WEBVTT - Bloomberg Businessweek Weekend - December 16th, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg business Week Inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.200 global business, finance and tech news as it happened. Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.360 Stinovik on Bloomberg Radio. Hi, everyone, Welcome to the weekend 0:00:21.440 --> 0:00:24.960 edition of Bloomberg Business Week. Carol Master is off the 0:00:25.040 --> 0:00:27.520 head on the program will examine the state of the U. S. 0:00:27.560 --> 0:00:31.120 Trucking business with carriers in the midst of the holiday deluge. 0:00:31.520 --> 0:00:34.000 We'll talk restaurants with the CEO of Open Table, and 0:00:34.040 --> 0:00:36.960 we'll hear from a newly minted Bloomberg fifty honoree who's 0:00:37.000 --> 0:00:40.440 rewriting the labor story at Starbucks. All that to come. 0:00:40.479 --> 0:00:43.000 We begin, though, with a story that everyone keeps talking about. 0:00:43.000 --> 0:00:45.600 A No, we are not talking about the Fed's latest 0:00:45.640 --> 0:00:49.199 interest rate hike, but f t X. Bloomberg Business Week 0:00:49.200 --> 0:00:51.559 columnist Max Chafkin has a story online and on the 0:00:51.680 --> 0:00:54.800 terminal that focuses on the relationship between Sam Bateman, Freed 0:00:54.800 --> 0:00:58.000 and Finances. Chang Peng Jao, better known as c z 0:00:58.920 --> 0:01:00.920 c Z, as you may recall, helped last month to 0:01:00.960 --> 0:01:04.760 blow the whistle on his longtime rivals failures. Carolin I 0:01:04.800 --> 0:01:07.319 asked Max about the implications of that with Bankman Freed, 0:01:07.319 --> 0:01:10.120 who's now in custody in the Bahamas. Congress continues to 0:01:10.160 --> 0:01:13.039 probe what happened. I think it's pretty clear, you know, 0:01:13.080 --> 0:01:15.679 he's got some tough legal sledding ahead. It's who else 0:01:15.720 --> 0:01:18.640 gets roped into this? So there are other figures um 0:01:18.640 --> 0:01:22.720 connected obviously to f t x uh Carolyn Ellison of course, 0:01:23.120 --> 0:01:28.160 um uh, from a girlfriend, Yeah, ex girlfriend's CEO of 0:01:28.160 --> 0:01:30.800 of Alameda um. And and also kind of the person 0:01:30.800 --> 0:01:32.720 that Sam Bankman Fried was sort of it kind of 0:01:32.720 --> 0:01:35.280 felt like was trying to pin this all on um uh, 0:01:35.800 --> 0:01:38.440 perhaps unfairly um to talk about a messy breakup, No, 0:01:38.600 --> 0:01:40.920 just kidding, Yeah, and UM And then you have the 0:01:40.959 --> 0:01:44.600 other crypto exchanges, and you know, we've seen this play 0:01:44.600 --> 0:01:47.440 out before over the last uh a few months, where 0:01:47.480 --> 0:01:49.920 we're off one exchange go down, one major player in 0:01:49.960 --> 0:01:52.720 crypto go down, and it's starting to suck everybody else down. 0:01:52.720 --> 0:01:55.000 We people have been talking about, you know, this this 0:01:55.040 --> 0:01:58.639 sort of unfolding credit crisis, and I think it remains 0:01:58.640 --> 0:02:01.360 to be seen, you know, kind of who else does 0:02:01.480 --> 0:02:04.320 Sam Banquin freed, uh, you know bring down with him? 0:02:04.320 --> 0:02:06.680 And and I think it's it's very possible because as 0:02:06.680 --> 0:02:09.200 we've seen in sort of the details of this case, 0:02:09.720 --> 0:02:12.960 these guys were all pretty tightly you know and meshed. 0:02:13.080 --> 0:02:17.160 And UM. One of the interesting things, uh that in 0:02:17.200 --> 0:02:19.840 the testimony that that Sam Bankman freed, which you know 0:02:19.880 --> 0:02:23.480 we and others have been talking about. Uh, you know, 0:02:23.520 --> 0:02:27.919 he's got these text messages from other CEOs of exchanges. Um. 0:02:28.080 --> 0:02:31.200 The the the title of this text message group is 0:02:31.240 --> 0:02:34.600 Exchange Coordination. UM. There you know, it's it's it's all 0:02:34.720 --> 0:02:37.679 very weird and and and it makes you wonder, um 0:02:37.760 --> 0:02:41.080 whether ever anybody else is potentially vulnerable either to like 0:02:41.200 --> 0:02:45.400 legal um issues or potentially