1 00:00:02,520 --> 00:00:07,400 Speaker 1: Bloomberg, Audio Studios, podcasts, radio news. 2 00:00:07,880 --> 00:00:12,640 Speaker 2: Jeans Soroca, where the Garcetti appointment in twenty fourteen has 3 00:00:12,680 --> 00:00:15,040 Speaker 2: the most important job in America right now. 4 00:00:15,160 --> 00:00:17,120 Speaker 3: Everyone on Global Wall Street. 5 00:00:17,200 --> 00:00:19,680 Speaker 2: Wants this view. We're honored off the Red Eye that 6 00:00:19,760 --> 00:00:23,040 Speaker 2: the gentlemen of Los Angeles and Long Beach Ports join 7 00:00:23,160 --> 00:00:26,160 Speaker 2: us this morning. Just thank you so much for joining 8 00:00:26,239 --> 00:00:30,240 Speaker 2: Bloomberg this morning. As simple as I can make it, 9 00:00:30,680 --> 00:00:33,440 Speaker 2: what is a single thing you would say today to 10 00:00:33,520 --> 00:00:36,840 Speaker 2: the long sharman of Long Beach in Los Angeles. 11 00:00:37,000 --> 00:00:39,040 Speaker 1: We're going to get through this, even though we're going 12 00:00:39,120 --> 00:00:41,720 Speaker 1: to be down by thirty five percent next week on 13 00:00:41,840 --> 00:00:45,360 Speaker 1: cargo volume coming into the port compared to last year 14 00:00:46,240 --> 00:00:51,280 Speaker 1: thirty five percent. Major retailers, big importers have said, at 15 00:00:51,320 --> 00:00:53,680 Speaker 1: one hundred and forty five percent tariffs, I'm not shipping 16 00:00:53,720 --> 00:00:56,080 Speaker 1: out of China. I don't know if this could change 17 00:00:56,080 --> 00:00:58,040 Speaker 1: in two hours, two days, two weeks. 18 00:00:58,200 --> 00:00:59,560 Speaker 3: So let's hit the pause button. 19 00:00:59,720 --> 00:01:01,880 Speaker 1: But the long shore and we've had a great fiscal 20 00:01:01,920 --> 00:01:05,000 Speaker 1: policy in place for a decade. We're going to keep investing. 21 00:01:05,120 --> 00:01:07,840 Speaker 1: We're going to get through this. Every four containers meet 22 00:01:07,880 --> 00:01:08,679 Speaker 1: a job at the port. 23 00:01:08,800 --> 00:01:12,240 Speaker 2: What would you say to sixteen hundred Pennsylvania Avenue. When 24 00:01:12,240 --> 00:01:16,400 Speaker 2: you observe their press moments, their managed messaging. 25 00:01:16,959 --> 00:01:20,840 Speaker 1: We're talking about the ground truth. Cargoes down, jobs are down. 26 00:01:20,880 --> 00:01:23,560 Speaker 1: And this is the dock workers, the truckers, warehouse folks, 27 00:01:23,560 --> 00:01:25,520 Speaker 1: but also the manufacturing people. 28 00:01:26,080 --> 00:01:27,800 Speaker 3: This is Los Angeles County. 29 00:01:27,920 --> 00:01:30,640 Speaker 1: Almost four hundred thousand people go to work every day 30 00:01:30,640 --> 00:01:34,240 Speaker 1: in manufacturing jobs. It's just in Los Angeles, in LA County. 31 00:01:34,360 --> 00:01:37,240 Speaker 1: It is the biggest in the nation. Those are the 32 00:01:37,280 --> 00:01:38,680 Speaker 1: folks that we got to keep going too. 33 00:01:39,560 --> 00:01:42,040 Speaker 3: So tell us how a tariff works. 34 00:01:42,440 --> 00:01:44,920 Speaker 4: When does it get assessed, How does it get assessed, 35 00:01:45,080 --> 00:01:45,760 Speaker 4: who pays it? 36 00:01:45,800 --> 00:01:48,520 Speaker 3: How does that work. There's a start date that's announced. 37 00:01:49,160 --> 00:01:53,760 Speaker 1: If your cargo is ingated to that port overseas after 38 00:01:53,840 --> 00:01:56,040 Speaker 1: the date of announcement, it's applied. 39 00:01:56,120 --> 00:01:57,120 Speaker 3: The tariff has applied. 40 00:01:57,520 --> 00:01:59,760 Speaker 1: It's assessed when it gets off the ship in Los 41 00:01:59,760 --> 00:02:01,840 Speaker 1: Angeles and assessed. 42 00:02:01,520 --> 00:02:02,400 Speaker 3: By US Customs. 