Global Trade This Week – June 12th, 2023
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Keenan Brugh 0:00
You're watching global trade this week with Pete mento and Doug Draper.
Pete Mento 0:10
Welcome to another edition of global trade this week, brought to you by our good friends at CAP logistics. And in case you haven't noticed immediately, I am not joined by my normal co host, Mr. Doug Draper who is as we say on assignment, instead we have wonderkid producer, Keenan bra with this this week. It's always fun when Keenan gets on the microphone, and just proves to everyone including our viewers how much smarter than Doug and I he is. So Keenan, welcome to the show. Very excited to have you my friend.
Keenan Brugh 0:49
Well, thank you very much. It's exciting to be here. I look forward to hearing what Doug has to say from his assignment tours in California. The first topic here has to do with the West Coast. And I bring mostly questions hoping maybe you have some additional insights. But our first topic here today is West Coast woes and denials. So as many of you already know, and if you're a regular listener of the show, we've already been talking about the West Coast ports experiencing work stoppages, not quite an official strike, but definitely some sort of coordination going all the way from Seattle and Oakland and LA. It's a pretty bad situation as far as them just stopping working. And now it's getting to the point where, let's see here, the pm A, this Pacific maritime Association, sent out a tweet this last weekend saying that the International Longshore and Warehouse Union ILWU have shut down cargo operations. Now they're kind of coming back and saying, We haven't actually made a strike PMA is leveraging one side of information to influence the process, quote, unquote, despite what you were hearing from the PMA West Coast ports are open as we continue to work under our expired collective bargaining agreement. So it's something that, you know, we've been through a rush of international logistics, there's already been delays and people shippers are moving their operations away from the West Coast. And now, there's not quite a strike strike going on. Just bringing this up as a topic of discussion. Have you seen anything like this before? Is this uncharted territories? Normally, I'm used to like, hey, we have negotiations going on? These are negotiations with frame controls, and what are we going to call this? And no, we're not striking, but you need to give us more money, because we've been operating without contracts. So what comes to your mind as we're week, or a week and a half into this sort of stuff?
Pete Mento 2:48
Well, you know, the whole deal was, we're not going to, as long as we're negotiating, we're not going to strike. Right? That was the deal. And then it was we're really not negotiating, but we're really not striking. I, there's all these words I want to use that I'm not going to use because they're they're adjectives that don't serve the greater purpose here. And I try to, I try to we try to evolve, avoid politics. So what and the last thing I want to do is be perceived as taking aside here. But what an outside of casual outside observer sees is the, the unions are in a position where they have only a couple of things they can use for leverage, let's be honest. They're the labor. And if they need to get something done, and something's not getting done, you just don't go to work. And the management has very few pieces of leverage to which what's the leverage, right? We hold the contract. If you want things in the contract, we've got to be the ones that put them in the contract and sign it eventually. And then there's a huge piece of leverage over both of them, politics. And it's hard to talk about this without getting into politics, because both sides of these negotiations have a lot to do with politics, both sides of the aisle, as it were. And then there's countless numbers of actors, that also have a lot to do with the outcome, whether it's the drymen, whether it's the ocean carriers, and people like us that work for logistics firms, we all have so much to do with this that also have our connections in the political world. And everyone is putting pressure on these two groups to do something while they put pressure outward politically. And I think what you're seeing here is the fine tuning of what has to be something close to an agreement, where they're getting to something that's really important. And my little birds, which are generally very, very unreliable. So I'm gonna put that up right up front, you know, but I'm hearing the same things for a lot of people. Kenan, which is they're extremely close to an agreement. it, okay, and that there's there's a couple of major things that have to be decided. And those things that have to be decided are big enough that they're they're going to use whatever leverage both sides are to get what they want before something is signed. So I don't know what it would be if it's something about automation, if it's a final decision about, you know, how many people will be involved on every hole? I don't know. I have absolutely no insight into that. But if you read the things that Peter Churchwell put out over the weekend, regarding the impact of slowdown, slowdowns, perceived slowdowns, you know, no one's saying that they slow down, perceived, calling out sick and people not showing up. They're saying we're showing up to work. There is no backlog, the ports are open, the ships are being and then the owners and people that are associated Porter saying, Well, you could have fooled us. Yeah, sure look like one to us. So if you can have a work stoppage, without officially having a work stoppage that appeared to happen. But because the supply chain is in the state that it is now which is slower, more lethargic, I don't think we felt it as sharply as we could have felt, say in the back in the last work stoppage that happened. It's not. And that's that's what I think we're seeing right now.
