Global Trade This Week – Episode 253
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Pete Mento 0:01
You're watching Global Trade this week with Pete Mento and Doug Draper. All
Doug Draper 0:09
right, welcome to the live edition of Global Trade this week. It's only the second time that we've been together, person to person. I'm Doug Draper. This is my co-host, mr. Pete Mento. Peter, what are you doing in Denver? What's going on? Tell me what your next week looks like.
Pete Mento 0:26
Well, between the lure of the dispensaries, the wildfires, not being able to breathe-I mean, how can a fat man not want to be in Colorado? But honestly, I'm here to see clients and prospective clients, and then at the end of the week, I'm going to the motorcycle rally in Sturgis, which I'm very excited for. And then back again for more calls next week, and then back to the beautiful city of New Orleans.
Doug Draper 0:49
Love it.
Pete Mento 0:50
So yeah, I mean, you're right. We don't generally get to sit in the same room. It's only a second time. I'm excited for that. If I'm being honest, it just gives me a bit more of like this is a real thing. For all I know, all 300 or whatever episodes we've done have just been a really fascinating hallucination that I've made up in my own mind. That's why occasionally I have to be in the same room as Doug.
Doug Draper 1:12
Yeah,
Pete Mento 1:12
yeah.
Doug Draper 1:12
The last time we did this, we were in front of Casabonita, and that's before Trey Parker and I forget the other guy's name that that bought Matt Stone. Yeah, yeah, Matt Stone. They bought Casa Bonita, which is a famous Mexican restaurant. Those in Colorado will know it. Those that are not may have heard of it. But they were closed. We tried to get like right in front of it, and they had security guards saying, "Get away! But there was this crappy little bar next to it, and we commandeered a table, we moved it so they could see Cassimy in the back, and then all of a sudden they just cranked up the music. This was like 3o'clock in the afternoon, and we're like, "Can you turn the music down? And the answer was no, and we were two of four people in there.
Pete Mento 1:55
Yeah, I had to be a dick, and I I believe that I threatened bodily harm to the DJ, and it got a little quieter, but he wouldn't turn it all the way off.
Doug Draper 2:03
No, he wouldn't. I should also
Pete Mento 2:04
mention that it was a brewery, and through the course of the recording, I probably had at least eight pints of their beer.
Doug Draper 2:10
I do remember that.
Pete Mento 2:12
Everybody won. Yeah, is really what I'm trying to say here.
Doug Draper 2:14
Love it. Well, we're a little bit more formal. We're at the Cap Logistic Studios and their division, Icosa Media, and you can see. I have black pants,
Pete Mento 2:21
very formal, or shorts, very formal. You normally have like Winnie the Pooh shirt, nothing else on underneath. Yeah,
Doug Draper 2:28
exactly, exactly. So we're excited to be here. We want to thank Cap Logistics. We do that a couple times during the show, but to be here in studio, you cannot see this, but there's a DeLorean just off camera to our left, which is pretty cool as well. So
Speaker 1 2:42
damn cool.
Doug Draper 2:43
Anyway, you ready to fire this thing up?
Pete Mento 2:45
Yeah. Hey, I thought you'd never ask. Thought we were just going to talk about our day for a while. Well,
Doug Draper 2:50
we'll do that at halftime for sure.
Pete Mento 2:52
All right. Big news story. A lot of it's a lot of people talking about it. C. H. Robinson and their God. How do we even put this? I don't even. I don't know if it's going to go to appeal or what, but they got hit with a pretty ugly, ugly judgment. So $600 million for them and the partners involved in the judgment, and this is a question that we've talked about a little bit here. But a large freight forwarder, a large truck broker like this can probably weather the storm of what's coming next. We talked about that. We talked about the smaller guys are probably going to have a harder time. What does this mean for the future of the industry? Well, first of all, their stock got beat bad when this happened, but so did a lot of other companies as well. So it's not just it's a systemic thing. It's not just part of Robinson. I, when talking with you about this, brought up the whole insurance thing. I thought insurance was going to go through the roof because of this, because now it's going to be harder to underwrite if someone's a problem or not. And you said something fascinating in a text this morning about that. So go ahead.
Doug Draper 3:51
What the? Oh well, I'm trying to get some more information on it. There's a gentleman, a listener that is loyal to the show. He sent me a text. I didn't get time to get all the details, but he said, "Hey, what you spoke about last week is not true. Insurance is starting to come down. We're going to talk about it next week's show because I was trying to get my ducks in a row and I was unable to do so. So it was a teaser, but we're going to hit it for the next next week's show. I'll give this gentleman credit, and we'll do that next go around because I was surprised as well, and I want to have my facts and my information straight before we talk about it. So that is coming.
