WEBVTT - Bloomberg Wall Street Week - December 6th, 2024 0:00:02.600 --> 0:00:08.559 Bloomberg Audio Studios, Podcasts, radio News. 0:00:21.360 --> 0:00:24.600 This is Wall Street Week. I'm David Weston bringing you 0:00:24.840 --> 0:00:28.880 stories of capitalism this week. Why families from Las Vegas 0:00:28.880 --> 0:00:31.440 to Vancouver can't afford to buy a house. If you 0:00:31.600 --> 0:00:33.880 can buy the house, why you may not be able 0:00:33.920 --> 0:00:36.680 to afford to ensure it, particularly if you live in 0:00:36.720 --> 0:00:41.600 Florida or in California. And US ports are consistently ranked 0:00:41.600 --> 0:00:44.680 among the least efficient in the world. What sort of 0:00:44.760 --> 0:00:48.960 investment would it take to fix that? But we start 0:00:49.000 --> 0:00:52.559 with the story about that trade balance. President Electroump focuses 0:00:52.600 --> 0:00:56.000 on so intently. On Thursday, we got the numbers, which 0:00:56.040 --> 0:00:59.200 once again showed the US in the red. But what 0:00:59.240 --> 0:01:02.000 does that tell us about the economy? And is restoring 0:01:02.040 --> 0:01:06.440 the balance, as mister Trump insists, really so important. Here's 0:01:06.440 --> 0:01:10.280 Bloomberg International Economics and Policy correspondent Michael McKee. 0:01:11.880 --> 0:01:14.280 There is a story about a college professor who told 0:01:14.319 --> 0:01:18.320 his economic students anyone who used the term bilateral trade 0:01:18.360 --> 0:01:23.280 balance would automatically fail. That's because international trade is a system, 0:01:23.520 --> 0:01:27.520 not a series of summable individual country by country relationships. 0:01:28.160 --> 0:01:30.760 A country's trade balance is the difference between what it 0:01:30.800 --> 0:01:34.679 consumes and what it produces. In the US, we consume 0:01:34.840 --> 0:01:38.679 more than we make. Aggregate demand is greater than aggregate supply, 0:01:39.240 --> 0:01:42.680 so we end up importing the difference to satisfy that demand. 0:01:43.200 --> 0:01:46.120 We have a trade deficit. China, on the other hand, 0:01:46.160 --> 0:01:49.520 produces more than it consumes. It sells its excess to 0:01:49.760 --> 0:01:52.440 US and the rest of the world. It has a 0:01:52.440 --> 0:01:55.960 trade surplus. To Donald Trump, the answer is to slap 0:01:56.000 --> 0:01:59.640 tariffs on Chinese made goods. But that won't solve the 0:01:59.640 --> 0:02:03.600 problem because we are the problem. As long as we 0:02:03.640 --> 0:02:06.720 demand more than we produce, the trade balance won't change. 0:02:06.800 --> 0:02:10.120 We will just buy more stuff from countries other than China. 0:02:10.720 --> 0:02:14.160 If China isn't the lowest cost supplier, someone else will be. 0:02:15.080 --> 0:02:18.000 Why won't we make more stuff here? We likely will 0:02:18.480 --> 0:02:22.640 just not enough. Meanwhile, our other economic policies are working 0:02:22.680 --> 0:02:25.919 to worsen the trade deficit. The US has a large 0:02:25.960 --> 0:02:29.280 and growing budget deficit, which we fund by selling debt. 0:02:29.880 --> 0:02:33.160 As the deficit rises, interest rates have to rise to 0:02:33.240 --> 0:02:37.640 attract buyers. That strengthens the dollar, which makes American exports 0:02:37.680 --> 0:02:41.680 more expensive and harder to sell. It makes imports cheaper. 0:02:42.560 --> 0:02:46.320 Tax cuts, meanwhile, give people more money to spend, increasing 0:02:46.400 --> 0:02:51.000 demand for those imports. We increase demand without increasing supply, 0:02:51.680 --> 0:02:55.160 and the trade deficit gets worse. Not even Donald Trump 0:02:55.240 --> 0:02:57.760 is above the law of supply and demand. 0:02:59.200 --> 0:03:02.840 So why the difference between exports and imports matter to 0:03:02.880 --> 0:03:05.800 a country that hasn't had a goods trade surplus since 0:03:05.880 --> 0:03:10.519 nineteen seventy five? We asked very lovely of the Peterson Institute. 