Global Trade This Week – Episode 163

What’s going on in Global Trade this Week? Today Trade Geek Pete Mento & Doug Draper of Inland Star Distribution cover:
2:57 -Are Sails Back for Cargo? Not Likely
6:17 -Portland Terminal 6 in Financial Distress
10:24 -Halftime
19:30 -Another Freight Forwarder Hit with Cyber Attack
22:11 -USPS Back in the News

• Full Show Transcript

  Doug Draper 0:00

  You're watching global trade this week with Pete mento and Doug Draper, good day everyone, and welcome to another edition of global trade this week. My name is Doug Draper. I am only one of your hosts. My other host, or our other host, is our good friend, Mr. Pete mento, who usually comes to us from some random hotel and some random town. And Pete, like I said, looking over your left shoulder, I can see a hotel vent like nobody's business. So, Sir, where are you?

  Pete Mento 0:35

  I am in Chicago, Illinois, and as I said before the show, Doug, normally, when I say I'm going to Chicago, it means I'm like, in Oak Brook village or or I task or something. No, I am actually in downtown Chicago. My friend sales calls this week. I just took off my adult clothes to do the show, and I'll be putting him back on to go back out and and finish the rest of my day. But I'll be driving all over Illinois, Wednesday, Thursday and Friday. I'm here literally all week, doing sales calls to support the local office and do what I can to bring more business to the the mighty Blue Flag. So that's where I am this week, pal, are you in Denver? I

  Doug Draper 1:15

  am. I'm in I'm in Colorado, in my little cubicle, right? I don't know if I like literally, I don't want to move my camera around, but it's probably six feet by six feet. But anyway, it's one of the phone booths. If folks that are familiar with co working spaces, it's, you know, when those little phone booths, but works out so Pete, what floor are you on? I let me guess you're probably, like, on the 17th floor.

  Pete Mento 1:39

  No, I'm on the 10th Okay, yeah, I'm on the 10th floor this time. You know, I spend my life in hotels. It's pretty sad. Frankly, I feel like I could design a Courtyard by Marriott at this point, like I could, I could actually sit down and do the architectural renderings for a Courtyard by Marriott, or a Fairfield inn or something of that nature. You know, I don't normally stay at like, the super nice hotels in the bonvoy collection Doug, but I'm not, I'm not worried about that. Every hotel is the same when your eyes are closed and you're asleep. Yeah,

  Doug Draper 2:12

  I like that very good. Well, you know what is not the same? Pete is global trade this week, every week, we come with new topics. So what do you think about that one for a transition?

  Pete Mento 2:24

  Yeah, pretty good. Yeah, right. All these years, Doug, you'd think that we would have some kind of pre production meeting or something where we, you know, now, we just log in and wing it more or less, if that doesn't come through to the 12 listeners of the show. Yeah, that's, that's pretty much how we do it. We have a pretty good listenership done. You know, I'm, I'm constantly being stopped by people saying, great shows like, Wow, thanks. Tell your friends, yeah.

  Doug Draper 2:51

  Well, you keep at it for 161 times somebody's going to listen.

  Pete Mento 2:55

  One would hope, yeah. So my topic, my first topic this week, is going to come as as a bit of a shock, like an ironic shock. I I was a sailor. I was a merchant mariner. And I love, I love what we call blow boats, right? Boats that are sent central around the world, harnessing the wind. I am, I'm absolutely what we call a Laffy, a wind assisted effing idiot. That is absolutely me. But this week, one of my great co workers, who I adore, sent a an article to me talking about how a French company has managed to move cargo, move containers on a new, efficient sailing vessel. And I, of course, because I'm a cynical jerk said, Well, this is stupid, and I wasn't expecting to feel that way, Doug, because, I mean, look, I have a clipper ship tattooed in my arm, for God's sakes, right? Like you'd, you'd think I would be 100% all about I'm not. I'm not. There's a reason why we move from sale to steam, and then, you know, from steam to diesel, and eventually, apparently, nuclear is the next step. It's just not efficient. I mean, I know what makes people feel good, but it's not doing the purpose of what we're supposed to be doing, which is low cost, highly efficient movement of cargo across the ocean. The old days were miserable. They were miserable man like on those old wooden ships. People die in a scurvy and crap. I mean, you know, taken months to get across the ocean. No, there's a reason why we have these ships that we have today. And I applaud the idea of using alternative energy to move cargo. But this is ridiculous. So because we don't talk about what's happening now, we talk about what's going to happen. This the birth, the rebirth of air assisted, you know, wind assisted cargo just happened. I'm calling its death immediately after all right, this is going absolutely nowhere other than maybe a PR move. It's just not a great idea,