43 00:02:02,440 --> 00:02:03,240 Speaker 2: Who pays it. 44 00:02:04,200 --> 00:02:08,880 Speaker 1: The importer of record and Walmart, big retailer, big manufacturer 45 00:02:08,880 --> 00:02:10,080 Speaker 1: bring it in parts. 46 00:02:09,880 --> 00:02:10,680 Speaker 3: They pay for it. 47 00:02:11,000 --> 00:02:13,600 Speaker 1: And what the CEOs and board members have been telling 48 00:02:13,639 --> 00:02:15,640 Speaker 1: me is they're going to pass it on to the 49 00:02:15,680 --> 00:02:19,160 Speaker 1: next in the supply chain. Consumers from the retail guys. 50 00:02:19,400 --> 00:02:21,040 Speaker 1: The parts are going straight to the factory. 51 00:02:21,120 --> 00:02:23,760 Speaker 2: We have somebody just emails in what's the COVID equivalent? 52 00:02:23,919 --> 00:02:27,680 Speaker 2: Is this like, Oh, I'm recalling March of twenty twenty. 53 00:02:27,680 --> 00:02:28,760 Speaker 2: Am I wrong? Call day? 54 00:02:29,480 --> 00:02:29,679 Speaker 3: Yeah? 55 00:02:29,720 --> 00:02:32,560 Speaker 1: It was March and our business was cut in half 56 00:02:32,639 --> 00:02:34,600 Speaker 1: that month. We only did like four hundred and fifty 57 00:02:34,600 --> 00:02:38,239 Speaker 1: thousand containers, but it made a quick return as we 58 00:02:38,280 --> 00:02:41,560 Speaker 1: all started buying online and curbside pickup. I don't know 59 00:02:41,600 --> 00:02:43,680 Speaker 1: when the return date is going to be just yet. 60 00:02:44,200 --> 00:02:47,919 Speaker 4: So what are the Walmarts of the world telling you 61 00:02:48,240 --> 00:02:50,520 Speaker 4: in terms of kind of what they think they're going 62 00:02:50,560 --> 00:02:51,920 Speaker 4: how they're going to behave going forward? 63 00:02:52,880 --> 00:02:56,560 Speaker 1: Again, hit the pause button. I'm not hiring open positions 64 00:02:56,639 --> 00:02:59,919 Speaker 1: or shelved for the time being. Capital investments are on pause, 65 00:03:00,480 --> 00:03:04,120 Speaker 1: and I'm waiting and seeing guys like Walmart and others 66 00:03:04,360 --> 00:03:08,639 Speaker 1: of the large big box variety started bringing in inventory 67 00:03:08,720 --> 00:03:12,680 Speaker 1: back last summertime. Campaign trail folks were talking about different 68 00:03:12,720 --> 00:03:16,120 Speaker 1: trade policy, tariffs, etc. These guys saw through that a 69 00:03:16,120 --> 00:03:19,560 Speaker 1: little bit, knowing that this day would come. Where I'm 70 00:03:19,600 --> 00:03:23,280 Speaker 1: concerned right now, Paul, are the small to middle sized 71 00:03:23,320 --> 00:03:26,200 Speaker 1: importers that didn't have the ability to bring an inventory, 72 00:03:26,240 --> 00:03:28,960 Speaker 1: warehouse it, etc. Now they're faced with a dilemma of 73 00:03:29,000 --> 00:03:32,560 Speaker 1: do I buy at these super exorbitant prices, Can I 74 00:03:32,639 --> 00:03:34,280 Speaker 1: pass it on and still compete with the big guys, 75 00:03:34,320 --> 00:03:34,720 Speaker 1: or do I. 76 00:03:34,720 --> 00:03:36,839 Speaker 3: Just sit and wait. I've got to make payroll next 77 00:03:36,840 --> 00:03:37,720 Speaker 3: month with your. 78 00:03:37,680 --> 00:03:40,520 Speaker 2: Harborst and with the Queen Mary over on Long Beach. 79 00:03:40,840 --> 00:03:43,360 Speaker 2: You know the tourist thing. The fact is the stuff 80 00:03:43,400 --> 00:03:46,480 Speaker 2: comes off and they get to get on Highway seven, 81 00:03:46,600 --> 00:03:50,680 Speaker 2: ten or whatever. What happens on the interstate highways. 