0:03:10.919 --> 0:03:13.840 We shouldn't care about the trade balance. The trade balance 0:03:13.919 --> 0:03:17.080 is an accounting number, and sometimes a country has a 0:03:17.120 --> 0:03:20.320 trade surplus, sometimes it has a trade deficit. What it 0:03:20.400 --> 0:03:24.240 means is it reflects how much you are spending relative 0:03:24.240 --> 0:03:26.760 to how much you're earning. And just like in your 0:03:26.760 --> 0:03:29.640 own private life, there are times when you should spend 0:03:29.680 --> 0:03:33.560 more than you earn. For example, the country of Norway 0:03:33.760 --> 0:03:37.720 discovered north sea oil, and it did not want to 0:03:37.800 --> 0:03:41.320 depress the consumption of the current generation the people alive 0:03:41.360 --> 0:03:46.640 at that time to build up the investment necessary to 0:03:46.720 --> 0:03:51.360 exploit that new resource, and so they ran trade deficits 0:03:51.760 --> 0:03:53.840 as they bowered from the rest of the world to 0:03:54.080 --> 0:03:58.960 begin to drill and to get this precious resource from 0:03:59.040 --> 0:04:01.960 under the ocean, and lo and behold, now they run 0:04:02.040 --> 0:04:06.600 trade surfaces. So they invested the money wisely in an 0:04:06.640 --> 0:04:09.760 asset that played off for years to come. So the 0:04:10.080 --> 0:04:12.720 answer to is the trade devisit bad or good? Is 0:04:12.760 --> 0:04:14.520 really why do you have one? 0:04:15.520 --> 0:04:19.919 We like to buy, we're big consumers, we have the 0:04:19.960 --> 0:04:24.640 most open market, we have low tariffs, and it's actually 0:04:24.720 --> 0:04:25.560 been a benefit. 0:04:26.160 --> 0:04:29.520 Fred Hockberg was president of the Export Import Bank under 0:04:29.560 --> 0:04:33.440 President Obama and author of Trade is not a four 0:04:33.520 --> 0:04:37.640 letter word. Like Mary Lovely, he questions all the emphasis 0:04:37.640 --> 0:04:39.000 on the balance of trade. 0:04:39.720 --> 0:04:42.680 Yes, there are obviously some shortfalls, but we have the 0:04:42.720 --> 0:04:45.600 greatest array of products. You go to a supermarket, they're 0:04:45.600 --> 0:04:49.120 over thirty thousand different products. So that's been a great 0:04:49.160 --> 0:04:51.200 benefit to our economy. 0:04:51.240 --> 0:04:53.920 Even if it were important to address the trade balance. 0:04:54.200 --> 0:04:56.839 Lovely is not at all sure that the sixty percent 0:04:56.880 --> 0:05:00.480 tariffs on Chinese imports and twenty five percent reports from 0:05:00.560 --> 0:05:02.640 Mexico and Canada are the way to go. 0:05:03.360 --> 0:05:07.279 There's a misunderstanding of thinking that TIFFs, because they'll lower 0:05:07.360 --> 0:05:12.440 our imports, will change our trade deficit. So if President 0:05:12.440 --> 0:05:15.680 Trump goes ahead and put on tariffs, we would expect 0:05:15.720 --> 0:05:18.600 that the US dollar will strengthen. That will make our 0:05:18.640 --> 0:05:23.080 exports less attractive to foreign customers, to buyers abroad to 0:05:23.200 --> 0:05:26.000 have to pay more for them, and so both imports 0:05:26.000 --> 0:05:29.920 and exports can shrink and the balance could very well 0:05:29.960 --> 0:05:33.080 be unaffected. So it may have zero effect on the 0:05:33.120 --> 0:05:36.880 trade deficit. It could even increase the trade deficit, that is, 0:05:36.960 --> 0:05:40.039 if we don't handle the underlying drivers, which have to 0:05:40.080 --> 0:05:42.240 do with domestic saving and investment. 0:05:43.200 --> 0:05:46.000 When the President elect talks about the problem of the 0:05:46.080 --> 0:05:50.600 US trade deficit, he consistently focuses on goods, not services, 0:05:51.000 --> 0:05:53.760 when much of US strength is in the latter category. 0:05:54.240 --> 0:05:58.120 Hackwork says that means the trade balance numbers may be distorted. 0:05:58.520 --> 0:06:01.080 With the second largest export in the entire world, were 0:06:01.080 --> 0:06:03.600 second only to China, and one of the things we 0:06:03.680 --> 0:06:07.839 excel in is service exports, whether it's media like Bloomberg, media, 0:06:07.920 --> 0:06:12.080 financial services, insurance, travel, those are much harder to calculate 0:06:12.120 --> 0:06:16.160 and capture, so my hunches our exports is somewhat understated 0:06:16.200 --> 0:06:16.880 as a result. 