Global Trade This Week – Episode 134

  • Keenan Brugh 0:00

    You're watching Global Trade This Week with Pete Mento and Doug Draper.

    Doug Draper 0:10

    Hello, everyone, and welcome to a nother edition of global trade this week. I'm Doug Draper. I'm one of the hosts that's on the show. And Pete is on assignment quote unquote. And so we get to have Keenan jump on this week. And it's always great topics and great to have you, Dylan key in. So what's going on, man? How you doing?

    Keenan Brugh 0:33

    Doing well, today? Happy to fill in. And I don't know if he mentioned it already. But we'll have to get the breakdown of his own assignment when Pete comes back. Looking forward to that. Yeah, I find myself not traveling. I'm here in Colorado. How about you? Where are you today?

    Doug Draper 0:50

    Yeah, well, when you see a chair behind me, right, usually I'm in a little cubicle doing this thing from Denver. But today, I'm in the great city of Fresno, California. And I went down to LA yesterday, it's about a three and a half hour drive to things I'd never driven over Raton Pass, which is the past that basically separates, you know, Fresno and de la. So that was pretty crazy. It's not as exact pass like people would expect them in Colorado, but up and over and in the rain. It was a little funky. So here's my assessment of all the rain, right national news. It's a big market. And for you and I it was raining, but it wasn't like crazy rain. It was just constant and inconsistent. So not that big of a deal. But when you jump on a six, seven lane highway in Los Angeles with traffic and trucks, the splashback is what was was crazy. I was driving at night, and it was a little nutty. So yeah, the rain was down there. It wasn't wasn't crazy. But highways. Yeah, I'll check that box. Man. That was a little bit. A little sketchy. Yeah,

    Keenan Brugh 1:57

    I can believe it on those roads. And I haven't been following the story too closely. But I've been hearing about flooding. So even if it's been light rain over maybe a big area consistently. Is that adding up and flooding and causing damage? Have you seen or really looked into it?

    Doug Draper 2:12

    Yeah, it's you know, it's all the hill flights and stuff that's up and I don't know, the LA area very well. But it's up north Delaware and you know, north of UCLA and those types of areas where it's steep. And there's beautiful homes that are on the sides of cliffs. I think that's those are what's what's doing it. But you know what I'm hanging out in Carson, California, which is just next to content, and it's full of warehouses and trucks. So other than some right on the roads, no big deal.

    Keenan Brugh 2:40

    Everyone going out on the roads be safe, especially in the rain.

    Doug Draper 2:45

    Cool. All right. Well, we got some great topics today, Keenan, and I think we decided you'll lead it off and a combo halftime that we'll talk about. So let's get this party started. Great.

    Keenan Brugh 2:56

    Well, let's try something new here today and share my screen. Something I wanted to bring to the table is visualization of some of the world's shipping lanes. So this is a story reported on by visual capitalists, they provide some great insights, you can log in and check out their website and or get their emails. But this story, they're actually citing someone on Twitter called Python maps. And Python is an incredibly useful programming language that has a lot of scientific and industry type users because of its ease in learning how to use it compared to, you know, lower level assembly and those types of programming languages. So a lot of scientists use it. And then there's a lot of packages. So people use it for GIS geospatial type intelligence work here. And so this isn't super up to date. It's like a couple years old. But it's definitely interesting to see the choke points of where these lands kind of converge around and really form these areas of high traffic. So some of the ones we've been talking about for a while with various things in the Middle East, you can see the obvious separation there. And how important that is connecting Europe and America to the Middle East and India and this whole area in Asia. But yeah, I wanted to go through some of these we probably know pretty well. But then some of them are also maybe less well known. So Panama definitely know and cover the Straits of Malacca. I don't know that I hear or read about that all the time. I'm sure Pete would have some more stories about some of these other ones the Danish straits the Suez Canal, we cover a lot very striking. Yeah. strait of Hormuz the English Channel famous Yeah, and yeah, so just wanted to share that it's a good visual capitalist is a good follow, and also the pull up his Twitter here.