Pete Mento 4:28
Doug, I don't want to have either facts or my information straight, so I'm going to speculate. And I think the speculation might come from using technology and having a better compliance program. Maybe that will get companies like like these large truck brokers, they'll be able to underwrite better because they have better information and better data. So maybe that's what happens. I don't know, but if it were like Pete and Doug's brokerage, I doubt we're going to invest in that kind of stuff.
Doug Draper 4:54
Right.
Pete Mento 4:54
So maybe that's where it comes from.
Doug Draper 4:56
Yeah.
Pete Mento 4:56
But yeah, a company like Robinson, they're massive, they're huge, they're international. They're worldwide freight forwarding brokerage everything projects they do everything. If anyone could weather it, I think it's going to be them. But I mean, an absolute shellacking in the market last week. I think at one point the stock was down 20%
Doug Draper 5:11
Yeah. Well, the interesting interesting thing for me is the sense that others in in the same space adjacent to C. H. Robinson got hit hit as well, which is very telling that everybody's a little on edge as far as when's the next nuclear verdict going to come down. Yeah. So,
Pete Mento 5:29
I mean, it's weird. I was looking at something on LinkedIn from somebody, and they said, "So does this mean when I have my Uber Eats, if the driver hits somebody, they're going to sue me? And the argument, because we talked about that, right? The argument was, well, no, because you didn't contract the driver, Uber Eats did. So what does that mean for these small haul food deliveries? But is there a logical path to suing the the customer for ordering the truck in the first place and not doing their due diligence? I think that's the next frontier. I know we've mentioned it before in the past, but that's probably where this stuff gets tested next, and that terrifies me. Yeah, terrifies me.
Doug Draper 6:06
Well, we're a litigious society, so it wouldn't
Pete Mento 6:08
true.
Doug Draper 6:09
It wouldn't shake out. It wouldn't surprise me if that if that shook out to that direction. So pretty interesting. Well, hey, this morning I saw an article that talked about a QR code that's now on apparel. Before it was, you know, just a regular barcode that you could scan. You know, if it's in retail and it would say "made in Malaysia" or something that nature. There's some companies are now putting a QR code on their apparel, and what that'll do is be able to talk to them and be able to pull up information about country of origin, which is what's usually on there. But where was the factory location? What is the material it was made from? Where was this sewn? Where did the cotton come from? All the things that customs is starting to ask for, even though you're guilty until proven innocent. To have that code, do you think that customs is going to use that information to some degree because it'll help them understand the sourcing strategy behind this garment that you're wearing, or is it like, hey, that's a marketing play. It's nice to know, but we're still going to do our due diligence and throw a bunch of requirements and compliance at you. So, what's your take?
Pete Mento 7:19
Closer to the second, and here's why, Doug. I work with a lot of handbags, and as you know, footwear companies, and so I can spot fakes really well. Same thing with watches, and everyone's still wearing them. If you can put a fake Gucci label or Prada or Louis Vuitton on a purse, you can certainly make a fake QR code. I think if there was a standard technology, a standard company who was tracing all the supply chain, then it could be more believable. But if they can fake pharmaceuticals and complications on watches, they can fake these things too. If there was an underlying technology that one organization controlled, that would make more sense to me. I just don't see that happening. I love the idea as a consumer, of being able to say, here are the factories that my stuff was bought from, you know, because it is heartening to think that I'm not part of the problem when I do my purchasing. But I don't think realistically that we can expect any sort of of authenticity in that sticker. You know, I can slap whatever I want on something.
Doug Draper 8:18
Yeah, like you said, if you can, you know, all you have to do is is create a QR code that can take you anywhere you want, right? And and go from there. So, I like it as a marketing ploy, right? And I shouldn't say ploy because there is value in that. So I'm going to take that comment back. I can see it as a marketing strategy for sure, and you, as the consumer, say I feel good about the garment that I'm wearing now or the watch that I'm wearing. So I think there's value in it, and I like I like the direction, but how truthful is it? To your point,
Pete Mento 8:48
probably not.
Doug Draper 8:49
Yeah, gotcha.
Pete Mento 8:50
Well, that brings us to halftime. Brought to you by the people who own this building, Cap Logistics. To learn more about Cap Logistics, please please visit them on the web at CapLogistics.com. Keenan is behind the camera, and part of me is we're gonna have to get a selfie with him and put it on because he is like a Sasquatch. He's like a yeti. He's a very, he's a he's a tall young man and outrageously hairy. So I think you know we should show the people exactly what we've been dealing with for all these years, for all these years, but a gentle, a gentle Yeti,
Doug Draper 9:24
yeah,
Pete Mento 9:25
I think is a gentle Sasquatch. So who's going first this week on on halftime?