0:06:17.560 --> 0:06:20.719 Beyond their effects on the trade balance, there's another aspect 0:06:20.800 --> 0:06:24.200 to tariffs that have attracted President elect Trump, the prospect 0:06:24.240 --> 0:06:26.120 of raising revenue. 0:06:26.440 --> 0:06:29.839 Why did we turn away from tariffs as a source 0:06:29.880 --> 0:06:35.479 of revenue? And the historical record shows us what folks 0:06:35.520 --> 0:06:38.280 were talking about one hundred years ago. What they were 0:06:38.320 --> 0:06:41.240 talking about is that it was a tax on consumption, 0:06:41.960 --> 0:06:46.600 and it left earnings that were saved untacked. So what 0:06:46.640 --> 0:06:51.159 you had was lower income people who save relatively small 0:06:51.240 --> 0:06:56.640 percentage or even zero of their income, really facing taxes 0:06:56.680 --> 0:07:01.760 on everything that they buy, whereas rich people were only 0:07:01.800 --> 0:07:04.200 taxed in the small share of their income that they 0:07:04.240 --> 0:07:05.640 actually used to buy things. 0:07:06.279 --> 0:07:08.920 Donald Trump is far from a loan in thinking that 0:07:08.960 --> 0:07:12.000 the sort of across the board free trade approach taken 0:07:12.040 --> 0:07:15.160 in the past has done real damage to certain industries 0:07:15.240 --> 0:07:18.280 and workers in some parts of the country. The question 0:07:18.440 --> 0:07:21.440 is whether tariffs are the best way to address the issue, 0:07:21.920 --> 0:07:24.520 or whether a more selective approach is called for. 0:07:25.200 --> 0:07:30.000 We have something called trade adjustment assistance. It's never been 0:07:30.040 --> 0:07:33.960 really fully funded to sort of support workers whose jobs 0:07:33.960 --> 0:07:36.560 have been compromised or loss due to trade, to make 0:07:36.560 --> 0:07:39.800 sure that they can find other jobs and seek other employment. 0:07:40.840 --> 0:07:43.040 That needs to be far more robust than it's ever been. 0:07:43.880 --> 0:07:46.400 To say that we may be misled by focusing too 0:07:46.520 --> 0:07:49.800 much on the trade deficit, or that imposing tariffs may 0:07:49.800 --> 0:07:52.120 not get us where we want to go, is not 0:07:52.200 --> 0:07:55.200 to say that the new President Trump's trade policies could 0:07:55.200 --> 0:07:57.960 not help the US accomplish things it needs to get 0:07:58.000 --> 0:07:59.160 done well. 0:07:59.200 --> 0:08:01.120 I think what he likes to do is one on 0:08:01.120 --> 0:08:05.120 one negotiations. He doesn't want to like the trans specific partnership, 0:08:05.160 --> 0:08:07.400 and there's a talk he might want to do some 0:08:07.480 --> 0:08:10.880 other one on one trade deals that would include higher 0:08:10.880 --> 0:08:13.520 tariffs that they would impose on China to sort of 0:08:13.560 --> 0:08:18.840 stop the Chinese overproduction. And China is overproducing and exporting 0:08:19.120 --> 0:08:20.520 a lot of the goods because they want to keep 0:08:20.520 --> 0:08:24.200 people employed. That hurts other countries that are trying to 0:08:24.240 --> 0:08:27.920 increase their businesses, their manufacturing, or their agriculture. 0:08:28.560 --> 0:08:31.240 In the end, maybe the most important point about the 0:08:31.360 --> 0:08:34.040 US trade deficit is that it can distract US from 0:08:34.080 --> 0:08:37.880 its underlying cause and a much bigger problem, how much 0:08:37.960 --> 0:08:40.440 the US is borrowing from the rest of the world. 0:08:41.080 --> 0:08:45.120 A trade surplus is the excess of your saving over investment, 0:08:45.640 --> 0:08:49.320 so that can change when you're saving the rate changes 0:08:49.440 --> 0:08:52.280 or when your investment rate changes. The US has had 0:08:52.400 --> 0:08:56.560 very healthy investment, and that's good. Our saving, though, has 0:08:56.720 --> 0:09:00.800 gone down, so we have a relatively low savings rate 0:09:01.559 --> 0:09:05.080 comparing across countries, and part of that is due to 0:09:05.160 --> 0:09:10.400 low private savings. But also low government savings. So here 0:09:10.480 --> 0:09:14.400 we get back to the large federal budget deficit and 0:09:14.720 --> 0:09:18.160 evaluating whether you think that deficit is something that should 0:09:18.200 --> 0:09:20.120 be made smaller. 