Global Trade This Week – December 6th, 2022
What’s going on in Global Trade this Week? On this penultimate episode of 2022, Doug Draper and Pete Mento cover some of the many logistics predictions they got right this year, such as:
2:24 -Ocean Freight Costs & Congestion
3:48 -Food Delivery Services Did Flourish & Expand
6:44 -So Far, No Port Strike
7:56 -Not as much Pop Up Logisitcs as Predicted
10:25 -Halftime
20:04 -Major Port Closures Did Happen More & More
20:54 -Electrification of the Final Mile
23:27 -US China Relations Did Become More Tense
24:07 -Republicans Did Not Take Both House and Senate in Midterms
24:45 - Logistics as a Subscription Service? Didn’t happen.
26:10 - Russia DID Invade Ukraine Q1 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
Welcome to Global Trade this week. My name is Doug Draper. I'm one of your co hosts. And we have one heck of a show for you today, we're going to take a peek back at what Pete and I predicted in 2021. So one year ago, we said, here's what's going to happen in 2022. And we got the guts to come out there and say what we got right, and what we got wrong. And we're gonna lay it on the line. So my other co host, on the other side of the country is the one and only Mr. Pete mento. Pete, what's going on?
Pete Mento 0:47
Doug, how are you, buddy? I am I'm coming to you. Live from beautiful Boca Raton, Florida, at the transport asset protection Association's annual meeting, and and I've never been around so many cops in my entire life. So it's good. Yeah, it's definitely. It's definitely terrifying.
Doug Draper 1:10
Nice. Well, that's good to clarify, because I was concerned that you would change the decor of your home because it pretty much looks like a hotel room behind you with sconces and pretty crazy artwork. So glad for that clarification. So our audience is now like, what the hell's going on with a mental household?
Pete Mento 1:30
Yeah, but yeah, you know, I don't think I've ever been in a hotel room and said, I need my house to look like this. And that is certainly the case for the Marriott Boca Raton.
Doug Draper 1:40
Mm hmm. Yeah, yeah. Well, maybe you're just not staying at the High Roller spots. That's for that's for another conversation offline. Yeah.
Unknown Speaker 1:50
Yeah. All right.
Doug Draper 1:51
Cool. Well, before we jump into it, just want to make sure everybody remembers the cap Logistics is the reason we're here. They're the ones that are allowing us this platform. And I'm super stoked about this show. Because truly, Pete, we're gonna go back and say, I've got this right. Got that right, have the little bragging rights. And then we certainly have some things that we missed on. So we will be both sides of the coin. Will will do it. So I don't know, man, we got two or I got three or four each or so. So I don't know you want to go first?
Pete Mento 2:23
Yeah, you know, the first one that's on the list, I think is definitely worth addressing first. And that was a prediction that we would probably see through most of the year congestion being an issue and rates as well. And I'm not sure how to greatest on this one. Because if I recall correctly, we had said that at some point in this year, we would see rates begin to correct but that congestion and and rate pressure would would probably go through at least a little Lunar New Year. So I don't want to give us I don't want to give us the wind on this. I don't want to give us the W but I don't want to give us an L this feels like this feels like an overtime loss and a shoot out. Right. Like, East Coast rates are still nuts. West Coast rates have gone through the floor. And congestion is still an issue on the East Coast. And it was an issue all the way through most of the summer. So I'm gonna give us c plus on this one, maybe b minus because we were pretty close on that one. And I think one of the things that we mentioned that most didn't was all the equipment shortages, and how that was going to be a problem between chasis and then, you know, moving things around with trucks and such. So yeah, that's, that's all great. But um, you know,
Doug Draper 3:36
you know, my mantra was D for diploma. That's pretty much kind of how I went through college. So I will take a c plus or or B minus all day long, my friend.
Pete Mento 3:46
Yeah. Yeah. And that, you know, that leads us to the next one, which I did some research before a call today, and you definitely got this one. Right. So food delivery services,
Doug Draper 4:00
just Yes. Yeah. If you
Pete Mento 4:03
even in a down economy where people weren't spending as much money, it's pretty nuts, the kind of cash these things made over the course the past few years.