just asset price it's falling 0:02:45.440 --> 0:02:48.000 and then hurting other companies. Right, makes me wonder like 0:02:48.040 --> 0:02:50.840 how systemic all of this is and who else comes 0:02:50.919 --> 0:02:54.480 down beyond the f t X kind of universe. At 0:02:54.480 --> 0:02:57.560 the same time, it also makes me wonder about collusion 0:02:57.600 --> 0:03:01.080 and I'm not maybe using it in a legal way. Um. 0:03:01.160 --> 0:03:04.760 And and also kind of you know, HARKing back to 0:03:04.840 --> 0:03:09.920 like Robert Barons, where you know, anything could happen and 0:03:10.000 --> 0:03:13.600 people would get rid of their other competitors or smaller competitors, 0:03:13.600 --> 0:03:16.440 because they wanted to own the marketplace. And I feel 0:03:16.480 --> 0:03:20.119 like that's where potentially yeah, and well, and you look 0:03:20.160 --> 0:03:23.440 at like why was Gary Gainsler, Why were people in 0:03:23.480 --> 0:03:26.120 the US resistant to this, to to these companies, And 0:03:26.200 --> 0:03:29.119 one reason was potential manipulation. You have all of these 0:03:29.360 --> 0:03:33.840 very small number of players, um lightly changed like traded currencies, 0:03:33.960 --> 0:03:36.480 and they're going around trying to pull in money from 0:03:36.560 --> 0:03:39.720 from normal people. Um, which of course raises questions. Um, 0:03:40.160 --> 0:03:44.000 you bring up Jao c z so Chang Peng Jao 0:03:44.560 --> 0:03:47.760 uh CEO of Finance, which is the other major exchange 0:03:48.040 --> 0:03:51.480 basically Sam Bankman Fried's main competitor. And over the years 0:03:51.560 --> 0:03:54.960 these two had a serious rivalry where it's kind of happening, 0:03:55.000 --> 0:03:56.840 as I write in the column today, this is all 0:03:56.920 --> 0:03:59.400 kind of happening behind the scenes. But they were both 0:03:59.560 --> 0:04:05.000 and in binance this case, are both operating in regulatory 0:04:05.040 --> 0:04:07.520 gray areas. So as we know, Sam Bankman Freed based 0:04:07.520 --> 0:04:10.080 on the Bahamas was operating this kind of quote unquote 0:04:10.120 --> 0:04:15.480 offshoring exchange Finance kind of same situation operating. UM. No 0:04:15.520 --> 0:04:18.599 one really knows where that's that's the main difference there 0:04:18.640 --> 0:04:20.400 as far as we're concerned. We don't know where where 0:04:20.400 --> 0:04:23.120 Binances headquarters is, but it's the same thing where um 0:04:23.160 --> 0:04:27.440 they're trading these alt coins um s coins are sometimes 0:04:27.440 --> 0:04:30.760 called as well as crypto derivatives. Much of that is 0:04:30.760 --> 0:04:32.880 not allowed in the US, and as a result, they're 0:04:32.880 --> 0:04:35.479 in this kind of regulatory gray area and and that 0:04:35.520 --> 0:04:38.120 has left them kind of vulnerable to you know, potential 0:04:38.520 --> 0:04:42.839 sec sanction, CFTC, potentially even criminal investigation. What we saw 0:04:42.920 --> 0:04:46.400 behind the scenes is that Jao and Sam bankmun freed, 0:04:46.560 --> 0:04:49.320 we're kind of vying to find a way to sort 0:04:49.360 --> 0:04:51.800 of legalize their business, to take this business from the 0:04:51.839 --> 0:04:53.960 gray area and bring it into the light. And I 0:04:53.960 --> 0:04:56.440 think that's part of what led to the conflict and 0:04:56.480 --> 0:04:58.440 maybe even part of what led to the to the 0:04:58.520 --> 0:05:02.800 run on withdrawals that ultimately, um, you know, exposed the 0:05:02.839 --> 0:05:05.120 f t X, the alleged fraud at f t X. 0:05:05.320 --> 0:05:07.640 Well go back to this idea of fud if you're 0:05:07.720 --> 0:05:10.119 uncertainty and doubt, because a big portion of your column 0:05:10.200 --> 0:05:12.320 today is about that, And I don't know if you've 0:05:12.400 --> 0:05:14.480 you know, found yourself at the center of this at all, Max, 0:05:14.520 --> 0:05:16.440 But if you talk about crypto online, and you you 0:05:16.600 --> 0:05:20.240 express any skepticism about it, you are accused of spreading fud, 0:05:20.279 --> 0:05:23.240 as you write in column. So where does