0:09:21.440 --> 0:09:26.280 You know what drives our economy, it's consumer spending, business investment, 0:09:26.720 --> 0:09:32.439 government spending, and a deficit, whether it's exports or our 0:09:32.480 --> 0:09:35.720 budget deficit, so that it's only one of four components. 0:09:35.920 --> 0:09:39.319 We need to up our exports. We probably need to 0:09:39.520 --> 0:09:42.760 have our budget and better alignment because we are spending 0:09:42.760 --> 0:09:44.599 a lot more than we're taking in. It's one of 0:09:44.640 --> 0:09:48.120 the things Scott Bessant, the incoming Treasury nominee, says he 0:09:48.200 --> 0:09:51.439 wants to work on so that we have to look 0:09:51.480 --> 0:09:53.800 at in the totality. But it's easy to focus on 0:09:53.840 --> 0:09:56.600 the trade deficit because it's like foreign and we don't 0:09:56.600 --> 0:09:58.360 have to talk about raising taxes. 0:09:59.440 --> 0:10:02.800 Coming up. The US is way behind in the efficiency 0:10:02.840 --> 0:10:05.760 of its ports. Does it matter and what can be 0:10:05.800 --> 0:10:17.600 done about it? That's next on Wall Street Week. This 0:10:17.840 --> 0:10:22.080 is a story about American exceptionalism, but not necessarily the 0:10:22.120 --> 0:10:22.800 good kind. 0:10:24.320 --> 0:10:27.080 Their Rural Bank comes out with this list of the 0:10:27.120 --> 0:10:28.760 top four hundred or five hundred. 0:10:29.040 --> 0:10:31.800 The USA ports are not hardly ever in the top 0:10:31.800 --> 0:10:32.440 one hundred. 0:10:33.480 --> 0:10:36.720 That's Mario Cardera, CEO of the Port of Long Beach 0:10:36.760 --> 0:10:41.520 in California, America's second busiest port. It ranks number nine 0:10:41.559 --> 0:10:44.320 in the world and level of activity, but number three 0:10:44.400 --> 0:10:47.200 hundred and seventy three in the list. He refers to 0:10:47.600 --> 0:10:51.920 the World Bank's annual Container Port Performance Index, which measures 0:10:51.960 --> 0:10:54.959 efficiency based on how long a ship stays in port. 0:10:55.520 --> 0:11:00.559 That index for twenty twenty three ranked Yangshan, China, Salala, Oman, 0:11:00.960 --> 0:11:05.560 and Kartahina, Columbia, first, second, and third. The only US 0:11:05.600 --> 0:11:08.920 ports that made the top one hundred were Philadelphia at 0:11:08.960 --> 0:11:12.680 fifty five and New York, New Jersey at number ninety two. 0:11:13.440 --> 0:11:16.959 Of the bottom fifty ports listed, six of them are 0:11:17.000 --> 0:11:21.680 in the US, making America's shipping infrastructure exceptional in the 0:11:21.760 --> 0:11:26.240 length of its delays. Turlock Mooney is the global head 0:11:26.240 --> 0:11:28.959 of Port Intelligence and Analytics at S and P Global, 0:11:29.320 --> 0:11:32.840 which partnered with the World Bank to create the efficiency ranking. 0:11:33.520 --> 0:11:40.680 Ports are critical to fluid supply chains. Efficient ports are 0:11:41.200 --> 0:11:49.240 extremely necessary to keep goods flowing smoothly. Efficient ports are 0:11:49.280 --> 0:11:58.040 actually catalysts for development. They attract investment, they attract logistics infrastructure, 0:11:58.920 --> 0:12:05.040 and they ultimately helped to drive growth Conversely, in efficient 0:12:05.120 --> 0:12:07.640 ports can have the opposite effect. 0:12:08.520 --> 0:12:11.400 Time, as they say, is money, and when it comes 0:12:11.440 --> 0:12:14.000 to United States imports, it can be a lot of 0:12:14.040 --> 0:12:17.480 money given the importance of consumers, which makes ports like 0:12:17.600 --> 0:12:20.559 Long Beach an indicator of the strength of the economy. 0:12:20.640 --> 0:12:24.599 Overall, you have a great economy, and you know the 0:12:24.760 --> 0:12:27.640 amer consumer is spending in terms of peor Long beachs 0:12:27.640 --> 0:12:31.079 our numbers lately have been historic, so we're approximately now 0:12:31.120 --> 0:12:34.120 after nine months, we're up in terms of te volume. 