Global Trade This Week – Episode 245
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Keenan Brugh 0:01
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. I'm Pete Mento, and with me is my co-host with The Most Host, mr. Doug Draper. Doug, it's nice to see you. I do want to address something. We had a little bit of internal conflict before the show started. Kenan was a little worried about the about the lighting issues of our bald heads, and for those who've never seen Kenan on the show, Kenan has been blessed with truly gorgeous, luxurious long locks. I mean, the man you got to give it to him, the man can grow some hair. Okay, so the fact that he would come so hard at two guys who are follically disabled, I think it's irresponsible. I think it's, you know, honestly, it's probably it's a little bit insensitive given the current environment of 2026 We might have to call HR Global Trade this week's HR. I don't know who that is, Doug. I think it might be you, and you know, file a formal complaint about his insensitivity issues towards our challenges, but, man, you know, I would love to know what Kenan, we should AI a picture of Kenan Ball about what that would look like.
Doug Draper 1:13
Yeah, I love it. I love it. Well, in Kenan's behalf, I asked him the question, because I'm in Fresno this week, and I'm in this boardroom, and I was like, "Hey, what lighting looks better? That was the question I asked. And lights on or lights off? Sure. And he said, "Lights off. So I'm in this dark room facing an outdoor window, but his response was, "Yeah, you better go without the lights, because it's shining off your bald head. So I prompted the question. He gave an honest
Pete Mento 1:43
dog. Doug, you're the victim here. I don't want you to justice. You're the victim here, and I know I know Kenan's a friend of ours. He's, but sometimes you do wrong things, you have to apologize for it. And
Doug Draper 1:55
yeah,
Pete Mento 1:55
I think we need to have higher expectations for this young man.
Doug Draper 1:58
Yeah, for sure. Hey Pete, I wanted a super quick story, and I'll make this thing like 45 seconds or less, but this is you talk about what you do this weekend, and oh, I went bike riding, I did this, whatever, I had something that happened to me this weekend that nobody else listening to the show guaranteed had this experience. Long story short, in Steamboat, left the trash can out. I guess this was Thursday night by accident, and a bear and her three cubs came over, and it was about 1130 at night, and I heard this tip over, and they're bear their bear proof trash cans kind of lock in the whole big yard. The second I heard that, I immediately remembered I didn't take the trash can into the garage anyway for 10 minutes, which is a very long time, when you have a bear right outside your house, picked up, tumbled, tossed, rolled down the street. He, it's a mama bear, she probably rolled that thing 25 yards down the street, just clanging and banging. I went out there, and I was throwing rocks and I was banging pots and pans, and that mama bear could give two shits about me doing any of that, and she ultimately got the trash can open and can decide to have a midnight snack. We had to get, we had to turn the car on, because she had three cubs, and they got the trash out in the middle of the road, and we're like, what do we do? So we backed the car out of the driveway at like 130 and drove around there, and like honk the horn, and flashed the lights. They scattered. I'm like, we got to get this trash can out of the middle of the street. So my wife said, all right, well, I'll kind of use the car as a blocker, you jump out and run this thing back in, and I'm in slippers and going crazy and whatever, so it was pretty a little scary, and the three bear cubs, my wife went on our back patio or back deck to take a picture of this bear tossing this trash can down the street, and the three cubs were in some aspen trees right next to our house, and they all just ran down, one of them, got on our porch, probably like two feet away from my wife, so she's up there screaming because she's shocked. I'm out there throwing rocks and banging pots and pans at this bear to try to get it run away. It was an adrenaline rush, to say the least, in the middle of the night.
Pete Mento 4:15
So, three questions, Doug. Number one, brown bear, black bear,
Doug Draper 4:20
it was black, but you know, I don't.. I don't know.. I'd have to figure out what's in Colorado anyway. They can climb up a tree, so what does that mean?
Pete Mento 4:30
They both can. Number two, did you get video of this? Because I think we need to all see it.
Doug Draper 4:36
Well, my wife got a video of the cubs coming down the trees, but it was dark, and it's a little.. you know, I know where you're going with this, you know.
