Global Trade This Week – Episode 110
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Doug Draper 0:12
Alright, speaking of good shows, this is global trade this week. I am your co host Draper coming to you from the great state of Colorado and my partner in crime the Grouch to my Oscar, over in the New England area, Mr. Pete mento. Pete, how you doing today?
Pete Mento 0:35
I am great, but I'm great. But I'm figuring that you would be the Ernie to my Bert, because I think Ernie was in the he was the he was in a happier mood. Yeah, that's probably correct. Yeah, yeah. Uh, Sesame Street. I was not allowed to watch Sesame Street. And growing up. That's a story for another day.
Doug Draper 0:57
Yeah. Speaking of Well, you said another day, but I, there's so many famous actors and actresses that have come out of that show. from years and years ago. Morgan Freeman, probably the most notable one, but there's, there's others there that it's been the springboard to a lot of good. Good actors out there. So
Pete Mento 1:21
do you have a favorite Muppet duck?
Doug Draper 1:26
Probably Cookie Monster would be one that would be up there. Yep. Yep. Good.
Pete Mento 1:31
I I like Kermit and I like Snuffleupagus. Yeah. Yeah. Also animal animals. Awesome.
Doug Draper 1:40
Yeah, yeah. Yeah. Back in the day. All right. What do we got? This is not. This is not about Sesame Street. This is about global trade brought to you by CAP logistics.
Pete Mento 1:53
Why can't it be Doug? Why can't it be about Muppets? We talked about some pretty bizarre crap on this show. And honestly, waking the people up, it's, you know, Jim Henson changed the world. Yeah. Anyhow, so I'm kicking off this week. And my my topic honestly, is one that we dance around a lot, but I'm gonna go right after it. Something that needs to be said it's kind of ugly. Honestly, we're pissing the world off, Doug, we're making people pretty angry here in the middle of US of A, the United States is really pushing electric vehicles hard on the consumer. No, no two ways about it. If you look at both domestic policy and international policy, it's pretty clear that we are building a lot of infrastructure to recharge cars, we are pushing automotive manufacturers to make these cars. We're telling consumers that whether it's on a state level or federal level, it's only a matter of time before owning a gas car is going to become a little more complicated than owning electric car. So get it together. Now, I don't know if it's going to be 10 years from now, or 20 years from now, or 50 years from now. But it's going to become kind of inconvenient to be the guy driving around in your F 350. You know, billowing diesel smoke all over the place. And the rest of the world is happy. On the one hand, that we're doing this because they are a bit more progressive in the green agenda. But they're also pretty annoyed. Because we have tied domestic policy to this a lot more closely than we've tried international policy. And that we have created a lot of the policy on green EVs with forcing companies to make them in the United States. What I mean by that is, many of electric vehicles that are being pushed on consumers have a percentage of content that must be made in the United States, the European Union, many of the countries in Asia. This really pisses them off because they don't have a similar requirement. So the US MCA, the artist formerly known as NAFTA, it has a lot of language written in it about how cars have to have a certain amount of content from these from the three countries. We have a lot of beneficiary language about product that comes into the US that's put into EVs. It has a high duty rate, if it comes from other nations. We also have language in the US UK free trade agreement if it goes forward that would require a duty free treatment on EVM equipment that would go into those anyway, that we're having new free trade agreements is beneficial evey exports as well, we're tying a lot into it. And it's just being seen as sort of, you know, coercive language. And they don't see it as fair because we as a nation feel that we have a lot tied in to our innovation economy wrapped into Evie technology. It To be fair, we have been at the cutting edge of Evie development, we have pushed a lot of this technology, we have a lot written into the science that's built it. And I don't mean the science, you know, in that term, I mean, literally, the science that's built into EVs. So Doug, we're making the whole world angry with this. There's a lot of pressure on President Biden to do something about it. But it's making a lot of jobs that make a lot of people in this country happy. Because it's seen as a long term opportunity for the blue collar work. That's really more like, you know, that baby blue collar, where it is technology, manufacturing jobs, that have a long tail to them, that could really build opportunity for American workers.