Keenan Brugh 6:23
And it's interesting, you were mentioning the politics without us, you know, getting into our politics of it. Like you mentioned, there are political aspects to this and people reaching out. It looks like just on Friday, the largest US business group, the US Chamber of Commerce reached out and urging President Biden to get involved and intervene immediately. So I don't know if that would look something similar to what happened with the railroads. Yeah, to your point, without knowing all of the details of what's on the agendas of each side for the negotiations, I'm hoping they actually come to a good agreement. And not just you're not allowed to hold the economy hostage. So kick the can down the road and not really address the underlying problems. So we'll see what Biden and his administration Buttigieg. Anyone else gets involved in what they say, though, hoping for the best because yeah, politics aside, we're all hoping that things move and people are compensated, and things are going in a sustainable direction, rather than making our transportation system weaker over time.
Pete Mento 7:26
You know, getting that, and that's a, something I think we can overlook is I don't think either side really wants Washington to be the arbiter of this. It's, it reminds me of when I was younger, and my cousins, and I would get into a fight. And my grandfather would say, you better sort this out amongst yourselves. Because if if I have to get involved, no one's going to be happy. Yep. And I don't think that either side would would ultimately be very pleased with how this would turn out if DC got got really involved. So we don't want to see that. Well, they collectively don't want to see that happen. I think we as consumers of what they sell, we just want this to end. We want it to end and we want to get back to doing quote unquote, business as usual. I think we want to have some stability in all markets, no matter how big or small they are. We want we want things to be predictable. And right now they're anything but
Keenan Brugh 8:21
absolutely. And that's a great analogy. I could just imagine, you know, you think you're getting the short term win by going to grandpa say, and it's my turn to play with the toy and then grandpa just takes it away or then just you know, comes back and now asserts a little bit more authority over playtime, then you've never really intended that in the beginning. So yeah, great analogy.
Pete Mento 8:40
Grandfather takes the toy and breaks it would have been probably the way he would have looked at it.
Keenan Brugh 8:49
Great Call. What do you have for us today on the first topic?
Pete Mento 8:53
Yeah, Topic number one's a little bit esoteric, but important. This is a business where there's really two types of companies. There are ones who make great money opportunistically, and then there are ones that think more strategically. And the strategic ones, because of the kind of money that we talk about in logistics tend to be larger. You need money to make money in this business. It's a lot like energy. It's a lot like infrastructure. Smaller ones had a hell of a time. The past couple of years were just the being generally victims of circumstance. They can also be winners of circumstance. So you and I could have had an NVOCC license and just gone through my rolodex, if you know what that is.
Keenan Brugh 9:40
I've heard of the term I've never actually seen one.
