Global Trade This Week – November 28th, 2022
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Keenan Brugh 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Doug Draper 0:10
Well, hello to another edition of Global Trade This Week, I am one of your co hosts, Doug Draper. And my other co host is on the other side of the United States. Mr. Pete mento. In lovely New Hampshire. Pete, how you doing today?
Pete Mento 0:29
I'm good, buddy. You know, it's funny that you mentioned our geographic differences because I, I have been, in my sleepless nights, trying to figure out where I want to live again. And I've decided rather than putting that much pressure on myself, I'm going to pick a bunch of places. And then Amy and I are going to go travel and see them. And maybe something will inspire us. I don't know. But you know, I love you know, I love Colorado. But I have this list of cities where you're less likely to be engaged in a like a puppet or the column. A disaster, you know, like a disaster, believe it or not, Boulder is one of them, like Boulder is listed as one of the safest to avoid some catastrophe happening. And it's in the top 10 There's other ones in there like in Charlotte, North Carolina, and I can't remember all Minneapolis was one of them, just like you know, cities where the weather is less likely to take you out than other places. And I thought boulder was interesting, because you guys get some real snow in Colorado. But anyway, I'm all about looking at like New Mexico in Wyoming and Montana right now. And planks. Just seeing where the damn kids are. So it's fun to have.
Doug Draper 1:54
Yeah, yeah. Well, there's a there's a million jokes in there about Boulder and being safe that I just can't think of off the top of my head. So I'm not even going to try to pull one out by by any stretch. But yeah, I'll
Pete Mento 2:06
help you out. Just kidding me. A city with that many safe spaces for people's feelings would probably be a pretty safe place to live. How about that? Yeah.
Doug Draper 2:14
There you go. That is that's perfect. And shocking. I
Pete Mento 2:18
would visit Fort Collins. Is that the right name?
Doug Draper 2:21
Yeah. Fort Collins up north Colorado.
Pete Mento 2:24
Would that be kind of the anti boulder? Or is it not that far off of Boulder?
Doug Draper 2:30
I don't know if you can ying and yang those two. But yeah, I mean, it's certainly it can be pitched that way in the media to talk about the differences and that is case some of the graphs
Pete Mento 2:42
that we should just talk about this and get this out of the way Doug, I am growing my beard longer. So I don't know if I've just been around Keenan too much or what the case may be. But I have been growing it out. So that is why everyone is seeing a much hairier Sasquatch Lake Pete. Wait, yeah, I'm just gonna hang out let it all hang out buddy. I'm still thinking in my head. But there will come a day Doug when I just stopped cutting the hair edge stop it's gonna quit and that's when you know that I just a couple years away from killing this whole industry at kiss off so when that happens, you'll definitely know how
Doug Draper 3:19
we'll know. They'll pull out Lovie Smith. I saw that guy the other day coaching and you kidding me? I was like, Who is that guy? And then crazy. Interesting
Pete Mento 3:29
stuff. Deuce McAllister in New Orleans a couple years ago and you don't remember who he is he was he was running back for the saints down the good but he is the size of I remember note Carter from Give me a break and be 1980s He looks about the size of notecard right now. Like I I don't know if he just stopped going to practice and stop stepping on the scale or what's going on but deuces a big boy. Yeah, and apparently he's also been known to let let the beard go. So yeah,
Doug Draper 4:02
well, yeah, the other thing that's popped on my mind I can't believe I remember this but the other character on there was a guy named rerun. Remember him?