fud come 0:05:23.240 --> 0:05:27.159 into this conflict? So everybody who's anybody in crypto has 0:05:27.240 --> 0:05:31.160 like thrown around the suggestion of fud um Uh Chang 0:05:31.160 --> 0:05:33.640 Pang Jao has a huge Twitter following. He's got like 0:05:33.640 --> 0:05:36.039 eight million or seven million followers. I haven't I'm not 0:05:36.160 --> 0:05:39.520 exactly which um, but he's he's constantly anytime anyone writes 0:05:39.560 --> 0:05:43.040 anything negative, you know, he's he's calling fud um. We 0:05:43.200 --> 0:05:47.440 saw about a month ago, it was kind of his 0:05:47.600 --> 0:05:50.560 tweet in response to these coin desk reports. The coin 0:05:50.600 --> 0:05:53.359 desk reports were about you know, this shaky balance sheet 0:05:53.720 --> 0:05:56.440 um Sam Bankman Freed and his colleagues are denying it. 0:05:56.880 --> 0:06:00.000 Jaw comes in and says, hey, this looks really concerned. 0:06:00.080 --> 0:06:02.680 We're gonna sell our you know FTX tokens called f 0:06:02.760 --> 0:06:06.200 t T And that sets off this run and and 0:06:06.240 --> 0:06:08.640 in you know, in some sense, right, Jao is spreading 0:06:08.680 --> 0:06:11.279 what a crypto person would call fud. On another sense, 0:06:11.320 --> 0:06:14.640 he's acting as a whistleblower. He's exposing a actual flaw 0:06:15.120 --> 0:06:17.400 now and and and so I think it's important, you know, 0:06:17.440 --> 0:06:20.520 we've got to make that distinction. But since then, Jao 0:06:20.560 --> 0:06:22.800 has kind of seemed to do the same thing to 0:06:22.839 --> 0:06:25.719 a couple of other exchanges, which is interesting and and 0:06:25.720 --> 0:06:29.000 and perhaps telling. Um, you know, he a couple of 0:06:29.040 --> 0:06:31.480 weeks ago he sort of went after coin Base, suggesting 0:06:31.520 --> 0:06:34.640 the coin base was shaky. Um coin based courses based 0:06:34.640 --> 0:06:37.760 in the US has audited financial statements. Um uh, you know, 0:06:37.800 --> 0:06:40.679 s serious charge. He deleted the tweet. Same thing with Cracking, 0:06:40.760 --> 0:06:44.560 another um reputable exchange, and he also deleted that tweet. 0:06:44.640 --> 0:06:46.960 And I think what's going on is you have the 0:06:47.040 --> 0:06:49.839 ft X collapse, and that's creating a sense of panic 0:06:49.839 --> 0:06:53.480 in the market, potential legal vulnerability. It's also it's also 0:06:53.520 --> 0:06:56.640 shrinking the market, and it's creating an opportunity for somebody 0:06:56.640 --> 0:06:58.960 like Finance or coin based or Cracking or any of 0:06:59.000 --> 0:07:01.320 these people to can solidate and to and to get 0:07:01.360 --> 0:07:04.400 customers in that sense, an opportunity, but it's also shrinking 0:07:04.440 --> 0:07:07.279 the market dramatically. So you kind of a sense the 0:07:07.360 --> 0:07:09.920 lights just came on and there aren't enough chairs. They're 0:07:09.920 --> 0:07:11.960 all trying to find a chair. That was Bloomberg business, 0:07:12.000 --> 0:07:14.200 We call him this Max Chafkin will continue to monitor 0:07:14.240 --> 0:07:16.760 all of the latest developments with FTX and bringing the 0:07:16.760 --> 0:07:19.520 news as it breaks. Now, we want to also bring 0:07:19.520 --> 0:07:22.160 your attention to a great piece from Business Week National 0:07:22.200 --> 0:07:26.080 correspondent Josh Green, writing for Bloomberg Opinion. This week, Josh 0:07:26.120 --> 0:07:29.160 says that Elon Musk is ruining former President Donald Trump's 0:07:29.280 --> 0:07:33.400 latest presidential bid. Bloomberg News senior market supporter Katie Greifeld 0:07:33.440 --> 0:07:35.440 and I spoke with Josh a about the irony of 0:07:35.520 --> 0:07:38.520 Musk inviting the former president back to Twitter, which would, 0:07:38.520 --> 0:07:41.920 of course detract from Trump's current social media home truth 0:07:42.000 --> 0:07:45.560 Social The whole rationale for having an alternative right wing 0:07:45.680 --> 0:07:48.480 social media platform was to get kind of people to 0:07:48.560 --> 0:07:50.040 go over there and be able to turn that into 0:07:50.040 --> 0:07:51.720 a business that makes a lot of money. And chunk 0:07:51.760 --> 0:07:54.800 has Trump has a chunk of that? Uh, the minute 0:07:54.800 --> 0:07:57.920 everybody starts gravitating back to Twitter, and certainly if the 0:07:58.000 --> 0:08:00.240 if the biggest power user of the mall and Donald 0:08:00.240 --> 0:08:03.400 Trump or to go back, it would really obviate any 0:08:03.440 --> 0:08:05.560 sort of a need for a right wing social platforms. 