Doug Draper 6:15
Well, good domestic policy will get you elected. Right. So that's the one arm of it. And then good international policy will make you friendly. That's the right, the right terminology. So I don't see the messaging changing a whole lot, especially in the next in the next year as we lead up to the election, but it's kind of a ying and yang contradictory messaging, but I don't see it changing. And it'll be interesting to see how it's it's pivoted, but you know, the raw materials, so to speak, to make the cars sourced internationally across across the pond, and the assembly and the manufacturing done in the US. I mean, the auto industry as a whole has done that very well for a very long time. But it is right you are you are right. It is contradictory in nature, with the messaging that's going out. From the US pretty, pretty interesting Seattle play out.
Pete Mento 7:16
You're he's damned if he does, he's damned if he doesn't, he can't win. So you might as well keep the people that are electing you happy?
Doug Draper 7:24
Yeah, for sure. For sure. All right,
Pete Mento 7:27
Doug, what do you got? Alright, man.
Doug Draper 7:29
So this is I did a not a speech, I did a zoom a couple years ago about the dispersion of the economy, meaning that control and decision making is pushing more and more to the end consumer like you and I. And it's being done through technology, where you're eliminating the middleman, and empowering the end user. And the one thing that came to mind was, what's the deal or when the dispersion of ocean freight and air freight bookings going to go into happen? So think of it, Pete referred to it as like the price line of freight, right. So there's all kinds of companies out there that are spinning it. And in forwarders, we have a strong connection, obviously, with the freight forwarding industry. But the idea of having an app on your phone, where you as the end consumer can go in there and say, this week, for this shipment, I want to find open space, or I'm willing to pay this amount of money for an LCL shipment coming into the US. And this week, I'll I'll route it through Oakland, and then on my next one, all routed through Houston, and to have that control on the individual level to disperse the decision making down to that literally the hand the palm of the consumer. So it's happened with, you know, the way we search for rental cars, and hotels and things of that nature. But I'm interested to see when that can happen when I can be on a ski lift Pete, and I can pull up my app. And I can select X dollars per cubic meter. And I want to go this direction. And I want this to happen. I'm waiting for that waiting for that technology out there. And from what I've seen, it doesn't exist, there may be companies out there spinning that as automation or control their choice from the end user, but give me a price line for my freight. And I think that's going to be some big pivot or disruptor, if you will, in the industry. The big ones, the big guys, the big importers, Walmart's the targets the Amazons may not be applicable, but if it's a small to medium medium sized shipper that wants that control. I've not seen it out there. And I think it's going to come eventually. Maybe not. I don't know what's your take on it. I
Pete Mento 10:00
think it's not only going to come out, I think it's becoming more and more likely between artificial intelligence, machine learning, and the use of predictive data. When you add those three things together, it becomes likely not not just not just possible, it becomes likely being able to take a look at historical data. And say, given all of the things that are happening currently or likely to happen, given a certain timeframe, what's the best possible routing best possible carrier for something to happen? And then make a decision for me? I think that's a very real predictable possibility. We were working on a TMS, my partner, Dell and I, we were able to buy, you know, someone had out there 20 years worth of effort data between all the airports in the world. What was the what was the, on time? You know, how often were they on time? How late were they? How early were they between this report in this report for all the airports in the world, over a 10 year period, and then we had a bunch of data, scientists take that information. And we can upload it to it. So if we knew that a flight from as an example, from London to New York was going to be late, and then we could see from that flight, how every other flight was going to be affected? We could make decisions, how to reroute freight based on that, or how to update clients based on that it's incredibly valuable, you know, and then over the course of years, we could say, how likely on August the seventh is a flight from that place of that place going to be late because of weather patterns, because of whatever the case may be. That's very valuable information. And I think that, you know, an AI, given that information, a bunch of other pieces of information would be able to make more predictable decisions than any human being ever could. Yeah, I think that's gonna happen. Yeah.