Pete Mento 4:47
Hillbilly bullshit, are you on the back porch throwing rocks at a carnivore? I don't know what type of maniac you are, dude, but I mean, I.. I'm a hunter. Talked about this, you know. I know you can't shoot them or anything like that, but they have big old claws and big teeth. I don't think throwing rocks. What if you got its attention and decided to run at you? What were you going to do?
Doug Draper 5:10
Oh, I was close enough. I was close enough to the door. I was trying to, I was trying to hit the trash can to make a noise for it to get scared. So, anyway, it was maybe I didn't handle the situation very well, but that situation doesn't present itself very often.
Pete Mento 5:27
No. Do you have pictures of the garbage can now? Did it really mess up the garbage can?
Doug Draper 5:31
It didn't. It broke the lock, broke the latch, but the thing was, I mean, it's a heavy, it's industrial strength, right? For this particular reason, so the latch got broken, but it's still usable.
Pete Mento 5:43
Your time up in Steamboat has been pretty hysterical as far as wildlife interaction goes. True bear, I don't know, man, it's Beverly Hillbilly shit. I don't know how I feel about this.
Doug Draper 5:53
Yeah, well, anyway, I had to share that because it was quite an experience. So,
Pete Mento 5:58
yeah, hell yeah, it was.
Doug Draper 6:00
Yeah, all
Pete Mento 6:01
right. Well, everyone, welcome to Global Trade this week, or Mutual of Omaha's Wild Kingdom, as it's slowly turning into where Doug is Marlon Perkins, and I'm Bill in the Land Rover. Chase it. Well, you actually know, I'd be Marlon Perkins, because you're the one actually interacting with the animals.
Doug Draper 6:16
Yeah,
Pete Mento 6:16
we're excited to have you all with us. Let's see, we've made fun of Kenan. We've talked about wildlife. What do you see? We talk about trade now, Doug. Once you get your first topic this week,
Doug Draper 6:25
I think that's excellent. Great segue, by the way. Good, good deal. It's like
Pete Mento 6:29
I'm a professional comic or something.
Doug Draper 6:31
I know, I know. So, may 14, Pete, the Supreme Court, in a ruling nine to zero, right, nine zero, made their comments on a case called Montgomery versus Caribe Transport, and they basically said freight brokers can now be sued for negligent carrier selection. Right, it's been making the headlines a little bit. It was specific to CH, or no, it wasn't CH Robinson, but they're the ones that have responded, so it essentially removes the shield, for lack of a better term, on state courts, right? Yeah, and my take is a court is a court, right, state or national, and so to me that's irrelevant, and even more so with state, it's closer, it's more personal, right, if it's some person that was impacted in the state of Washington, and I happen to live in Colorado, you know, I may not know that individual would care that much, but if it's in the state, I would care more. So, I think the state veil that's been pierced is probably more important. But here's the thing, what does that mean for carriers, brokers, shippers, the whole nine yards, right, and these are kind of obvious, but I still wanted to go over them, right. The carriers, the good ones are going to rise to the top, the bad ones are in trouble, right, but that does not change carrier fraud and all the things that we're working on, because that just means that the good guys are going to get targeted more, so the fraud didn't go away, but the carrier selection, I don't know if it's going to be enough to create supply and demand issues, but I think it'll clean up the industry a little bit for brokers. The liability obviously just skyrocketed, so you got insurance rates. I think the large brokers are going to be able to absorb it a little bit more versus the small guys, so I think there will be an element of carriers of our business. I think there'll be an element of small brokers that go out of business, but the big boys, I think, ultimately will get a little bit stronger, so to speak. And then shippers, you know, they'll have better carriers, they could talk to their C suites about that, the one thing that that struck me, Pete, and I want to get your take on it. Do you think this is going to spark the discussion about private fleets in the future? People are just like, I can't deal with this. I'm talking about shippers, and I don't want to deal with it. I don't care if it's C.H. Robinson or Johnny's brokerage service. We're going to take a serious look at just managing everything ourselves with the private fleet. Do you think that's going to happen? And what's your general take on it?