0:08:05.600 --> 0:08:08.240 I think that's about the only thing that's kept him 0:08:08.240 --> 0:08:12.400 from going back. But in his absence, a new Twitter 0:08:12.520 --> 0:08:15.680 overlord has emerged, and that is Elon Musk And as 0:08:15.720 --> 0:08:19.400 I say in the columns, he's essentially overshadowing and eclipsing uh, 0:08:19.480 --> 0:08:23.040 Donald Trump, who's whose political superpower always has been to 0:08:23.080 --> 0:08:26.680 be able to dominate the political conversation, largely through the 0:08:26.760 --> 0:08:30.480 use of Twitter. So I'm hearing you talk, I'm reading 0:08:30.520 --> 0:08:34.199 your column, and it brings me to a natural question, 0:08:34.280 --> 0:08:36.520 which is, how does this end? Are we gonna be 0:08:36.800 --> 0:08:41.800 watching Musk's campaign in however many years? I don't think that. 0:08:41.920 --> 0:08:44.160 I don't think that Elon Musk is has any real 0:08:44.200 --> 0:08:46.920 interest in politics besides just kind of weighing in with 0:08:47.080 --> 0:08:50.000 his takes, which he seems to be doing about every 0:08:50.120 --> 0:08:53.400 every thirty minutes on Twitter from what I can tell, um, 0:08:53.840 --> 0:08:56.520 and I would I would never hazard a guest to predict, 0:08:56.600 --> 0:08:58.360 you know, how Trump's campaign is going to go. But 0:08:58.400 --> 0:09:01.760 I will say this, you know, tru Umps. What first 0:09:01.800 --> 0:09:05.720 elevated Trump, um, you know, in national politics was his 0:09:05.800 --> 0:09:09.680 ability to draw all the attention to himself, to just 0:09:09.760 --> 0:09:14.760 be this constant, churning story that you couldn't look away from, 0:09:14.800 --> 0:09:18.480 that eclipsed everybody else, and that drove the news cycle 0:09:18.559 --> 0:09:22.960 on Twitter on cable media on newspaper headlines. And the 0:09:22.960 --> 0:09:25.560 one thing that Trump has really lost since January six, 0:09:25.600 --> 0:09:29.000 since he was the platform, was his ability to do that. 0:09:29.040 --> 0:09:31.920 He just doesn't have the outlet he once did. Uh 0:09:31.920 --> 0:09:34.160 And as we can see him, he launched his presidential 0:09:34.200 --> 0:09:37.320 campaign three weeks ago and it's pretty much been crickets 0:09:37.320 --> 0:09:40.720 ever since then. He really the only real topic of 0:09:40.800 --> 0:09:44.319 conversation was his dining with with white nationalists, and that's 0:09:44.360 --> 0:09:46.120 sorta of not the kind of press that you want 0:09:46.559 --> 0:09:48.400 when you're trying to launch a white house bit. But 0:09:48.440 --> 0:09:51.240 what has replaced that the guy who was driving the 0:09:51.280 --> 0:09:54.600 news cycle all day and all night is now Elon Musk, 0:09:54.640 --> 0:09:57.040 And if that lane is occupied by Musk, it's gonna 0:09:57.040 --> 0:09:59.720 make it awfully difficult for Trump to to become what 0:09:59.760 --> 0:10:01.720 he it was. Well, what if that lane is occupied 0:10:01.720 --> 0:10:04.240 by Elon Musk and then Elon Musk then goes and 0:10:04.760 --> 0:10:07.720 decides to get behind someone like Rhonda Santis for example. Well, 0:10:07.760 --> 0:10:10.560 I think it's problematic for Trump. And you can see 0:10:10.559 --> 0:10:12.720 this in all sorts of ways. I mean in the column. 0:10:13.080 --> 0:10:16.080 You know, I looked at Twitter followers, Musk has fifty 0:10:16.080 --> 0:10:19.360 million more. I looked at Google search mentions. Uh, Elon 0:10:19.480 --> 0:10:22.760 Musk is easily eclipsing Donald Trump. But I think what's 0:10:22.760 --> 0:10:25.120 even more important from political standpoint is if you go 0:10:25.200 --> 0:10:27.800 to a place like bright Barton News, the hard right 0:10:27.880 --> 0:10:30.960 news site to help launch Donald Trump. Uh, they now 0:10:31.000 --> 0:10:33.440 have a vertical on Elon Musk and they're writing about 0:10:33.440 --> 0:10:37.000 his Twitter stuff every day, and Trump is almost an afterthought. 