Pete Mento 4:09
Nope. Different show. You're thinking of what's happening. Don't even start with me the 70s and 80s because it was Raj and reran, I love that show. I love that show to death. And I would they would go to a Ross was the lady who ran the diner they hung out at it rerun with start doing his pocket and lock and I love every second of that television show. Kenan is right now while we're doing this, he's on his phone like what's happening in the follow up what's happening now? When they actually had a spin off of that show? That's how sad and pathetic I am. I have a friend of mine who is obsessed with older television shows. He has an incredible twitter feed called ponchos disco Rama, where he takes pictures for those of you who are not white following on Twitter is definitely where to follow, he'll take a picture of one of the nights of an old TV Guide from like, you know, Tuesday, September whatever in 1983 and he'll just go through the shows that are that were on that day and I'm like, oh my god TV was so good. But it was so bad at the same time, but it was so good. We were you a Hawaii Five o guy. Well, you you Magnum, Hawaii, five o Simon and Simon?
Doug Draper 5:27
Nah, probably. Wi Fi though. I liked that one. That was good. And then this one will take your way back. Remember that show in the 70s called Emergency?
Pete Mento 5:39
Emergency was a bomb. Emergency. One out of 12 was another one. Right? There was another one. That was
Doug Draper 5:47
the only one I can remember that. That was you've seen it. I saw it recently. And it just dreads it's so bad. It's NEC even believe that was prime time must watch TV. It's so bad.
Pete Mento 6:02
But we loved it. We were kids there was there was a show called Dark Tari that you might not remember. But it's about a family that lived out in Africa on a wildlife preserve. And they would drive around with their dark rifles in their Range Rover sticking out of the I love that show. I watched a couple of minutes on YouTube the other day and I said I don't know just how much drugs my parents were doing when they gave you know when they can see me but apparently it was a lot. If I found it that entertaining in the 1970s. Medieval shows don't. They just don't. They don't stand up, unfortunately. But, but like Rockford Files, you know, Columbo me and I've started watching old movies again. So we're kind of on a Hitchcock kick right now. But I've just I'm trying to not get myself sucked into too much of the new television because I've just I got so much to watch, but it's getting kind of ridiculous. Yeah, yeah.
Doug Draper 6:54
Well, you know, what else is incredibly entertaining? Is this show that you and I do right here right now called global trade this week? Yeah. Brought to you by CAP logistics. And we'll kick this one off. And I was driving in and Pete. So audience, we're doing three topics today. One is the big one, the elephant in the room that we've all talked about. And all I can think of speaking of old TV shows is the Brady Bunch. And Jan was so frustrated with Marsha and all she could say was Marsha, Marsha, Marsha. So this topic is all about China, China, China. So there's this best segue I got on this one. Pete. So I got some thoughts. You got some thoughts, you just jump in?
Pete Mento 7:36
I'm gonna start with this. Right. So this is a difficult topic for us to discuss. And you want to talk about an elephant the room, right? So I have a visa of a business visa for China. And I got it maybe four years ago. So So that's six years left on it, or so, you know, and, you know, we're talking about today is the difficult way that people have been living in China in certain cities who much is 100 days now on lockdown, where they're not getting food, they're not getting to the ability to communicate with their friends and relatives all over the country. And they can't say anything about. They can't. They can't do much about it for the most part. But what we're seeing now is people actually out in the street protesting and that's, you know, Doug brought that up this morning. He said, Why don't we do this together? Then the first thing that came across my mind was a blind need to go to China soon. It should I be worried about what I say how I say it, and where I come off on the side of the topic. Because to be very honest, it's not difficult for the Chinese Communist Party to decide that they've got enough. They have more than enough. This opinionated bearded white dudes running around right now. We don't need one more. So how effective they are. The effectiveness is such that we even as companies that work in international trade, you and I have to be concerned about how vocal and I guess negative leading we are about this subject, but to give people some background in dog food, got some more on it as well. China has taken a zero COVID stance. And what that essentially means to those of us who are not in Chinese public policy class is very simple. If they come across a certain incredibly low threshold of people who happen to have this, this version of the disease. They shut down entire geographies. Now they're doing their opinion, they're doing much better on limiting just how big a geography we're talking about. But there's one right now that's happening that's going to be delaying the ability for us to get the iPhones out the new iPhones. There are a number of these have slowed down the exportation of automotive parts, critical parts of chemicals and heavy industry that we're not seeing exports on not to mention the fact that that things have not been very hot for the Chinese economy to begin with. They When I usually talk about this, I say that there's public health safety. 1.4 billion people, too difficult to manage and to leave that many people. But there's the other side of me that says that part of this is just making sure that people are reminded exactly who's in charge. So, you know, it's it's a, it's a difficult thing for us to tiptoe around. But from a logistics perspective, this has become very real, if you think about where we were last year when Shanghai was closed, but at the same time, the ripple effects of the global economy on our building logistics, it was heavy felt, air, freight, ocean freight, the ability of people to get a hold of what they wanted. And that tailwhip when it started opening up again, you know, it was difficult to keep up with it. But now in a down economy, it doesn't seem to be as difficult for the rest of the world. It just seems really hard on the people in China.