Doug Draper 4:13
Yeah, for sure. Well, that was that's a good setup. So we'll we'll do the one two punch. But yeah, so we said that the food delivery services will flourish, and they'll expand beyond just servicing food, and there would be some some, some acquisitions. So yeah, so the final mile infrastructure I said was established, making those deliveries so this one is a hell yes, this happened. And even to the point where I haven't seen him in a while Pete but there was some commercials that Uber had put out there where there's a grocery bag and people are pulling out all kinds of stuff that's not food related to validate that they can do other things. And there's been partnerships with companies like Ulta Beauty, supply and things of that nature. So Yeah, there's only so many times people wanted to order food into their home, we talked about the concept of goods and services driving the economy. People wanted to get out and, and spend money and see people and, and go to restaurants. So they had to pivot. It was inevitable. And I think it will continue to morph and evolve. I don't have a prediction on that. We'll do the prediction show. Next week, but anyway, the point of this show is that was the call, we got that one, right. And I would say it's an A plus.
Pete Mento 5:34
Yeah, I'm gonna give you an even bigger Pat, on the back on this one. If you look at where Uber and Uber Eats, took it beyond, I guess it would be restaurant delivery, you know, they have a whole section now, with companies like go puff, where you're getting grocery delivery directly to your home, and it's being done many times within 15 minutes. And they're using convenience stores, grocery stores. And it's, it's been wildly effective. I've used it, you know, I'll admit it. I've been fired up to have some cereal or something. My low carb crappy tasting cereal, and there's no almond milk, like so. And then I you know, I go on, I go on this and I order it in 15 minutes later, it's at the house. So yeah, nice. I'll tell you. I was not sure where you were going with that one last year. And I thought that given where the economy was going that you were gonna get that wrong. So I'm getting some crow on that. And I gotta give you credit. You got you got that one, right. Yeah, thank
Doug Draper 6:42
you very much.
Pete Mento 6:43
You're welcome. Number three, we were spot on to this one. So far. No port strike now. Yet, right. Like, I can't believe we're recording this on December the sixth. And we still haven't figured this out, man. Like, we were talking about this basically the same time last year. You're ready to get ready. And here we are a year later. And they still haven't figured this mess out. But hey, you know what, unless there's a port strike between now and the 31st. Looks like we got this one. Right.
Doug Draper 7:19
Yeah, agreed. 100%. Right. This is 2022 prediction. So yeah, I would say this is teetering on an A plus, because we have, what? 2030 days, 20 days left and 24 days, whatever the math is. So
Pete Mento 7:34
yeah, I'm taking the W I'm not I'm not going to I'm not going to feel bad about about rounded up on that one. Could you afford strike? Absolutely. Have we come dangerously close a few times, according to a lot of media outlets, outlets. Yeah. But it hasn't happened yet. But so I'm taking the W.
Unknown Speaker 7:54
Very good.
Pete Mento 7:56
So next is pop up logistics, which was one of yours.
Doug Draper 8:00
Yeah. Yeah. And, you know, we said the beginning we'll we'll take we'll take the wins and and we'll take the losses. So this one didn't transpire. So concept of, you know, when, when the infrastructure was jam packed, I thought that there would be more pop up ports, obviously, you're not going to build a port, but some, excuse me, temporary infrastructure. Use me outside of, you know, an active port, even pop up stores related to e commerce into densely populated markets. So I think it's still worth the conversation, I still think there's some value. But the key thing here is that it it has to be SKU specific has to be a high turn inventory market. And it's really got to hit a sweet spot where you can come in and do like a marketing blast. You know, I think maybe last year I use san francisco, set up something outside of San Fran Blitz, the, you know, that whole metro area, cell controlled number of SKUs. And just blast stuff out. I liked the idea. I still think there's some legs and Yeah, that happens a little bit. But I will say that I missed the mark on this one, because I thought with the port congestion, that there would be some pretty creative pop ups that would help support the congestion and that from my my perspective, it didn't happen. So I will say that I missed on that one.
