Global Trade This Week – April 12th, 2023
What’s going on in Global Trade this Week? Today Doug Draper of Inland Star Distribution and Trade Geek Pete Mento of Mento LLC cover:
2:42 -IMF Comments on Interest Rates & Stability
9:32 -Generation Z’s Retail Buying Habits
19:50 -Halftime
29:13 -Ali Baba to Split Up
32:12 -ILWU Shut Down Ports of Los Angeles &Long Beach
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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
Hello, everybody, and welcome to a another edition of global trade this week GTW. As we refer to it, I am one of your hosts Doug Draper. This week I'm residing in Denver, Colorado, and my compadre on the other side of the United States is my good friend, Mr. Pete mento. Pete, what's going down in New Hampshire, my friend,
Pete Mento 0:33
Hey, buddy, just hating the government. Everybody else in the state, just, you know, sitting here, doing everything we can to not pay taxes. But I was just explaining tax time is coming. And, you know, as per you you know, sitting here dreading the annual filleting that I will take from the good people at the IRS. You can talk about happier things while I'm sitting on my couch. Probably not the best lighting. I imagine. beaming back windows. It's unfortunate. You can't see beautiful mountain connect or the Amazon, Amazon, the Merrimack River. Yeah, Amazon. Where'd that come from? Me. It is a cloudy, overcast day here. Live for your die as always. Yeah.
Doug Draper 1:28
So were you one of those guys. Whenever a paper was due in college or high school, and you just waited until the last possible moment and just cranked it out over a 24 hour span.
Pete Mento 1:40
Know, if there was a paper that was due I would normally do it. I had the syllabus I would do it weeks in advance. I just hate giving the government money.
Doug Draper 1:51
Everything pivots back to Uncle Sam this time.
Pete Mento 1:54
Yeah. Oh, no. Sometimes Doug, I will wake up in just a tax rage at like three o'clock in the morning like, oh my god withholding. Like, it just happens out of nowhere. I just get so angry. When I when I traveled to other states, and they have sales tax and like, why? Like, why? Why on earth? What is this? Do I need this that bad? Then I've I have intentionally not bought things and said I'll just get it when I get home. Because I hate paying taxes. We have no income tax. We have no sales tax. This is nirvana. As far as I'm concerned, I don't know what's wrong with the rest of this country. Just you know, we don't have a tax problem. We have a spending problem. We spend money on silly stupid things. But that's not what this show is about.
Doug Draper 2:39
No, I was about to say I'm trying to think of a pivot away from that into this week's episode.
Pete Mento 2:44
And the company shut up. Pete Let's get back to trade.
Doug Draper 2:46
Yes, so that I kicked it off. So that means your topic number one.
Pete Mento 2:50
Yeah. Topic number one is funny. Okay, so I am not really not I'm not a ticky tacky guy. I'm not an Instagramer as it were, but I do love the Twitter's. And mostly because it's like it's like quick hits. You know, not a big poster on the Twitter's I do post a lot on LinkedIn, but not really on Twitter. But I do follow a lot of just straight nerd shots. You know, they're just like shots of tequila of financial nerd stuff. One of my favorite things to follow are, are just a big financial organizations, a World Bank, the IMF, because when they do something, they put it on Twitter, before they really put it anywhere else, even their own websites. So today, I was reading the new IMF blog. Because I know a super nerd man. Also the IMF stability paper that came out today. You can go ahead, you can double their new bro, I don't care. But the new stability paper that came out today. But the blog was, for the most part, man like it was the weakest thing ever. It's like the IMF is so worried about saying anything substantial. That they have to water it down. It's like well, don't say anything that can be misconstrued. The last thing we want is the heat coming down on us. So it's like, Hey, listen, interest rates will go down. When inflation comes down, like oh, you don't say in other news, fish smells fishy. Water is wet. You know, but there was one there was one thing about it. There's a couple things in the piece that got my attention. But one of the first things that really got my attention was that they will say that it might actually get lower or as low as pre COVID levels. And if you talk to anybody, most people are saying No, they're not like the the interest rates that we're seeing now, as inflated as they are, you should probably get used to interest rates being a little higher than they were before this latest baking binge of interest rates. Like, it seems like there's almost the tried to get us used to interest rates being a little bit higher. You know, we're not going to get back to that super low, crazy low interest rate that we saw for a long, long time. But they were saying, no, they're probably gonna get lower. So then I read the because dorky, dark dark, I read the stability paper today. And here's what the IMF said, which again, they're not usually the people that say a lot of crazy stuff, Doug. But the economist, the IMF said, because we think there's going to be like, some serious instability and global banking. And we're probably going to see, like, really low interest rates to get people back into buying houses and trying to get money back into markets. And so even the IMF is thinking that the global banks are probably going to have a tough time with it. And a lot of that will be driven by commercial real estate. So even the IMF is like, this could be a two to three year recovery. And we're probably facing a bubble bursting. And, yeah, we could see some ugly. I don't know if I believe it, man. But yeah, yeah, even the IMF is freaking out a little bit, Doug.