Doug Draper 10:54
Yeah. Well, there's been references to Tiananmen Square, and the upheaval and discourse going on over there would be comparable, or haven't seen it at this level since 1989. But when I did a little legwork on that, Pete, the one thing is that Tiananmen Square was three things, it was a protest, it was a massacre, because people were shot and 1000s were injured. And then of course, you got Tank Man, who was the iconic image of that of that whole cannon square situation. The difference now is social media. And the ability to spread talk and be a sounding board to what what's going on out there is just leaps and bounds because of the social media, that the thing that I wanted to hone in on is specific to the logistics and supply chain, and you just made mention of it, we're starting to see delays with zero COVID COVID, zero policy out there. And I think what's going to happen, which was similar in 2021, when Chinese New Year hits, and if if some of these workers can get the hell out of there, and go back home, it'll be very difficult or I won't say unlikely, but you get home, why come back? If you can get out? Why would you come back to that situation and those regulations and standards that are in place, so I think we're starting to see it. But if things don't change dramatically, you're gonna see post Chinese New Year. I don't want to use, you know, Evening News terms like apocalyptic, because I don't think it's it that well, but that's when we're going to see a pretty substantial blip. Because if you can get out, Chinese New Year going home, we saw it happen right after the 2021 Chinese New Year, it's going to happen again, if this continues to rear its head, or as simple as it may be Pete, they squash it, they meaning the Chinese government pretty damn fast, like Tiananmen Square, but I don't think that's going to happen with the outreach and the tools available to speak your mind through Tik Tok and all the other social media. So my whole point in this one is I think there's going to be an impact post Chinese New Year because workers are just not going to come back. And, and just not put up with it.
Pete Mento 13:18
What I worry about but is you just said it right, Tim and square. I think you and I were both just getting out of high school. So that happened. So yeah, it's like our senior year or something or whatever. Yeah. And I remember being just oblivious to the importance of what was going on. I still remember why watching CNN and all the rest of it, and be like, Wow, this, this seems pretty crazy. But then I came to school. And we have this absolutely incredible history teacher. And his name was Colonel Spaulding, because falling he had faked his age to go in the army during World War Two. That he said he spent his like his 16th birthday in France. Somewhere getting shot at like he really faked his age. And then went back after he graduated from college, went back in the army as an officer. He was one of the first Green Berets and he went to Vietnam and the guy me the guy stayed in the army forever. They came out as a colonel and I remember going to school afterwards and Colonel Spaulding saves everybody watching the news and what's going on in China. Do you understand the differences of what it means to be an American and have access the ability to see your mind speak your mind if our press to be able to put those opinions out and we had what was one of the very first real adult conversations in my life about the ability for that information to spread and you know how it's difficult to keep he brought up Watergate you know how it's difficult to keep something that's devastating. And I want to across balding would say today when you've got you know, like me a knucklehead with a LinkedIn page is like whipping out what's going on around the world on news. You and I have a weekly television show with our laptops, and some, you know, shaved down Sasquatch in Denver, Colorado who produces the whole thing. They have that in China, though, like you're saying, all these years later, and there are 1000s of people in the street, in a country where dissent can end you up in prison pretty quickly. And they're saying what they think about it, and I don't care if you're a truck driver, if you're working in warehousing, if you're every associate working in a court, there has to be a degree of fear associated with what could be happening right now. And it's Americans. So I'm gonna bring it back to logistics. We're constantly talking on the show about supply chain resiliency, constantly. The amount of faith that we have in the politics of China to keep things running, it's almost blind faith, that we don't have to worry about some sort of political, political turmoil getting in the way of our supply chains. It's exactly what zero COVID has done. And it appears to be ramping up as we