Pete Mento 9:27
It was not from a lack of trying, though, Doug, I think this was an idea that failed an execution. I think there was a lot, particularly the US government that was looking for ways to do pop up container yards. In pop up chassis yards, I think it really came down to it wasn't from a lack of desire, it really came down to a lack of ability to execute. I wouldn't be too hard on yourself on that when that was that. That should have happened. Particularly like from January through Chinese through Lunar New Year. And then probably made June of last year, that would have helped a lot with congestion issues. I think. I think maybe Pete Buttigieg should have been watching the show and taking some notes. Yes. On that particular particular issue. So I don't know why the halftime buddy Did you? Did you have a halftime ready for today?
Doug Draper 10:18
No, no, I was just gonna power through these. So if you have one and you prep something, go for him, do it.
Pete Mento 10:23
And I do I do. So this is this is what Doug says is everybody's favorite part of the show. I disagree. I think that everyone's favorite part of the show is me and Doug crapping all over Keenan. But this is the halftime brought to you by our good friends at CAP logistics, to learn more about their wonderful services, you can reach out and learn that on cap logistics.com We want to thank them for their tireless support of the show. And thank you for watching. The least you can do is check them out and learn more about the services that they provide at cap logistics.com. So Doug, with Christmas coming. I have a I have an argument, a long standing argument about what is a suitable Christmas dinner. Now, right? This is this is I know it could be regional. I know that this could be traditional, depending on your family. But for me growing up, particularly as a Texan cow, a cow. And it's always cow now it can take the form of a prime rib, Beef Wellington, maybe we're just going to slap some meat on the grill. Who knows? Right? And that's going to be accompanied with a whipped potato of some type. And then 700 million different types of pastries. The my father, being of Italian descent would always make either, you know, stuffed shells, or he would make lasagna. But it was always steak. Now I have friends from New England who do some pretty goofy stuff. That Christmas time. Christmas goose. Right. They do like a big, big, like boiled fish. I have a friend of mine has a lobster bag, which sounds pretty good to me. Like I wouldn't mind. Do a lobster at Christmas time. I have friends that do hams and I would say that the that most of my friends in New England do a turkey. Which to me seems a bit ridiculous because didn't we just do that a few weeks ago? I would I would even go so far as to say that because Americans are so lazy. I bet that between their freezer in their fridge. There's still stuff from Thanksgiving that's leftover in the refrigerator that it didn't meet like some errant cranberry sauce in the corner. So Doug, what do you think is a suitable Thanksgiving dish? Named dish?
Doug Draper 12:59
I mean, Christmas.
Unknown Speaker 13:00
Christmas. Sorry that Thanksgiving? Yeah. Yeah, yeah,
Doug Draper 13:04
well, definitely not Turkey. I think we do. I can't remember. I think it may be. I can't remember. It's a tenderloin for Christmas and a ham for New Year's or a tenderloin for New Year's and a ham for Christmas. But but I'm with you on that one. I think I can't remember. Anyway, we'll be eating one of each. And within a seven day period coming down but agreed turkey. Come on, get out of here. That's crazy.
Pete Mento 13:31
And one of the best Christmases I ever had was on a ship. And the chef was from the Philippines. And we had Chinese food. And it was glorious. We had been important while and we had like fried rice. And it was glorious. It was it was absolutely fantastic. But I've never recreated that. This year, my family will be split up unfortunately at Christmas. And he's going to Minnesota with two of our kids. All this is going to be with his fiance's family and youngest will be with me at home. And that is going to be it's going to be a carnivorous bloodbath of steak at my house like I'm talking. It's going to be like steak tips and steak like it's just going to be a giant mound of dead cow in the interim, it's going to be fantastic. So I apologize up front to all the vegans who watch then, you know, I bet Keenan probably has some sort of, he probably like takes down a deer is probably out like in some loincloth. You know with a knife between his teeth on top of a tree waiting for somebody to walk in anything. He just dives on it, you know? And just takes it down for the holiday feast. It's probably something like that. Yeah,
Doug Draper 14:50
yeah. Well Hey Pete while you're while you're talking, it's not food related. But here I'll throw something out. I was talking with my wife. So the Artemis two things right Artemis went up to hang out at the moon and two things number one, yeah, the Apollo missions, you know, back in the in the late 60s. And Artemis is Apollo sister, I believe. And so that's the reason that the Artemis program had come out. I don't think it was his wife or anything. But there, it's the female version. I think it was his sister. So that's why the Artemis one, Artemis two, etc, etc. That's where that came from.