0:12:34.600 --> 0:12:38.439 We're up about nineteen percent over and above last year's number. 0:12:39.280 --> 0:12:42.559 To handle all that volume, ports like Cordero's Long Beach 0:12:42.720 --> 0:12:45.520 have been changing the way they do business, trying to 0:12:45.520 --> 0:12:47.840 make sure that they're as efficient as they can be, 0:12:48.480 --> 0:12:52.000 improving that low ranking in the World Bank Index. And 0:12:52.080 --> 0:12:53.960 some of that requires automation. 0:12:55.000 --> 0:12:58.960 The research right now points to the fact that automation 0:12:59.040 --> 0:13:03.040 clearity is a cost reduction policy for the poor Long Beach. 0:13:03.120 --> 0:13:05.480 We're interested in productivity as. 0:13:05.280 --> 0:13:09.959 A global community. We've entered the fourth Industrial Revolution, so 0:13:10.040 --> 0:13:14.640 to speak, and that is the coming of robotics automation. 0:13:15.080 --> 0:13:17.640 If you go back to a report that mckensey issued 0:13:17.679 --> 0:13:22.280 back in twenty seventeen, they predicted that by twenty thirty 0:13:22.400 --> 0:13:26.000 we would lose two thirds of American jobs. As we know, 0:13:26.800 --> 0:13:29.440 for every robot that you put in place, there's six 0:13:29.559 --> 0:13:33.600 jobs that are limited. So I think for a poor 0:13:33.679 --> 0:13:38.040 long beach, how we navigate that issue as a public port. 0:13:38.600 --> 0:13:41.920 We have to consider all factors and I think what 0:13:42.000 --> 0:13:45.679 we've been successful at. Then when we do talk about 0:13:46.040 --> 0:13:49.040 automation or in the case of the Blombach container termal 0:13:49.120 --> 0:13:53.760 semi automation, we have that discussion as a stakeholder group, 0:13:54.440 --> 0:13:55.560 a collaborative effort. 0:13:56.320 --> 0:13:59.640 Automation at seaports is not an all or nothing proposition. 0:14:00.240 --> 0:14:03.720 Loading and offloading ships and moving cargo from one form 0:14:03.760 --> 0:14:07.760 of transportation to another involves many complex steps, some of 0:14:07.800 --> 0:14:11.360 which are more readily automated than others, and some of 0:14:11.400 --> 0:14:15.599 which don't lend themselves to automation at all given current technology. 0:14:16.280 --> 0:14:19.840 The main benefit of automation and the reason that it 0:14:20.000 --> 0:14:22.920 is the future and the reason that you see the 0:14:22.960 --> 0:14:27.800 most efficient ports and the world automating operations more and more, 0:14:28.480 --> 0:14:33.040 is that it sits very well with digitization. So it's 0:14:33.480 --> 0:14:39.960 an important part of the technical foundation for interoperable data 0:14:41.040 --> 0:14:46.520 sharing of data between different stakeholders. Sharing of good quality 0:14:46.640 --> 0:14:52.400 data so that action can be taken where necessary to 0:14:52.560 --> 0:14:56.880 drive efficiency and improve efficiency of port operations. 0:14:57.960 --> 0:15:00.880 Automation is far from the only way that ports like 0:15:00.960 --> 0:15:04.440 Long Beach are seeking to improve efficiency. Indeed, it may 0:15:04.480 --> 0:15:07.640 not even be the best way. A better approach may 0:15:07.680 --> 0:15:10.360 be to get more productivity from the system the way 0:15:10.400 --> 0:15:15.280 it's now configured, particularly by extending the hours the port operates. 0:15:15.760 --> 0:15:17.920 One of the things that I was very vocal about 0:15:18.120 --> 0:15:20.320 is how we move to twenty four to seven operations. 0:15:20.560 --> 0:15:23.040 Now we're not working twenty four hours a day, seven 0:15:23.120 --> 0:15:26.000 days a weekening time soon. Imagine if you told the 0:15:26.080 --> 0:15:28.560 American consumer you can only fly during the week and 0:15:28.600 --> 0:15:31.280 the airport will closed on weekends, or you can only 0:15:31.280 --> 0:15:33.720 fly between the hours of eight am and six pm. 0:15:34.080 --> 0:15:38.000 I mean, imagine what the airport bottleneck would be like. 0:15:38.240 --> 0:15:40.280 So I think the same emphasis needs to be put 0:15:40.320 --> 0:15:41.520 in terms of how we move cart. 0:15:42.880 --> 0:15:47.080 Another route to improve efficiency is rail. One train can 0:15:47.120 --> 0:15:50.360 carry seven hundred and fifty trucks worth of cargo, and 0:15:50.480 --> 0:15:53.400 earlier this year, Long Beach broke ground on a one 0:15:53.480 --> 0:15:56.680 point five billion dollar expansion of its rail yard that 0:15:56.720 --> 0:15:59.800 will triple the amount of cargo it can handle annually. 