speak, man. So I think that there's nothing we'll talk about politics, we try really hard not to on the show. But I think as professionals in transportation and logistics and supply chain, we have to begin to consider how political unrest can negatively affect the supply chains of ourselves of our clients and the people that we advise, because this can go sideways fast. And if it does, it's going to mean a lot more than just bad supply chains. It can mean a lot of pretty awful situations for the people that we've worked with many of us that are employees of ours, many of us, and how this could turn out. So yeah, we should be watching it. It should be a bigger news story than a murder in Idaho. It should be a much bigger news story than what stupid thing Megan Markel has sent lately. This, this is probably the most important, impactful story, other than the invasion of Ukraine so far this year.
Doug Draper 16:50
Yeah, I think you nailed it. Well, I think we're gonna pop into our halftime show. Brought to you by CAP logistics, cap, logistics.com eat and I wouldn't be sitting here bantering back and forth without them. So so check them out, take a look. You know, I'm gonna go first because I like yours to end. Right. And we talked about politics and how we want to stay away with it. Stay away from it on our show. But I want to jump right into it and bring up some politics stuff. But this is kind of comical, right. So I just saw the other day that we are officially in the lame duck session of Congress. So for a quick reminder, it's the period after an election, and before the new current Congress has been sworn in the Find his lame duck, which means not a whole lot gets done. And I just started thinking about that. That's like, like, where else in the entire world in any industry that is in that can assembly just check out and fully admit that they're just kicking the can down the road and literally doing nothing other than window dressing? for six weeks? Seven weeks? I mean, can you imagine if that happened in our industry, I mean, this is, you know, specific to supply chain logistics, just hey, I kind of just, you know, it's after the holiday, or it's, you know, holidays are just starting, and we kind of don't really want to work because it doesn't really matter because we gotta go for next week. I mean, it wouldn't. It just wouldn't play, like the economy would shut down. But yet, our administration and Congress are not only is it happening, but they give it a name, for God's sakes, lame duck sessions, which means we're not going to do jack crap for six to seven months or six to seven weeks until until things until the new Congress is sworn in. It just it just baffles me that the I don't want to get too political on this stuff. But anyway, lame duck session, are you kidding me? Any other industry in the world would be catastrophic. And if you ran a business that way, you would be out of business. So there's my little rant on the lame duck session and how much of a joke it is, in my opinion.
Pete Mento 19:06
Having DC nerd for quite a long time there and managing to live inside of that beltway. The term is very fitting that idea of a wounded duck. Not it's taken off. Nothing's going anywhere. It's just going to die. So your point there's no point in doing anything right now. Because that duck is lame. It is wounded. Just wait for something to kill it and take it away. It is worthless. And then I was thinking of just as you were talking like, Are there times in the system like what about Chinese New Year and now what about holidays now like? I live in the middle of Chinese New Year had people in China like in the middle of the holidays, we like I need something done right now man can we get it this is a business where I was on the phone today and I you know my current position is such where I work with mostly people that are on my level of what I'm doing right now. Not in Canada. They're on Canada, they're on Montreal and Toronto. And last Thursday and Friday, we're just like, last Thursday and Friday. As far as they were concerned, it was like, you know, oh, we forgot today's your big eat turkey get fat day American. So, too bad. But hey, can you call someone for us and take care of this? This is one industry where nobody cares what the dates is on the calendar. Ring the pain, man. And what's crazy is you kind of find out if you're made for this when you first learned to respond to crap like, but it's my vacation. It's Valentine's Day, it's my anniversary. Oh, I don't care. You know, I need a truck. And I need it now. So poorly paid for that vacation. Let's go like that's, it's a it's an industry where when you're good at it, your customers come to depend on you. You're just going to work all the time. But it's, it's it's rewarding. And I think that's why you and I after 75 years are still doing it.