  Doug Draper 4:49

  yeah, yeah. And that's PR move. That's exactly I was thinking whenever we came up with this, or when you brought this topic, it's, it's novel. I think it's niche brands that would use it to further exclusivity, because I think what they moved over, it was a couple 100 pallets and a whole lot it was champagne and wine was alcohol that they brought over. So hey, man, I'm not a hater, but like you said, I want to be clear of its purpose and its impact on carbon reduction, which is almost insignificant, but hey, it's a good mix for a good story and and if you're a brand that wants to support that, so be it. But I think you, and you and I are on the same page, for sure, well

  Pete Mento 5:36

  as a big believer in the new electric vessels that people are making and the secondary power that's available to ports got out to fleet zero. I'm a big fan of that and seeing that move, but the idea that we're going to have inconsistent schedules, right, based on basically what's going on in the wind and moving such a small amount of cargo just doesn't make sense. Dude, yeah, all right, Doug, what do you got for us? Which Topic number one?

  Doug Draper 6:03

  All right, this is still vessel related, right? And this popped up on my feed the other day, probably over the weekend, because we're all about supply chain logistics and global trade all the time, so I'm even reading this stuff on the weekends. But it's about the Portland terminal. Portland terminal six is in financial distress to the point where they're kind of putting out a an All Points Bulletin for or, I should say, an SOS for help, right? So it's basically the terminal in Portland. They're trying to find a new private company to run it, and in the interim, they're asking the government to help right the place. Needs significant investment in the infrastructure, needs to regain efficiencies and all that. But here's the gist of it, right in doing some research. So we spoke about this. I don't remember what episode, but we talked about the labor negotiations that took place between that port and along shoreman, and it kind of turned out to be a mess, right? So sure you can find some links and things of that nature. But basically the end result is that the union owned the operator, which is a company, ictsi, so the union owed them some money, like 20 mil, and then ictsi had to pay the terminal like $11 million so everybody's paying everybody a bunch of money. And the IC TSI, they wanted to get out of their 25 year contract, or their 25 year lease, so they paid a penalty to get out. And then meanwhile, where all this chaos has been happening, a lot of the steamship lines have just diverted. They're like, we're not going to mess around with this in Portland. We'll just go up to Seattle. So it's a terrible situation for everybody. I don't know what they're going to do, right? I mean to get so. So, hey, let's have the government help us out. I get that. So the proposed funding that's needed to support it. Those approvals happen in September, and then will be discussed in the 2025, legislation session. This is the government. So, oh my gosh, I need help now. SOS does not really correspond with Hey, we'll talk about it in 2025 so I'm not really sure what's going on. Well, I know what's going on out there. I don't know how it's going to get resolved or what's going to happen. But meanwhile, the chaos continues, the uncertainty continues, and the vessels continue to leave that port, and it would really be a tragedy, with the revenue that that generates for the economy, the individuals, the jobs could be could be catastrophic. Have you heard about this? And do you have any comments on it?