Doug Draper 6:35
I think that's some 25 year old kid that's doing their marketing and is asking or encouraging them to put stuff out into the www.com. To stay relevant.
Pete Mento 6:48
Duck, nobody at the IMF is like, under 80. Like, these are, you know, but I'm telling you that like, if we if you and I ever went to the offices of the IMF, like they probably you know, those those protein drinks, they give the elderly and sure, like, I'm pretty sure those are in the coke machines like, like, everybody's on their walkers going from desk to desk. It's like super smart, really accomplished economists and people in the global, you know, global affairs just sitting around stroking their beards, opining they love going to work because they have no social life, like, basically older versions of me these really nice offices somewhere in Geneva.
Doug Draper 7:33
Yeah, so that's, that's why they have the the young buck they're telling them to, to push content out even though there is no meaningful value. But yeah, I don't. You know, I always say I'm this simple kid from Kansas, but I don't see how anybody could allow interest rates to go back to where they were. And that just kind of repositions ourselves, you know, you and I spoke about the the roaring 20s As far as the 2020s versus the 1920s. And I don't see people going that direction and risking the whole fallout that we're experiencing now because of the consumption and the free spend. But I guess that I'm just a kid from Kansas looking at it for face value.
Pete Mento 8:16
Well, Doug, I'm, I'm a kid from Texas in New Hampshire. And what happened at the end of the roaring 20s?
Doug Draper 8:26
What, which, which one is
Pete Mento 8:28
what happened at the end of the wart rolling toward the 1920s?
Doug Draper 8:33
Yeah, a bank collapse. Economy shut
Pete Mento 8:35
down its legs because everybody overspent and overextended themselves. And if it weren't for World War Two, this economy would have crapped itself even worse, I mean, essentially, it took a banking collapse, a restructuring of our entire financial establishment, a global war in America reconstructing itself to a manufacturing juggernaut an export juggernaut. I mean, it was a banking collapse, the financial collapse the stock market collapse, mass unemployment in the in the New Deal that took America to recover. So I don't know, man, I think that people are, are spending money they don't have after spending a whole bunch of money they got from a government that didn't have any money either. So sooner or later, we can't just quantitative ease ourselves out of this problem. And it's getting creepy.
Doug Draper 9:28
Yeah. Yeah. Good Topic. Topic. While speaking a 20 year olds that are pushing buttons for the for the IMF. My first topic is related to Generation Z. This is a little bit off supply chain, but I'm gonna pivot back retail consumer buying habits with Generation Z. Right. So I saw this article and I'm like, I think we can spin this into supply chain. So I'm just gonna throw out a couple of bullet points of what this article has had indicated that I'm going to spin it towards supply chain. So um, To 47 50%. And I think the technolon was 47% said Gen Z is willing to spend 30% More if an immediate service is available, or guaranteed. So that means they're on their couches just doing UberEATS and, and stuff like that. So they're willing to pay more money for for immediate gratification, sustainability and products, companies that believe in sustainability and ESG that we've talked about before p. That is important. So if your product spec is in that realm, the Gen Z's will will follow. Value, personalized products, I couldn't quite figure this one out, because I googled it a few more times. But to me, mass customization is something that would be specific to me whether I've kept thinking of those keychains, at the Walgreens, you went to when you're on vacation with your parents, and you spin it around, and you look for your name. Right. And and I'm sure Pete was right there in the middle, I don't know about Doug's, I couldn't find Doug's a lot. But my point with that is that mass customization for Gen Z is is of importance, political alignment, Gen Z will engage in purchase from companies that have their same political values. And this one kind of struck me on both sides. Initially, I said, Yeah, I get this. And other times, it was surprising that 25% are impulse buys. Right? She means on the couch, and if I can impulse buy this thing and get it in in a matter of minutes. So the one thing that caught my attention, Pete, which really relates to the supply chain piece of it, is that Gen Z is cool. With vintage, retro and used type of merchandise, right? I have a nephew, I don't even remember the name of the website, but he sells all kinds of clothes and, and everything else that they define as vintage, which is crap that you and I pull out of our closet, that all of a sudden is worth five times as