Doug Draper 21:06
Now I get it. It's a badge of honor. It's pride, you know, we'll get the job done. It doesn't matter. Air ocean trucking ground doesn't matter. People just make sure it gets it gets done. So I'm very proud of our industry and how we do not back into a lame duck session. We're always moving forward. Anyway, what what you got beat?
Pete Mento 21:29
My mind is not nearly as fascinating as yours, you know. So I live in a divided household with regards to Christmas. Everyone around me things seem to think that there is absolutely nothing wrong with putting up Christmas decorations. Whatever the hell you feeling? Like there's there's nothing wrong if you wanted to have Christmas up before Thanksgiving. So people came over for Thanksgiving. And there was a tree in the living room. Day. That's cool, right? Like, let's put Christmas music in the car in October, right? This is this is normal now. Right? It's just normal. And when do you take Christmas stuff down, people are very get added to that. So in my in my my way of thinking. Don't put any Christmas stuff up until after Thanksgiving. Every holiday deserves its time. And then once Christmas is over with, I want to go on December 26. I want to go on because to me 12 days later is when you start Mardi Gras, which is you know, it's the most important holiday in my entire year. So give me just give me a look as you walk past me like so. day after Thanksgiving, you could start with the never ending like Holly on Sirius XM listening to Christmas music. You can put up your Christmas tree and hang the stockings with care and yatta yatta yatta yatta yatta. But December 26, I call it my God. But here's the thing. I don't have any say in any of this. It will be done when it's time when they want to do it. And it will come down when she feels like it's going to come down this has I have nothing to do with the decision, Doug. So two questions. What is it okay for decades to come up and go down? And second of all, do you feel like you have any power whatsoever and that decision is the man of the house?
Doug Draper 23:28
I love and you ask these questions. So the weekend of Thanksgiving, right? So they fan our family you know my kids are in college, they came home great for a week. So we trimmed the tree, bought the tree set it up did the whole thing as a family. So Saturday after Thanksgiving, and then literally Pete I have taken the tree down on Christmas day before and I've it's it's pretty much dead on my next door neighbor. He made a comment he said it's it's you know it's Christmas at the Draper house when Doug is dragging a dead tree in the backyard and chucking it out in the in the alley to be recycled. And then when I I feel like who wasn't Dan Ackroyd in trading places when he's got that fish. He's all mangled and dislikes to shove. Yeah, he's got the salmon. Just bah humbug. I mean, open the presents, you know, and let's just let's shut it down. I mean, Pete, I'm not even kidding. There was probably more times in the last 20 years that I've chucked that tree on Christmas day than I have not and it's just time to go. So I'll go a little bit early. But the answer question the Saturday after Thanksgiving. Christmas day in the evening, the party's over. It's time to move on.
Pete Mento 24:49
You're a mean one. Mr. I don't necessarily disagree. I just know that that's not I don't have a choice man. Like I They will go up, when they go up, they will come down when they come down. If it needs to be more, go by it. Like there. I don't have a choice in any of this and I'm fine. Because it's, you know, everybody else so damn happy. But I do have one line. I don't like cross and I said, I don't like presents for me. I think it's a waste to I have everything I could ever want. Don't buy me stuff, unless I specifically asked for it. Like, and I don't, I don't need it. And the kids go crazy. And he goes crazy, right? They love all that. That's wonderful because I love giving presents, but I don't like getting them because it just feels like a waste on me. Want to give you a great present. Leave me the hell alone for a couple hours. How's that?