    Doug Draper 5:13

    Yeah, like that, that first one with a global perspective is is really solid, it just I guess individual validates, you know a couple of the key arteries that impacted global trade for sure. Let me

    Keenan Brugh 5:25

    share my screen real quick. So you can see they have quite a few libraries for GIS, I've only played with a couple of these, I've done a lot more of these data science type. But just to understand how people are making some of these charts with some of the industry data, this is a powerful resource to do it. And if you just like to watch, you can look at visual capitalist or follow Python maps. This accounts have been around for three years, it looks like they just celebrated their anniversary with the topic of Rome. And not everyone thinks about Rome all the time, but some people think about it quite frequently. And I guess the first map that they had posted was a recreation of all the roads that the Romans built within the Europe and North African Mediterranean levant area, and turn that into kind of a vector image. And then you can kind of see, depending on the dataset, they can do population densities, sometimes this account makes them or sometimes they'll just share other cool maps. I'm a big fan of maps, I like visual representations of data. So one of the look at those streets, and then also share this Python maps and visual capitalist as a resource for you and our followers. Cool.

    Doug Draper 6:35

    So my question to you, Keenan, are you getting paid to hype up those those sites there? I want to know

    Keenan Brugh 6:43

    these are, these are not I'm going to be including the links just to help spread the love, I find value out of these resources and wanted to connect our audience to them. And know this random Twitter account is also not paying me. Conflicts of interest, just just enjoyment of content.

    Doug Draper 7:00

    Yeah, agree. Great. Well, a couple of comments I'll make on that with with the canals. And we've talked about this, and it's not, you know, new new information, but the Panama and the Suez, right, I was trying to say okay, well, those two are really in a in a state of flux right now, obviously. So Panama is that they've had 40% less rain in the fourth quarter than they normally do. That's the rainy season and the interest in that given rain. And it's the driest it's been in 70 years. And the Panama Canal has been around since 1914. I think so You know, it's been around for 100 years. And this is the driest has been in 70. So Panama is challenged with the large vessels moving through there, they're being queued up, and things are moving slower, obviously Suez and the political instability going on over there. So then I was like, Okay, what else is out there as far as canals, the third busiest canal is the great canal in China. It's incredibly old. And if you get a picture of it, it's more of people on gondola boats, you know, pushing things, and that is basically moving product within intra China. And then there's the Corinth Canal, which connects Corinthian golf with the Ionian Sea, let's just say it's not a very popular or very busy trading lane. So the really those two are incredibly impactful, right. And there's two things that are coming out. Number one, people are starting to say that this could impact fourth quarter in the holiday season, as you know that the volume start coming in middle to end of summer. And although that still five, six months out, it's going to happen sooner than later. So people are starting to say, Hey, what's going to happen in q4. And the other piece is that Mexico is starting to hype, an infrastructure project that would use rail through Mexico to bypass the Panama Canal and to on to peck I think as it ramps it to on to peck, it's basically a you know, a rail where you would unload, put the container on the rail and then reload it. So sounds good. But they're still looking for investors, which means they don't even have the money yet to really get into it and start moving forward. And then you have to have two vessels, one to unload and one to reload, which is you know, somewhat not realistic. So it's nice to know there's some creativity out there. But the big picture on this one Keenan is that those are two of the largest are two of the largest on global trade, and they're a mess right now. And I think we're gonna see ripple effects for a long time. We've spoken about that. But I think it'd be an underscore, the longer that those two are in our state of flux. So it'll be very interesting. The fact that it could impact that queue. Before and the holiday season is very interesting. And before that is back to school. So so we'll see, we'll see what's going to transpire.

    Keenan Brugh 10:08

    Absolutely, they are key. And these current crises and influences of sorts probably is driving more of that interest in what could be some alternatives. But to your point, those aren't going to be in place tomorrow and or even next year. Those are longer term type plans. That wouldn't offer relief for shippers here and now, but is interesting to see and keep an eye on in the long run. It's something I wanted to add on to the topic of Panama. Let me share my screen. Another piece I saw this week from visual capitalists, I cannot pay but do check them out, if you like different visualizations, rather than them just sharing a random Twitter account. This is the type of work that they produce various different types of infographics on all sorts of economic issues. But the economy is very closely tied to shipping. So there is quite a bit of good content there. But as you can see it kind of breaking down a lot of containers going through also a lot of dry bulk. I know that's something we've mentioned, going through the Panama Canal, soybeans and various agricultural goods, which, you know, we didn't have as much agricultural exports in North America kind of in going along with the lack of rain down in the Panama Canal region. But that could become more and more of a problem. What if North America has a bigger production year this year, and the Panama hasn't caught up on the rain? They've already passed their rainy season, as you've mentioned, that affects a lot of cars. It affects a lot of natural gas and chemicals. It affects a lot of things. So there's not going to be a new rail canal of sorts tomorrow. That is an interesting projects I hadn't heard of we'll keep an eye on that for the longer term. But in the meantime, people still have to move things. Yeah,