much as what you and I purchased it for so so here's the bullets on that piece that I'm getting from the supply chain, ecommerce is here to stay. Now, that's not any forward thinking, a commentary, but it is going to continue to grow. And now it was an accelerator during COVID, I don't think it's going to regress back to 2019 levels, it is going full speed ahead. The one piece that they made mention of is that the creativity that you they said you have to meet the consumer where they hang out, right, and I'm not talking physically, I'm talking virtually. So you're gonna see a lot of engagement, and Tiktok. Twitter, so wherever I am in the moment, on my on my cell phone or whatever. Advertisers, companies are going to be selling their products in that moment, versus a static web page that says click this link, and go here to look at your stuff. So there's going to be more interface with those two. And the big thing on this page, this is the one thing that I want to talk about is finding a returns solution. Right? The fact that Gen Z is interested in buying used items, whether you want to call it vintage for clothing, or used for other things is that I've spoken about this before and and and you have done as well on some of these things is that once a product is in market, never ever, ever let it leave that market, find a way to sell it, repurpose it, donate it, you're just pissing away money trying to get it back to some source of distribution. And so there's going to be some disruptors out there that come up with some pretty creative ways is that once it's in market, do not let it leave, get rid of it, get it off your books, sell it however you see fit. And there's lots lots of strategies. And I would say anybody that's listened to the show that has some extra money, and wants to start a side hustle with me, I got all kinds of ideas, Pete on how you can keep things in market, and also make a quick buck. I don't want to tell them on the public airwaves here in fear of losing my competitive advantage. But that is a big deal. I'm going to continue to hype it probably to the point where I hype drones, but there will be a disrupter that have come up with some great solutions to keep product in market and blow up the concept of returns and the Gen Z's are willing to participate in that and byproducts that fit that fit that that that hole if you will. So anyway, a little bit all over the place on that one Pete But I wanted to bring out Gen Z consumer buying habits and how that relates to supply chain.
Pete Mento 14:45
I don't think it's all over the place at all. First of all, being Gen Z sounds kind of awesome. sitting on the couch, ordering kickass food having it delivered buying crap online. Sounds great. Having everyone sort of agree with you politically. With your social stance on things, just just being always being able to just do whatever is aligned with what you like, and not having to make any trade off. Sounds pretty awesome to me. God bless him. Yeah, I don't think he keep that up. You know, from from my perspective, the the the two things you brought up that really struck a bell with me is the returns beastie man, you want to talk about how big a problem is, when, when such a creative business like ours is still struggling with it on the daily after like a decade. And we can we generally we can come up with some pretty smart ways of dealing with crap. And when we're still just like, oh, you know, after all the things that we've been able to come up with reasons to deal with? Have you have you ever done a return for Amazon at Whole Foods? Doug?
Doug Draper 15:54
No, but I've done a Kohl's.
Pete Mento 15:56
Same idea, right? Like, you know, at a at an Amazon is a little bit different. Because they have a kiosk. And you, you turn up with your with your product, self serve, you do the scan, and they have bags for you to put your crap in. And you scan it, you put the thing in the kiosk, and then it says, Hey, gives you a little sticker says thanks for coming. And then you know, you go buy yourself a $25 Cheesecake or whatever, because your whole foods. But the thing about it, that's that's interesting is there's no human interaction calls. Same thing, you know, super convenient. You go in, you see somebody, it's like, uh, you know, other than waiting in line, it's like a 10. Second. It's really easy. UPS stores, same thing. But the problem with it great customer interaction, wonderful. But like you said, that stuff is still there. And now they've got to figure out, how do we restock it? Do we restock it? What do we do with it? How do we put it in such a way that we can make this thing a moneymaker for us again, and it's man, it's just such a problem. It's just ever happened to you. It's happened to me a couple of times now, where I bought something online, I've gone to execute a return and they've said, Just keep it. Here's your money back. Just keep it. Yeah, it's happened to me a couple of times now.