Doug Draper 9:30
Well, I'll do this because I was thinking about this when I was driving down. So we're in Denver, right? So you flew across country. I decided to drive three hours down from Steamboat to be here, and I was started thinking about as I drove over the mountains onto I-70, where it's always bumper to bumper, and driving into the big city. I was like, "What's better, small town or big town? Right, and you've done a little bit of both, right? Mostly big town, but your your heart is in small town. So I want to make sure I got these right. So I got some questions. Right, so best place is to raise a family. I'm going to go through and I'm going to ask you questions, and you're going to say, big city, small city, something like that. Right. So, best place to raise a family: big city or small town?
Pete Mento 10:12
Small town.
Doug Draper 10:12
All right. Would you rather know everyone or no
Pete Mento 10:17
one? Ooh. Well, as a general rule, I hate everyone, so I would rather not know anyone at all, Doug.
Doug Draper 10:26
Okay.
Pete Mento 10:27
Yeah, if I like you, I'm gonna love you forever. If I don't know you, you will annoy, irritate, and aggravate me until I know you.
Doug Draper 10:34
Okay.
Pete Mento 10:34
It's it's really hard to get through this exterior, Doug. Yeah, I'd rather not know a damn person.
Doug Draper 10:39
All right. So you're you're two for the small town, rooftop bar in a city or a backyard barbecue with neighbors.
Pete Mento 10:45
Rooftop bar in a city.
Doug Draper 10:46
Got it. Love it. All right, now we're going to talk about traffic. Would you rather sit in traffic for 45 minutes or have to drive 45 minutes to your work?
Pete Mento 10:54
Drive 45 minutes. Traffic makes me violent.
Doug Draper 10:58
So you'd want to drive 45 minutes.
Pete Mento 10:59
I'd rather drive 45 minutes than sit in 45 minutes of bumper-to-bumper traffic.
Doug Draper 11:03
Got it. Got it. All right. Food scene: hundreds of restaurant options or one local place that everybody knows.
Pete Mento 11:09
F your local place. Hundreds upon hundreds of restaurants. Every time I leave New Orleans, I text my girlfriend and I'm like, I want to come home. The food sucks here. Everywhere I go, Denver. Sorry, you're no better. This is basically one giant strip mall with a couple of barbecue joints. Your food sucks. So I, I was in Wisconsin last week. It was like, it was like an assault on my good taste, the food that they serve there. So no, lots and lots and lots of restaurants.
Doug Draper 11:38
All right, all right. For shopping, anything delivered tomorrow, or the friendly local hardware store that kind of knows your name.
Pete Mento 11:45
Anything delivered tomorrow. Delivered tomorrow.
Doug Draper 11:47
I like it. I like it. Vacation week in New York, Chicago, or L.A. or a cabin by a lake or a mountain.
Pete Mento 11:54
That depends. How much do I hit my job that month? But but normally I'm going to go to a big city.
Doug Draper 11:59
All right. Good. Good. All right, sports: Major League Stadium or Friday Night Lights?
Pete Mento 12:04
Major League Stadium.
Doug Draper 12:05
I knew that one was coming.
Pete Mento 12:06
Yeah, because you know how I feel about academics and sports-they don't belong together. I can't wait to finally get you set off on that one.
Doug Draper 12:12
Yeah, yeah. No more college
Pete Mento 12:13
sports. I'm sorry.
Doug Draper 12:14
Yeah, well, the high school football stadium is just down the hill from my house, and I can hear it on Friday nights. So, do you go
Pete Mento 12:20
down there if you become a booster? Do you know like do you know like the third string guard for for your home home club?
Doug Draper 12:25
No, I don't care. I just take it all in, right? Take it all in takes me back to high school. So all right, career, big market, bigger opportunities or small market, better quality of life.
Pete Mento 12:36
Big market big opportunities make your money. Nobody cares.
Doug Draper 12:39
Love it. All right, final question.
Pete Mento 12:42
Okay,
Doug Draper 12:43
this is there's no it depends. This is just yes or no. You can only live in one place for the rest of your life. Big city, small town.
Pete Mento 12:52
New Orleans. Is
Doug Draper 12:54
that do you find that as a big city or a small town?
Pete Mento 12:56
It's a big city.
Doug Draper 12:57
Okay,
Pete Mento 12:57
I've been to over 100 countries, all seven continents, everywhere but there sucks.