    Doug Draper 11:55

    it's just not Fendi handbags rolling through the Panama Canal, right. I mean, the vast majority, raw materials agriculture, that indirectly impact us. So cool. All right. Well, I gotta give a shout out to you and cap logistics. Kenan, you bring this show to light and obviously, kind of sponsor, if you will, the halftime that Pete and I usually do, and I think this go around. We're going to kind of tag team something that's very relevant. It's about to hit us here in a couple of days. And I'm not talking about Mardi Gras. I'm talking about Chinese New Year. And I'm not even sure if we're allowed to say that anymore. Kenan as far as Chinese New Year I think it's just the new year the Lunar New Year

    Keenan Brugh 12:39

    a Lunar New Year. Yes. Well, there is the Chinese New Year I believe, I think it's also celebrated by many other countries in the region. So probably Lunar New Year is most encompassing of the effects that we see not only are they celebrating, but as most of our listeners know that also impacts manufacturing and shipping I'm not sure if you're currently working with China on anything but I've definitely noticed communications with people in China have already started to drop off even though we're still days ahead people begin traveling to join their family and friends for kind of a multi day long period. We even had suppliers share like mooncakes and different types of things during this time period. So happy to help see happy to see them celebrating though that does turn off manufacturing for a little while.

    Doug Draper 13:27

    Yeah, yeah. Crazy. So this year right? is the year of the dragon right you got pigs and horses and stuff but this is the dragon and and from what I've read is that there's a couple things one year the dragon is kind of like the badass year right it's the one to to move forward and and there's also two colors that associated with it silver and gold. So if it's a dragon year with silver and gold, which is what's about to happen, then it's going to be a pretty robust year so Keenan if there's any decisions that you've been thinking about any big life changes, or things that you want to venture into the year of the dragon is the year to do it so I think there's going to be a lot of a lot of positive things coming out of this so as far as me personally all of my craziness is behind me with relocating the steamboat and and all that kind of stuff but Keenan if you are about ready think of some life changes the year the dragon is the way to do it, man. That's a kick ass year so I don't know what are your thoughts on year the dragon?

    Keenan Brugh 14:32

    Excellent. I am excited about 2020 for the year the dragon is ostensibly the coolest I'm not sure if I know all the Chinese zodiac or Lunar New Year type Zodiac characters, but some of them are like rats and different things. So dragons very cool. I am actually have the dragon sign based on my birth year so you know extra power my way to make the most of it this year. Definitely excited about the year the drag. Cool Well, we'll

    Doug Draper 15:00

    have to take that mindset and see if there's some cool stuff we can do here with the show and make it more engaging. You threw some, some some charts up there from visual visualization. So let's get creative. So my commitment candidate, let's get some creativity. Now I'm not asking you to do it. I'm saying collectively you meet Pete. Absolutely. Let's try something new with global trade. 2024.

    Keenan Brugh 15:22

    Let's do it. Absolutely. Cool.

    Doug Draper 15:24

    All right. Well, Keenan, again, thanks to cap logistics for, for making that happen in our audience out there, visit cap logistics.com. We'll take care of you on your on your supply chain needs. So alright, man, I think you're up for the second topic here. That's yeah, that's right. I'll let you start off.