Doug Draper 17:19
Yeah. Now it's on that model with Cole's beat. And I mean, I don't know why they haven't thought of this. And maybe they have, right so take that product. Like what you described as the customer interface is phenomenal. I agree. 100%, make it super easy. I don't have to get a box or whatever, take the thing in the back, put a new label on it and put it in the corner. As far as a as seen on TV display, Amazon returns and have a whole section and don't even frickin put it in a truck and take it anywhere. Just literally walk it to another part of the store and sell it Whole Foods could do that. I that's what I mean, just keep it in market. And even if you got to sell it, get it off your books, whatever. It's, anyway, I think we're on the same page
Pete Mento 18:02
with that. The other thing I wanted to bring up that you too, that you bring up is the Gen Z. And I don't know what comes out after them, I'm sure that there's there's another, there'll be another generation with Gen X, I would like the worst, you know, but that but that that next that next generation with Gen Xers do Gen Z is doing which is fascinating to watch is this, the whole ecommerce thing is kind of evolving with them. It's, it's, I'm not gonna say it's passed us by because it certainly hasn't, where we're spending bigger than they are. The things that we buy are much bigger. And ecommerce remembers services as well as products. So we're the ones that spend like 10 grand on a vacation to Grand Cayman. So don't forget us. You know, we're the ones that have absolutely no problem paying our American Express Bill for 30 grand on business expenses. So you know, we're still okay. But they're, they're going to be the generation I think that have the biggest impact on supply chains, because they're the ones that are building and creating the expectations that are going to sort of create the models that will build the platform and the foundation for the future of E commerce and supply chain with what they expect, how they want it to react, and all those things that will come with it. So there's is the generation that will ultimately build all those things stuck. And that's why I think they're so important and why we really do need to pay close attention because to what you and I might seem like a I don't want to say unreasonable, but what might seem to be very granular or very microscopic and their desires and approaches. It's just it's, it's honestly what expectations are going to be in the next 30 or 40 or 50 years,
Doug Draper 19:47
ya know, for sure. All right, now comes our favorite part of the show at least half halftime brought to you by CAP logistics. This is where Pete and I get to talk about whatever We want to talk about as crazy as it may sound. But that's the platform that cap gives us and we appreciate that. So Pete, let a rock and roll buddy, how's your halftime looking today?
Pete Mento 20:10
Yeah, my halftime is kind of fun. So there's been a lot made of how Shep paying the president of China bears a passing resemblance to Winnie the Pooh. Not saying that, I believe that, but there are people who do. And amongst the people of Taiwan, it has become a bit of an ongoing choke. And during the recent military activities, where the Chinese very easily quickly and well surrounded the Taiwanese with their Navy, the Taiwanese Air Force not long after, do their own exercises. And someone noticed on the Taiwanese Air Force, that they had a special patch. So anyone who's ever watched Top Gun, or watched you know, iron Eagle, or any, any movie where they show the Air Force, or naval aviators knows that these guys were patches about their units, there were patches about there, there were air groups that that denote the aircraft, Iran or the unit that they're with. And it became very popular seemingly overnight in the past 24 hours stuck, when they noticed that the Taiwanese Air Defense Forces sort of like their first unit. First Response forces had a very interesting patch. And that patch shows a Taiwanese grey bear punching Winnie the Pooh in the face. Oh, okay. And the, you know, the, it's pretty clear, pretty clear what the symbolism is supposed to be. It's Taiwan, punching China in the face. Now, these were done. For these particular pilots, and his scramble on the bottom, and they were done for these particular pilots. And the desire for people to buy them has been massive, and for t shirts has been massive. But the the air wing themselves is not selling them in the air wing themselves is not putting them on T shirts. It is just for them. And they see it as a badge and a mark of honor. But of course, people are already trying to sell them online. So what they're asking us is that people don't buy them. That it's a you know, it's a badge of honor. People are saying you could probably make money and we'd like to support you and all this and they're saying no. So just an interesting story, and an interesting use of symbolism. And have, you know, I want to how Disney would feel about that in the such a pretty cool story. But
Doug Draper 22:48
