Global Trade This Week – Episode 197
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Doug Draper 0:00
Doug, you're watching global trade this week with Pete mento and Doug Draper, Hey everybody, welcome to another edition of global trade this week. My name is Doug Draper, and in the great state of Texas, is my co host and partner in crime, Mr. Pete mento. Pete Waco, Texas, is what you said you are. And I guessed a Holiday Inn, right? But it's more of a Marriott courtyard. Is that what you said with the beautiful wall on the background? Marriott
Pete Mento 0:37
guy? So, yeah, this is a, kind of, have a, you know, a place where you have breakfast on a paper plate, sort of a budget. So it's either going to be like a courtyard or a Fairfield, or, I can't remember all of them, but, you know, that sort of that it's not quite the hotel, motel six, but it's not a Weston, you know, I'm, I'm feeling like I'm in high cotton when I'm at an actual Marriott. You know, that's when I feel at the Ritz Carlton, but they take good care,
Doug Draper 1:05
nice. So it's not a Tombo debt special, nope.
Pete Mento 1:09
I love those commercials, the one where it's all dark and it's just black, and he says, doesn't matter what you pay for a hotel room, they all look the same with your eyes closed, asleep. Yeah.
Doug Draper 1:22
What is Tom BOD, famous for other than the Motel Six commercials, I
Pete Mento 1:26
think he was a comedian. Oh, really he was, yeah, yeah, yeah. I remember those clear as day, those 80s commercials, like the fast talking. Was he a Subaru guy? Yeah, Joe Isuzu, that guy was a liar, right? The he was selling other people's cars. Does it have a motor? Doesn't have a motor? Yeah, I remember all those. So
Doug Draper 1:47
is Suzu. Well, shame on us for not knowing Tom bodets backstory, because we pride ourselves in obscure trivia like that.
Pete Mento 1:55
You sure do. Yeah, yeah. Cool man. We gotta today, buddy. So Topic number one, you've probably been reading a lot about the proposed rebuilding of the US Merchant Marine, and the amount of time effort and money it's going to take to do it. Executive Order by the president Pete heckseth, the Department of Defense's secretary is all about this too, as is our Secretary of Commerce. And personally, as a graduate of a Merchant Marine Academy, I'm for it too. I think it's extremely important. But there's two things I wanted to bring up. First of all, Doug, this is a supply chain problem. Building these ships from a number of different perspectives. One the raw materials, like steel and aluminum, something we don't have a lot of here, and then once we get the raw materials, we need new ship building facilities, which I guess we're going to work with the Koreans on building here as a joint venture. Cool. Well, then someone's got to build the ships. Doug and the people that remembered how to build the ships are like our parents age. We don't have those folks just laying around looking for jobs these days. So we're going to have to build a whole new supply chain of people to do it, and then from there, it's money. It's a lot of money, pal, it's hundreds of billions of dollars. So the question is, do we really need it? Do we need a merchant marine moving cargo, or do we need more of a military based Merchant Marine? I believe we do. I had a pretty enthusiastic discussion with someone who took the contrary to that, who said that when we have the Danish and we have the Italians and the French with MSc and Maersk, we can depend on them if something were to go wrong. And I believe that it's better to depend on yourself, you know, more of a worry about our own flag, kind of a guy, but I don't know, Doug, do you think all this money, time and expense is worth it to rebuild our Merchant Marine, or should we rely on our partners?
Doug Draper 3:45
You know, as my co host and good friend and graduate, I have to say that time, money, effort, it's not, I don't see it worth it, right? It's a long, long cycle to get to where the, you know, the end goal is way down the horizon and the bureaucracy that would be needed to align to move this thing forward, conceptually, I love it, right? Yeah, of course. You know, self sufficiency, and, you know, bring that ship building back to the US. And there's been some discussions on it, but it's the sustainability on that is, you know, decades and multiple administrations, and I just don't see, I'm not against it, I just don't see the cost benefit analysis, really, that would make it truly viable. Think
Pete Mento 4:40
we're missing Doug is people don't realize how Herculean a task it is. And you said it's going to take decades, and politically, are we going to have the will to continue to invest in it? And I hope they do. I really do. But I don't think that the average person in transportation really understands what a. Huge undertaking, a commitment we're about to make, yeah,
Doug Draper 5:03
yeah. We'll have to see. Yeah. I think that's the only comment I have on that one, my
Pete Mento 5:11
friend, what good topic this week?
