1
00:00:12,280 --> 00:00:15,720
Speaker 1: Time now for our Wall Street Week daily segment. David Weston,

2
00:00:15,760 --> 00:00:17,119
Speaker 1: the host of Wall Street Week.

3
00:00:17,000 --> 00:00:17,680
Speaker 2: Joining us now.

4
00:00:18,120 --> 00:00:20,360
Speaker 3: Thank you so much, Katie. So we thought we were

5
00:00:20,360 --> 00:00:22,599
Speaker 3: getting past some of the supply chain problems right, well,

6
00:00:22,640 --> 00:00:25,200
Speaker 3: we're all seeing those images now of the Panama Canal

7
00:00:25,360 --> 00:00:27,880
Speaker 3: zone as the levels go down to the water and

8
00:00:27,920 --> 00:00:30,400
Speaker 3: the ships build up outside the canal trying to get through.

9
00:00:30,600 --> 00:00:32,559
Speaker 3: So the racist questions about what is going on the

10
00:00:32,560 --> 00:00:34,839
Speaker 3: supply chain, and for an answer we turned out to

11
00:00:34,880 --> 00:00:38,880
Speaker 3: Vindiava kil she's resilink chairman, CEO and co founder. Thank

12
00:00:38,880 --> 00:00:41,479
Speaker 3: you so much for being with us. Your work at

13
00:00:41,520 --> 00:00:45,080
Speaker 3: reslink is focused on monitoring risks to supply chain, specifically

14
00:00:45,120 --> 00:00:49,239
Speaker 3: respect to the Panama Canal. How big a risk is that, you.

15
00:00:49,200 --> 00:00:51,320
Speaker 2: Know, it's not on the scale of the LA and

16
00:00:51,360 --> 00:00:54,480
Speaker 2: Long Beach port disruption that we saw. It's also not

17
00:00:54,600 --> 00:00:57,120
Speaker 2: on the scale of the Shanghai port disruption.

18
00:00:57,640 --> 00:00:59,800
Speaker 4: There are few silver.

19
00:00:59,600 --> 00:01:01,920
Speaker 1: Lining here in this particular case.

20
00:01:01,960 --> 00:01:07,160
Speaker 2: We have more inventory levels on shore regionally going into

21
00:01:07,640 --> 00:01:10,200
Speaker 2: twenty twenty three than we had in twenty nineteen, going

22
00:01:10,240 --> 00:01:11,559
Speaker 2: into the pandemic and.

23
00:01:11,480 --> 00:01:13,160
Speaker 1: Those other events.

24
00:01:13,520 --> 00:01:17,880
Speaker 2: We also have more emphasis on companies regionalizing their supply chains,

25
00:01:18,080 --> 00:01:21,800
Speaker 2: so I think there's a silver lining here. Having said that, definitely,

26
00:01:21,880 --> 00:01:27,720
Speaker 2: companies are going to be seeing shipments their transportation cost

27
00:01:27,800 --> 00:01:31,720
Speaker 2: increase by thirty to fifty percent, just depends on the route,

28
00:01:31,920 --> 00:01:34,759
Speaker 2: as well as delays of if not a few days,

29
00:01:34,760 --> 00:01:38,720
Speaker 2: then several weeks on certain ships, especially those that have

30
00:01:40,040 --> 00:01:44,120
Speaker 2: which do not meet the weight limits for transportation seamlessly through.

31
00:01:43,959 --> 00:01:46,480
Speaker 3: The canal and BEDI that's about the Panel Canal. We

32
00:01:46,520 --> 00:01:48,960
Speaker 3: also hear reports out of the line obviously that's been

33
00:01:49,000 --> 00:01:49,960
Speaker 3: having some problems for a while.

34
00:01:50,000 --> 00:01:50,200
Speaker 1: Now.

35
00:01:50,320 --> 00:01:53,000
Speaker 3: I've seen reports by the Anxie River, even the Mississippi River.