0:10:37.080 --> 0:10:39.280 You know, it's buried at the bottom of the page. 0:10:39.559 --> 0:10:42.400 That was Business Week National correspondent Josh Green with Katie 0:10:42.400 --> 0:10:45.280 Gradfeld and me. Check out Josh's full piece online or 0:10:45.280 --> 0:10:47.320 on the terminal by typing O P I N go. 0:10:48.120 --> 0:10:50.760 You're listening to Bloomberg business Week. Coming up next, the 0:10:50.840 --> 0:10:54.160 president of shipping payments platform Triumph Pay breaks down the 0:10:54.240 --> 0:10:57.160 massive volume of packages on the move this holiday season. 0:10:57.720 --> 0:11:09.720 This is Bloomberg. This is Bloomberg Business Week with Carol 0:11:09.760 --> 0:11:14.000 Messer and Bloomberg Quick Takes. Tim Stinovan from Bloomberg Radio. 0:11:15.400 --> 0:11:19.040 American ship more than fifty million packages last holiday season 0:11:19.080 --> 0:11:22.240 with the US Postal Service, and with package volumes continuing 0:11:22.280 --> 0:11:24.320 to increase, thanks in large part to the rise of 0:11:24.320 --> 0:11:27.280 online shopping, the agency is preparing for an even higher 0:11:27.320 --> 0:11:30.120 volume of parcels this year. The trucking industry helps move 0:11:30.120 --> 0:11:32.720 many of those around the country, but driver shortages are 0:11:32.720 --> 0:11:35.599 creating doubts that everything can get to its intended destination 0:11:35.920 --> 0:11:38.880 and on time. Melissa Foreman is the president at Triumph Pay. 0:11:38.920 --> 0:11:40.959 This is a payment platform and what it does is 0:11:41.000 --> 0:11:44.200 it connects brokers, shippers and carriers. It's a division of 0:11:44.280 --> 0:11:46.240 t b K Bank, member of the f d i C, 0:11:46.440 --> 0:11:49.000 and part of the publicly traded Triumph Financial. It's got 0:11:49.040 --> 0:11:51.880 about a one point three billion dollar market cap. We 0:11:51.920 --> 0:11:55.800 asked Melissa for her assessment. Were uniquely positioned, given where 0:11:55.840 --> 0:11:59.199 we sit within the transaction flow of payments, to really 0:11:59.240 --> 0:12:02.840 have a good understanding of what drivers and carriers and 0:12:02.920 --> 0:12:05.520 carriers are experiencing in the industry. And so Try and 0:12:05.640 --> 0:12:08.920 Pay makes about twenty four billion dollars annalyzed payments um 0:12:09.360 --> 0:12:13.439 two carriers per year, and that's the most of anybody 0:12:13.480 --> 0:12:16.160 in the industry. And so in doing that, it gives 0:12:16.240 --> 0:12:19.360 us that unique view. And we recently did a survey 0:12:19.400 --> 0:12:23.679 of our drivers that we're paying, and what's happening right 0:12:23.679 --> 0:12:26.319 now is is truly unprecedented. You know, when you look 0:12:26.360 --> 0:12:31.079 at the full truckload market, consumer spending and shifting from 0:12:31.080 --> 0:12:33.960 products to services, and so what does that mean on 0:12:34.000 --> 0:12:36.600 the transportation industry. It means that the trucks you know 0:12:36.640 --> 0:12:39.200 aren't aren't getting full, the inventories are high, and in 0:12:39.240 --> 0:12:42.080 all of the retail chains that are out there, and 0:12:42.120 --> 0:12:45.559 so they're just not re stalking all of that. Um. 0:12:45.640 --> 0:12:48.000 When we talked to our drivers out there, they said 0:12:48.880 --> 0:12:52.400 of them indicated that their revenues in twenty two were 0:12:52.600 --> 0:12:56.040 down from one And while twenty two started strong in 0:12:56.040 --> 0:12:58.480 the freight market, we've seen, you know, on the spot 0:12:58.559 --> 0:13:01.760 side of that in the last you know, two quarters, 0:13:02.120 --> 0:13:05.920 a significant cliff where it's where it's fallen off. UM. 0:13:06.000 --> 0:13:09.240 And those guys out there are saying, guys and gales 0:13:09.600 --> 0:13:12.040 that spot rates are their number one concern, and you 0:13:12.120 --> 0:13:14.320 have to ask yourself, why why does that matter? You know, 0:13:14.360 --> 0:13:17.280 spot rates aren't lower than they were a few years ago. 0:13:17.640 --> 0:13:20.920 There still would seem healthy in comparison to previous years. 