Pete Mento 9:10
So, the private fleet thing, to me, one of the ways that these freight forwarders make the money that they do, and many of them do, these brokers, they have their own trucks, some of them have their own trucks, they make it because it costs so much money to keep those assets on the books, so having it as a sliding scale, you know, where it's variable works out over time. Maybe it doesn't work out for a month or two, maybe there's some years where it's worse than others, but it gives you a degree of financial flexibility that has been a winning, a winning formula for a very, very long time, I mean, doesn't matter if it's trucks, warehouses, whatever. I mean, there's a guy who owns a baseball team that built his fortune off of that sliding scale of cost, you know. Lots of billionaires out there that have done it through this, so I, I don't think that you're going to see a wholesale adoption, but I think sort of a asset. Light model, maybe. Where they have their own that they can depend on. Where a big fleet comes more into effect, as I worry about the owner operators. I worry about the one truck companies, the three truck companies, where the cost of being compliant for security purposes, it might drive a lot of these people out of the business, and who wins on that? The owner, the owners of the big fleets are the ones that do. So, there's so much money on the table, you might be pushing people to have sort of an augmented model where they do own significantly more assets. It does seem like Doug, you're onto something here for that.
Doug Draper 10:37
Yeah, thanks for the input. All right, this is a four quarter show, so what do you got?
Pete Mento 10:44
Yeah, a bunch of stuff came out over the weekend about where we are right now with energy policy specific to oil. Streets have been closed for quite some time now. Every time it seems like close to getting a deal, somebody bombs a snot out of somebody else and it all goes to hell again. And if you begin to look at our oil reserves in the current inventory of crude, it's not good, it's not good at all. And replenishment of those reserves is not happening quickly. We are slowly getting to a point where not only you're going to see advanced expensive rates on energy, which then trickles down to our whole industry, but you're about to see an area where there might be gaps big enough, where even when this gets solved, it's going to take six to nine months for to catch up. Will you be looking at a 2027 that is going to be positively overrun with high energy costs for transportation, unless something changes very, very quickly? I think 2026 gets done. What you're any hope that we have of lowering transportation costs on energy? I don't imagine anything that's happening right now makes me feel like we're going to have something good. I think it's going to get worse, much, much worse, particularly in parts of the world that don't refine their own crude, like Europe, not to the degree that we do. So, Doug, you know, my take is I think we're past the tipping point. I think we're at a point right now where the cost of transportation is going to be really effective, really impacted over the course of six, possibly 12 months, because of that break in that gap. What's coming out of the Straits of Fort Lewis?
Doug Draper 12:16
Yeah, I love the point about the tipping point, and the fact that even if things are corrected here, right now, right today, you know, the trickle down is not going to happen. So I had not thought about what you said with 2026 as a wash, but I think that is very valid. Then I saw the other comment that the CEO, I believe it was Exxon, said that $150 barrel is is coming very soon. I don't know if that's posturing and positioning to help out with shareholders or if that's real, but there's certainly, you know, maybe that's clickbait, but nothing seems to get resolved. We're kind of close, we're not there, we're kind of close, we're not there. Once bitten, twice shy, people are going to hunker down and double down, meaning that you know the fuel prices aren't even if they, even if the things are resolved, it's not going to change for the rest of 2026 to your point. Yeah, so alright, yeah, you got it. So, brought to us by Cap Logistics, check them out@caplogistics.com We appreciate them every single week. So, Pete, what do you got for this week?