Pete Mento 15:28
I'm wondering pieces to do that, like, Was it some NASA gender requirement that they had to?
Doug Draper 15:34
Not even that we're gonna go down a wormhole if we speculate on
Pete Mento 15:38
my daughter, so Charlotte, she, she's really into mythology. So I kind of wish that she was around, because she would not just tell you like who Artemis was, she would go into deep, deep detail about exactly right. And it's all mythology Greek, Roman, Egyptian, Native American, Viking Nordic, she just loves it. And we had a bit of an argument over this past weekend, because we went and saw Wakanda forever. And as you know, Doug, unlike yourself, I have a soul with joy in it. And I like comic movies. And I know that I don't. And one of my problems with the kind of forever, which is not a spoiler for anyone, is that one of my favorite characters in the MCU Marvel comic universe is named more. And they just completely reinvented his backstory. They they they completely reinvented his backstory. Here's the thing that works, right? It's an excellent, it's an excellent backstory. And it works. It's still great, but it's not his backstory. So it would be like if we're doing a movie about Napoleon. Okay, but now, work with me. He's Italian. Okay. And he's like, six, five. And he wins at Waterloo. Like, well, let's not Napoleon, but for this film, it is right. So I don't know. So we left the movie and I'm sort of like, barking at my daughter about it. You know? She's hilarious. I liked it is great movie. You know, I love what they did is very emotional. Chadwick Boseman. Dying and also so soon I just I didn't like other messing with, with this character that I grew up loving. You know? Just stop it. He's not real. He's not real. And I said, well, then how would you feel if I said that? You know, Zeus didn't throw lightning bolts. He threw rocks at people. But that's not how it happens. I said, Well, he's just fake. Is anymore. So and then it caused a whole problem then. Yeah. Got it. No, you don't. You're just getting stopped. I'm gonna stuff you in a locker nerd. Stop talking about it. Yeah,
Doug Draper 17:57
I was about to say when are you going to break out the Dungeons and Dragons set? Did you get that when you came home?
Pete Mento 18:02
Don't make fun of it. It's back. Diddy is back in a big way.
Doug Draper 18:07
I think there's a movie coming
Pete Mento 18:09
out. I don't get you man. Like, what do you do for fun other than yell at young people trying to enjoy themselves like
Doug Draper 18:20
don't know. Hey, hold on a second. Hold on a second. Keep it going.
Pete Mento 18:24
Oh, I guess Doug had to go in. This is a first removal trade this week. Everyone. We have a production issue. Doug had to go answer the door. Anyway, so you should definitely if you haven't seen it yet. I highly recommend what kind of forever? I did get. We'd be a part of it. Oh, look at that. Crappy Coloradan whiskey. I would rather that you and Keenan drank that fruit up in a bucket. And I would rather drink what you threw up in the bucket than what's in that bottle of whiskey.
Doug Draper 18:55
On now. Straight hands you can make rash. Beautiful.
Pete Mento 19:00
That's the distillery in Colorado, right? That Correct? Yeah. Oh, it's awful. Yeah, no, come on. No, no, no, no, no. It's like when your buddy says, Hey, listen, I've got this. Grab a brewer and you're like, Oh, okay. Please don't ask me like, Hey, you want to try my beard? You're like, Okay. Pretend that it's good. Because your friend made it. You guys in Colorado all have to pretend that that whiskey is good, because it comes from your state. Rash? Oh,
Doug Draper 19:27
I don't know. Well, we'll have to fight about that.
