreign suppliers. I just think it's important that every time I have a conversation, I see an online webinar, any interaction I have with CBP, that bringing it up, it's not going away. So for those of you who have not really paid attention, regardless of the industry, of how force protection, force labor could be impacting your business, you just sit down, know your supply chain from start to finish, and know who's supplying your suppliers because it will eventually come in my opinion that it will come to all industries.
Doug Draper 28:04
Yeah, know, your suppliers, suppliers that that's key. And I think people dive kind of deep. And at some point, they don't really want to know. Right? I think that there is more forced labor out there than we may realize with all the things that we touch, purchase and engage with, and even ate. You made a comment before we we've jumped on here, but absolutely 100% Agree. I'm not sure if people want to know the dirty laundry and know where their supplier suppliers are getting the raw materials. Absolutely
Pete Mento 28:35
not. And unfortunately, the government's gonna make a more duck.
Doug Draper 28:40
Yeah, good. I'm all for it. I'm all for it. All right. Government that? Yeah. That's part of the government that that's good. I'm good with that. Not the post office.
Pete Mento 28:52
I opened the show duck. So who closes it? Oh, yeah.
Doug Draper 28:56
Got it. Got it. So that means thank you. So that's it. That's the latest edition of global trade this week. As we said during halftime is brought to you by CAP logistics. Please check them out at cap logistics.com It is always fun to talk we always come up with some crazy stuff. And the fun that the funnest part. I know that's not a word. It's just the banter. Because half the stuff that you and I talk about, we don't really prepare for it just kind of comes out. And hopefully we sound somewhat intelligent, but it's always a blast to do the show every week with up and I want to thank the audience for joining us as well. So next week, we'll do it all over again. Have a good one. Happy travels. Take care everyone
Transcribed by https://otter.ai