Doug Draper 5:13
Now, mine is kind of about waiting, the waiting game, so to speak, right? And you've seen this, I've seen this, and I even have the waiting game of tariff clarity right now. You and I see it, and all of our listeners, the majority of our listeners, hear that, because we are in supply chain, physically moving products and stuff. But I have friends that are in trial consultation, right that are involved with cases that are on hold because of tariff uncertainty, two of them. And so it has nothing to do with supply chain and logistics, but the wait and see attitude is permeating beyond just supply chain and logistics, right? And so my my topic is really about prolonged hesitation, right? And the inaction, if that's the right word, like, how long are people going to wait on the sidelines for something to change, right? And for a decision to be made, I should say, not necessarily something to change. You are a visual example of that. You were going to grow your beard for a period of time until all this was resolved that here we are, you know, looking like Santa Claus before the before the season, right? You fully admitted that. So by not making a decision, is really making a decision and hiring, investing and general proceeding and processes moving forward, at some point, companies are going to have to make a decision and say, we are moving forward. We are moving forward in this direction or that direction. Maybe it's after the 90 day pause. Who knows what's going to happen if that pause is going to be kicked down the road? But I think we're going to see companies after that 90 day pause saying we cannot wait anymore. We have to move forward. And there will be companies that will time it right, and there will be companies that are going to get hammered by their decision. But I think the United States needs to move forward and start making some decisions, even in a sense of uncertainty, because you can't just wait inevitably, because by not making a decision, a decision will be made for you, and you lose the proactive nature of your business. So I think that we're going to see, I don't think I feel pretty confident that people are going to be done waiting and decisions are going to have to be made, and it's going to be probably to the end of summer, but you know the waiting game and what's going to happen, what's going to happen? That's a nice conversation six weeks ago. It's not a nice conversation for businesses six weeks ahead of us, and so we're going to see changes in action here in the relatively near future.
Pete Mento 7:50
I don't know who said it, Doug, but he who hesitates is lost. And for the folks that didn't immediately jump on it when the tariffs were paused, good luck finding space on a ship right now. Good luck there. There's no capacity, and you're going to be waiting. So now there's that fear of, if I continue to wait, am I going to miss the the window if the tariffs come back on and I'm not going to be on the water when it happens? Because we don't know what the window is yet, and it's causing all of this anxiety and chaos. So I agree with you, Doug, you know, we've got Pete coming back to school, Christmas, the holidays, all of that happening. And right now, people aren't making that move because the prices are too high. Can't find capacity, you know, all those sorts of things. And he who hesitates is lost if you don't want to be in a position where the tariffs have changed, or you don't have inventory now because you've waited just too damn long. So in my experience with our clients, they're moving cargo. They're getting they're doing everything they can. They're spending the money, because the money on the containers is cheaper than the tariffs would have been, and they're moving that stuff as quick as they can. But yeah, Doug, he who hesitates is lost. I agree with you, yeah,
Doug Draper 9:00
and I think the small to mid sized companies are going to have that's, that's a deeper conversation around a table with a kumbaya moment to say, are we going to do this? Are we going to jump? You know, if you're a fortune 500 and some of the customers that you touch, maybe it's a strategic decision that whatever. But it could be make or break for some smaller companies that say we have to do something. So it'll be an interesting time. Sure, there'll be lots of articles about it here in the upcoming months. That's
Pete Mento 9:28
a scary position to be in. You're right if you're a smaller company. Cool. All right. Brings us to halftime. Brought to you by our friends at CAP logistics. To learn more about CAP logistics, check them out@www.caplogistics.com my daughter makes fun of me when I put the w's in front of things I don't care. So that's half time this week, and we got some good topics. Doug, you want to go first? Yeah,
Doug Draper 9:52
yeah. So this is a term that I that literally, when I was having breakfast with my wife this morning, she brought this up, and I said, You know what? There's my. Halftime conversation. So this is hot off the press as like six hours ago. It's something called type two fun type like type one, type two, type three. I'll go over the types here in a second, but this is specific to type two. And type two fun is essentially taking an experience. And maybe we should think of more of like athletics or adventures, right? You're in the moment. It's an activity that's challenging, uncomfortable, maybe even miserable while it's happening, but then when you're done, you have a sense of pride and enjoyment. In hindsight, I accomplished this, I did this, and you know what? In the moment, it sucked, but you look back on it, and there's pride that comes from it, a sense of accomplishment. And there was a kid here in Steamboat. There's a school called the