    Keenan Brugh 15:42

    Sounds good, I will go ahead and share my screen again, second topic wanted to look into outlooks on us clean energy. So again, looking at visual capitalists today, they made this cool infographic all about the different sources and the percentage change of what's going on here. So of our clean energy, most of it is in wind power, but that's seeing more and more marginal increases 5%, as opposed to 40 within solar rapidly catching up. Probably overtaking, who knows. But again, both of those are kind of while the sun is shining, or while the wind is blowing, and that is probably explaining this down here to the left the plus 82% on gigawatts of battery storage. So my interpretation is that this is grid level storage so that you're able to harness and capture the sun energy and wind energy when it's available and in surplus and then make it available for loads elsewhere in the time spectrum. One disappointing part on this, to me, at least I think, is the nuclear aspect here. Doesn't seem like it's growing very much. And when I see nuclear in the news, it's usually a plant is closing or plant was about to close and they're going to sunset it for an extra 18 months or something just to try to keep it going. But that is something I see and wish there'd be more of I might also post things this link in here. Subjects zero science here has a new video on thorium. I may have mentioned thorium with Peter you in the past, but this video is a is a good update on what the concept is as well as why it hasn't quite taken off yet. And or what are some of the challenges coming up. And one of the big ones they mentioned is public perception. Nuclear definitely has a PR problem. Obviously, people are against nuclear proliferation. But that also impedes some of the small modular nuclear reactors, which are now gaining some steam, as well as some new fuel types like this whole thorium cycle. That makes it a little challenging. Yeah, so that stack of papers, this was all the paperwork that was needed for the small modular nuclear reactors, let alone switching the fuel cycle and doing all that sort of stuff. So yeah, challenges to overcome there, but is important if we're going to be using clean energy and having cheap, available energy for countries around the world, not only the Western world, and the North American region like we are, but also in India. And in China. I know this has been an area where there's also policy impacts. I'm not 100% up to date on both of these, but quick stories kind of related. There's been some talk this week of whether intentionally or not, coal exports are higher than ever, really. And a lot of that is going to India, India's making quite a few coal burning plants. And then there's also export bans and different things on liquid natural gas, liquefied natural gas LNG that has been increasingly an export of US production and in increasing need over in Europe as a country's need to heat themselves and have cheap, affordable electricity. And there's not necessarily the friendly relations or even pipelines in existence now, between Russia and Europe. So all these things kind of have an interplay. They obviously impact transportation. So wanted to give a quick update as a lot of companies are putting together their sustainability efforts, looking at the numbers trying to move in the right direction that is going on. And I guess in closing here, kind of on that topic, cap is proud to announce we will have our last phase of solar panels installed and operational this week, on Friday, so we will be able to use solar power and battery power for our own operations 24/7 And then we're making an additional 100% available to the community surrounding us in Denver. So trying to make the accessibility of clean energy more widely available because in a lot of cases, it is more expensive and so people need both clean and affordable electricity. Yeah,

    Doug Draper 20:02

    nice. Well get off the grid man can That's right. That's

    Keenan Brugh 20:06

    right. That way cap is also up and running even when the grid goes down, because sometimes we need to help get the grid backup.

    Doug Draper 20:12

    Yeah, yeah. So one comment on yours. And then that dovetails into my second topic number one, the nuclear piece. You know, the, you mentioned perception, right. So when you hear nuclear people think of nuclear bomb, which means war, people think of Three Mile Island, which happened, I think that was in the 70s. Right, when I was just barely alive. That was negative, and then Chernobyl, right? So you have all these perceptions that are still taking a lot of time to

    Keenan Brugh 20:43

    ruin Fukushima that's even more recent to Oh, yeah, yep. Yeah. Japan crazy.

    Doug Draper 20:49

    So it's just, you know, you only hear about the negative and not the positive. But you know, those are horrific situations that certainly transpired. But, you know, there's so much potential there. It's just of any of those energies, it's wind is gentle sun warms us, nuclear is bombs, nuclear is melt down nuclear is, you know, is, is a perception that needs to be changed. I don't know mean, that's got to be a massive campaign to try to change that. It's interesting, but

    Keenan Brugh 21:18

    I need some rebranding as well as getting through the hurdles. It is complicated science, obviously, complicated business. The video also discusses that there's maybe some resistance to change where there's a current way of doing business with uranium and the regulatory regulatory environment is all kind of crafted around that. And that isn't really friendly to a brand new fuel cycle like thorium, which, I think some of the benefits they described as much more abundant, but then also maybe less capable of making bombs. I don't know if that's completely true, you could probably still do some dirty type of situation, but maybe not the like, high yield nuclear weapons that we had seen in the Cold War, but you're right, maybe it needs a totally new rebranding new category, not called nuclear but something else entirely.