Pete Mento 13:34
Well, my topic this week was punctuated by a social media post some friends of mine sent me this morning, where there are little, there's a thing you can bet on right now in Eastern Europe. They put little tiny hamsters in these little model cars that look like f cars and give them names like Hamster Hamilton, and you know they put hamsters in them, and then the hamsters roll on the wheel, and they bet on which one of these is going to win, and there are actual betting markets, Doug grown adults are putting money down on which one of these will will win. So I started doing some more research. We talked, I think it was last year, about how I love it when ESPN does the Ocho, but it's about this time every year when, when the sports begin to trickle down a little bit, and pillow fighting, jungle gym, tag, right, here's some of the ridiculous things people are currently betting on, two people with a soccer ball kick it back and forth like tennis, and if someone misses the ball, then that's a win, and you're betting live time, like real time, on whether or not Bob will miss the ball or Eric will miss the ball. We have, you can bet on eight people in a circle flipping a coin, heads or tails, who will be the last person to get it right. It out of those eight, and how many rounds if you want to take a parlay. Legalized betting has given rise to positively ridiculous things that you can bet on if you're so inclined. Goldfish racing, apparently, how long it will take a cow to eat a whole bag of feed. These are these are all things that you can apparently bet on, man. And you know, I do whatever you want with your money, it's up to you, right? You already do whatever you want with it, as silly as I might think it is. So, Doug, do you think that you and I should put some bets down on some of these high stakes opportunities that are happening in the betting world right now?
Doug Draper 15:38
No, I'm not. I'm not a big bettor. I go to Vegas or anything like that. I'm more for the experience, not the gambling, but you're right, it is pandemic. I can use that word related to this, and especially young men, right in their late.. I hate to say this, but late teams and into their 20s, you know, my son, your daughter, right in that demographic, and yeah, the stories my son tells me about dumb shit that they're anybody on is is funny and scary,
Pete Mento 16:13
betting on whether or not the next pitch someone throws will be a strike or a ball, people bet on that. I think it's nuts. When the Kentucky Derby happened this year, a friend of mine in New Orleans, she's great. She's just awesome. She never bet on horses before, and so I said, I will look at $20 bet on this and see what happens. And she texted me and said, 'Wow, you know, this makes it so much more exciting. I was like, 'See, that's it. I think I was six the first time I've been in a football game, my grandfather was a bookie, right? Told me how to do it. Yeah, fantasy sports are fun, having your fantasy thing is fun, but having $100 on the over on the Miami Dolphins-Oakland Raiders game is a lot more exciting. So I can see why people are doing that, but there's enough sports now. Wait, come up with this crap, Doug. I'm convinced we're watching the fall of civilization, because we're trying to get out when grown people are betting on hamster races. It's all gone to help
Doug Draper 17:09
out. Great. All right, you've got me into the mojo of questions and answers at halftime. Now, I had seven set up, but I'm only going
Pete Mento 17:20
to do five
Doug Draper 17:20
in the sake of time, right? So, these really have not - they're not industry related. So, I'll ask a question. I'm going to give you four choices, and you pick the correct one. And I'm looking at the screen right now, so I'm going to select your answer. I'm going to tell you if you're right or wrong. All right, so what percentage of teens had summer jobs last year? I'm going to give you four percentages: 13% 30. 3% 53% or 73% What percentage of teams had summer jobs?
Pete Mento 17:51
1313,
Doug Draper 17:52
and the answer is not correct. 33%
Pete Mento 17:57
Okay. Yeah.
Doug Draper 17:59
All right. US adults have consumed about 1.9 pounds of what per capita in 2025 cucumbers, honey, salt, or tree nuts?
Pete Mento 18:13
Salt,
Doug Draper 18:15
salt is not correct, my friend. It's actually honey. You can believe that.
Pete Mento 18:21
Wow, I'm not doing well with this dog.
Doug Draper 18:23
Yeah, yeah. Okay. Have you ever heard of the enhanced games where athletes were permitted to take? Okay. So, the question is, how many record-breaking performances were there in the most recent enhanced games? Now, I don't know if it was summer. Well, it's probably summer related, because that's so. how many records were broken, one record, five records, nine or 13, 159 or 13 one
Pete Mento 18:47
one.
Doug Draper 18:48
Click submit. You are correct. It was a Greek swimmer that set a new world record in the 50 meter freestyle. So, yeah, he was also wearing a suit. It looks like that was illegal as well, so all right. Two more will be, will be over with halftime. Which country became the 12th US company to join the $1 trillion market cap club? Which company became the 12th US company to join that? And Broadcom, Exxon Mobil Micron
Pete Mento 19:27
Micron
Doug Draper 19:29
Micron Submit, you were correct. Ding, ding, ding, ding, ding. Yeah, so it went to 1.6 trillion.