Doug Draper 12:10
And some of that exists now. But there's still an intermediary, right? There's all kinds of data that people like service providers have access to, and then they disseminate it to their clients. But the dispersion is to put that all the way to the end consumer that can see those things and make those decisions real time. And let me make that decision. Give me the data, right, that's what's missing. And I think you nailed it, right, it's going to happen. And it's going to be a huge disrupter in our industry.
Pete Mento 12:42
It's just getting the opportunity for something to make that decision in the hands of a company or a system. And then probably getting that to the consumer. Someone's going to figure that out. Someone's going to put it there and people are going to get comfortable with it, it's going to have to prove over and over again, that you can make that decision and that it can do it safely. And then it's going to fail. I think the art industry's ability to overcome a couple of failures, because it's going to fail, it's just going to fail, right? You know, and when it does fail, how well does it recover from that failure? That's also going to be super important. Because every system fails.
Doug Draper 13:27
Yeah, interesting. Interesting. All right. So our favorite part, one of my favorite parts of the show, Pete is that we can just go off on talking about whatever we want, right? And some of the topics that our listeners don't see that you and I come back and forth with would probably get us kicked off the air, but it's always good. So halftime, as you know, is brought to you by CAP logistics. We wouldn't be here every week without them. And we appreciate their support. So cap logistics.com enables this show and halftime to happen. So Pete, you got an interesting one. I don't know you want to roll this thing first. You want me to go?
Pete Mento 14:05
Yeah, yeah, I'll go first. My daughter Charlotte was up last week. And she and I love movies. So we wouldn't saw to last week she is 17 we saw the Haunted Mansion, which was far more entertaining than I expected it to be. So I will give that a b minus. It was better than the original with Eddie Murphy. But we also want some Barbie. The Barbie movie. Now my daughter Charlotte is a bit of a social warrior. And very much a feminist. Very much a liberal and she insisted that we see this movie and she was delighted and bringing her old crotchety father with her. When I said Doug, my topic is I went and saw Barbie so that no one else has to. And here, here is my my very quick review. It was not an all what I expected. So there's that. It was not it was not a, it was not a kids movie about a toy. So it was very much a statement movie. It was, it was, it was a thought piece with a political agenda. And it was definitely not meant for an old, mostly white guy about that. It was not meant to speak to me. It was not meant to inform myself or change my mind. However, I did find it very funny. There were some there were some laugh out loud moments for me. And there were some very touching moments for me as the father of daughters. And I don't want my money back. You know, I did enjoy it enough to to find parts of it that did touch me. And yeah, I mean, I don't understand why it's a worldwide phenomenon. But it was, it was it was good enough to keep my attention for the hour and 15 minutes that I sat there but I still don't get it.
Doug Draper 16:31
So that was a beat if the Haunted Mansion was a b minus what was Barbie?