    Doug Draper 22:06

    Something something like an admission impossible stops need needs to stop having their storylines against plutonium that's being being being stolen. So anyway, it's not. So you know, my last topic is related to the battery metal thing that you had mentioned. And my take is the electric vehicle piece of it. And Keenan You better watch out because the Chinese are coming to eat Elon Musk's lunch, right. I used a different term when I was talking to you earlier that would be inappropriate for this show. But one of the largest, if not the largest, Evie manufacturer, b y d BYD is in China, and they are ramping up production and one of the unique things that happened with their development, Kenan is adjacent technologies that they were working on. So the founder and the team that kind of merged BYD is number one, they worked on cell phone batteries. So they've had, you know, legacy business with batteries. And then there was a an auto company that was just making automobiles, which was legacy. So rather than say, we're going to make an Eevee vehicle, they had worked with batteries, and cars, and now they're merging them together, like your chocolates and my peanut butter or your peanut butters and my chocolate. But they are they are taking this the world by storm with their EVs, and they are starting to export them all over the world, and it's gotten so prolific with the demand of their EVs. Kenan is that they are starting to reconfigure and charter their own railroads, right. So roll on roll off, that's a type of vessel where you'll see all these cars literally drive on Park and then they take them overseas and put them on the vessel. So you know, you have the keys and the and the Toyotas Honda's Subarus of the world. They already have contracts with all the railroads. It's a unique piece of equipment. And so with BYD coming in the market, there's just no equipment for them to move their product, and is a huge demand. And so they are essentially saying we're gonna go vertical, we're just going to get our own boats and our own row rows, and we're going to retrofit them, we're going to take existing vessels, and we're going to retro them to row rows, and we're going to just create our own. So I think my point there is that the Eevee technology through adjacent business units, the cell phone batteries, and then cars are being fused together. And I think a lot of our listeners are going to hear those three letters. BYD a lot more in the upcoming months and I don't know if they're gonna come and eat Tesla's lunch, but I guarantee on a global perspective, they're gonna start taking market share, and you're gonna learn a lot about them. So they're embracing that bad Technology for sure.

    Keenan Brugh 25:02

    Great story. I have heard of BYD I hadn't heard of that news of them now starting to export. I was just searching around and saw this. There's an actual picture of that row row there in the background, fully branded BYD. And it sounds like they're taking it to India, they're taking it to the Netherlands and Germany. So they're finding a way to get their product out. So, yeah, I've often thought of China as a importer of cars from different places, including Tesla. But when I was there, though, I also saw lots of Buicks and those types of American cars as well as lots of Mercedes and those European cars, but now it looks like China is becoming more like Japan and producing and exporting BYD cars are not just for the Chinese anymore. Yeah, yeah. We'll be shipping around. So we'll keep an eye on that. Very, very interesting. Yeah, Tech is a big piece for vehicles or the grid. Yeah, major breakthroughs and or just economics of them who can make them cost effective? It's gonna be a big question here. Yeah,

    Doug Draper 26:07

    yeah. People drive electric vehicles outside of the US, right. It's a big, big, gigantic market. So I think it would be important for our listeners to keep those initials in the back of your mind. So I think with that one Keenum, we're going to wrap this show up, right. I think that's it for global trade this week, I want to first off thank our listeners for engaging. We do appreciate that I know we post on LinkedIn, and then you can, you know, hear or listen to the show on on all the podcast channels, if you will. And I want to thank you for, for filling in. I think Pete I don't know. We'll give him his take. But I think he'll give it a an A on on the show. So thanks again for that. And then finally, thanks to cap logistics for making it all come together. I know you push the buttons behind the scene, but caps also involved for giving us this platform. So as I say on my post Namaste. Thank you very much. So anything else to add Pete before I'm sorry, Keenan, before we, before we jump

    Keenan Brugh 27:05

    off, appreciate your optimism of how we did I imagined Pete will have some constructive feedback, not criticism, constructive feedback on how we did our topics and our performance, but it will be interested to hear his take and an update next week on his assignment. Oh,

    Doug Draper 27:24

    awesome. All right. Well, I think that's it. appreciate everybody listening again and we'll talk to you later my friend. Talk soon. Thanks.

    Transcribed by https://otter.ai

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