Pete Mento 19:37
It's amazing.
Doug Draper 19:40
Yep, there you go. All right, I got you. Wait
Pete Mento 19:42
till SpaceX is a quadrillion dollar company.
Doug Draper 19:46
Nice. Oh, this would be a good one to end. Which of the following cities has the highest number of Airbnb listings that have been completely unoccupied for the last 12 months? So all all the. BNBs in this city completely unoccupied for the last 12 months, Amsterdam, London, New York, or Paris,
Pete Mento 20:10
London,
Doug Draper 20:12
London. Submit, you are correct. Nice job. They looks like they had 47,000 listings in roughly half had been open for the past 12 months, so good job. Three out of five, nice job, my friend.
Pete Mento 20:30
I think it was more like three out of seven, but whatever. I'll, I'll take the L on this one. I'm good at trivia. This is actually like statistical stuff, it's a little bit harder.
Doug Draper 20:38
Yeah,
Pete Mento 20:39
that was fun, Doug. We can do these all the time. I don't care. Yeah, you still watch out with Pete. That's fun for me.
Doug Draper 20:44
Yeah, yeah. Might give you a solid B minus on that.
Pete Mento 20:47
Thanks, bud.
Doug Draper 20:48
All right, brothers into the second half.
Pete Mento 20:51
That was half done by Cap logistics. You are, you are first up.
Doug Draper 20:56
Oh, sorry about that. So I'm I'm diving into your turf a little bit here, but us and Taiwan finalized a trade agreement, and it caps certain section 232 tariffs at 15% mostly auto and aerospace, timber and lumber is in there as well, but I think the the autos and an aerospace, so it used to be 20. This is what I read. Now it's 15% And then the derivatives for auto and aerospace are the ones they're going to get impacted the most. I want to talk to you and get your take on the derivative piece of it, so it provides a little certainty in a very fluid tariff situation, and then I think it, here's the one piece we just went to China presidential meeting to presidential meeting, eagle to eagle. This shows that it's, we're still tight, which with Taiwan, they make a hell of a lot of semiconductors, they're really good at it. So I think this is a little bit of a shout, shot over the bow, so to speak, a little. Hey, China, don't forget that we still have strong time ties with Taiwan. So I think you know there's value in that. But what's your take on this one? And talk to me about the derivative piece of it.
Pete Mento 22:17
So what this shows more than anything is a country who is willing to make direct foreign investments into the US to build infrastructure and manufacturing is going to get better deals than other countries. Taiwan has done an incredible job of sending jobs to the United States by building infrastructure for things like what they're doing with TSMC, with building semiconductors, and so on and so forth, so you're seeing this trade off. If you're willing to bring your production to the US, we are willing to dramatically lower your tariffs. The derivatives one's the part that got my attention more than anything, Doug, because they mentioned steel and aluminum, and I think what you've seen with this Taiwanese agreement is going to be the template for every country moving forward. If you are willing to make a certain type of investment, we are not going to destroy you with these derivative tariffs that we've been putting on companies for so long. So, yeah, I think these countries, this country in particular, will become the template for reducing 232 and derivatives on steel, aluminum, copper, and things of that nature. To me, Doug, I saw this as a good thing. I saw it as a nice, a nice event that we can hopefully all see for Europe, for Canada, of what comes out of USMCA, that we can get these ridiculous tariffs reduced on the basic core building blocks of industry.
Doug Draper 23:35
Good tape. All right, wrap us up here, my friend.