yeah, it is it is. So my halftime is related to a concert that is about ready to kick off at the end of this week. Coachella. Coachella Coachella depending on how you want to think of it. And it's now a four day Music Festival in the Indio Valley. Out in the desert, right 250,000 People expected this one blew my mind 167 artists, like I don't understand how that mean, it's
Pete Mento 23:21
too many, many stages dug. There's many, many venues where the when
Doug Draper 23:24
I was going through there when I was like, Okay, I'm not going to count them all. I probably recognized three names, right? As far as is bands on their bad bunny is one of them. And I'm probably out of that demographic. But you know, I It's crazy how it's evolved. So 1999 is when it started. It's 20,000 people. And Pearl Jam, which is our our era was just the same type of thing that's going on now with Ticketmaster, trying to stick it to demand. So they started to sell these things offline without Ticketmaster, and that's kind of how Coachella got started. It was 50 bucks a day. And now it's up to 550 for general admission, and it's on the same grounds, where Cesar Chavez and the United Farmworkers fought to use an unionize grape pickers, which I thought was interesting. So good show up. You know, Pete, I got to pat myself on the back or pound my chest a little bit. All of that is entry level. Early Childhood Education. The place you want to be is at the end of the summer, which is Burning Man. Up in the Black Rock Desert. That's, that's where the big boys go to graduate after the Summer Music Fest season. So Coachella. I like it. It's kind of interesting. Never been there. I'm never going to go. But when you're ready for the big leagues, and can play guitar like Eddie Van Halen head to Burning Man. That's the place to be. It is freaking expensive. I will give you that. I don't know if I told you I went there once Pete in 2017 and dropped a ton of money to go there. And I'll tell you a whole nother story on that one, but Coachella. Yeah, that's nice. You want to play guitar like Eddie Van Halen? Why don't you drop into Burning Man in the Black Rock Desert at the end of the summer?
Pete Mento 25:27
Doug, when you said a ton of I was hoping you were gonna say acid. It made this story like so. So much better. I got so much to say about this. So first of all, our youngest son, his girlfriend is going to Coachella. And your she goes to school out your way. She's out in Boulder. And in this is exactly. I know moving the camera everywhere and he is going to be so angry. I don't care. You know, sorority girl and Boulder. Her and all of her blonde friends are all going to go to Coachella. That's all I gotta say. Yeah. Like, that's all I gotta say, man. Like, you know, for me, every girl I ever knew that went to Coachella back in the day. It was just like, how little Can I wear and how much coke can I do for four or five days. For me. It's like all of my rugby buddies. I know that went to Woodstock 90 whatever it was and almost died. Like it's the guys. That all went to the Woodstock and then either almost drowned in mud, or almost got beat to death when wet biscuit played. I am a New Orleans guy. So I love jazz fest, which is three days of a pretty awesome music with hundreds of people playing. But there's a reason why it doesn't get out of control. Reason number one is people in New Orleans know how to handle their party. Reason number two is New Orleans police officers will beat you to death if you step out of line. So they know how to take care of it down there. The other festival that I can't, I just can't say enough good things about man is Ebony. Ebony fast. It's in New Orleans. It is it's urban. They call it urban acts, which is a nice way of saying like r&b and rap. It's it's an Orleans, it's now they do it at at the smoothie center. But it will be everything from like, whatever the most current r&b and hip hop acts are all the way back to like the 80s and 70s. Folks, like you may have Diana Ross one year, and like Jay Z has played there, and Beyonce is played there. And then you might have like, what's left of the Sugar Hill gang. You'll have but it's it's fantastic man like it's, it's fantastic. And it's a whole bunch of days in New Orleans being a pretty I don't want to say integrated city because it's not but just people tend to get along regardless of their ethnic background. It's a lot of fun and always sells out. Everybody wants to play there. So they kind of get their pick of who plays. But again, it's also super expensive. So you kind of want to know somebody who can get you a ticket to go. And that's what bums me out about what we're seeing here is all the things we're talking about. Jazz Fest, Coachella. Bumbershoot, right. They're all they're just so expensive dog. Whereas when we were kids, I remember going to Monster fest, which was Metallica, Guns and Roses, Ozzy Osbourne, great white. Whitesnake, right. I think my ticket was like 30 bucks. Yeah. And it was out in some, you know, some muddy crappy field up in Maine. And we raged all day long and it was the best. So I just wish that people could still go see some great music and have to pay a lot of money for it. That was an important part of being young. I wish these kids could enjoy it still.