0:13:20.960 --> 0:13:24.640 But what's changed over the pandemic and COVID in the 0:13:24.640 --> 0:13:27.080 supply chain issues that we've had over the last couple 0:13:27.120 --> 0:13:30.599 of years is that the you know, inflation has increased 0:13:30.840 --> 0:13:33.959 the cost of their equipment. Fuel prices are at record 0:13:34.040 --> 0:13:37.160 highs for diesel, and so when you compound that with 0:13:37.240 --> 0:13:41.400 the rising interest rates, their cost to operate has skyrocketed. 0:13:41.760 --> 0:13:44.480 And so what would have been a healthy level a 0:13:44.520 --> 0:13:47.240 couple of years ago is now in many cases where 0:13:47.280 --> 0:13:50.440 carriers are taking on freight where they're they're hauling that 0:13:50.480 --> 0:13:54.560 load at a loss. What's even more pressing about that 0:13:54.720 --> 0:13:57.559 is that they have to do that in front all 0:13:57.640 --> 0:14:01.000 the expenses to be able to pay for the fuel, 0:14:01.080 --> 0:14:05.559 pay for the drivers, you know, settlements, pay for the equipment, insurance, 0:14:06.040 --> 0:14:08.080 and they're doing that up front, but yet they have 0:14:08.160 --> 0:14:10.120 to wait thirty to sixty days to get paid, and 0:14:10.160 --> 0:14:13.000 so it just further compresses them and puts in a 0:14:13.040 --> 0:14:16.200 position where they're just being squeezed out of the market. 0:14:16.320 --> 0:14:18.640 It's really hard for them to operate. Right now, we listen, 0:14:19.080 --> 0:14:21.840 help me understand what goes on in the trucking market. 0:14:21.840 --> 0:14:24.080 I know people who have owned their own cabs, right, 0:14:24.120 --> 0:14:27.000 and they, I guess, do their own thing. But is 0:14:27.040 --> 0:14:30.720 it largely kind of like individual owners of trucks or 0:14:30.760 --> 0:14:33.440 is it a lot a lot of larger companies that 0:14:33.920 --> 0:14:36.760 have their trucker base. Yeah, if you could explain some 0:14:36.800 --> 0:14:39.840 of the dynamics of the industry, sure, care. That's that's 0:14:39.840 --> 0:14:43.479 a great question. And if you look at the truckload 0:14:43.640 --> 0:14:47.520 over the road market for higher about eight five cent 0:14:47.640 --> 0:14:51.800 to of trucking companies are five trucks are less. So 0:14:51.840 --> 0:14:55.560 they are small businesses live in the American dream, trying 0:14:55.600 --> 0:15:00.200 to build you know, their their businesses, and you they 0:15:00.240 --> 0:15:03.600 have all this this upfront expense and and these pressures 0:15:03.640 --> 0:15:06.920 that are that are squeezing out their margins. Well, is 0:15:06.960 --> 0:15:10.880 it any different though, from anyone else who either has 0:15:10.880 --> 0:15:12.520 to get in a car to head to work or 0:15:12.600 --> 0:15:14.800 has to buy clothes to go to work? Like, tell me, 0:15:15.720 --> 0:15:17.840 is it not just kind of the same that everybody's 0:15:17.880 --> 0:15:20.520 facing right now? And it's companies are trying to figure 0:15:20.560 --> 0:15:24.680 out the balance between raising wages right to meet what's 0:15:24.680 --> 0:15:27.920 going on with the inflation pressures. And we talk a 0:15:27.920 --> 0:15:30.520 lot about wage in flash and flash and wages have 0:15:30.560 --> 0:15:32.720 gotten up a lot, but you know what's the balance 0:15:32.800 --> 0:15:35.240 Because if you raise the costs the wages too much 0:15:35.280 --> 0:15:37.080 and everything gets too expensive, you do wonder if people 0:15:37.080 --> 0:15:40.000 are going to slow down on demand. For those in 0:15:40.040 --> 0:15:44.200 the trucking industry, it is quite similar. However, it trails 0:15:44.600 --> 0:15:47.920 um what what consumers do a little bit longer. And 0:15:48.000 --> 0:15:51.040 so because of the cost to acquire that equipment, you 0:15:51.120 --> 0:15:54.440 have these assets, and you know, these carriers are fighting 0:15:54.520 --> 0:15:56.480 hard to keep them on the road and to keep 0:15:56.520 --> 0:15:59.080 them profitable. You can't just say one day, I'm going 0:15:59.160 --> 0:16:01.120 to take a different job where i make more money. 