Doug Draper 25:43
How you like them apples?
Pete Mento 25:47
That was halftime, brought to you by our friends at CAP logistics. And Doug and I have just proven that we really are a couple of just cranky, older Mogens at this point, we hate everything. But we love cat logistics. And we love our viewers and we love our listeners. And at least Doug loves Kenan. And I love him too. He knows I love him for all of you that every time I see somebody I'm like you watch the show. And you're like, why are you so me to keep it? Lucky that we didn't need to I love the guy. I think he's incredible. There. Why are you always break his nuts on the show? And I'm like, well, because it's fun. Yeah, like he's, he's like Wilson on the old home improvements, where you only see the top of his of his hat over the fence. Like, you know, he's fantastic. But if you know people get too much of cannon, it's going to wreck it's going to wreck the magic. So yeah, let's be noise head getting too big. He's gonna start his own podcast, we don't need that. Very true, very true. But there were more of a cap logistics, visit them our friends at CAP logistics at cap logistics.com. And that will take us to our second topics. So I guess there you go. Yeah,
Doug Draper 26:57
sure. So we're this one has been kind of heated and very controversial that our show that is up until now we got some politics. We got China, we're talking about lame duck sessions, and of course, the holiday. So this one's pretty mundane. But I saw something a couple maybe a week or two ago about there's a push to standardize the E commerce sales tax. Now sales tax. As far as the E commerce sales tax, there's like 45 states, I think that already have some type of sales tax program. And sales tax are generally set and collected by the state and used for local needs and policies and things of that nature. So it's, it's local, it's defined by what that community in that state needs done, whether it's infrastructure or support services, or things of that nature. So standardizing an E commerce sales tax across the entire country, you know, I have to admit, I'm in favor of it. For one particular reason, once you give somebody something, it's very difficult, almost impossible to take it away. Right. So you have to set the standardized ecommerce sales tax at the highest level of any state in the country, and maybe even bump it up a little bit. So if your sales tax in Texas is zero, or that's income tax, but the sales tax is very minimal. You can't set the bar, the bar has to be set at the highest possible letter level, and then bump it a little bit. The reason that'll work Pete is that I don't know a single person that shops online and pays attention understands or looks at what the sales tax is, it's all about the item they're purchasing. And is it higher or lower than the other site that they went to I get an X on Amazon, I can get it on why with with eBay or directed to consumer. So you know what, make it standardized, bump it up to the extreme, make some more money for the taxes. I'm all in favor of it, people aren't going to pay that much attention to it, it'll make a little bit of noise. But nobody in that I know focuses on sales tax of any level and making a decision online when they push the Buy Now button. So So I say go for it. I think there could be some good benefits. The key is trying to monitor it and put rules and regulations around it could just crush the whole thing and go back to the established processes that are already set up and make it a state issue but I'm in favor of it. I like it. Make sure you bump it as high as you can to cover all the states out there that have various degrees of sales tax. And and let's go with let's make it happen. So I'm in favor of it for those reasons. And that's all I have on that topic, my friend.
Pete Mento 29:50
On behalf of all 1.2 million of us here in the great great state of New Hampshire. You can kiss my ass really free or die I do not tread on me. Taxation is theft, though. So having worked in E commerce, having worked for the company whose name is synonymous with this tax question, so, you know, the wayfarer case when it came to how we deal with right now it's it really was established because they were stuck in this nexus of selling over the country. And I'm gonna Why didn't go over get Amazon or somebody? Here's the deal. Is it a sale? Yes. Do we have sales tax in my state? No, because we are civilized people here. We don't expect to stick it to you like that we find other ways to stick it to the numerous tourists that come here, like meals, taxes and hospitality taxes so that people actually do live here. Don't have to be messed with so much. You want a sales tax? Doug, God bless you. You can have it there in Colorado. Don't bring that noise to the Granite State. Well, we don't have an income tax. We don't have a sales tax. I'm not sure the kids here can read. But I will tell you this. We're not going to have additional costs put onto our products just because someone's decided it makes it easier. Yeah, no, no, every state should have to figure this out on its own. It creates a lot more jobs for my friends and tax firms. God bless you. And it gives people reasons to have these conversations and arguments about where they want to live. You want to tax something with California. Okay? You want to sell ecommerce. haven't sent to your friend in New Hampshire's address, you don't have to worry about the extra 8%.