Pete Mento 9:45
I don't have one anymore. Smart ask before you ask. But you could have gone through my rolodex and just called people for a couple of years and said, I've got some access to containers. Call me if you need them. And then eventually that phone would rang buddy and we would have sold Someone a 40 footer out of China for 20 something 1000 bucks. And we could have made money, you know, and a lot of people that. And hopefully, they save that money. Because you can't really make money that way like you used to, there's still profit to be made margin be made. But the strategic companies now the ones that are bigger are the ones that are about to become bigger, have saved that money. And they're looking, a lot of them are looking at Project 40. The reason for this has to do with what most investors, private equity firms and financier See, as what should be a boom in infrastructure spending globally, probably, let's say four years from now, three years from now, depending on how a couple of things fall. So I'll give you a few examples. If the the conflict, the war, the way that most people see it between Ukraine and Russia, were to come to some detente or to cease, or if there was a peace agreement that was made. Ukraine has to be rebuilt. So the rebuilding of Ukraine is probably going to be done by Western powers, those Western powers are going to need a lot of stuff, a lot of equipment, raw materials, and people moved in to that part of the world. And that's all going to be done by project logistics. It's going to need overweight, availability, it's going to be chips, and it's going to need all kinds of equipment to get things there. And it's gonna need to be done in a way that's bulky, hard to do and cumbersome. That's where project 14 comes into play. Another one will be, let's say that China in the United States find some way to work through their problems soon. If they do. There's a lot of money to be made right now, between those two countries, in building infrastructure in China for energy in China, reinvesting in the United States, there's a lot of money. And a lot of companies that work in the US that have Chinese backing that want to build infrastructure, believe it or not, in high end technology, manufacturing, the list goes on and on and on. Canada is getting its toe deeply back in to energy exploration into new energy and alternative energy. And then the third one I'll give you, is the rush to EBS, which I think the Lord dog is not on right now to tell me how stupid they are. Because I am a tree hugging bark chewing hippie, I love talking about them in a positive way. I don't think that Doug hates EVs. I think he just hates driving them. But yeah, the point I'm making is is all of the Eevee infrastructure can't come from existing automotive infrastructure, a lot of it is going to have to be built. And because of that, it's going to require project 40 to get it there. So I think you're going to see a significant number of these project forwarders, who are big but not huge, get gobbled up. And I think you're going to see a lot of the larger project 14 companies begin to strategically, geographically place themselves in places like Africa, and in places outside of Asia, certainly in Southeast Asia, in South America, and in parts of the Middle East to prepare for what's going to be a pretty big import export market for the sorts of things that we're talking about Eastern Europe as well. So I'm excited about that. Just because customs and trade, wherever things are wonky, and people aren't used to doing that kind of work. There's usually money for crazy Uncle Pete here. So I'm excited to get engaged in that kind of work. And I think it's gonna be fun to watch
Keenan Brugh 13:45
will be really interesting. First questions that come to mind as I'm not closely following m&a activity, have these already started or you're seeing it's about two and I'm wondering if now or the near future is a good time because overall freight market is slowing down. So maybe some of these companies have been doing well, and they're still busy, but they're not making as much margin and so their, their valuations may not be quite as high. But to your point, there's probably a lot of ongoing are near to be soon, big projects going on that will require these services. So maybe it is a good time for the larger players with capital to pick up these companies capabilities and their customers to
Pete Mento 14:26
Project 14 is doing very well right now, from what I understand. There's a lot of this already. A lot of government business falls into Project 40. So it's doing quite well. And you have a lot of these larger, more strategic thinking more strategically aligned, logistics firms are sitting on a lot of money. So their shareholders, their boards of directors are saying to the leadership, hey, you have billions of dollars that you're sitting on. And you can either do share buybacks, you can start being more aggressive with you dividends, we can make investments in traditional lines that we work on. Or we can start doing acquisitions. And doing an acquisition and something that's likely to grow organically because of the way just the world's going seems to be smart, as opposed to doing an acquisition of what might be a failing asset because of the market and hoping that your brand of magic is going to make it do better. So like most things, Kenan, this is more peak wild speculation than anything I'm particularly seeing in the market. It just would occur to me, it's probably where the business is gonna go.
Keenan Brugh 15:38
Very insightful. I'll be keeping an eye out on the news. With that in mind, for sure. Good stuff.
Pete Mento 15:43
I will too, you know, I like don't get on my predictions, you know?
Keenan Brugh 15:47
Absolutely.
Pete Mento 15:49
Yeah. So that brings us to halftime brought to you by our friends at CAP logistics, Cap logistics.com. To learn more about them without their incredibly generous support, we would not be able to bring you global trade this week, not the least of which because Wonderboy producer, Keenan would not be able to do all the incredible technical things that make it happen. And we can't thank them enough for their ongoing support. And halftime is always Doug's favorite part of the show, it is my least favorite part. Really only do it to keep them happy. So first want me to go first?