36
00:01:53,240 --> 00:01:56,880
Speaker 3: So how widespread are these challenges with navigation with respect

37
00:01:56,920 --> 00:01:57,720
Speaker 3: to the supply.

38
00:01:57,520 --> 00:01:59,720
Speaker 1: Chain, David.

39
00:01:59,720 --> 00:02:04,200
Speaker 2: Globally, extreme weather events have been tripling since twenty nineteen.

40
00:02:05,000 --> 00:02:06,440
Speaker 1: We saw about, you know.

41
00:02:06,440 --> 00:02:09,799
Speaker 2: In twenty sixteen or seventeen, wrestling would have reported maybe

42
00:02:10,680 --> 00:02:14,480
Speaker 2: seventy to eighty extreme weather events a year. Last year

43
00:02:14,520 --> 00:02:17,240
Speaker 2: we saw that go over three hundred and fifty. So

44
00:02:17,360 --> 00:02:21,000
Speaker 2: it's been multifold increase. We see six times the number

45
00:02:21,000 --> 00:02:25,040
Speaker 2: of flood related events, and now we're talking about drought.

46
00:02:25,639 --> 00:02:29,359
Speaker 2: As you said, Ryan, a Yangsa River, we saw Mississippi,

47
00:02:29,440 --> 00:02:33,640
Speaker 2: so all on the waterways and ocean choke points such

48
00:02:33,680 --> 00:02:37,399
Speaker 2: as sus Canal straight Offmas the Panama Canal are all

49
00:02:37,520 --> 00:02:41,120
Speaker 2: choke points right that are impacted by climate change and

50
00:02:41,200 --> 00:02:46,160
Speaker 2: these disruptions. A bigger issue is actually on the factories

51
00:02:46,200 --> 00:02:46,600
Speaker 2: as well.

52
00:02:46,639 --> 00:02:49,120
Speaker 1: When you have these droughts.

53
00:02:48,720 --> 00:02:53,640
Speaker 2: They affect the company's ability to get uninterrupted water and power,

54
00:02:54,120 --> 00:02:58,359
Speaker 2: both of which are essential in certain industries. Factories cannot

55
00:02:58,400 --> 00:03:02,360
Speaker 2: have any interrupt availability of water and power.

56
00:03:03,200 --> 00:03:06,200
Speaker 4: We also see one more issue, which is that globally,

57
00:03:06,240 --> 00:03:10,160
Speaker 4: when you look at the business continuity plans of many factories,

58
00:03:10,880 --> 00:03:14,160
Speaker 4: they do not have back of power available.

59
00:03:14,639 --> 00:03:17,080
Speaker 2: And certainly they have back of power It powers up

60
00:03:17,160 --> 00:03:18,359
Speaker 2: lights and climate, but.

61
00:03:18,480 --> 00:03:22,880
Speaker 1: Not the actual line itself, so availability of water power.

62
00:03:23,040 --> 00:03:26,200
Speaker 1: These are all critical risks that are facing.

63
00:03:25,880 --> 00:03:28,000
Speaker 3: The supply chain, But do you mention some of the

64
00:03:28,040 --> 00:03:30,760
Speaker 3: factory issues. We're seeing a lot of investment right now,

65
00:03:30,919 --> 00:03:33,720
Speaker 3: spurred by the US government under the Chips and Science

66
00:03:33,760 --> 00:03:36,360
Speaker 3: Act for the so called semconder fabs. I see some

67
00:03:36,400 --> 00:03:38,600
Speaker 3: of those being built in places like Arizona. Is this

68
00:03:38,640 --> 00:03:40,080
Speaker 3: a possible risk to that plan?

69
00:03:41,360 --> 00:03:42,040
Speaker 1: Absolutely?

70
00:03:42,400 --> 00:03:46,800
Speaker 2: It does require additional investment worth multiple hundreds of millions

71
00:03:46,840 --> 00:03:48,600
Speaker 2: in order to recycle the water.

