WEBVTT - Satish Jindel Says Amazon Will Crush Other Retailers (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven, Brio to Washington,

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<v Speaker 1>one nine and around the globe the Bloomberg Radio Plus

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<v Speaker 1>and Bloomberg Got Gone. This is taking Stock. Coming up

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<v Speaker 1>on taking Stock. Do you think that Amazon already rules

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<v Speaker 1>the world? While according to my next guest, get ready,

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<v Speaker 1>you've not seen anything yet. We're gonna be talking about Amazon,

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<v Speaker 1>its logistics business and its ability to crush almost everything

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<v Speaker 1>in between the producer and the consumer of a product.

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<v Speaker 1>But right now, let's go to Katherine Cownterie in the

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<v Speaker 1>Bloomberg news room for you Bloomberg Business Flash. Thank you,

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<v Speaker 1>Pam Bloomberg. Taking Song has brought to you by the

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<v Speaker 1>a dr dot org. The stock market has reversed direction

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<v Speaker 1>and is gaining for the first time in four days.

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<v Speaker 1>The smallest job's advance in seven months, is fueling speculation

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<v Speaker 1>that the Fed Reserve will look to raise interest rates gradually.

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<v Speaker 1>The report showed employers added one hundred sixty thousand jobs

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<v Speaker 1>last month. That's far fewer than the two hundred thousand

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<v Speaker 1>that economists had anticipated. John Canally, chief economic strategist at

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<v Speaker 1>LPL Financial, says for stock investors, the report was mixed.

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<v Speaker 1>Not strong enough the cause of FED rate hike in June,

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<v Speaker 1>which is good, but also not weak enough to suggest

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<v Speaker 1>that there's a global growth scare. So it was a

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<v Speaker 1>narrow path for this report to actually be somewhat favorably

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<v Speaker 1>viewed by markets, and I think we hit that path

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<v Speaker 1>alough it might be on flood on the side of

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<v Speaker 1>a week. We check the markets every fifteen minutes throughout

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<v Speaker 1>the trading day. Down industrial average is up sixty three

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<v Speaker 1>points a third percent, trading at seventeen thousand, seven hundred

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<v Speaker 1>twenty three. Smp f I thundered up five points at

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<v Speaker 1>quarter percent to two thousand fifty five. The NASTACAZ up

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<v Speaker 1>twelve points a quarter percent. Its trading at eight West

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<v Speaker 1>Texisinemedia Crude oil up thirty one cents a barrel to

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<v Speaker 1>forty four sixty three spot gold up eighteen dollars. Announciense

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<v Speaker 1>a cane at one point four percent, trading at twelve

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<v Speaker 1>ten year treasury down eight thirty seconds with the yield

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<v Speaker 1>of one point seven seven percent. Among today's top business stories,

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<v Speaker 1>Charter Communications has cleared its last federal hurdle to become

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<v Speaker 1>the second largest cable company in the US. The FCC

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<v Speaker 1>has approved its murder with Time Warner Cable. The development

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<v Speaker 1>leads approval from California as a final regulatory hurdle for

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<v Speaker 1>the fifty five billion dollar deal. It's three thirty two

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<v Speaker 1>on All Street and having dis time to get an

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<v Speaker 1>update of some of the other stories were following right

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<v Speaker 1>here on Bloomberg Radio. Thank you Catherine from the Bloomberg Newsroom.

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<v Speaker 1>I'm a Lisa Parenti. This news update is brought to

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<v Speaker 1>you by the Jeep Grand Cherokee, the most awarded suv ever.

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<v Speaker 1>at your local Jeep dealer Today. President Obama, answering questions

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<v Speaker 1>from reporters today, refused to comment directly on Donald Trump

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<v Speaker 1>becoming the presumptive Republican presidential nominee, but the President called

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<v Speaker 1>Trump the standard bearer of the GOP and said voters

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<v Speaker 1>and the media need to examine his policy positions and

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<v Speaker 1>statements carefully going forward. This is not entertainment. There's not

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<v Speaker 1>a reality show. This is a contest for the presidency

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<v Speaker 1>of the United States. As for the Democrats, Mr Obama

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<v Speaker 1>said he won't make an endorsement until the primary process

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<v Speaker 1>plays out. He said he expects both candidates to work

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<v Speaker 1>to unify the Democratic Party for the general election. Pentagon

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<v Speaker 1>Press Secretary Peter Cook says the attack by Islamic State

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<v Speaker 1>in Iraq this week that killed Petty Officer first Class

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<v Speaker 1>Charles Keating took officials by surprise. And the forces they're

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<v Speaker 1>been able to see this attack coming, they would have

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<v Speaker 1>responded differently to it. Perhaps this could have been avoided.