Keenan Brugh 16:27
I'll go first. Yeah, let's keep keep Doug happy. And I'll try to make it super tangential related to transportation. But my topic here for halftime today is the new UFO whistleblower. I'm sure many of you have heard of this, because it's becoming mainstream news all over the place. I think just last night, the full length interview got released. But even before that, Mark portions of it were released and people reporting apparently a pretty high level. You know, member within the government who's had access to some of these programs and things going on as senators and people are asking questions is going through the quote unquote, official whistleblower pathways, in order to make some pretty startling claims like the US has, quote, quite a number of non human vehicles like, not only do these things exist, those videos you've seen in 2017, and the likes. And this is brought to us by some of the same reporters who, who helped break those video stories back then. They're saying that they're confirmed, they're not Russian, they're not Chinese, they're non human. And not only that, we have some. So this is a wild, wild time for me and some of my friends with some conspiracy curiosities will entertain ideas. This is pretty much of what a lot of people have been saying it's been going on for decades. But then now that there's a whistleblower and stuff that's coming out, some friends are excited, but a lot of friends are suspicious. They ask why now, is this a Project Blue Beam type situation where it's a government SIOP in order to or no to what Reagan said, you know, imagine if we had a common enemy, you know, how quickly our differences would evaporate type of thing, or just a confusion as major stuff is going on with China and Taiwan? And Ukraine? Is this just a distraction? Is it real? What's your initial take? And then thoughts on this? Is it real? Is it sign up?
Pete Mento 18:26
totally real. And, and here's, oh, God, I wish Doug was on with us right now. This is when we do like a split screen with three of us. Cuz, you know, Doug is always
Keenan Brugh 18:35
like, Oh, no.
Pete Mento 18:36
And, you know, I, I'm like you I want to believe I want to, I always think of that Carl Sagan line where he says, mathematically, it would be such a waste of space. If, if there was this infinite, never ending space. And we were the only things here. And then, if everything is a possible reality, how unlikely it would be that there wasn't a more advanced group of organisms than us. And given how things go wrong and exploration, that something would not have come here and failed. So then you said that there could be a couple of seniors more than 12 that we've recovered more than 12 of them? It sounds like one or two that some, which could have been somebody did something in their backyard, you know, no, there's a dozen of them. But the thing about the story that drives me the craziest, Kim Kardashian can put a picture of herself on the internet in a billion people start talking about it. How is this not the biggest story? How are we not endlessly talking about this? How is this not? How is there not a new news channel solely focused on this? I don't know why. In 2023, with all of our access to it information? And are Are y'all caught addiction to data and information? We are not losing our collective minds over wanting answers to this because I know I can't get enough.
Keenan Brugh 20:14
We absolutely should be asking for that data. You know, if they actually do have the materials, I understand there's probably quite a bit of national security and things involved. And that's why it's all been hush hush till now. But right now, we don't really have the data. We don't have footage of the aliens, non human pilots, we don't have, you know, any autopsy stuff that we don't have any materials that we've seen, we've seen footage. But we don't see all the footage just because of the nature of the sensors that they're being captured on some of that stuff's classified, even if the subject matter itself isn't. So yeah, I think we should definitely should be calling for more data. And the implications of this would be huge, you know, for warfare for space exploration for clean energy technology. And bringing it back to the topic of the show for transportation, you know, we use a lot of energy and moving goods around the world. And if there's some gravitational anti gravity, electromagnetic fields, something that we could reverse engineer, we could move a lot with a lot fewer emissions, just from that type of climate perspective. So you think just that lobby would be interested for power generation and transportation alone.
Pete Mento 21:27
So Kenya, you don't go to Comic Cons? Right?