0:16:01.240 --> 0:16:04.480 You've got an expense that you have to handle UM 0:16:04.560 --> 0:16:08.320 and either offload or take a loss. And and so 0:16:08.400 --> 0:16:11.000 they are working as hard as they can to be 0:16:11.080 --> 0:16:13.600 able to stay in the business, stay on the road, 0:16:13.760 --> 0:16:16.680 keep their trucks moving, but but doing so in a 0:16:16.720 --> 0:16:19.800 profitable way. Because you can only take a loss for 0:16:19.880 --> 0:16:23.000 so long before you either get bought right you sell 0:16:23.000 --> 0:16:26.920 out your company UM or you've lost everything that you've built. 0:16:27.000 --> 0:16:29.880 And so UM they tend to stay in a little 0:16:29.880 --> 0:16:32.720 bit longer, and those that make it through survive because 0:16:32.760 --> 0:16:36.640 we know that transportation is cyclical. And what happens is, 0:16:36.720 --> 0:16:38.880 you know, you you have this pressure and and this 0:16:38.960 --> 0:16:41.280 happens you know every few years where you start seeing 0:16:41.280 --> 0:16:43.920 your capacities start to come out of the market, which 0:16:43.920 --> 0:16:48.720 will rebalance UM. But again it's lagging, and so to 0:16:48.800 --> 0:16:51.760 get that capacity back in the market is also lagging. 0:16:52.120 --> 0:16:55.560 And so as you know, we look forward to probably 0:16:55.680 --> 0:16:58.120 end up twenty three or even beyond, when things start 0:16:58.160 --> 0:17:02.560 to stabilize a little bit and consumer um spending shifts 0:17:02.560 --> 0:17:05.720 back to products. We've got to make sure that those 0:17:05.720 --> 0:17:08.240 carriers are there and that the drivers are there and 0:17:08.280 --> 0:17:09.879 able to haul that freight for us, or will be 0:17:09.880 --> 0:17:12.080 in a similar situation that we ran into at the 0:17:12.119 --> 0:17:15.480 beginning of COVID where there just was no capacity UM 0:17:15.480 --> 0:17:18.720 and back in in a significant driver shortage situation. For 0:17:18.760 --> 0:17:22.080 a decade, we've been hearing about automation in the context 0:17:22.119 --> 0:17:25.600 of driverless trucks. Good question, you're laughing, you're laughing, and 0:17:25.720 --> 0:17:27.439 it's it's interesting. I mean, I remember being at a 0:17:27.480 --> 0:17:30.679 dinner with a Silicon Valley friend who was early at 0:17:30.680 --> 0:17:32.720 one of the Silicon Valley firms, and he said, we 0:17:32.760 --> 0:17:34.600 are going to see a revolution in trucking and and 0:17:34.640 --> 0:17:37.520 this was more than five years ago because of driverless trucks. 0:17:37.760 --> 0:17:39.240 We haven't seen them yet. Are we going to see 0:17:39.240 --> 0:17:42.000 them on a large scale anytime soon? There is certainly 0:17:42.119 --> 0:17:45.399 some some efficiencies you can gain, and there's some applications 0:17:45.480 --> 0:17:48.800 for it. Um. But you know, if we haven't mastered 0:17:48.840 --> 0:17:51.119 how to get a car to to be driverless on 0:17:51.160 --> 0:17:53.760 the road, UM, it's really hard to to do that 0:17:53.800 --> 0:17:56.600 with with a long haul truck, right Amy, Lissa, What 0:17:56.920 --> 0:18:00.640 do truckers get paid? Oh, it depends so so right now, 0:18:00.680 --> 0:18:03.040 if you look at spot rates, Um, it's around a 0:18:03.080 --> 0:18:06.199 dollar eighty six per mile, and that is you know, 0:18:06.280 --> 0:18:08.520 that's all in there, two dollars a mile, that's all in. 0:18:08.600 --> 0:18:11.879 They have to pay for their their truck, their fuel. Um. 0:18:12.119 --> 0:18:15.320 Most trucks are are running around you know, five to 0:18:15.760 --> 0:18:19.320 eight maybe nine if they're if they're brand new, miles 0:18:19.320 --> 0:18:22.360 per gallon and so they're not the most efficient vehicles 0:18:22.359 --> 0:18:26.720 out