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<v Speaker 1>That's certainly something that that we're looking at carefully. Keating

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<v Speaker 1>is the third U s Service member to be killed

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<v Speaker 1>in combat in a Rock since US forces returned there

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<v Speaker 1>in two Police on Long Island say stepped up efforts

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<v Speaker 1>to fight an opioid crisis are paying off. Suffolk Police

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<v Speaker 1>have made more than one hundred fifty arrests and sees

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<v Speaker 1>more than one million dollars this year. Global News twenty

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<v Speaker 1>four hours a day, powered by our twenty four hundred

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<v Speaker 1>journalists and more than one hundred fifty news bureaus around

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<v Speaker 1>the world. From the Bloomberg News Room, I'm Alisa Parenti, Katherine,

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<v Speaker 1>thank you. And now let's get a quick update of

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<v Speaker 1>the equity benchmarks down Industrial averages up fifty five points

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<v Speaker 1>at seventeen thousand, seven hundred sixteen smp F I founded,

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<v Speaker 1>up three and a half points at two thousand, fifty

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<v Speaker 1>four nasat higher by nine points trading at And that's

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<v Speaker 1>a Bloomberg business flash. You're listening to Taking Stock with

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<v Speaker 1>Kathleen Hayes and Pim Fox on Bloomberg Radio. Amazon. Amazon

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<v Speaker 1>will least twenty Boeing seven six seven jets from Atlas

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<v Speaker 1>world Wide. That was announced yesterday. In March, Amazon also

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<v Speaker 1>agreed to least twenty Boeing seven six sevens from air

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<v Speaker 1>Transport Services Group. So is Amazon getting into the airline

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<v Speaker 1>and logistics business. Let's find out from my next guest,

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<v Speaker 1>Satish Jendal, joins me. Now, Satis Jendal is an expert

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<v Speaker 1>when it comes to the world of logistics and transport.

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<v Speaker 1>He is the founder and the president of s J

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<v Speaker 1>Consulting Satish. Always a pleasure, Thanks for coming in, Thanks

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<v Speaker 1>for having um. It just set the record so people

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<v Speaker 1>understand a little bit about your experience, so that they

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<v Speaker 1>are aware that you know a lot about logistics and

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<v Speaker 1>also about the changing nature of who's in the logistics business.

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<v Speaker 1>I have worked with every global transportation provider that we have,

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<v Speaker 1>from FedEx, do Ups to d h L to T

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<v Speaker 1>and T and on and on. And I've been in

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<v Speaker 1>this industry thirty some years, have been part of all

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<v Speaker 1>the major changes the industry has had an influence many

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<v Speaker 1>of them, and have worked with overtoned companies around the globe.

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<v Speaker 1>So and also deal with many of the retail shippers

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<v Speaker 1>through the technology of ship Matrix and have got great

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<v Speaker 1>insight into the paints they're experiencing. All right, So, now,

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<v Speaker 1>did you ever think that you will be writing about

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<v Speaker 1>Amazon as a shipping and logistics company? You know, for

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<v Speaker 1>people who know me, they are shocked that I could

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<v Speaker 1>put up paper like that about Amazon out And when

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<v Speaker 1>you had me on the taking Stock television a year

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<v Speaker 1>ago about minions, you saw what I had to say

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<v Speaker 1>about it. Amazon is a company that is a very

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<v Speaker 1>large company, but it operates like a very small company.

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<v Speaker 1>When they've put ideas, they don't waste time analyzing and

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<v Speaker 1>analyzing for a year it becomes dated. They implement and

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<v Speaker 1>they test it. If it works, they go forward. If

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<v Speaker 1>it doesn't, they move on to something else. And Amazon

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<v Speaker 1>is going to change the way people think of retail sector.

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<v Speaker 1>And let me put in perspective. Not many people will

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<v Speaker 1>realize that there used to be a time when when

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<v Speaker 1>you bought something from a retail store and you took

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<v Speaker 1>it back, they won't take it back. You couldn't take

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<v Speaker 1>it back. There was no returns, and if some of

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<v Speaker 1>them did take it, there the stocking fee. Today, every

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<v Speaker 1>retailer takes our return returns are very expensive for our retailer.

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<v Speaker 1>So what do they do? They take it? But then

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<v Speaker 1>who's paying for it? Everyone? It's part of the business

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<v Speaker 1>model Amazon exchanging that where they're gonna say free shipping

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<v Speaker 1>is part of the business model. You have to find

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<v Speaker 1>ways to recover the cost of shipping. And Amazon has

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<v Speaker 1>got the best model for it. That's gonna crush other

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<v Speaker 1>retailers who are struggling with it. Social investors who are

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<v Speaker 1>invested in fed X and UPS, should they be concerned.