Keenan Brugh 21:30
I have not been to one No,
Pete Mento 21:31
I as viewers know, I go to many. And there are, there are stratifications of nerdom. Okay, at the Comic Con, and there, um, Star Wars guy, as everybody knows, I love I love Star Wars. And I love comic books. I've never really been a Star Trek guy. And the Star Trek people. They're, they're not like the rest of us. And one of the reasons for that is, is they tend to be really into science and really into the applications of the geopolitical concepts of like, they're, they're into this for the for philosophical reason. And they love this stuff. They they see this, as you know, one of the big questions when most amazing questions that man has always asked to really look into the stars is, are we alone? Are we alone here? And the reason that Star Trek did so well? Is it was a television show that explored the question, is man alone in its universe? Is mankind is human mankind alone in this universe? And here we are, with an opportunity to find that out. And everyone's like, Yeah, let's talk about politics. Sorry about politics. And I think it's ridiculous. I would rather turn on the news and be inundated with maybe there are little green men, then practically anything else I can think about talking about right now. So yeah, I hope we learn more, buddy.
Keenan Brugh 23:10
I hope it's a it's a big question. And according to David group, which is this whistleblower quote, we're definitely not alone. I'd like to learn more. So I will watch that full interview and look forward to any follow up evidence or actions or discussions about this. Because I agree it could be a really, really big story. If it's not just a blue beam sign up. We'll we'll find out.
Pete Mento 23:34
I don't know. We might be seeing a new podcast being born, you know, exploring the unknown with Pete and Keenan, I don't know. Watch that. My halftime is not quite so cerebral, but it is important to me. So I love jiu jitsu as, again, I keep saying this, many of you who watched the show no. And I've been a practitioner of that sport now for 12 years. And it's, it's an important part of my day, and important part of what I do to keep myself sane. I'm not particularly good at it. So I don't want to come off as someone who's like Imams rule. Whether it is I love it is you don't have to be the biggest, you have to be the strongest. You don't have to be older young. You can be super old to be very, very good at it. It's a great equalizer. And what I like to tell the boys all the time, you know, Amy has two older sons that are my boys now. And one of them is a behemoth of a human being. He's a terrifying looking person. And I say to him all the time, be careful who you mess with, at bars and stuff. Because there could be some nerdy flip flops that will kill you like there are, there are train killers walking the earth. And that brings me to the UFC. I have loved watching the UFC and boxing all all physical combat sports since I was a boy and the UFC gave us a chance to see who was really the baddest. And recently in my In my worldview, we had a wonderful champion and her name is Amanda Nunez and Amanda Nunez burst on the scene not too long ago, and just like, like a wood chipper went through anybody that messed with her. She took out absolutely everyone that got in her way. She beat the unbeatable and Chris cyborg, she was a champ champ she had she wanted two different weight divisions. And she was also the first openly gay champion in I believe, any professional paid sport, I don't know, of anyone else that openly came out. I've been trying to find one before we came on the show today. But she was married to another woman. It was a very big deal. And the UFC treated it like any other sport like yeah, who cares. She's married. Let's get back to the action. I mean, it was fabulous. And I loved it for that. And she was an incredible champion. She's from Brazil, she gave back to the community she came from. She loved teaching kids. That's a great teaching everyone. She's a great champion. And this weekend, she absolutely tore the tar out of El Donna and went out in her 30s as a champion as a champ champ. She put her gloves, the middle of the ring, which symbolizes the end of her career. And she retired. And her daughter, very little daughter and her wife, who's also a UFC fighter came into the ring. She thanked everyone. And it was just wonderful to see a career span the way that it has. It's such a wonderful champion. It's also kind of nice. It happened in Pride Month, if I'm going to be quite frank not to let you know politics and as such get in there. But she was an incredible champion. And in a sport that most times any combat sport, somebody doesn't you can go out on their own terms. It was wonderful to see a champion go out on their own terms. So here's two men and then yes, and a lady who was an incredible champion for the sport.
Keenan Brugh 26:56
Congratulations.
Pete Mento 26:57
How's that for halftime? Doug?