0:16:00.440 --> 0:16:05.000 John Gabriel is Group president for Consumer Products at b ANDSF, 0:16:05.360 --> 0:16:07.840 one of the two railroads servicing Long Beach. 0:16:08.640 --> 0:16:11.760 October of twenty twenty four was the biggest single month 0:16:11.800 --> 0:16:15.800 moving intermodal that we've had as BNSF Railway. Tying that 0:16:15.880 --> 0:16:18.520 back to the ports this year has it's on a 0:16:18.600 --> 0:16:21.240 record pace for the most shipped the train movements that 0:16:21.280 --> 0:16:23.520 we've done. It's the fastest we've ever gotten to a 0:16:23.640 --> 0:16:26.480 million containers loaded on the trains and departed out of 0:16:26.480 --> 0:16:28.800 the ports of LA and Long Beach. And I would 0:16:28.800 --> 0:16:31.400 certainly say that's a testament to, you know, the investments 0:16:31.440 --> 0:16:36.040 we've made. Again, we've invested in tracks facilities more than 0:16:36.040 --> 0:16:38.520 two and a half billion dollars over the last five years. 0:16:39.240 --> 0:16:41.200 I think it's a testament to the collaboration we have 0:16:41.360 --> 0:16:43.560 with the ports of LA and Long Beach and the 0:16:43.600 --> 0:16:47.920 investments they've made. That's so important. Right now, right now, 0:16:47.920 --> 0:16:51.440 we're handling more volume than we were post supply chain crisis, 0:16:51.440 --> 0:16:54.600 where we saw the huge uptick in consumer demand, you know, 0:16:54.640 --> 0:16:58.000 post pandemic, and we're doing it about fifty percent faster 0:16:58.360 --> 0:17:02.840 from ship to train and ultimately the ship to end destination. 0:17:03.080 --> 0:17:06.479 Across our animal network is about seventy five percent faster 0:17:06.720 --> 0:17:09.280 than it was from a transit perspective back in twenty 0:17:09.320 --> 0:17:11.280 twenty two. And you know, really, I would say the 0:17:11.440 --> 0:17:14.440 entire supply chain and all stakeholders have really stepped up 0:17:14.800 --> 0:17:17.359 and it's really been a great demonstration of you know, 0:17:17.560 --> 0:17:20.919 a capacity and supply chain resiliency for all the goods 0:17:20.920 --> 0:17:22.040 moving through the West Coast. 0:17:22.760 --> 0:17:26.480 Containers and Rossterdam are only thirty three percent off the 0:17:26.520 --> 0:17:31.399 total cargo through pit the major cargo nearly fifty percent 0:17:31.440 --> 0:17:33.480 of liquid bulk clicking i AIN World Away. 0:17:33.720 --> 0:17:38.320 Anna Steltzel is working on maximizing efficiency in Rotterdam, where 0:17:38.359 --> 0:17:42.400 she's the Director of Containers. It's the world's tenth busiest 0:17:42.440 --> 0:17:46.479 port and ranks ninety first in the World Banks Efficiency Index. 0:17:46.920 --> 0:17:50.680 As with Long Beach, Rotterdam is facing increasing demand. 0:17:51.880 --> 0:17:56.560 We're expanding our container capacity. We do know from research 0:17:56.680 --> 0:18:00.800 that to container business in Europe will be actually it 0:18:00.840 --> 0:18:03.399 will be growing all over the world. That has to 0:18:03.400 --> 0:18:06.520 do with containerization, that has to do with a growing 0:18:06.520 --> 0:18:10.600 middle class, and in order to prepare for their growth 0:18:10.640 --> 0:18:14.359 and to participate in their growth, we had decided to 0:18:14.440 --> 0:18:15.760 invest into our. 0:18:15.600 --> 0:18:21.040 Infrastructure Rotterdam is a leading port in a new system 0:18:21.080 --> 0:18:25.280 called Gemini, involving shipping companies HAPAC, Lloyd and Meersk. 0:18:26.280 --> 0:18:29.760 The trends that we see is that transhipment volumes are growing. 