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<v Speaker 1>They should be concerned from the perspective that those companies

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<v Speaker 1>need to respond at a faster pace to the changes

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<v Speaker 1>taking place in the e commerce world, and to the

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<v Speaker 1>extent that some of them will tell their investors that

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<v Speaker 1>we're not losing any business because our customers are not

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<v Speaker 1>going to Amazon. What Amazon is doing is when they

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<v Speaker 1>are shipping a billion packages a year and managing it themselves.

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<v Speaker 1>Those packages would have been part of a fed X

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<v Speaker 1>or a UPS or a post off the network. The

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<v Speaker 1>report that you put together about Amazon. Where can people

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<v Speaker 1>access this so that they can learn a little bit

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<v Speaker 1>more in detail? They can't get the details for free.

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<v Speaker 1>We've spent three months, over two fifty hours of research

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<v Speaker 1>assembling it, and people who wanted are placing orders for it,

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<v Speaker 1>and they can buy They can get the highlight from

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<v Speaker 1>the articles that they have been published. Vast Peak is

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<v Speaker 1>going to be including that in one of their reports,

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<v Speaker 1>but for the full details and the charts and the tables,

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<v Speaker 1>they would have to buy it. How much is this

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<v Speaker 1>going to cost Amazon to put together or is that

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<v Speaker 1>immaterial for a company of this size. You know Amazon

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<v Speaker 1>is going to spend sixteen billion on all of this

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<v Speaker 1>for this year, on the outbound shipping twenty two billion

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<v Speaker 1>next year. That's a lot of money, but it is

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<v Speaker 1>still a better model for them because what Amazons approaches

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<v Speaker 1>that my customer is my customer, and I want them

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<v Speaker 1>to have my kind of experience from the time they

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<v Speaker 1>place the order till it is delivered to their doorstep.

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<v Speaker 1>Turning it over to a carrier and washing your hands

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<v Speaker 1>off like retailers to is not the customer satisfaction model

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<v Speaker 1>that they are pushing, which I think is a very

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<v Speaker 1>high level of customer satisfaction. And they're going to to

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<v Speaker 1>English themselves from that perspective and whatever it takes for

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<v Speaker 1>them to build this, they're not trying to build it.

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<v Speaker 1>They're trying to control the distribution and the fulfillment. And

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<v Speaker 1>it's the control that's important that doesn't cost as much

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<v Speaker 1>as building it. Is. This also part of their strategy

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<v Speaker 1>to expand outside the United States. I mean, obviously it

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<v Speaker 1>already is global, but to reach even deeper into emerging

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<v Speaker 1>economies where they want to be big players. Yes, and

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<v Speaker 1>they're already doing that in India. I know it from

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<v Speaker 1>being my home country. They're doing it in Europe. Look

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<v Speaker 1>at their buying an airport in Germany. They can control

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<v Speaker 1>of it and what they plan to do. And this

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<v Speaker 1>is where people don't realize. The biggest target for Amazon

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<v Speaker 1>in their corporate offices is another company starts within eight

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<v Speaker 1>and it's not Walmart, and it's not Target and others.

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<v Speaker 1>It's Alabama. Because Alabama is approaching it in the perspective,

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<v Speaker 1>they're saying, I'm gonna make it easy for the manufacturer

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<v Speaker 1>to sell directly to the consumer, which is the real

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<v Speaker 1>value of Internet is connect pieces people without middleman. Amazon

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<v Speaker 1>is saying, ah, when it comes to product moving, I'm

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<v Speaker 1>going to control that because distribution is critical the goods

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<v Speaker 1>moving from one point to the other. And I'll have

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<v Speaker 1>the cheapest and the fastest solution that no manufacturer will

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<v Speaker 1>be able to offer. Thank you very much, Satisue Gindle

0:10:44.080 --> 0:10:46.720
<v Speaker 1>of s J and southing. Where where's the airport in Germany?

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<v Speaker 1>Maybe we'll go visit. It's near Frankfoot. Aye, we'll take

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<v Speaker 1>a little ship there in Amazon's new airport. Thank you

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<v Speaker 1>very much, satis Gender On Amazon, it wants to rule

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<v Speaker 1>the world. Coming up on taking stock, We're going to

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<v Speaker 1>take stock of impact investing, What is it sustainable investing

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<v Speaker 1>and what portion of your portfolio should it be dedicated to.

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<v Speaker 1>That's next