Keenan Brugh 27:01
Good. Halftime quick follow up question on that just because I know you do practice and are interested. I always hear about these fights after they come out. Where do you watch them? Does UFC have their own UFC streaming? Or is that cable? How do you watch these matches nowadays,
Pete Mento 27:15
there's so many leagues I have, you know, I've got there's one that you can get fights from me on. But you have ESPN plus, which has a lot of it. There are regular fights on ESPN, the beginning card is on ESPN does pay per view, you've really got to follow it to figure out the bigger fights are always going to be paid for pay per view. And then there are actual for like PFL and things like that there are streaming channels for it. What's unfortunate is it's still a small enough sport, that in order for them to pay these guys a decent wage, they've got to do a lot of the stuff pay per view. So it's changed, radically, radically changing. If you don't know Francis and gone Who is he went to the PFL so that he could also be a boxer the guy looks like a real life superhero. He's uh, he looks like the Hulk. So he's gonna box heavyweight while being a PFL. And I think you can do a lot for the sport. He's he's, I think he's from Cameroon, or from Nigeria. He is incredible. And there's another African, who's also a champion right now in style bender. And it's another thing about the sport like people are from everywhere. So unlike baseball, or hockey, anyone from anywhere can rise to be a champion. It's really It's, I don't know, I could talk about for hours. It's like being a vegan. You don't want to get somebody
Keenan Brugh 28:36
I look forward to learning more about it. Maybe I'll watch a couple matches and have a couple more enlightened questions for you
Pete Mento 28:42
know, we gotta go we gotta do it like you and I gotta go to a fight. All right. I'll you'll be hooked. It's a lot of fun.
Keenan Brugh 28:49
Can't wait. Yeah.
Pete Mento 28:51
All right. So what do you got for the next topic?
Keenan Brugh 28:53
All right. Next topic is a little bit related to the first one. But we are seeing a potential UPS workers strike in a couple of weeks here. And this is all within the backdrop of, you know, falling truck demands. Generally, it's softening here domestically in the US. So it's, again, one of those things kind of like the rail, kind of like the ports. Now is the time apparently they're having the negotiations and striking though they may not have as much leverage as they did just a little bit ago. But it's also one of those memories of you know, you wouldn't have wanted them to stop when things were super desperate. So are you going to remember that and honor that? Again, on this case, I don't know the nitty gritty details of what's being fought over and negotiated for. But already, people are predicting that if this did go through with them handling seven 17 million domestic packages a day, that would be a pretty big shock to suddenly try to replace that with their competitors. And so we may see more political interactions or interventions. If If this gets too close to it, have you been hearing anything and your discussions or seeing anything on the news and reading between the lines? What does the situation look like to you?
Pete Mento 30:08
So this is probably going to be from a public relations standpoint, significantly worse than the West Coast port stuff. And here's the reason why. If I, I call this the ladies in my house, politics dynamic. If I say to Amy and our two daughters, hey, listen, there's a porch strike. And it's going to slow containers down from coming in from the west coast and be like, Oh, that sounds terrible. I bet that's going to make life for you tough at work. I gotta go watch below deck, see?
Keenan Brugh 30:41
Yeah.
Pete Mento 30:45
But if I say to them, you know, all that crap you're endlessly buying online, there's a good chance that it's going to get significantly more expensive, it's not going to turn up as timely as it usually does. It might not turn up at all, they're going to care, they're going to care more about what I do for a living than they've ever cared before. Because the idea of them not being able to get what they want, when they want it, if it's on prime in two days, or if they bought it, you know, from Sephora, or from God knows where I don't even know where this crap comes from, you know, that is the American consumer, regardless of their of their demographic has become very, very used to getting things in a certain amount of time delivered in a certain way. And the UPS workers know how important a cog they are in that. The UPS management also knows this may be the last time they get to put certain rules in place that are going to set them up for automation, artificial intelligence, the use of robotics, they have a lot on the line as well, it's, I keep saying this, and no one really gets it. But it's like the writer strike. That writer strike right now is going to make a lot of decisions about how our entertainment is written for centuries. And isodose. This UPS strike is going to have a lot to do about how Ecommerce has operated for centuries. Because it may decide if Doug's beloved drones are going to be used instead of, of trucks if they're going to use to what degree are we going to use autonomous vehicles rather than