72
00:03:48,760 --> 00:03:51,200
Speaker 1: A wafer fab requires nine.

73
00:03:51,120 --> 00:03:55,400
Speaker 2: Million gallons of clean water a day, and so that

74
00:03:55,560 --> 00:03:59,560
Speaker 2: is not a small task for a drought zone. In fact,

75
00:03:59,600 --> 00:04:03,360
Speaker 2: in I Want, we've seen drought cause supply chain and

76
00:04:03,400 --> 00:04:07,800
Speaker 2: semiconductor disruptions because you know, semiconductor factories, as I said,

77
00:04:08,440 --> 00:04:13,400
Speaker 2: require uninterrupted water and power. So these companies that set

78
00:04:13,480 --> 00:04:17,159
Speaker 2: up factory fabs in these regions need to make those

79
00:04:17,200 --> 00:04:23,040
Speaker 2: additional investments in back of power and recycling water continuously.

80
00:04:23,320 --> 00:04:28,000
Speaker 2: This is also why companies need to map their supply chains. Unfortunately,

81
00:04:28,040 --> 00:04:32,960
Speaker 2: many companies don't really realize that their side in Arizona

82
00:04:33,080 --> 00:04:36,279
Speaker 2: that supplies them actually has a supply chain that spans

83
00:04:36,360 --> 00:04:40,760
Speaker 2: across the world and might require fifteen to twenty weeks

84
00:04:40,760 --> 00:04:44,800
Speaker 2: to replenish inventory. So mapping the supply chain and monitoring

85
00:04:44,839 --> 00:04:48,080
Speaker 2: for these disruptions, Really knowing where the factory is and

86
00:04:48,160 --> 00:04:50,680
Speaker 2: whether it's in a high water region or a low

87
00:04:50,720 --> 00:04:55,159
Speaker 2: water region really affects the type of mitigation plans that

88
00:04:55,279 --> 00:04:57,000
Speaker 2: our customers are working on.

89
00:04:57,040 --> 00:04:59,120
Speaker 1: This with many suppliers as we speak.

90
00:04:59,320 --> 00:05:01,640
Speaker 3: You're going back to aftermath of the pandemic. You and

91
00:05:01,680 --> 00:05:04,720
Speaker 3: I talked at the time about things like friend shoring

92
00:05:04,800 --> 00:05:07,760
Speaker 3: and reshoring, really redoing supply chains in light of what

93
00:05:07,760 --> 00:05:09,880
Speaker 3: we'd learned from that is that going on, you're monitoring

94
00:05:09,920 --> 00:05:12,760
Speaker 3: that now have those supply chains been refactored.

95
00:05:13,960 --> 00:05:17,919
Speaker 2: It takes many years, but this is a passionate issue

96
00:05:17,920 --> 00:05:22,039
Speaker 2: for me personally. We see companies are looking at Central

97
00:05:22,080 --> 00:05:25,560
Speaker 2: America as well as south of Mexico. These are very

98
00:05:25,600 --> 00:05:30,560
Speaker 2: competitive cost wise, as well as availability of labor and

99
00:05:30,640 --> 00:05:38,160
Speaker 2: natural resources wise, for companies to locally source bypassing oceans

100
00:05:38,320 --> 00:05:42,000
Speaker 2: entirely and having a land based supply chain, by working

101
00:05:42,000 --> 00:05:45,120
Speaker 2: closely with our partners here. Actually in Europe, we see

102
00:05:45,120 --> 00:05:50,239
Speaker 2: a similar regionalization happening with countries in Africa where there

103
00:05:50,360 --> 00:05:54,520
Speaker 2: is a where there is access to clean water, power

104
00:05:54,720 --> 00:05:58,679
Speaker 2: and plenty of labor actually at highly competitive rates.

105
00:05:59,080 --> 00:06:01,120
Speaker 3: Vidia's always so good to talk to about supply chains.

106
00:06:01,160 --> 00:06:04,279
Speaker 3: That's been df Reslink chairman, CEO and co founder