  Pete Mento 8:52

  I had not, until you mentioned it pre show, and I started looking into it. And first things, first, man, the port of Portland is is incredibly important for a number of different reasons, not the least of which is it serves an area of the country that's not it's growing dramatically, and it's not as easy to serve it over road from places like Seattle or Northern California. Second of all, we have a major league infrastructure problem in this country. How many times we have to talk about it, though, right? It's it's such an issue, whether it's dilapidated, ports, bridges, roads, the federal government needs to spend a little more time upgrading, managing and and making more efficient our current ports than it does setting up electric car chargers at billions and billions and billions of dollars all over the country. This is where the money needs to be spent the 10s and of 1000s of people who rely on that port for their living, for their living, not to mention our ability to get things where they need to, all over the all over the country from there, but particularly Pacific Northwest. It's preposterous. Yes, we have Vancouver, yes, we have Seattle and Tacoma, but this is. Very important and vital port that we need to maintain every single semblance of an efficient operation if we plan on being a world class trading country. So how they let it happen? That's a crime. You know, I'm not literally a crime. It's sad. But the fact that they're not doing everything they can as quickly as they can to manage it and make it better, that's just shameful.

  Doug Draper 10:20

  Yeah, interesting. That'll be an interesting story to see how it develops. Anyway. So that brings us to the midway point of our show, which is called halftime. This is when Pete and I get to talk about whatever we want, and most of the time it's not supply chain related. And this segment of the show is brought to us by CAP logistics. We wouldn't be here without them, and we appreciate their support. Caplogistics.com if you want to check them out. So that being said, Pete, I'll let you go first.

  Pete Mento 10:47

  All right, thanks, man. So this weekend, my daughter and I went out to Fairfax, to the movie theater, and we saw the new Beetlejuice. Beetlejuice, Beetlejuice. So there was Beetlejuice now, Beetlejuice. Beetlejuice. Most of the original cast is in it, which was wonderful. There were some new additions. They were also fantastic. And I enjoyed it. It was not, it was not the hit of the summer. You know, for the amount of star power and money that was spent on it, I was expecting a little bit more, but I enjoyed it. But in 2024 there's a lot of movies that have associations with the 80s that are kind of coming back, and that's fun, but I'm always interested in these remakes. You know, the the second time they're making a movie for us, there have been some not so hot ones that have come out, but I have a list of movies I would like to see redone with our our current CGI and the way that we film things. Now, I was just wondering, Doug, I'll tell you mine after, are there any movies that you would love to see remade in 2024

  Doug Draper 11:47

  No, no. And I thought about this. I really did. I thought about this. So here's the ones that work right Fast and the Furious franchise. Um, is Indiana Jones. You know, all the trilogies with Star Wars and those, but you know, some of them have jumped the shark. So if there's an action figure or an action center focus, yeah, they can get going. But I just can't part of it is, if it's a bad remake, all you're doing is talking about the remake, and you forget the beauty of the original. And sometimes you just got to let things be, let them, let them simmer. So two points in that I'll make, then I'll flip it back over to you. So Breakfast Club when my kids were in high school, I'm like, You got to watch the show. It's amazing. We watched it about halfway through. Both my kids are on their phone, not paying attention, and they're like, Dad, this movie is so slow, it's boring. And I kind of get it because it was moving a little bit slow, but I kind of was like, that just ruined the impact it had on me when you first watched it, right? And the other one was poltergeist. I was scared to death when that movie came out. Same thing. I'm like, You got to watch it. And poltergeist did do a remake that really didn't go anywhere. But again, my kids were like, This is dumb. It's not scary, and I need to move on. And they left, literally left the room when we were watching it. So those two movies are awesome. I love them, and now they're tainted because my kids didn't want to see them, and they brought out the negatives. I just want to talk about Ferris Bueller's Day Off is another one. You know, all those John Hughes movies, just leave them alone, let the memories resonate for what they are. So I can't think of any really, that jump out at me, other than the ones that are already happening. Well,