82 00:03:51,040 --> 00:03:54,080 Speaker 1: Given this crisis, you're going to see truckers who have 83 00:03:54,200 --> 00:03:57,760 Speaker 1: been hauling four and five containers up till now per 84 00:03:57,840 --> 00:04:01,360 Speaker 1: day move maybe two or three start next week. You 85 00:04:01,440 --> 00:04:04,320 Speaker 1: see less traffic on the roads. The warehouses with their 86 00:04:04,400 --> 00:04:07,160 Speaker 1: vacancy rate at six seven percent, that's probably going to 87 00:04:07,200 --> 00:04:09,840 Speaker 1: dip to Retailers have told me that they've got about 88 00:04:09,840 --> 00:04:12,960 Speaker 1: five to seven weeks left of normal inventory. 89 00:04:13,160 --> 00:04:14,600 Speaker 3: Then we'll start seeing spot shortages. 90 00:04:14,640 --> 00:04:15,880 Speaker 2: Give us an example of that. 91 00:04:16,440 --> 00:04:18,360 Speaker 3: You may go to the store and you're looking for 92 00:04:18,400 --> 00:04:22,160 Speaker 3: that blue shirt Duke perfect Duke merchandise, right it. 93 00:04:22,279 --> 00:04:25,120 Speaker 1: Give us one of nice blue shirts, your size and 94 00:04:25,160 --> 00:04:27,480 Speaker 1: your style, with the right kind of collar. You may 95 00:04:27,520 --> 00:04:30,800 Speaker 1: see eleven purple ones on the shelf and one blue 96 00:04:30,800 --> 00:04:34,359 Speaker 1: one that just doesn't match your taste, and the price 97 00:04:34,360 --> 00:04:36,760 Speaker 1: for that blue one is likely up a lot more 98 00:04:36,800 --> 00:04:37,360 Speaker 1: than the others. 99 00:04:37,440 --> 00:04:39,359 Speaker 2: Our interview of the day here, we welcome all of 100 00:04:39,400 --> 00:04:43,120 Speaker 2: you accrastination, particularly early in the morning on the left coast. 101 00:04:43,200 --> 00:04:46,360 Speaker 2: Jeans Soroka with us here of the ports of Los Angeles, 102 00:04:46,480 --> 00:04:47,760 Speaker 2: Long Beach and the rest. 103 00:04:47,839 --> 00:04:48,719 Speaker 3: Paul, Hey, Geene. 104 00:04:48,920 --> 00:04:52,280 Speaker 4: If again, we've got a president who's the situation is 105 00:04:52,360 --> 00:04:55,200 Speaker 4: very fluid in terms of his policy pronouncements. If we 106 00:04:55,200 --> 00:04:57,640 Speaker 4: were to have a president that's maybe dial back some 107 00:04:57,720 --> 00:05:01,920 Speaker 4: of the tariff situation, what's the time frame for your 108 00:05:02,000 --> 00:05:03,800 Speaker 4: whole process, your whole world to. 109 00:05:03,720 --> 00:05:05,320 Speaker 3: Start kicking in again. Yeh, Paul. 110 00:05:05,680 --> 00:05:09,279 Speaker 1: If we reached a deal today as we're speaking with China, 111 00:05:09,360 --> 00:05:12,000 Speaker 1: whatever that deal may look like, a framework, et cetera, 112 00:05:12,600 --> 00:05:14,760 Speaker 1: it would take the shipping lines about two weeks to 113 00:05:14,880 --> 00:05:20,719 Speaker 1: reposition their vessels to the major ports Ching Dao, jamin Shanghai. 114 00:05:21,440 --> 00:05:23,640 Speaker 1: Then it takes another two weeks after they load up 115 00:05:23,640 --> 00:05:26,360 Speaker 1: to steam over to La So we've got a month 116 00:05:26,520 --> 00:05:28,480 Speaker 1: once we push the button to say hey, we're back 117 00:05:28,520 --> 00:05:31,920 Speaker 1: in business and that's why this inventory level at the 118 00:05:31,960 --> 00:05:34,640 Speaker 1: retail folks are telling me about we're starting to we're 119 00:05:34,640 --> 00:05:35,719 Speaker 1: starting to get a little tight here. 120 00:05:36,000 --> 00:05:38,960 Speaker 2: You're maybe that one person in America that can answer this. 121 00:05:39,040 --> 00:05:41,919 Speaker 2: With great respect for Ambassador Burns, Nicholas Burns, with his 122 00:05:42,320 --> 00:05:46,280 Speaker 2: public service to China here in the recent years, we 123 00:05:46,360 --> 00:05:49,520 Speaker 2: all understand there's going to be retail shortages here empty 124 00:05:49,680 --> 00:05:54,200 Speaker 2: the four hundred thousand manufacturing types in Los Angeles, those 125 00:05:54,360 --> 00:05:58,200 Speaker 2: Chinese names you pronounced correctly, that I Butcher. What's this 126 00:05:58,320 --> 00:06:01,240 Speaker 2: going to be like for the people in those Chinese 127 00:06:01,279 --> 00:06:04,440 Speaker 2: cities of manufacturing and export? 