0:18:30.280 --> 0:18:33.760 That has to do, for example, with the fact that 0:18:33.960 --> 0:18:38.720 we have hubbinspoke concepts that are being introduced. Maersk, together 0:18:38.760 --> 0:18:41.480 with Harperkloyd, introduced the Gemini concept. 0:18:42.160 --> 0:18:45.399 The Gemini project features a series of hub ports around 0:18:45.400 --> 0:18:48.400 the world that handle the bulk of the cargo. Containers 0:18:48.440 --> 0:18:52.080 are then immediately loaded under smaller ships destined for spoke 0:18:52.280 --> 0:18:55.919 ports dotted all over the world. Central to the project 0:18:56.000 --> 0:18:59.640 in Rotterdam is APM, which bills itself as the most 0:18:59.640 --> 0:19:03.680 advance against most fully automated terminal in the world. Its 0:19:03.720 --> 0:19:05.640 CEO is Harold Kunst. 0:19:06.400 --> 0:19:08.800 The Gentleman and I approach is different than the traditional 0:19:08.800 --> 0:19:10.200 shipping line approach. 0:19:09.920 --> 0:19:11.120 We took for many decades. 0:19:11.800 --> 0:19:15.439 With the up structure integrated into the network of the 0:19:15.520 --> 0:19:18.880 five hubs in the East West approach from the trade 0:19:19.320 --> 0:19:21.280 is that we are able to enable the ships to 0:19:21.320 --> 0:19:25.600 be nine days earlier from far rays into Europe. Sports 0:19:25.720 --> 0:19:28.719 like Rotterdam in Europe and Long Beach in California are 0:19:28.760 --> 0:19:32.120 seeing greater demand than ever for cargo handling, and are 0:19:32.119 --> 0:19:35.160 investing and innovating to keep up with what's coming their way. 0:19:35.840 --> 0:19:38.320 So why is it that they still lag so far 0:19:38.400 --> 0:19:41.600 behind their counterparts in Asia, in the Middle East, and 0:19:41.720 --> 0:19:44.720 even in Latin America. Why is it that it takes 0:19:44.760 --> 0:19:47.280 two or three times as long to move a container 0:19:47.359 --> 0:19:50.320 at a US port than it does in China. It 0:19:50.359 --> 0:19:53.720 turns out that there are several reasons. First, and most 0:19:53.720 --> 0:19:57.000 basic is that twenty four to seven schedule that Cardero 0:19:57.240 --> 0:19:59.879 is pushing for at Long Beach, but that hasn't yet 0:20:00.040 --> 0:20:01.520 been accomplished. 0:20:01.480 --> 0:20:04.600 After nine months in the year twenty twenty four because 0:20:04.600 --> 0:20:08.200 of expanded hours of operation which commenced with the twenty 0:20:08.320 --> 0:20:12.639 four to seven conversation. Again, are we twenty four seven today? No, 0:20:13.280 --> 0:20:17.560 have we taken incremental steps to expand operation hours. Yes, 0:20:17.960 --> 0:20:20.320 that's a big reason why we don't have congestion and 0:20:20.320 --> 0:20:23.200 bottlenecks at the Pear Long Beach because our terminals have 0:20:23.320 --> 0:20:25.560 been able to work with us and making sure that 0:20:25.960 --> 0:20:30.440 we use night gates, we use early morning gates, we 0:20:30.560 --> 0:20:34.199 use weekend hours in times that we have historic volume, 0:20:34.600 --> 0:20:36.200 which is what we have done. 0:20:36.920 --> 0:20:39.280 So I think again we'll get there. 0:20:40.200 --> 0:20:42.960 Even if Long Beach were up and running all the time, 0:20:43.119 --> 0:20:45.240 it would be very difficult for it to approach the 0:20:45.280 --> 0:20:48.199 efficiency level of some major ports because of where it 0:20:48.240 --> 0:20:52.360 fits in the supply chain. Goods coming into Singapore or Oman, 0:20:52.480 --> 0:20:56.480 for example, are transferred from one ship to another rather 0:20:56.520 --> 0:21:00.000 than being moved over land by train or truck for distribute. 0:21:00.359 --> 0:21:03.840 In the United States, we're not a transhipment port. 0:21:04.200 --> 0:21:06.360 I mean some of the larger ports that you look at, 0:21:06.480 --> 0:21:10.960 for example Singapore, they are a transhipment port. They always 0:21:11.200 --> 0:21:14.000 have been, and the allies will. 0:21:14.040 --> 0:21:17.479 And finally, there is the question of automation, something that 0:21:17.560 --> 0:21:20.800 others make more use of than the US. But as 0:21:20.880 --> 0:21:23.439 much as automation promises to be an answer to so 0:21:23.560 --> 0:21:27.520 many prayers for greater efficiency, first it comes with a price, 0:21:27.960 --> 0:21:31.840 quite literally, in the investment it requires, with the associated 0:21:31.920 --> 0:21:34.600 questions of where the capital will come from and whether 0:21:34.680 --> 0:21:37.879 it will earn the return on investment normally required. 