drivers? You know, what's it going to mean to have a fully operational warehouse now? Is that going to mean it's autonomous? Are they going to be allowed to do that in districts where they have agreements with unions in place? I don't know. Again, I'm not in the room where they negotiate these contracts, thank the Lord, because I can imagine that's gonna be tense. And I'm not gonna have that kind of conflict. So this is a huge, huge, huge deal. And as I said, a couple of months ago, I think the person who is the mouthpiece for the UPS union, he is not afraid to throw haymakers in public about what this could mean for the American consumer. He has said a lot of really, really brutal stuff, and he's throwing heat. So you're gonna hear about it, you're gonna hear about it in the news, you're gonna hear about it everywhere. We're dangerously close to a work stoppage. And no one's talking about it yet. Just wait to think slow down. But I'm, I'm thinking about going going by and short on some FedEx sock, just you know, you know, I don't know if I can do that, given what industry I'm in. But man, they seem to make a lot of money if things slow down and UPS
Keenan Brugh 33:41
could be very interesting. You bring up good points. This was a major story to me. But I did not even consider the effects of you know, transportations, gotten more news play as things have been a little messed up the last couple of years, but it'll really hit home when it's People's Daily packages hitting their house, their shopping, their consumption, or businesses that rely on that type of shipping, that will make a much bigger splash as far as news and potentially politics as that stuff gets in. And you're right. I also wasn't considering the importance of the timing of these negotiations for precedents, especially as drones or warehouse automation, different things in place. There's probably a lot of that long term strategic thinking going on in these lawyers minds and these decision makers as they're negotiating. So, yeah, could be very interesting in the next month or two coming up here. Yeah, we
Pete Mento 34:39
got to think long term because men are they think in the long term. You know, I heard one person say this, this bridge that fell in Philadelphia on 95. And if you've ever driven on the East Coast, 95 is is such an important. It's an artery and when 95 is down our ability to get up and down the East Coast. It's not just Hanford, it's, it's like somebody just pulled up, pull the switch. And that's gonna cause traffic up and down it. If you're using automated trucks, do you think that Americans are going to be comfortable with them on back roads? With them going through places where there's high population areas? I don't think they are buddy. So they're more comfortable with them being on highways overnight with his fear people, if you have a major artery like 95 breakdown, what's it mean to a UPS or FedEx or a larger company? That depends on Teamsters? If they're saying, Well, you told us we can't drive trucks at time. So there's a difference in our finances. Now, if you want to put us behind the wheel again. I mean, I would certainly put things like that in the contract, if I were them. And if I were management, I wouldn't want to put that in the contract. So I'm sure things like that are fair, I would imagine things like that are discussed in that contract.
Keenan Brugh 35:50
Very interesting, especially if it's a major artery, and all of a sudden, there's a lot of Rerouting. It's one thing. I mean, maybe it's sketchy enough to have one autonomous truck going on a back road. But if all of a sudden you had quite a few other normal drivers, other normal truck drivers, and then lots of AI could get pretty messy out there.
Pete Mento 36:08
What a mess. Yeah. All right. Well, that brings me to my title. And the last topic today, which really is ugly. So humbug sued, which is owned by our friends at Maersk lost a, an argument over a case with a European furniture importer, or our shipper, I'm not sure how I would describe the the export import. And this company is a lead alleged that umberg sued was acting in a degree of retribution for contract problems and disagreements by forcing them to pay certain demurrage by fiddling about they wouldn't do certain things in a contract. So they stuck to him in other areas, they took them to the FMC and they want, they want a $10 million, what they were fined $10 million. There's that side of the story, we can certainly talk about that. We're I'm much more concerned. Because I always am, I'm thinking about what's going to happen because of this. You know, I think a lot of importers who went through and I was one of them. When I was at Wayfarer, I bought over a billion dollars worth of ocean freight. It was it was a lot of containers med. In those days were hard. I was very fortunate, though, that we made such a large purchase of volume that carriers tended to work with us very fortunate. The smaller people that were working with them oftentimes found themselves in a difficult spot where there are only so many ships, and you carriers can't make them. They can't manifest a vessel. There's no magical way to make 240 footers fit where 140 footer is supposed to go. So they had to make hard decisions. And they did everything that they could to make as many people happy as