Doug Draper 13:04
All right,
Pete Mento 13:05
it's like it's degrees of sucks. I know you want to get me off this topic. Too bad. Like I love Boston, I love love love Boston, but I don't love it as much as much. I love Chicago, so much. I love Denver. Right? They all have things I love about them, but they all pare pale in comparison to the drunken shit show of dysfunction that is New Orleans, and it's the only place I feel at home.
Doug Draper 13:28
Drunken shit show at home, I guess.
Pete Mento 13:31
You forgot dysfunctional.
Doug Draper 13:32
Dysfunctional. So you're about 60% big city, 40% small town.
Pete Mento 13:36
Okay, I think if I were not a guy whose kids are grown up and lives on his own. I would absolutely want to be in a small town. You want to insulate your children and get the best education, right? But fuck them. You know, I'm. I don't know how much more of my life I have left. I'm gonna live, baby. I'm gonna live.
Doug Draper 13:55
All right, here we go. All right. All right. Okay. Got my friend. All
Pete Mento 14:00
right. Speaking of kids, damn it. So, this topic keeps coming up. I went wine tasting in Sonoma. Everyone told me no one under 30 drinks. I talked to large breweries. No one's drinking anymore. I was out with a very, very big international brewing company a couple weeks ago. Like it's a crisis. People aren't drinking beer. I talked to bourbon manufacturers. They're like 10 years ago. We were killing it. Now we're really having to work hard to make $1. The kids aren't drinking, Doug. They're not drinking. Not only that, studies are showing that they're also not fooling around. So they're not drinking. They're not engaging in other acts. Right? There's just this absolute arc that I'm noticing of not having fun, becoming more and more isolated, spending time alone, living on the internet, not having humor and interaction, losing communication skills. I've got a very young team, and I'm very proud of the fact that they are comfortable and confident in front of a client. You know, they might not have all. The answers, but they're comfortable talking in front of a client. If you ask my daughter, who works like lives in the theater world, to go and give an extemporaneous off-the-cuff speech, she'd be like, "It's not going to happen, Dad. I need at least two weeks to get ready for that. That's why it's called extemporaneous, right? It's off-the-cuff. Nope, couldn't do it. Doug, between what's going on with the kids not drinking, what's going on with the kids not fooling around and not having interaction, I'm I'm terrified for humanity, but at the same time I'm disgusted with myself for how I acted, because compared to these guys, I I was, I mean I was like Dan Balzarian, I was like Hugh Hefner compared to these kids, we were wild in the 80s and 90s, and I'm worried they're just not going to have any fun.
Doug Draper 15:42
Yeah.
Pete Mento 15:43
So we talked a little bit about this before the show. It was very different how we grew up and what they're going through.
Doug Draper 15:48
Yeah.
Pete Mento 15:48
These kids today.
Doug Draper 15:50
Yeah, that's a whole nother podcast for sure. But you know our kids are right in the thick of it, and I see it every single day. You know, I always told my kids, firm handshake, look somebody in the eye and make sure your shoes are clean, and that'll get you that that'll get you a decent way down the road for sure. But yeah, the isolation and you know living your life through a facsimile of what's on the internet is dangerous, right? It's absolutely dangerous.
Pete Mento 16:15
Yeah, go get in trouble, guys. Go do some dumb things. You're gonna thank Uncle Pete, right? I mean, nothing like felonious, but do some silly things. First of all, make you a lot more interesting. Many of you are very dull people, so maybe get out there and raise a little more hell. All
Doug Draper 16:31
right. Well,
Pete Mento 16:32
that does it for halftime. Doug is so uncomfortable right now, and it's so much fun for me. I think this is why we do it over Zoom because you're just so uncomfortable. I
Doug Draper 16:42
can look up. Yeah, you can look away and say you're you're this big in a screen, and now you're this big in person. I know,
Pete Mento 16:48
I know, brother, I know. So all right, so that takes us to the next topic. Yeah,
Doug Draper 16:52
well we're gonna we're gonna tag team this one. All right, we are. We're just gonna roll with it. Oh my next one. Yeah, go for it, and then I'll chime in.
Pete Mento 16:58
Okay, so
Doug Draper 16:59
so three topics, not four, because we had some good halftime banter going on.