Pete Mento 16:37
Oh, it's a hard c minus. Yeah. It's a movie that if if I was on a plane, I probably I probably would have watched it on a plane. On Yeah, yeah, that pick your own. Like if I'm flying to Asia. I probably want to watch it after a couple other things like I you know, Margot Robbie is a is an absolutely incredible actress. I've watched her in anything. Ryan Gosling is hysterical. He is hysterical in this movie. He's I don't know if he's actually that. That oblivious. He I don't know how anyone can play anyone that stupid and not be at least a little bit that stupid. It Will Ferrell isn't it? And he is always hysterical. So they were they were quite good. The two of them were very, very, very, very funny. And that's that's kind of what made the movie for me is that he was just so dumb. He was so dumb that you could not stop laughing at it. But it was it was the typical like modern writing of a man like men have to be bumbling idiots in order for it to be approved by Hollywood these days. Like, if you if you notice anything like like the father in anything written. In greenlit, in today's Hollywood streaming service kind of the Father has to be a moron. You know, an effective moron. In order for it to be okay, in in this in this, it was no different. You know, Ken is an ineffective idiot who would left to his own devices ruins everything. So it's the same thing. And I think that's just part of the modern trope, or just as in the old modern trope of Hollywood, left to our own devices, Lucy ruins everything. So somewhere between those two, there won't be a balance where you know, gender doesn't necessarily equate to a negative outcome just the way it should be. So maybe that's the lesson one could learn by watching both of those, but also one more thing I'll say about the movie. It is absolutely awesome. To see how they could take the toy part of it and make it look real like because you've got a daughter you've been around Barbie stuff like the Barbie Dream House the Barbie car the Barbie the Barbie clothes like to turn it into like a real thing. They did not make it dorky. Like they didn't make it. Did it make it an uncool? Like it was actually kind of cool to see them turn that world into a movie set. And it was neat. So I did enjoy that and as a mom a film guy, right, you know that about me? So I had a lot of appreciation for the director did with that. In the last 10 minutes of the film. We're we're very good. So yeah, I mean, I can't I can't crap on Doug. I can't so it's just an average. It's an average but good film. So it is not. It is not Oppenheimer. It is Oppenheimer. But again Margot Robbie. If you have not seen Babylon, she was absolutely amazing. If you one of the best performances I've seen by an Actor in a long time, so go check that out if you want be blown away by her by her chops. Alright, what do you got?
Doug Draper 20:13
All right? Well, we're going, we're going deep on this one here. So Pete, my take on this is we need to bring back the draft. As a,
Pete Mento 20:23
as we sound like a couple of really angry old men today. But yeah, go ahead,
Doug Draper 20:28
bring back the draft. And what I'm referring to, specifically is Job Corps, AmeriCorps and Peace Corps. And you have a daughter that is just about to enter college, I have a son that just graduated and my daughter is going to be a senior. And I also am involved with mentoring. And young men entering college in their freshman year at the University of Kansas. And the one thing that we're seeing, that I have personally seen with two kids. And also these kids that I'm that I'm working with, is that they need something in between high school and college, right? I'm a huge believer, become one, about a gap year, right? That was kind of the hip thing when everybody's going through COVID. And they're like, I don't know what I want to do. I'm gonna do a gap year. And some of that was sitting in the basement playing video games. But I think if there's some sort of government supported program, that can help young kids gain experience and connect with others. I think they would have tremendous value, because I think children and kids need that more so now than when you and I were transitioning from high school to college, the key things these kids look for as well, I make friends in college, that I picked the right major. And did I make the right, the right choice, those are all things of uncertainty. And the those corpse Job Corps, AmeriCorps Peace Corps, can provide guidance and direction in life. So they know what to do. When they take that next step, right. There needs to be a sense of belonging, a purpose, and kind of a common goal. And the common goal thing P is impactful because we have no common goal anymore as as Americans, in my opinion, because of the divisiveness that's going on in our political nature, and all that kind of stuff. But I think that getting kids back and really encouraging a year off and engaging with one of those three organizations to really figure out what you want to do. Well help the kid make a better decision on what they want to do, as they go into college and take the next step in their lives. And so in my time with my kids, and and being around a lot of 18 to 20 year olds, now. They need a gap year. And I think if we bring back the draft in the sense of Job Corps, AmeriCorps Peace Corps, I think it'll well position the next generation to really understand what they want, provide guidance and direction and a sense of belonging. So a little heavier topic than normal and halftime, Pete But I wanted to bring that up.