Doug Draper 31:40
Yeah, I'm doing some math for you, my friend. Well, I'm doing some math, I'm not being disrespectful. But the great state in New Hampshire represents point 00 4% of the population in the United States. So we'll put that in perspective, that's four tenths of 1%. So I'm
Pete Mento 32:03
usually would be
Doug Draper 32:04
voted, and the state great state, New Hampshire would lose.
Pete Mento 32:10
In the great state of New Hampshire state a kiss our ass, we got all the guns anyway, here's where it goes. The 1/10 of 1% of people go to places like Harvard. And that's what makes them so spectacular, right? Just because there aren't a lot of them doesn't mean that important. There are other states that don't have income taxes, like I believe Washington state is another one, which it's a very big deal. People from Oregon, neighboring states go there all the time to buy their stuff, and increases their ability to make revenue. No, taxation is theft, and having additional taxation, just because it's easy, is the kind of thing that you know, I find that we're gonna have a flat across the board tariff on everything. It just makes it easier, Doug, no, absolutely not. Bitcoin boys, and he's probably got a shirt off right now pacing like she was on right now, which is probably lose it because he makes me look like Gavin Newsom in my opinions about this stuff. So I'd love to see what Kevin's doing. Right. I want to ask him at the end of the show. Yeah. You're wrong.
Doug Draper 33:15
We often ask our listeners and our guests give us your thoughts and your feedback, right, we'll see, we'll get the feedback from from from the masses out there. So
Pete Mento 33:26
my feedback to you go ahead and comment on the video, you comment on LinkedIn. He did some good old local pizza has some stuff to say you too. Well, I'll bring it home for us with my last topic here. And this is this is something that over the course of last year, about the same time we started talking about before we did our MD your show, we knew that things were gonna change, we knew that rates were going to change, and we knew that the economy is going to change. And with that, Party's over, party's over for these these kids and freight forwarding, you know, it's like, selling junk bonds for milk into the 80s. There were like all these, all these guys, that that were salespeople out there that never really had to sell in a hard environment. Because like, Oh, I got space on a ship who wants it? Who wants it? It's like you're dangling a piece of bacon in front of 50 dogs, right? And now you're gonna have to work and what we're seeing what we've been seeing, probably over the course of, I'm gonna say the last four months, and it's gonna get real serious now is freight forwarders really working? So you're beginning to see people out in the industry, doing everything they can to be disruptive financially in order to either reclaim business that they lost during the pandemic or to gain as much volume as they possibly can so that they can try to lower their costs make a bit more profit, but the push is on my friends so that the back to reality of working for Florida The good times being gone, they're gone. This is now a time where you're gonna see salespeople in the streets, hitting the bricks, and all the other wannabes. They're not gonna be around for much longer. And I want to expand on that to go a level up. We're not just talking about salespeople, buddy, we're talking about a lot of freight forwarders, who did not see increases in file volume, who did not see increases in the amount of expansion they're having with bringing on new customers, new logos, if you will, into the business, I think we're going to see maybe two to three years of a lot of people just fallen off a lot of assets that that are going to be out there a little toxic that no one wants to buy. And you're just gonna see a lot of freight forwarders fall off the wayside, you're gonna see a lot of people in sales, just like real estate's great, we're going to be going back to working at the barista counter, because they were selling based on nothing but cost rather than trying to sell a relationship trying to sell an ideology, and knowing what they're actually doing. So a nice, goodbye. I think 23 is a year that starts.