Pete Mento 19:29
Yeah, I don't know. It's a mystery that drink that. No,
Doug Draper 19:33
I got it on my desk here. I'll put it. You know, it's good. I'm actually transitioning. Pete. The reason that happened is I'm transitioning to a new job next week. I'll talk to everybody about it at a later date. But that was somebody knocking on my door. I thought it was my mom. I was about to say, Mom, I'm doing a podcast. And yeah, just got a bottle of whiskey. So I'm waiting for the steaks to come next. So we'll see.
Pete Mento 19:56
We're very, very excited and proud of you and happy for Doug. So yeah, more than that. Now. next week. All right, so you got it. Next. Next topic will be port closures and disruption because of COVID. And I believe we were spot on on that as well. We did see more of that last year. We're continuing to see supply chain disruptions. We were having one right now. And what's going on in China, we spent a lot of time over the course of the past year discussing it. And you know, that's one of those things, Captain Obvious things. I don't think it took Carnac the Magnificent to have noticed that that was going to happen. But the fact that we put it out there. Yeah, I think he deserves a little bit of respect. So
Doug Draper 20:39
Agreed, agreed. I got all this stuff on my phone. That's why I keep looking down.
Pete Mento 20:43
Oh, same here. He's wondering, yeah,
Doug Draper 20:46
I'm going to do one on electrification. And then we're going to, we're going to save your money shot for the end. But one of the things I talked about was the electrification of the final mile. And I think that it's coming along, it didn't come through as fast as I can. But here's the deal on EVs and electrification, to scale in a commercial environment, you got to drop a lot of assets and a lot of things on the road, right? So to come out and make a splash and say we have two or three vans delivering doesn't push the headline. So I kind of didn't think about that when I made this prediction. That has to be in massive scale. It'll come and you're starting to hear about it. So maybe that prediction was a little premature. The one thing that I did not expect that's really blown up is personal vehicles and electrification, because it's a one to one relationship, you got one person buying one electric vehicle, and the amount of ads and new companies and existing companies rolling out an electric and Evie solution to me has skyrocketed in the last six months. So Evie is still a big topic. I thought it would be more prevalent in the commercial space. But I think it's really taken off on the the personal type of car. So that's it. I don't know that's a split. I can't even get myself a grade or a yes or a no, but
Pete Mento 22:17
I give more credit. Giving yourself yeah, and here's why. Doug. So over the course of the past year, I'm really getting into camera. This is why you can only do it from my laptop, I turned to the giant head. The reason why is because the number of EVs whether it's scooters or bicycles that are being used for final mile. There's tons and tons of scholarly paperwork paper that's been done, about how important that's been in final mile delivery in mostly on the retail side. So whether it's food delivery, convenience delivery, it's happening, Doug, so I'm gonna give you a lot more credit on that because last year was definitely the year we hit a tipping point. Now, it's not Amazon trucks yet. That's coming. It wasn't postal trucks yet. That's coming. But certainly for final mile delivery of retail. I think you were right. So was it an eight plus No, but I'm gonna give you a B plus A minus on that one. Because last time, we're really sad happening.
Doug Draper 23:22
That's why we work well together. Pete, you're my wing man on this.
Pete Mento 23:26
So us Chinese trade relations, and I said it was gonna get frostier, I, I'm going to give us the thumbs up on that one. It's certain things were pretty nasty this year. And it mostly happened because of Taiwan. We did mention that. And then basically the fact that we as a country that as two countries can't stop poking the bear. We'll talk more about my predictions for next year on that. But we're we're hitting a point now where everything that could be done to set us up to maybe finally hit that boiling over point do something about it. We pretty much got. Yeah, so I'm feeling pretty confident that we can get that one spot on. But so what do we got left? Oh, we got two left. Republicans will take the house in the Senate. Nope. They took the house. But they haven't they will not take the Senate. I don't know what was it today
Keenan Brugh 24:18
the
Pete Mento 24:21
special election in Georgia? Yeah, yeah. Who? Even if he wins, yeah, won't matter. So
Doug Draper 24:27
we'll see. Interesting, for sure. So yeah. Let's see what else we got. The one thing Yeah. Now one thing I wanted to talk about because if we talked about stuff that we hit and didn't hit, and then we'll save yours for your one for the end. But I talked about subscription based services, kind of like Netflix, Hulu prime. I said that would morphin and be part of the supply chain world. That was a big mess. That didn't happen and I think in hindsight, the whole supply chain thing is too fluid. And it's too impactful on market conditions impacted. And you can't put a subscription based pricing structure around the fluidity of our industry, right? Say, Hey, I'll charge you X dollars to move this from A to B, whether it's a parcel or something like that. And then you know, the something weird happens in another part of the world, and things just impact and skyrocket. So that's a little naive of me, Pete, think that a subscription based service would would pop out, I think there's something that's there in the future, maybe not as big a scale as I had thought. So it's just our industry is too fluid and impacted by external forces too often. So I will say that one I missed on.