Doug Draper 29:09
Yeah, yeah. Cool. All right. We're on the back half of our show. So I think this is you to jump up here.
Pete Mento 29:19
Yep. So a lot has been made in the news recently of Ali Baba, making the decision as a corporation to split themselves up into smaller organizations. Many reasons for this you can speculate what they are but one of the biggest is for some of these businesses to go IPO. And one of the businesses that's gonna go IPO apparently, possibly first, I see the name wrong over and over again. cany cainiao cainiao. When I worked at Wayfair, the company that I actually were formed paper was called castle gate. And not unlike this particular organization, it it's the forwarding arm of of Alibaba. And they've been very successful, extremely successful in what they do. They offer logistics distribution, custom small package service. And just mostly it's the E commerce side of what Alibaba does. And they have been very successful in breaking into markets where Amazon has not. This is the secret sauce of Alibaba, they have been able to find their way, in mainland China, they've been able to find their way in many parts of Asia, find their way in India find their way, all throughout the globe, where Amazon has, at times stumbled, where Amazon has at times found hiccups, and maybe not been as fiscally rewarded, as Ali Baba has. So what they're hoping to do is take this platform and open it up to other companies who want to find that same ecommerce success, and do it as an independent organization, so that people aren't worried that Alibaba is basically just using it to try to take over their business, which I think is pretty smart. And it makes me wonder, will Amazon do the same thing? Will Amazon take their distribution services, take the logistics services, and eventually break it off into another business, so that they can provide those same services for all kinds of other companies who want to use the platform, but worry that Amazon will simply just take their infrastructure, you know, take their supply chain, and go up and offer their own products as part of it. So it'd be fun to watch ducks. Yeah.
Doug Draper 31:29
Well, they kind of did that with AWS. Right. And I think they intentionally use the acronym versus Amazon in there. And I've heard I don't have any specifics on this. But that is incredibly profitable, successful piece of business. So you're, you're spot on. I mean, Amazon is a phenomenal logistics company. And oh, by the way, they happen to sell some stuff. So I don't know if spinning that off is going to basically take away the secret sauce of the whole the whole enchilada there. But if there was another spin off, I could see that would be it, because they definitely have had much success in managing the modern day supply chain.
Pete Mento 32:07
We'll be watching that one pretty closely, and then seeing what happens next.
Doug Draper 32:12
Speaking of modern day supply chains, I know you caught this, and I'm sure a lot of our user or listeners did a little port shutdown last week, with the International Longshore and Warehouse Union, a 24 hour, Hey, guys, we're flexing our muscles here. We're on a contract that expired, gosh, nine months ago. And, you know, we're not the only big entity in town that could threaten a strike, also known as ups. And so I thought it was interesting, I thought the timing was interesting, I think there is some connection to flexing muscles at the port, along with the UPS strike possibilities that we spoke about last last year. And it's, it's funny, because for the last couple of months are like, hey, things have been congested, but it's not anymore. And we don't have any boats off the off the port and plenty of capacity, you know, and that's kind of the sales pitch. And then all of a sudden, this, this wrench got thrown in. So I'm interested to see what's going to happen. But here's the two things. Number one is the the consumer and companies out there, you know, are not going to fall for the banana in the tailpipe a second time because they've already expanded their supply chain to Gulf ports and East Coast ports, Savannah and the likes. So they've already kind of figured it out not in a reactive mode. Now they're fine tuning that supply chain and managing their ocean freight coming in. I so I think it won't be as impactful if if there is extended, we rephrase that, if it's an extended strike, there will be problems. But work stoppage is on again off again, I think won't be as impactful as they have in the past. But here's the thing. He again, my company inland star distribution headquartered in Fresno, California, the breadbasket of the world. The one thing this will impact because all of the ocean containers are no longer centralized, or as many of them in Long Beach and LA is exports. A lot of it in the agriculture industry that thrives on getting containers repositioned overseas, and the amount of money they pay for exports, whether it's grain, powdered milk, almonds, raisins, you name it from that area of the country, they're going to see their export rates increase, because there won't be as many containers in in in in LA and Long Beach. And I was talking to my wife about it, believe it or not, she's like, Oh, well, they'll pass it on to the consumer. Well, the consumer is another entity and another buying group outside of the United States. And so what could happen is they're like, What do you mean almonds are X percent higher now? I think I'll just go buy my almonds from Argentina. I won't buy as many almonds from from California. So I think there's real implications, not necessarily on what you and I spend at the grocery store related to this. But there will be less containers, which will be more expensive. And I believe the agriculture in the farming communities are ones that are going to suffer the most with that, just because the containers are now spread out all over the country. So interesting, unintended consequence, maybe of a more adaptable supply chain, and not having everything centered in in California. So I don't know. That's just my take on it. Looking at it from a high level, what do you think?