Doug Draper 36:04
Yeah, well, I would agree 110%. Right, we talked about the roaring 20s. When started coming out of COVID to the extreme level, and I was about 18 months, we we called it we spoke about it. Now, as far as the service providers and ocean freight and consumers that touch it indirectly or directly. It's here. And the one piece that I had not thought of Pete that you made mention of is what's the fallout going to be, I think, meaning businesses going out of business, right? Just like whenever over the road, trucking rates were skyrocketing. And you had all these people that were leaving larger companies to go start their own trucking company, it's me and my neighbor and a guy I met drinking a beer at a bar and we're gonna get our, our licenses, and we're gonna go out and crush it because it's so so profitable right now. And you're seeing a lot of those guys, and those trucking companies and gals, you know, folding up again, and going back over to the traditional asset based carrier. So same exact thing. I think there's going to be some fallout, we'll see that probably second middle, second quarter, third quarter, we'll start seeing if they're gonna hang on as long as they possibly can. But yeah, the fallout from businesses dropping out and going out of business is going to be pretty substantial. So I would agree with you on this one.
Pete Mento 37:33
Yeah, I was joke about this. But there needs to be a scared street version for free 40 with an old TV show where they would take first time offenders from high school, they have a go to a real prison. And I just, I've been saying it for a year when I was watching all these young guys that were selling these upstart freight forwarders that, like you said, somebody built on their garages and cargo wise. And you just see him and you're like, Look in my eyes. 30 years, I've seen it come and go. I've seen the big E the small, the small and big. I've seen that government recom. I've seen companies that have had four or five clients that all went bankrupt at the same time. You don't know what you're signing up for. So if you think it's always going to be this easy. You better way to work hard, because this industry is about to get hard. And if you're not ready for that, if you haven't been through it before, if you don't know what it means to knuckle up and make it work. This ain't the job for you, man go back to selling pharmaceuticals back in Poughkeepsie. But you know, this ain't the place for you, man. Now for operations. I think it's about to be a nice breather. Two years of burning Hellfire a little bit better as the volumes come down. But yeah, you might want to go sell that beach house, because I don't think the payments audit if you're not really willing to docile. So that's that's my brutal opinion. And I guess it's a great way to end it. One thing I will say is, who must be getting pretty close to doing our, our, our our show will be start talking about next year's
Doug Draper 39:11
predictions. Yeah. Yeah, you know, it's, we need to talk about that. Here's the beauty of this show. Pete, it's like most of it is ad lib. We've not talked about that. So we should come up with that date and kick it out. Here very quickly. So keep an eye out. And we'll even tell you where we were wrong in 2022. But you know what we're forward thinking we got the guts to throw out some, some predictions, not just some fluffy language. We're not a lame duck session. Pete We're going to tell it like it is and we're going to work.
Pete Mento 39:45
I had my lame duck session when I got laid off. It was a wonderful month of not having that people screaming at me about where their cargo was. I don't need lame ducks. I don't think I've ever been as happy as as I have been lately to just be answering people's questions about freight. Going out there and trying to win business and there is no lame duck in this business, but we have the courage to put our ideas out there. And I think we're also old enough to realize you're not always going to be right. And that's okay. But someone's gotta at least put it out there. And I'm proud of the fact that she does it every week. And I'm certainly very proud to be honest with you. And I did say I was thankful for your done and my Thanksgiving prayers when I went to church that morning because I am that guy. And I'm thankful for the show with Keenan and cabbages. It's really do for us. I'm thankful to all of you, our viewers and our listeners who continue the 1000s of you to come and watch this week after week and show up again next week. We'll have an excellent edition of poetry this week. Thanks, Ken. Thank you, Doug. And thanks to everybody