steamboat Mountain School, and think of it like East Coast prep boarding school, but it's here in the mountains of steamboat, and the valedictorian was in the paper, his speech was about type two fun. And the more I started thinking about that is what an amazing commencement speech to talk about the concept of type two, type two fun, whether you're literally doing an activity or whether it's a mindset, you know, whenever you're tackling projects that may be difficult and then having a sense of accomplishments at the end. So anyway, I thought it was a perfect topic to discuss. Never heard of the term type two. Fun type one. Fun Pete is in the moment. I'm rafting, I'm skiing, I'm doing, you know, I'm out there hanging out and Mardi Gras. That's type one in the moment. Type Two is what we just talked about, type three, which I don't even understand why they call it type three fun is stuff that's not fun, like I broke my leg, or I had a very harmful experience. So I don't know why they call it type three fun, but anyway, I thought type two. It's good, good life lesson. And I know that, you know, we've extended those experiences to to our children, explain that not everything is is fun in the moment, but their satisfaction with the job well done. So I just want to tell our listeners they never heard of the concept of type type two, fun. There's the a new word that you can add to your vocabulary.
Pete Mento 12:25
I had never heard it, Doug, until you gave the show notes and I started looking into it. And the way I see it, it's like, like you said fun in the moment, but you don't know what the ramifications will be, or the long term impact, as opposed to enjoyment and fun after the fact that you had to, there could have been some fun in it, but it's really just the joy that you have afterwards. Like, type one fun will be like dating an actress. Super fun while it's happening, probably not a good idea when you look back on it, you know, type two fun, it's a lot of what we do in our career, surviving COVID. You know, it's those first couple of years in the industry when you were just so miserable and screwing stuff up all the time and working really hard, but you're really you have all these amazing stories about how great it was after and I was fortunate this week to be at a client where they had, I think it was four people studying for the brokers exam in the fall, and they were all talking about how hard it was and how they're missing out on all kinds of things. And I'm like, Yeah, but I'm telling you, you're going to look back on that time you prepared, and you're going to remember how cool it was. So, yeah, I get it, man. I think that's a really good point to make. Is it seems hard in the moment, but after the fact, you get a lot of pride and a lot of cool stories
Doug Draper 13:32
about what happened. Yeah, yeah, cool. All right, what's your halftime one, buddy?
Pete Mento 13:37
Yeah, my halftime one. I was in Austin earlier this week and talking to people about my lifestyle, their lifestyle. And there's some things I've decided are bullshit. Doug, other people say is wonderful that I'm just going to call out and say it isn't wonderful at all. So number one, cold plunges. I think cold plunges are something that people are just doing, that they think are cool. Yeah, no, you're sitting in cold and you're miserable. And I do get how it can help people with inflammation and such, but it sucks and it's stupid, and I think we should just say what it is. It's not fun. Number two, kombucha, the amount of kombucha that I see in California and in Austin, or any sort of, you know, hippie lini kind of place, can Bucha is bullshit. You know what? Eat some yogurt. You don't have to do that to yourself. It's, it's absolute horse shit. This new one that they're doing, it's called Urban snorkeling. Have you heard about this done? No, no, that's what that's what the youngsters are calling a walk. The walk. It's a walk. It's like when you're snorkeling and you're just looking around you, you're not paying attention to your phone. You're really in the moment, enjoying the place where you're walking. It's called the walk, you jackass. Get your face out of the phone. Don't call it. Bourbon, snorkeling, you're going for a walk. Okay, don't be a jackass. It's a walk. So those are three things that are kind of driving me nuts right now, the cold plunge one really pisses me off, but, and I've done them, you know, I get it. It can feel good afterwards, but doing it every day and I don't want to hear about it, yeah,
Doug Draper 15:18
yeah, you're right. You know, I had not thought of cold plunge, but agreed everybody's talking about it, this Imhoff, right? I can't remember the guy's name, the Imhoff method. Anyway, I that's perfect, the cold plunge thing, what I thought of Pete was like the high end designer water bottles right when? When I remember you got a water bottle that was clear, it had some type of logo on it that pretty much was peeling off after the first couple of days, and then it becomes all scratched up and charred and it looks like it's been through the ringer. That's the kind of water bottle I have that I take to the gym, but the designer ones that cost 60, $70 you know, that are pink with the handle, and they got the straw, and everybody's just hucking that thing around and sipping it, putting it down, and you got to have your fancy water bottle next to you. That was the thing that came to mind with, really, just, you know, I don't know, go old school water bottle, right? You don't need it the kind you can just hang on with your finger and it's plastic, and you drop it and it gets all torn up. So high end designer water bottles and sip cups from from some clients that you may work with, I think that's just asinine.