Pete Mento 25:50
I think there's been so much fluidity and chaos, it's hard to get people to buy into a subscription service, when everyone saw rates begin to tank, we were all expecting such a huge change in our market, it makes it difficult to buy into that. Um, that's just as big a part of it as the rest, Doug. Yeah, the last one that we'll mention is kind of the big one. There was a lot of folks that thought I was crazy. We were crazy. When I said that Russia would invade Ukraine in the first quarter of 2022. Russia will invade the Ukraine. And they will do it early on. And it will have a fascinating and almost immediate impact on the cost of natural gas around the world. I was right. I didn't just say that. Russia would invade Ukraine. I said, when if so then I said it would have a dramatic effect on oil and gas and energy markets. So pretty good one?
Doug Draper 26:48
Oh, hell yeah. I mean, are you kidding me? That's like the prediction of the prediction. And I was, at the time not dialed in with the whole potential out there and what was going on between those two countries. And so I was like, that's a pretty bold statement you're talking to you're predicting war. And I didn't think it was going to happen. And it was delayed a little bit. But the fact that you called it and you called it in q1. That's the prediction of the Year Without question. And that's an A plus, with a smiley face on the end of it.
Pete Mento 27:22
I was in March at Mardi Gras. And it happened right, so Marlins and division about to happen and it was like a hate this hate that. You're right. I mean, I hate it. There's a war going on. But I hate that I'm gonna have to hear about it. You were right again, about something. Yeah, it's, um,
Doug Draper 27:40
so I'm not going to go through on what was right or wrong. But I think 70% I think by far and away, we call fine right than wrong. We
Pete Mento 27:51
were pretty good this year. And the ones that we were wrong on we came pretty close, but we had some whips. But hey, at least we tried. So that's part of the fun, right? And you got to put some stuff out there and see what happens.
Doug Draper 28:03
And as it is, and we'll do, we'll do the prediction show sometime in the next two weeks. We'll figure all that out with travel schedules and whatnot, so stay tuned for that.
Pete Mento 28:13
I got some crazy ones. Doug makin even give you guys a hint, but I think it's gonna be a wacky 2023 is going to be awfully weird. Powell. So yeah, I mean, one thing I can't predict is I'm going to keep growing my beard long. My daughter said it makes my face look fat. So
Doug Draper 28:31
I don't know. Yeah, I could set you up for that one. I don't think it makes your face look fat.
Pete Mento 28:37
You think my fat face thinks my face?
Doug Draper 28:40
I was. I was about to say your fat face makes your face look fat. But that's too harsh. I apologize. Which is
Pete Mento 28:49
all this wonderful banter and comedy back and forth. You know, leads me to realize that it's yet another fantastic episode for this week of global trade this week. I want to thank everybody for your your comments for watching the show for telling your friends. I was shocked Doug when I was downstairs here but if the tap a conference the number of people in Tampa that watch us every week, oh cool that are in cargo security who really don't directly identify with this area of our business and they've never miss a miss an episode. So thank you for all of you that tell your friends to watch. Keep doing that please. Best co host in the world. Doug. Thank you and congratulations again. Looking forward to hearing more about details about your new game. I want to thank Keenan again for his endless mediocrity behind the booth. Yes, we love you, man. And now think cap logistics again for their unfailing support of us on our show, if they call you for listening, and we'll see you again next week with another wonderful edition of global trade this week. See you buddy.
Doug Draper 29:55
You got it later.