  Pete Mento 13:43

  first of all, every time I tell my daughter to watch a horror movie, she goes, Oh yeah, my friends and I watch that to make fun of it. It really wasn't funny, dad. So I get a lot of that the John Hughes movies are canon. It would be like trying to remake, trying to remake, Gone With the Wind, or, or, or, Casablanca, you don't touch those, right? I watched the making of dazed and confused on my flight out to Chicago, which is a wonderful, wonderful movie. You watch the making of it, yeah, it was like a documentary about how they made it. And it was, it was incredible. And then where everybody is now. It was, it was very good. And I thought to myself, you know, we have, in the 1950s we had, gosh, what was the one with Ron Howard? Like, there was a movie about car culture in the 50s. There's lots of movies about, about the 70s now, but in the 80s, we haven't really done the retro. There's a couple I can name, but not really done the retro bit of it. It'd be nice to see that. Just don't touch the classics. For me, the remakes I want to see Doug are all world war two movies, all of them. I would love to see Kelly's Heroes redone. I would love to see the Dirty Dozen redone. I would really love to see the longest day redone, which is about the Normandy invasion. And I would love to see the Big Red One redone by by American. Studios that have the money and the ability and the graphics and the and the actors to redo those it wouldn't in any way diminish how much I love the original movies. I just think you could do a lot more with the story. Now, when I watched Inglorious Bastards, that's all I could think to myself, was, God, could you imagine if these people had what Quentin Tarantino has right now to make one of these films? It would be positively incredible.

  Doug Draper 15:22

  Well, you're a huge movie buff, so maybe it's just my, my perspective. I don't know when the last time was in a movie theater.

  Pete Mento 15:30

  Well, Doug, I'm in the movie theater at least once a week when I travel, because I don't really, I don't really party on the road. I come home and I work, and if I don't have a lot of work to do, I'll either watch a movie on Netflix in my room, or I'll actually find a local movie theater and I'll go see a movie that I love going to the theater. God, you are such a curmudgeon.

  Doug Draper 15:53

  I'll tell you what. How about this? I don't know if I can do it in the next week, but by the end of the month, right that I will get to a movie theater and check something out. I wanted to mention one

  Pete Mento 16:02

  more thing before we go to your topic, Doug, I did receive an email this week from Casa Bonita. I shared that with you and Keenan, and they are now taking reservations from I forget if they were called the founders club or something, so we can get in. And I think it would be very wise on my next trip in Denver for us to have a global trade this week dinner there. I don't know if we'd be able to record inside, but we could at least record with our phones, and maybe Keenan could do something to upload that as a very special edition of us at the Casa Bonita.

  Doug Draper 16:33

  I'm all in. I am all in. It's a whole sidebar story about it took them long enough to get to this place. I won't even go down that one. That's a too long of a story, and I have a lot of strong opinions on that one.

  Pete Mento 16:47

  Pete, so imagine that. All right. Doug, what you got, bud?

  Doug Draper 16:50

  So J crew's back. I'm talking about the clothing brand, right? They actually are coming, bringing back their catalog, a catalog they actually print and will mail out. And me more. Demi Moore. Demi, however you want to pronounce it, Demi Moore is going to be on the cover. And if you're on the mailing list. I have no idea where the mailing list came from or whatever, but they're coming back. They're bringing the catalog. It's going to go out. What'll happen is people will flip through the pictures. There'll be some models which will crush it, because everybody and their dog will want to see this catalog. So if you're a model in the new J Crew catalog, or have any type of reference, your career is going to take off. But I thought it was kind of cool. It's retro. What will happen to people just go online again and order what they want, and kind of, their buying habits will change. But I think it's pretty cool that they're bringing back the catalog. I'd be curious to see if there's other retail operations that will, you know, bring the retro catalog. And I know up in your neck of the woods, LL Bean, they probably still have a catalog. I don't know. But that was kind of the, you know, the OG of catalogs, because those things were cranking out back in the 70s. I think so, I don't know. Do you hear about J Crew? And do you have any other takes on catalogs

  Pete Mento 18:10

  until you brought this up? No. First of all, LL Bean is the greatest. They're absolutely fantastic. I love LL Bean. I don't know if I could be any more of a New Englander when I say that. But I absolutely love LL Bean. I also love them as a company, the people that all work there and transportation and compliance, they're fantastic. So yeah, love being as far as the J Crew catalog goes, I'm happy to me more, who I think is gorgeous and very, very talented, has gotten herself another angle, you know, to further her career. But I could really give a damn Doug, you know, I, I could, I could. I don't know if I could care less about the the opportunity for very beautiful people to have their faces splashed on a magazine cover. I don't care. I buy everything online. It just seems like a waste of paper and time. Yeah?