Pete Mento 16:36
Yeah, a lot of stuff these days is puffery. Just call it what it is. It's just, yeah, showing everybody how pretty your feathers are. Bunch of bullshit. So I'm gonna stand by that and stand by that. Yeah, I
Doug Draper 16:49
think cold plunge, you nailed it that. That is exactly it. The cold plunge, that's the hot scene right now, and how long you can stay in and agreed, 100%
Pete Mento 16:59
puffery. All right, man, what's your next topic?
Doug Draper 17:02
All right, so this is a little bit to the waiting game that we spoke about. But I think talk about new terms, right? That I've started to see a little bit is the ready fleet, right? Like we're about to get ready the ready fleet, which is kind of the the new thing, because everybody, everybody is expecting a surge when the tariff situation gets resolved, which may or may not happen, but I can respect companies that are doing the Ready, ready fleet. The one that's gotten the most attention the last couple of days is BNSF, the railroad, a class, class, a railroad. Apparently, they've lined up 100 extra locomotives ready to support the surge of of containers that they expect to come in third, fourth quarter, they've done mainline track expansion. I like 58 miles seems pretty insignificant in the big picture, but I'm sure it's strategically located and like staging areas in their terminals, so there's more spots to park. So I think that you know, they're expecting the ready fleet for inbounds, but I think that there's other companies out there, and if our listeners know, please make some comments in the notes when we post this show. But the ready fleet. We're going to ready for this explosion that's going to happen after all the tariff stuff gets dialed in. So trucking, I could see that pivoting pretty quick. Air Cargo. I just saw something today Pete, that they're trending, that the rest of the year is forecasted to basically be flat. So I don't know if there's a ready fleet in air cargo, but the concept of air is you can reposition pretty quickly. But I don't know, have you heard the term ready fleet? Or heard any examples of companies that are kind of ramping up in preparation for, you know, a waterfall cascade that's going to come?
Pete Mento 18:53
I haven't. I think it's great. You know, if individual companies are being thinking ahead, right? Being prepared, being strategic, but it takes a lot of collaboration in our industry to do that. And I'm not so sure that all the other parts of that, on the rails, as you put it, are all doing that together. You talked about the rail right? 58 miles doesn't seem, doesn't seem like it's that big a deal. And the rail congestion is a real problem because we need more infrastructure. So I think it's great. You know, I'm never, I'm never going to poo poo, not going to yuck. Somebody's yum for working on, trying to help to deal with problems that are going to happen. But, man, it's, it just seems kind of like screaming into the void. It's just not enough.
Doug Draper 19:37
Yeah, yeah. It's, you're right. It's all we talked about this before. It's all connectors, right? So you could haul ass and get a container from LA to Chicago in record time. But if the the terminals in Chicago weren't ready to accept it, it's kind of irrelevant, right? So, you know, good, good on those companies for being proactive. Most. How this transpires. So ready fleet, I'm sure you'll hear that term more and more coming up. Hell yeah. All right, bring us home, my friend. What's your last topic?