Pete Mento 23:09
Alright, so I am, morally and ethically opposed to drafts. start that off. From the very beginning. I don't believe that
Doug Draper 23:21
you're looking around, like somebody's behind your back about ready to attack. You
Pete Mento 23:26
know, I just I worry about ever being political. But that's something that I am deeply, deeply opposed to. My father was drafted, ended up I would not be alive if it hadn't been for that. Because my father met my mother. After he got drafted in the army. My mom joined the army of her own volition, because she's very patriotic woman. She wants to go to Vietnam and help him boys. But my father, you know, got kicked out of college and rest is history. But I'm deeply opposed to dress however, I am very much for what you're talking about. gap years are wonderful. And having known and met a lot of young people from Europe, many of them do exactly what you're talking about. They take time off in between a year or two after they finish, you know, their public schooling and or private schooling, before they go to universities, or start their careers. And I think it's very good for them. But more importantly, Job Corps Peace Corps in Boston, we have something called City Year, which I don't know if you've heard of where they they do everything from working in public schools, working for local government, working for the state government, whatever the case may be. I think it's wonderful, incredible check now being opposed to the draft. I am, however, very much in favor of voluntary service to the US military. So I think I think that that's also incredibly Wonderful, I think that serving one's country, any way that you can, is, or once one's local city, one's government, volunteering for fire service, EMT, first responders, joining, joining the National Guard, these are all wonderful things to do as a young person. Being a Boy Scout, being a girl scout, my youngest daughter is still a Girl Scout, you know, at 17 years old, just fantastic park services, anything that you can volunteer, join the Humane Society, work in a shelter, work in women's shelters, help your church, just giving. One of the biggest problems that I noticed with younger people that I work with is it's a terrible word. But it's just selfish, selfish, selfishness, not understanding. It's just the great opportunities that come from setting your ego aside, which is a problem that I had as a young person that was mercilessly beat out of me literally and figuratively. The first time I got on a ship. And I really, I needed it. So I agree with you that there's a lot of good that could come from service.
Doug Draper 26:17
All right. So there's the there's our disclaimer a little a little heavier than normal on our on our halftime, we'll get back to the shenanigans next week.
Pete Mento 26:25
Yeah, buddy. All right. All right. So my next my next topic is it's pretty cool, man. It's a it's a bizarre financial 180. So the course of this week, we have a ton of reporting on that is really deeply focused on on inflation. So the inflationary numbers for China come out on Wednesday. And we're expected to hear that they're in a world of deflation, the inflation numbers come out for the UK, and they're, they're going to be pretty good. But the bad news is, is the GDP numbers are super bad. They're just not really, the economy in the UK is really, really awful. And the strangest of all is the United States where we're expecting to get numbers that tell us, unfortunately, that fortunately, that it sounds like the Fed is probably going to stop there, there are endless increases of rates, and that we're probably going to hear the worst political worst is over, that things are probably going to start getting better. But unfortunately, we're probably not going to see a change in the housing market, we're probably not going to see a lot of crazy growth happening, that the American economy is sort of at its apex right now. If this is all going to create a lot of uncertainty in global markets. Normally, what happens in a time like this is that everything starts to get better. What sounds like the Chinese economy is about to start to get worse. That United Kingdom's economy is about to get worse, if the European economy is about to get worse. Well, that might drag the American economy down with it. Even though every single American economic indicator is great. So what's going to happen, buddy? We don't know. We don't know. We're in uncharted waters, my friend, which economists love what consumers hate? Yeah.
Doug Draper 28:25
Yeah. Well, the the one thing that caught my attention on this one is the strict COVID lock down in China. Right? That was this whole thing was unprecedented. So I can't say that was unprecedented to other things. But it's almost like strict lockdown, almost like a bear Harbor, hibernating, right? Where all of a sudden, they they wake up, and those restrictions are gone. And they just realized the demand is not there anymore, the production is down, there's not as many exports. And it's like, they, they were unaware of that. And what you just described is a manifestation of it. Which is striking in there kind of China is kind of the point of origin of a lot of things that happen because that's where the factories are, that's where things are being made. That's where, you know, all the stuff that we don't need, that we that we consume. So that's always the point of origin. But that was the first thing is that I think a lot of that has to do with their strict COVID lockdown rules. And when they finally lifted, holy crap, nobody's buying anything across the across the world as much as they were before we went in to hibernation. And I think you're seeing some of that manifest. I think that this is one small aspect going over to the UK. I think fuel from what I've read, has gone down and come down a little bit, which I think definitely has a huge impact to the kind of pivot over there. But it'll be interesting because everybody is at this tipping point, right? It was the spiral down, or spiral up with inflation, and everything's right at this tipping point, right. So what direction is it gonna go? Left to right, which, like you said, the economists love the uncertainty. And the consumers, like, just give me something that I can grab on to and feel some comfort. So it'll be an interesting you know, reports and, and interesting what's to come in the next six months.