0:21:38.800 --> 0:21:43.240 There's about twelve hundred legitimate container terminals throughout the world, 0:21:43.840 --> 0:21:46.399 only about four percent are automated. 0:21:47.400 --> 0:21:52.360 So the challenge with any type of transformation of technology 0:21:52.800 --> 0:21:57.280 is a costly endeavor. So from a private sector perspective, 0:21:58.080 --> 0:22:02.400 what's the return on investment. I think that question is 0:22:02.480 --> 0:22:05.960 probably going to be more challenging moving forward, because obviously 0:22:06.000 --> 0:22:10.040 none of this happens under some private sector investment in. 0:22:10.000 --> 0:22:12.280 The United States. It's not just a question of the 0:22:12.359 --> 0:22:17.680 capital investment in return. Automation also has potentially substantial effects 0:22:17.720 --> 0:22:22.119 on employment, which led forty seven thousand members of the 0:22:22.160 --> 0:22:25.280 Longshoreman's Union to go on a three day strike in 0:22:25.480 --> 0:22:29.280 US ports on the Eastern Seaboard and Gulf Coast in October, 0:22:30.160 --> 0:22:33.280 something Cordero on the West Coast is very aware of. 0:22:34.080 --> 0:22:36.920 For a port like Low Beach, who are public ports, 0:22:37.280 --> 0:22:40.840 we need to take into account the social impacts that has. 0:22:41.119 --> 0:22:43.439 I think that at the Port of Lombreaes we're proud 0:22:43.480 --> 0:22:47.360 about the footprint that we have in terms of job production. 0:22:48.200 --> 0:22:50.920 You know, five hundred and thirty five thousand the local level, 0:22:51.960 --> 0:22:54.560 at the state level seven hundred and four thousand plus 0:22:54.680 --> 0:22:56.800 jobs directly and directly as a result of the pro 0:22:56.920 --> 0:23:00.000 Long Beach, and at the national levels the numbers like 0:23:00.040 --> 0:23:03.760 two play six million. So we just were talking earlier 0:23:04.320 --> 0:23:08.239 about the great economy that we have, our dependency of 0:23:08.280 --> 0:23:15.080 our GDP based on consumer spending robots don't spend money. 0:23:15.240 --> 0:23:15.919 Consumers do. 0:23:16.560 --> 0:23:20.920 So that's the conversation that I haven't really heard amplify 0:23:20.960 --> 0:23:24.240 it because for US, it's very important to keep labor 0:23:24.280 --> 0:23:29.560 in place, because hypothetically you eliminate labor, what are you 0:23:29.640 --> 0:23:32.960 doing to the economy and spending in terms of consumer spending. 0:23:34.680 --> 0:23:37.040 And that story will be an important part of the 0:23:37.200 --> 0:23:41.280 larger story of American exceptionalism and whether the US can 0:23:41.359 --> 0:23:46.040 remain the dominant economic force in an increasingly competitive world. 0:23:47.359 --> 0:23:50.840 Coming up by families from Las Vegas to Vancouver can't 0:23:50.840 --> 0:23:53.240 afford to buy a house. If you can buy the house, 0:23:53.320 --> 0:23:55.840 why you may not be able to afford to ensure it, 0:23:56.320 --> 0:24:00.280 particularly if you live in Florida or in California. On 0:24:00.400 --> 0:24:13.880 Wall Street Week, this is a story about risk, how 0:24:14.000 --> 0:24:16.280 much we are willing to pay to protect against the 0:24:16.440 --> 0:24:19.719 risk of losing something we value. It's a story that 0:24:19.960 --> 0:24:22.879 always begins when something goes very wrong. 0:24:28.960 --> 0:24:36.440 This is where we designated the water levels for Helene. 0:24:36.800 --> 0:24:40.200 Glenn Scarpa and his wife own Scarpu's Coastal restaurant in 0:24:40.240 --> 0:24:43.240 Boca Grande, a small island town in Florida. 0:24:43.720 --> 0:24:47.520 We cut everything around the whole restaurant at two feet, 0:24:47.640 --> 0:24:50.240