  Doug Draper 18:58

  Well, maybe so and well, we'll have to see how it plays out. I'm curious on who, who's going to get it. I didn't sign up for J Crew catalog, so if I get one in the mail, I will let you know for sure. And then I'll be curious on how, how my name got on the list. But I'm sure there will be millions that won't be going out. Yep,

  Pete Mento 19:15

  many dead trees. All right, so that was half time. Brought to you by our friends at CAP logistics. To learn more, please do check them out@caplogistics.com They do everything for us to make the show happen, and we do appreciate all of their many years of support. So that brings me to topic numero dos, another freight forwarder, not gonna I'm not gonna put them on blast, as the kids say Doug. But another freight forwarder, a pretty significant one, got popped with a cyber attack last week, and it was a it was a good one, from what I understand. But if you're keeping track at home, folks, that means that there have been six global freight forwarding firms that have been hit with major denial of service attacks. And if. Not going away, and the fact that it's 2024 and this keeps coming up, and we keep having these stories make it into the news. It it doesn't shock me as much as it really makes me angry. Doug, this is a truly avoidable process which really comes down to human beings doing what they're asked to do. You're being asked to change passwords, not open attachments and emails. Look at the at the email address of external emails when they come to you. Just think, think right before you decide to engage with this stuff, because it could be what brings down global forwarding. You know, we're so inter intertwined. We have so much data going back and forth from each other, it would be so easy for someone to take the bulk of us down by making one stupid decision. So Doug, I'm going to call it again. I said this year we'd have major tax we did. I think we're going to have a devastating one in 2025 when I say devastating, I'm talking about major, major pop to the global economy. Bad. It will happen next year.

  Doug Draper 20:58

  Yeah. Well, the whole concept of the supply chain is that there's multiple chains, and it's easy to go after the weakest link, right? And we've spoken about it. It's not other than the integrators, FedEx ups, some of those guys. But even when you get into freight forwarding, that's an international game, and you're using different technologies and legacy systems that may not be up to par with, you know, the security that's needed. So I think forwarding, and I'm not saying because this is our industry, and we see it more frequently, I think forwarding a transportation is is ripe and will continue to get hit, right? It's almost like low hanging fruit, and we're moving stuff, right, tangible things. So when there's a glitch, there's a glitch at a law firm, I don't know, doesn't really impact me, and I don't really know what they would create a problem for, other than some documents or something. But when you hijack a freight forwarder, you're also hijacking and disrupting the movement of goods, and that's very tangible, and I think it'll continue to happen. Makes it kind of nervous, but I think our industry is in for it. And I would agree with you, there's we haven't seen the end and we haven't seen the big

  Pete Mento 22:12

  one. No, nowhere near it. But yeah, all right, it's your last topic. Amigo, yeah,