Pete Mento 35:35
This one was kind of interesting for me. I tried very hard to. I tried very hard to be open minded last week, Doug. So last Thursday, and Friday, the new starts trickling in that, you know, there's some foolishness going on in the West Coast ports, and you're like, okay, whatever. But you've been hearing that they were upset about lunch breaks. They were really upset about lunch breaks, because they weren't, they were they were unable to stagger their lunch breaks properly. And these guys are like our walls, shake our lunch breaks at once. How's that? How's that? How's that work out for you. And then they're like this, they took all their lunches all off at once. And there was nobody working the port. So it's just like total shutdown, and imports a really big organism. So you just can't like, once everything stops, it doesn't just like start up again. It takes a while to get everything moving again. So then the the Friday to Saturday later. It's kind of what everyone everyone's saying to themselves today. Just kind of like, what's the word the kids are doing today? The sort of the slow quitting? What's it called? Quiet, quiet, quiet, quitting, did the labor union just sort of quiet quid on Good Friday, they just do that. And there wasn't anything official, right? There wasn't like a note, everyone passed each other and study hall like, Hey, don't come in tomorrow. But they they basically did sort of like the blue flu, where they all said to one another, I'm taking Friday off, I have the right to take Friday off. Good Friday is a floating holiday, doing it. And they use the legal means the contractual means to do that. And then people didn't come into the backups. And they were unable to actually keep the port moving efficiently, did it on Saturday as well. And they were able to do a work slowdown, without making it officially a work slowdown. And it really, even though there wasn't a lot of wasn't a lot of cargo, you know, really threw a wrench in everything. And that's the part that got my attention. That seems to get lost in all this. There wasn't a lot of freight. You know, they they only asked so many people to come in, because that's how many they needed to work the port. And they didn't need to tell that many people to just, you know, stay home and play Tetris. Because it didn't take a whole lot to screw everything up. I don't think that the Port of Long Beach in management understands just how little you've got to turn the dial down right now. Absolutely. Turn this into a goat rodeo in that port. And not a lot is coming in because it's all going these coasts going to Gulf ports. So there's no contract, they're working without one. And they could do some trick fuckery most foul if they wanted to on the west coast to make this thing really nasty. So it's not in anyone's best interest right now to keep this going. But I think that we saw the first salvo we saw the first salvo. And I think it's going to keep going like I think I think that this kind of behavior, it's going to make management dig their heels in even harder, because they don't have anything to lose. I think we're gonna see a protracted, it's going to keep the contract talks going even longer.
Doug Draper 39:04
Never thought of that. That's bad. I don't I can't believe I'm about to say this. But that's why you and I are on our soapbox. I think you just blamed the porch strike on Jesus Christ.
Pete Mento 39:17
Oh, never. No, it's not. It's not Jesus's fault. No, no, it's the I tried to explain to someone the other day about why are they? Why haven't they just come to a decision already, they're never going to be in a better position. Or look at my lifetime. They need to negotiate right? So they're gonna make it hurt. They're gonna they're gonna get what they have to get out of this thing. You know, when you talked about the UPS strike a minute ago, same thing, man. Like they need to get it while they can. There's some sympathy right now for both these organizations.
Doug Draper 39:52
That is there is sympathy out there.
Pete Mento 39:53
So with all that that's the that's it for this week's edition of global trade this week brought to you My good friends at CAP logistics. And we think as always we thank all of you for joining us for listening to us for watching us. Like thank Keenan for being back there in his tree house playing rounds of rounds of music GoldieBlox Roblox whatever they call it, I guess, plan these days. But as always to learn more about CAP logistics check out their website at cap logistics.com. Doug's Good to see Troy back up again. So good to see you as well. And we can't wait to see you again next week for another edition of global trade this week, everybody Excellent. Thanks.