there. So um, they it's it's their margins are 0:18:26.760 --> 0:18:31.080 are you know, anywhere from eight to twelve maybe fift 0:18:31.760 --> 0:18:34.399 on the high end in a good market. Um, and 0:18:34.440 --> 0:18:38.199 that's without the you know, the higher inflation and costs 0:18:38.200 --> 0:18:41.080 of their equipment and their financing to get that equipment 0:18:41.080 --> 0:18:43.000 that has gone up recently. What are the rules in 0:18:43.040 --> 0:18:46.080 place to prevent drivers from driving long hours so they 0:18:46.119 --> 0:18:48.480 don't get too tired if if this incentive system is 0:18:48.520 --> 0:18:52.280 in place that actually you know pays people per Miley, Yeah, 0:18:52.320 --> 0:18:56.879 absolutely so. FMCSA has hours of service regulations that are 0:18:56.880 --> 0:19:00.560 in place all drivers, certainly those that at that cross 0:19:00.600 --> 0:19:03.480 border and run outside of a hunter mile radius, adhere 0:19:03.520 --> 0:19:08.280 to standards, and they have electronic logs that keep track 0:19:08.320 --> 0:19:11.600 of every minute of their day. So they have to 0:19:11.640 --> 0:19:14.520 log when they're resting, they have to log when they're sleeping, 0:19:14.600 --> 0:19:16.639 they have to log when they're on duty, off duty, 0:19:16.680 --> 0:19:20.399 not driving. Every part of their day is tracked and 0:19:20.800 --> 0:19:24.840 the formulas will tell them how much they can drive today. 0:19:24.880 --> 0:19:27.400 And so when you think about, you know, the driver shortage, 0:19:27.720 --> 0:19:31.200 a big part of that came from, you know, implementing 0:19:31.680 --> 0:19:34.439 the electronic log you know, those which which held drivers 0:19:34.440 --> 0:19:36.800 accountable to not being able to go over their hours. 0:19:37.000 --> 0:19:40.200 That was Melissa Foreman, she's the president at Triumph Bay. 0:19:40.359 --> 0:19:42.439 Still ahead on Bloomberg Business Week, we go from the 0:19:42.480 --> 0:19:45.359 shipping economy to the local economy for an in depth 0:19:45.359 --> 0:19:48.720 conversation with the mayor of Tulsa, Oklahoma, GT Bind them. 0:19:48.800 --> 0:19:52.800 The big concern is inflation UH and the challenges that 0:19:52.880 --> 0:19:56.240 presents with keeping up with cost UH costs as a 0:19:56.320 --> 0:19:58.560 city government where we have to have a balanced budget 0:19:58.600 --> 0:20:01.359 every year and providing the level of service that people 0:20:01.400 --> 0:20:04.719 expect when the cost of doing everything, whether that's fixing 0:20:04.760 --> 0:20:08.200 a street or hiring a police officer is dramatically more 0:20:08.240 --> 0:20:10.720 expensive than it was just two years ago. This is 0:20:10.720 --> 0:20:19.520 Bloomberg Broadcasting from the financial capital of the World, Bloomberg 0:20:19.560 --> 0:20:22.359 Eleve in Rio in New York to Washington, d C. 0:20:22.520 --> 0:20:27.240 Bloomberg to Boston, Bloomberg one, O six one to San Francisco, 0:20:27.320 --> 0:20:31.000 Bloomberg nine to the Country Sirius XM Chamber one nine 0:20:31.400 --> 0:20:34.880 and around the globe the Bloomberg Business and Bloomberg Radio 0:20:35.040 --> 0:20:39.119 dot Com. This is Bloomberg Business Week with Carol Messer 0:20:39.359 --> 0:20:45.760 and Bloomberg Quick Takes Tim Stinovan on Bloomberg Radio. From 0:20:45.800 --> 0:20:47.760 time to time, we like to check in with mayors 0:20:47.760 --> 0:20:50.520 from some of America's great cities. It really helps us 0:20:50.560 --> 0:20:52.520 get a feel for life on the ground and gain 0:20:52.560 --> 0:20:56.399 insight into growth, labor markets, investment, innovation and more. Today 0:20:56.400 --> 0:20:59.800 we're focusing on Tulsa, Oklahoma. Back in the fall, Bloomberg 0:20:59.800 --> 0:21:03.200 News reported that a consortium including Devon Energy, Williams Companies, 0:21:03.200 --> 0:21:06.080 and more is partnering with a Tulsa nonprofit founded by 0:21:06.119 --> 0:21:08.919 the George Kaiser Family Foundation. The hope here is to 0:21:08.960 --> 0:21:11.119 bring as many as two thousand energy tech jobs to 0:21:11.160 --> 0:21:14.280