Pete Mento 30:31
Yeah, buddy. All right, man, bring us home. All right.
Doug Draper 30:35
So this is kind of go in more towards my, I have a humanistic approach to my topics. This this week, Pete, it's kind of funny. So I read this article. And I got, somebody had said to me, about were hot warehouse automation, it was specific to Walmart. And they talked about all the automation that's coming in there and that robots are doing the heavy lifting and the hauling and, and how everybody that was on the floor, checking boxes, and doing a lot of labor to keep the machine moving forward, are now don't need to do that anymore. They can go in and, and manage the robots and manage the machinery and look at this great advancements of your career, where you don't have to do that anymore. And I think there's a decent amount of people out there peak. That like it that like the the, the labor, the hard days, the enjoyment of ending the day and saying I accomplished something today, with my hands. And not everybody wants to evolve in the hierarchy and be able to run the machines and, and go from touching a box in moving a forklift. And moving something tangible across a warehouse for loading an aircraft, unloading an ocean vessel. There's a lot of people that like still doing that. And they may not necessarily want to go into an office and do all that with a joystick behind a computer screen. And so automation is coming, it's not going away. And it will continue to evolve. But there's going to be a worker workers out there that don't want to evolve with it. And it could be a whole group of people that just eject and and don't have a place to go. But I think this whole point, Pete is that automation is coming. And I think there's a lot of people out there that that that don't like it for a variety of reasons. And some of those just like to work with their hands. At the end of the day, I like being tired. I like enjoying the fact that I accomplished something and help somebody with my hands to move the supply chain forward. So that's a group of people I think is overlooked too often. And so, I that's my take when I read that article.
Pete Mento 32:54
I think this is a hard one. This is a really hard one to opine on, Doug. And the reason is that hard work is changing. You can still be a carpenter, but you've got to use a nail gun. And you can still be a mechanic, but you've got to use a pneumatic wrench. The technology that we use to do hard work is different now. The guys that are out doing the hard work out on the street, are doing it differently. They're not digging ditches with with pikes and, and trench taxes, you know, I have a lot of respect for the noble work of the hard working man. They're still going to do hard work. They're just going to do it with different technology. And I think that they're going to do more work just with fewer people. So maybe they'll do different hard work. There's always going to be somebody doing hard work. But maybe you're right, you know, maybe they won't be doing as much hard work and that warehousing industry. There's always going to be somebody doing hard work that we just can't automate. I shouldn't say always, that there could be work that we just cannot that is maybe maybe there's going to be work that that we end up on me if that's the first thing we automate is the hardest of work until there's just no more hard work to automate. Maybe that's the direction all this goes. That's why I I wonder how big this population is going to get. You know, the population just keeps getting smaller and smaller because of it. This is a tough topic though. Because there is there is nobility. In hard work. We come from a human I come from a different type of family, you know, and yeah, that was an Measure of a Man, somebody who worked hard
Doug Draper 35:04
and hard work, nobility and hard work.
Pete Mento 35:08
That's unfortunately that type of appreciation is starting to go away. There's not that many people who are doing that kind of hard work anymore. And the appreciation of that is going away.
Doug Draper 35:19
Yeah. Agreed. All right.
Pete Mento 35:23
All right. Well, that's gonna be it for global trade this week on that Debbie Downer of a note. For my end, I apologize for that. But we'll be back next week. I want to thank the good folks at CAP logistics are supporting us again. As always, thanks, Keenan for keeping all the knobs where they're supposed to be in the bubbles and the beeps and all the rest of it. They call you for listening as we always do. We'll see you again next week. Thanks, Doug. for another edition of global trade this week, everybody
Transcribed by https://otter.ai