Pete Mento 17:02
So this this one really got caught my eye. The the yen, the Japanese currency, is getting just maligned. It's not good, and they're a major trading partner of the United States. So it shouldn't come as any surprise normally that the U.S. has said we're going to come in, we're going to prop this up. There's a lot of reasons for that. One, Japan owns a lot of American securities and the bonds, so we don't want them selling off our bonds in order to deal with their their market collapse. That's part of it. The second is they're an incredibly important strategic ally in a very dangerous part of the world, so we don't want them to be economically harmed in any way. So it doesn't surprise me there. But then I started thinking to myself, how hard are we going to negotiate with Japan? Because that trade deal is not done when we're trying to rescue their economy, or are we going to be even nastier now? Maybe that's part of the negotiation. Then on the other side of that, the RMB, the Chinese RMB, looks at notes is inflating, right? So the Chinese RMB is actually gaining in value against the dollar. China doesn't want that. China doesn't want that. They want stuff to be cheap, labor to be cheap, things to be inexpensive. So they're trying to find ways to lower it, and it's not working. It's continuing to escalate. In both of these situations, I see this, and I say to myself, how much of this is tariffs? It's got to be part of it, right? How much of this is blowback from the COVID years and things not getting any better? It's got to be a part of it. How much of it is domestic consumption? All that wrapped together, but how much of that is trade policy? How much of that is American diplomats saying we got them where we want them? You want us to come and save you? Take the safety standards off of American automobiles. Buy more beef. Buy more sorghum. Buy more rice. Buy more corn. How much of it is we got them where we want them? Let's keep the pressure on to get them to agree to anything because the RMB is inflating. I think that monetary policy has just as much to do right now in an active way with trade, whereas in the past it was very passive. You know, monetary policy was about worrying about our sole economy more than it was the rest of the world. I think the two of them are absolutely tied now, and I think it's fascinating.
Doug Draper 19:13
Well, in this administration and our approach towards global trade, it's winners and losers.
Pete Mento 19:20
True,
Doug Draper 19:20
and we are winning this situation right now, and so I think it's just going to put the gas down and see what happens because we're now in a in a controlling situation. But but the investment, the bonds, and things that you spoke about with gosh, how how do we control that so we don't lose? Because everything is about winners and losers, and we've seen through trade policy since April of 2025, it's better to be on the winning side than the losing side. May not always be the truth in the long-term strategy for global trade and success of America, but it is very black and white nowadays. And so I think the gas is going to be put on, and we're not going to see anything different than what's happening right now.
Pete Mento 20:00
The The level of sophistication that the negotiations at are at right now, there's that meme from Always Sunny in Philadelphia where the guy's pointing at the wall and he has all the strings between post-it notes while he's trying to explain the conspiracy. This isn't a conspiracy. This is just super complicated diplomacy, and I I don't want to give this administration credit yet, but I kind of need to. That they're they're playing every level of it. They're playing the trade piece of it strictly on tariffs, non-tariff barriers to entry, focusing on what I think is hard power of what you can do with your own currencies. Now there's some loser parts to it as well, but 20, 30 years from now, the losers that lose this particular fight, I don't know if it's something you can come back from. So I think the smaller economies need to start paying attention to these levers as well.
Doug Draper 20:47
Yeah, good, very good points. Well, Pete, I don't know what to do because this officially in-person show is coming to an end.
Pete Mento 20:56
I know what you want to do. You want to say that we're never going to do this again because every time we do it, I act out. Every time we do it, it gets totally crazy. Every time we do it, I make you uncomfortable.
Doug Draper 21:07
Yeah. Well, I'll tell you what. The next time we do it, I'll go to wherever you are because you've come to Colorado twice. Will you
Pete Mento 21:13
come to New Orleans?
Doug Draper 21:14
I, you know, maybe I will. There's, we talked about my wife and I making a trip down there over Thanksgiving. So, is there a
Pete Mento 21:19
Kansas game of some sort I can lure you down for.
Doug Draper 21:22
I'd have to look at the schedule. I don't care about Kansas football, so maybe we'll see about some basketball. Yeah. But we don't have the cap team here to rock and roll the show. It's going to be you and I on our iPhones, dicking around in some bar, trying to prevent people from being noisy.
Pete Mento 21:36
You can't come over here and just say hi, Keenan. Like like an actual Sasquatch? Yeah. What? Yeah, we'll do the. Keenan is a is is a is is is a very integral part of the show. Watch out! Watch out! People do love him. So we thought we'd get Keenan on camera too.
Doug Draper 21:58
Love it. Yeah. A little handshake. Always appreciate everything you're doing. Absolutely. Thanks, everybody.
Pete Mento 22:07
Yeah. So as we say every week, if it's happening in Global Trade, we'll be talking about it right here on Global Trade this week. Take care.
Unknown Speaker 22:12
All right. Catch you later, everybody.