  Doug Draper 22:20

  I hate to say this. Pete, hate to say it because I've talked about it before, but I'm going to have to do it because it keeps popping up into the into the into the news. But the post office, again, is talking about enhancements and efficiencies to save $3 billion that they want to start out in 2025 so I want statistics on this one, Pete, because I bad mouth post office enough. And yes, you know you're, I know you're a big fan, but so I get it right. I saw a stat that said 80% drop in first class mail Since 22,007 right? Which is obvious. That's, you know, nobody ships a document anymore. It's all DocuSign and E signatures. And there was an $87 billion loss from 2007 to 2020, which is like, say, if I do my math, like, I don't know, 67 into 13 is like 7 billion a year, right? And they're saying the program aligns with the organization's mandate to be financially self sufficient, blah, blah, blah, blah, blah, but it's just they need to privatize the thing, right? Look at what Germany's done with DHL and Deutsche Post. Just privatize the whole damn thing. Even do something like the bell network used to be back in the day, right? I know they blew that up to to do that, but privatize it, turn it into like regional Bell providers. You know US West back in the day, and I can't remember the other ones. I just know US West because here in Colorado. But anyway, I mean, they've talked about it so much. Do something very different. It can be done correctly. And here's a couple of things that I looked at Pete, and then I'll get off my high horse. So part of the cost savings is reduction in workforce. Do you know how many years they've talked about that? 2009 2015 and 2017 consolidate processing sites. They talked about that. Then 2010 2015 and 2021, they talked about saving $22 billion from 2011 to 2015 didn't happen. And now delivery for America. Check this out. Over the course from 2021 to 2030 they want to save $160 billion right? So it's just same song, different verse. I know I've talked about this multiple times, but it keeps coming up. If you keep don't talk about it and do something, then I wouldn't have to speak about it here on the show. But anyway, it's just you. You got to try something different. You know, what's the definition of insanity? Do the same thing over and over, respect a different result. They're doing the same thing over and over and over, and there is no change. So anyway, Pete, I almost didn't talk about this one, but I think our listeners need to understand that it's it's crazy. Try something different. Privatize it, as my suggestion, turn it into a regional, privatized network. All right, I'm done. There you go.

  Pete Mento 25:28

  Well, I don't know how good privatizing it would be. Doug, I don't know how much that would actually help. You. Mentioned danzis and Deutsche Post and all the rest of it. They're breaking everything up so we can start with that, and then all you're going to do is have a private company who buys up more and more and more public resources and makes them for profit. Makes them too expensive for common people. You want to pay four bucks to send a letter someplace? No, of course you don't. How dare? How dare you continue to malign my beloved postal service, right? I think part of the problems we're having is, is they don't understand the continued decline, the rational continued decline of the use of the service they need to right size the business, which is going to mean eliminating real estate, not having post offices in every single city that doesn't necessarily make sense, and changing the way that they actually manage delivery. I don't think we have to have it seven days a week anymore. Doug, I think that there's something to be said for having a limited number of days that that postal stuff is actually delivered. But you know why that's not going to happen? Because Amazon, Alibaba, and every single e commerce company in the world is dependent on the fact that they have a throughput for their e commerce to be delivered independently and inexpensively, and that's why it's not going to go down to two or three days a week, which is what it ought to do. So I get it, man, I know they did something to you at some point show me on the doll where the Postal Service touched you, because you have an irrational hate of my beloved Postal Service.

  Doug Draper 26:56

  I don't know it's not, I don't know if it's a hate or not, but it's just disappointing, right? Like you said, you know, America the final frontier, all the amazing things that we can do to visit the stars and everything else. Let's just figure out the post office. It's absolutely incredible that it's been the same song and dance year after year. Anyway, Pete, I promise I will not talk about the post office again for the rest of the year. No,

  Pete Mento 27:21

  you'll do it. There'll be, there'll be a point. Yeah, yeah, there'll be a point when you do yeah.

  Doug Draper 27:24

  How about the rest of the show? I won't talk about it for rest of the show. Fair enough.

  Pete Mento 27:28

  Yeah. Well, that's going to do it for four topics and a half time for us here at global trade this week, we want to again, thank our friends at CAP logistics for being just so steadfast in their support of the show. Want to thank you the viewers who always find time in your week to spend it with us and for letting your friends know about the show. I guess we will give a half hearted thanks to Keenan. Sure. Yeah, and, and, let's we always say, if it's happening in global trade, we'll talk about it next week on global trade this week. Have a great

  Unknown Speaker 27:58

  week, Bud bears. You.

  Transcribed by https://otter.ai