Pete Mento 20:08
So my last topic has to do with kind of, again, with the people supply chain. So I've worked for a couple of European companies, and right now I work for a Danish company, and a lot of the Danes that I meet here didn't come up through the system like a lot of my American colleagues did. So for a lot of my American colleagues, you know, there's the joke, did you choose freight? Or did freight choose you? Did you need a job? And like your uncle down at the airport called somebody and helped you out? Right? This wasn't something that you decided from a young age you were going to do. But when I speak to a lot of my European colleagues, it's the exact opposite. They were young people who entered into apprentice programs when they were late teenagers, 1819, maybe coming back from government service in their early 20s, and they got a job working for a major transportation company, forders, logistics firms, ocean carriers, where they brought them in, and they said, Okay, welcome to Working in logistics, and we're going to have you drink from a fire hose for the next couple of years. And we're going to have you try everything. We're going to have you do imports, do ocean freight, work in the warehouse, work in accounting, work in human resources, and really, maybe not get a belly full of everything, but try Enough of all this stuff so that you can understand where they're coming from when you do eventually specialize. And I think that that's a concept that we need here. I think that saying to a young person just out of high school who maybe isn't ready for college or doesn't see the point in college, but could have a really a hell of a career doing what we do, I'd rather have someone that got out of high school and spent the last five years in it up to their elbows of the crap working with me, than someone who just got a, you know, a supply chain degree not to cast shade on on MIT and University of Tennessee, Knoxville and Penn State, great schools, right? But I'd rather have someone where their experience wasn't so theoretical as it was actual practical working on that desk when I bring a new client in. So I think if anybody from a major freight forwarder is listening, I think it'd be a great idea to bring those those concepts here to the States. Yeah, 100%
Doug Draper 22:14
that bleeds into another conversation about, where'd all the VO tech schools and the vocational training go? That is just a lost art, a service that is needed, an educational offering that doesn't exist, right? The concept of high school, go on to college, then you can get a good job from there just has been blown up, right? So that's a whole nother conversation that has nothing to do with supply chain and logistics. But I love the idea, right? There's book smarts and street smarts. And if you want to, really, you know, move forward on the operational aspect of freight forwarding, and, like you said, Drink from a hose, you got to have a lot of street smarts. And you can't define all of the unusual, unique situations that you will transpire you and I could probably talk for for, you know, a long night of drinking about all the crazy crap that we've seen in in our business, whether stuff that's been trying to move or or bad ideas that didn't pan out but 100% and so whatever The Europeans are doing to make this rise to the top is something that's important. You know, we need to bring that over here to the US, because 110%
Pete Mento 23:28
right. I mean, I worked with an incredible lady at expediter. His name Rosanna sposito. She ran customs, and one of the funniest and clearest and most intelligent things she ever said to me was, never forget, you work in an industry which is led by charismatic dudes that went to state schools and graduated with C averages. And you know, it's more about making people happy and figuring out how to do something when everything goes to hell and building relationships than it is anything theoretical. All that theoretical stuff is important, and we need that so that we can grow but this is an industry that is mostly led by people that graduated with C averages from state universities, that partied hard, that know how to build relationships, that know how to get people to love them, and that's really important. Remember that when you're when I'm communicating, because I'd always get way too academic about crap. And it was excellent advice. It was sound
Doug Draper 24:21
advice. Yeah, I love the topic. I'm glad you brought that one up. Good, good, good topic. So good man.
Pete Mento 24:29
Oh yeah, sorry. So I'm closing
Doug Draper 24:33
and the dramatic pause that was for the effect of our show and how impactful it was,
Pete Mento 24:37
yeah, so I want to thank Keenan, back in Colorado, for managing our our technical stuff here. I think my co host, Doug for as always, keeping this thing moving. I think all of you who listen and watch, subscribe, tell your friends we love doing the show, thanks to cap logistics for their unending, unwavering support. And remember, if it's happening in global trade, we'll talk about it on global trade this week. Have a great week.
Doug Draper 24:59
Okay, all right, thanks, Pete, have a good one. Thanks, everybody. You.
Transcribed by https://otter.ai