they could but in the end, someone's going to be angry. And that anger has cascaded into the days now, where things aren't as good. Contracts are are still pretty high as a contract rates that are very high. And people want to renegotiate them. And curious, you're saying to that signed contract? And shippers are saying, well, I signed a contract back then too. But you wouldn't let me get out of it. Even though you didn't have speed. I mean, there's a lot of there's a lot of angry. And much like when you know two people who've had a disagreement find themselves where the worm has turned. The import community now is very much looking forward to getting their pound of flesh out of the carriers. And this is a very unpopular opinion. I'll say it right up front. I think it's dangerous for the shipping consumption community to try very, very hard to punish carriers for the sins of the past. Because all we're going to do is find ourselves with fewer choices. We're going to find smaller ocean carriers going out of business or being gobbled up by bigger ones. And supply and demand is going to end up going down because we're going to have fewer people to negotiate with. You want carriers to be healthy. I'm not going to tell people how to run their business, but going into these negotiations saying it's time for me to deliver some pain along with getting a good deal. It's not a good way of doing business. If you're really into this for the next 20 3050 years. Hopefully we've learned some kind of lesson. The shipping community, the ship owners need to have more oversight on them to not let them take advantage of the people who are consuming their services. But again, they seem to have all the leverage. It's up to us as consumers of their products to find a way to not let this happen again, by being more of a partner with these carriers, then looking for some type of revenge. But I'm telling you right now, Keenan, I have a lot of friends at bcos. We still talk all the time. And all of them, these beneficial cargo owners, they're all gleefully waiting for their opportunity to stick it to these carriers, they're going to eventually regret it. No one forgets anything. No one. And I think this is a time I wish we could have like a truth commission like they had in South Africa, where we can all just sort of sit around and apologize for what happened and move on. But people just don't seem to be in the mood to move on right now. I think it's not, I think it's very detrimental. For the overall health of our community.
Keenan Brugh 40:59
You bring up good points and money. Again, longer term perspectives, though, compared to you know, just the recent retribution or wanting a little bit of compensation. For some recent since passed, it's important to keep an eye on the long term of what do we want this environment to look like? Are things going to change if if this becomes the new norm, are there going to be more mergers and acquisitions and just fewer options in the future, and is that really what you want in the long run, might not be the best situation. So interesting take as always,
Pete Mento 41:31
man, I mean, the last thing I'll say to this is I, I represent the customs brokerage community, above and beyond anything else that we talked about here, and throughout the entire panty, all throughout the crunch. And the logistics problems, you know, in our rates didn't do increase. We didn't, we never charged more, because it's not about space. It's about a relationship. And no matter how bad things got, and how difficult it was, because there wasn't the same amount of people working at customs, there were all the problems that happened. And there were a lot of problems. People didn't take advantage of our rates because they appreciated what we did for them. And we didn't take advantage of our clients, because we appreciated their loyalty. And I think there's a lesson to be learned there, that when when we brought value to our clients, they stay with us, when it's not just a transaction, they stay with us. And I really wish that that we could find a way for for our ocean carrier partners to show that value in a way that's more meaningful, because they do bring a tremendous amount of value. I don't know if they're always the best at showing it to the consumers that buy from them. And to be honest, I don't always know that Customs House brokers do either. And we need to do a better job with that as well. I'll be damned if anybody ever since that about my service, you're going to know who's doing their injuries. But But yeah, this, this is troublesome to me, and I want it to be better.
Keenan Brugh 42:53
Well, I definitely will be hoping for good outcomes of this in the future. And I appreciate you sharing your expertise and insight with us and everyone listening here today. Thanks for tuning in to another edition of global trade this week. And barring any last minute assignments. It should be as scheduled with Doug and Pete again next week. So thank you very much. Plug to my employer cap logistics. Thanks for allowing us to come on here and share these insights as these questions make predictions and be right more often than not. And yeah, keep moving forward one day, one week at a time.
Pete Mento 43:29
All right. Thanks, man. We'll see you soon. Thanks, guys. Logistics Take care everybody. Bye. See ya