Pete Mento 23:39
So, lot of talk in the trades this week about the Jones Act and the waivers that were given to Chinese ships for the Jones Act, and what I.. there are certain topics that when normies talk about them, I just shut up or I leave the room. I don't.. I don't.. the uninformed foolishness of what people talk about with the Jones Act, is one of them. I had an introductory cargo class my freshman year, my fourth class year at Maine Maritime Academy. I remember it very well. It was on Tuesdays and Thursdays at 2o'clock so I had eight classes a semester at Maine Maritime. We had a lot of them. Yes, and I, you know, I don't, I don't remember all of them. I just remember shuffling from class to class to class, but it was always warm, and the professor was a guy named Charles Weeks, Captain Charles Weeks, and his nickname on the academy was was Stinky Weeks. Stinky, uh, smoked a pipe, and that's why they called him Stinky. I don't know, but he was an authority on a number of things, one of them being the Titanic and the crash of the Titanic, he was a world-renowned resource on the Titanic. The man knew everything about it. Second, he was the chief mate of the only nuclear-powered cargo ship America ever made, the Savannah. Pretty cool. And third, the man knew more about the Jones Act than any human being who had ever lived. Commander, who. Is do everything about, and this is the first thing we learned. The Jones Act was put in place to ensure that America always had the ability to project itself through its navy to bring cargo and move its military anywhere in the world, but it was also done to protect American sailors, not just financially, but in case we were hurt. If you were hurt on a ship, you got what was called maintenance, cure, and wage. He beat that into our heads, maintenance, cure, and wage. So, maintaining your, your safety while recovering. Cure, if you were hurt on a ship, it was the ship, you know, the ship's responsibility, the owner, to make sure that you were cured of your ailment, and then wage that you were paid during that process, maintenance, secure, and wage. The whole point of this is to protect American sailors, so that we have them. We don't have them right now, and allowing these waivers for these Chinese ships. Yeah, they've, they've been doing it, man, and they haven't really raised costs that much, or lowered costs that much. They've stayed about the same. The Jones Act is vital, and people who don't sail, and people who haven't worked on these ships, and people have not seen the intricate building blocks of international maritime power need to shut the fuck. That's as kind as I can put it, Doug. The next time I see some banker on FT, or some guy who's involved in shipping very tangentially, talk about the Jones Act. Yeah, you might understand the regulatory piece of it, talking about 100 years of keeping American maritime power where it needs to be. It needs to become the fundamental building block of exactly how we rebuild the US merchant marine. So, I'm a little angry about it. I saw a couple of things this weekend that made me real, like, had to put down the paper, kind of angry, you know what I mean, of folks that are clearly just politically showing on this idea of, we don't need American ships. Okay, great. Well, next time we have a war and we have to depend on the Danish or the Taiwanese or the Germans to get things there, remember, they can say no to us, like we've so often in the last couple of years said no to them, and we will not be in the position to be successful.
Doug Draper 27:08
Yeah, yeah, I don't really have any comments on that, because I would agree wholeheartedly with you. I did not know the backstory, and kudos to your prof, what was his name, Stinky, what
Pete Mento 27:20
Commander weeks, sticky weeks. Then you would tell us, you know, there's a reason why, when you think of sailors, they have peg legs, they lost limbs a lot, and no one gave a damn. So then, yeah, they're walking on a peg leg, it's the only job they can do. And the merchant marine would take you back, guys with eye patches, you lost an eye. Being a stevedore on a ship or working on a vessel, being involved in maritime trades at all is an incredibly dangerous job, even with all the technology that we have now, and sailors are the last thing anyone thinks about. Maybe someday there will be autonomous vessels, but there aren't now, and the men and women that keep these vessels afloat and get everything in your life that you need, it's no different than truck drivers don't get the respect they deserve, and they really ought to,
Doug Draper 28:01
yeah, well, like you said, it's mostly economic and political play, not the really root, the foundations of it, which are protecting sailors, interesting, right?
Pete Mento 28:13
But bring us home, all
Doug Draper 28:14
right. Well, that's it. I think we got this thing under 30 minutes, so that's a good, that, that's always a good show. I know our listeners appreciate that, and we appreciate them for joining us every single week on Global Trade. And Pete, I think you started this one many, many moons ago. That if it's happening in Global Trade, we will be talking about it on Global Trade this week. Pete, hope you have a good one. And we will catch you in seven days with an amazing conversation. Make queued up for everybody. Take care, pal. All right, catch you later.
Unknown Speaker 28:44
Bye.
Transcribed by https://otter.ai