128 00:06:04,680 --> 00:06:06,680 Speaker 1: Yeah, tom As, you remember I worked in China for 129 00:06:06,680 --> 00:06:09,039 Speaker 1: about four and a half years. They still maintained very 130 00:06:09,080 --> 00:06:11,919 Speaker 1: close ties there to the business community. I'm on the 131 00:06:11,920 --> 00:06:16,680 Speaker 1: phone with guys and friends overnight every night, and basically 132 00:06:16,800 --> 00:06:20,559 Speaker 1: manufacturing has slowed to levels they have not seen before 133 00:06:20,600 --> 00:06:23,839 Speaker 1: since the COVID times. And if folks are out of work, 134 00:06:23,880 --> 00:06:25,120 Speaker 1: the government's going to help them out. 135 00:06:25,560 --> 00:06:27,080 Speaker 2: They have a social safety net. 136 00:06:27,160 --> 00:06:32,080 Speaker 4: Yes, So what are you telling I guess your workers 137 00:06:32,080 --> 00:06:34,520 Speaker 4: at the port, I mean you've got I remember from 138 00:06:34,560 --> 00:06:36,800 Speaker 4: you were so kind to us during a pandemic. To 139 00:06:36,839 --> 00:06:39,320 Speaker 4: explain how this whole supply chain thing works. It's not 140 00:06:39,360 --> 00:06:41,719 Speaker 4: just the people unloading the cargo. It's the truckers, it's 141 00:06:41,720 --> 00:06:44,400 Speaker 4: the it just it's a warehouse, employees, it's. 142 00:06:44,240 --> 00:06:45,200 Speaker 3: Everybody, right right. 143 00:06:45,279 --> 00:06:47,440 Speaker 1: It's one to nine jobs. In the five counties Southern 144 00:06:47,520 --> 00:06:50,720 Speaker 1: California area. A million people go to work every day 145 00:06:50,760 --> 00:06:53,760 Speaker 1: based on what we do at the ports of La 146 00:06:53,839 --> 00:06:55,880 Speaker 1: and Long Beach, and so what we're trying to do 147 00:06:55,960 --> 00:06:56,960 Speaker 1: is just keep morale up. 148 00:06:57,160 --> 00:06:59,400 Speaker 3: Again, Let's not blink here. We still get a lot 149 00:06:59,440 --> 00:07:00,800 Speaker 3: of work to do. The Loong shoreman as. 150 00:07:00,680 --> 00:07:03,800 Speaker 1: An example, they can start doing preventative maintenance on the 151 00:07:03,839 --> 00:07:07,320 Speaker 1: machinery when volume dies down a little bit. The mechanics 152 00:07:07,320 --> 00:07:09,080 Speaker 1: can get out there in force and make sure that 153 00:07:09,120 --> 00:07:11,360 Speaker 1: all this equipment is ready. When that surge comes back, 154 00:07:11,640 --> 00:07:14,120 Speaker 1: we're going to be humming with the truckers. Let's move 155 00:07:14,160 --> 00:07:17,440 Speaker 1: around some domestic freight as well. So we're just trying 156 00:07:17,440 --> 00:07:20,880 Speaker 1: to keep the morale up, keep the people focused on 157 00:07:21,000 --> 00:07:23,920 Speaker 1: the job as best we can. But knowing that we've 158 00:07:23,960 --> 00:07:27,480 Speaker 1: got a preparation. We've got preparation here. Now when that 159 00:07:27,480 --> 00:07:29,560 Speaker 1: cargo picks up, we're going to see it forty days 160 00:07:29,560 --> 00:07:30,600 Speaker 1: before it actually arrives. 161 00:07:30,640 --> 00:07:32,280 Speaker 3: On our shores. We're going to be ready. 162 00:07:32,320 --> 00:07:34,120 Speaker 2: Do you sleep on the Red Eye or do you 163 00:07:34,200 --> 00:07:35,200 Speaker 2: work in the Red Eye? 164 00:07:35,320 --> 00:07:38,400 Speaker 1: You know, I got a couple of winks, but you know, 165 00:07:38,760 --> 00:07:41,120 Speaker 1: I mean just getting here to Manhattan, seeing you guys, 166 00:07:41,160 --> 00:07:43,040 Speaker 1: the energy here and with all that's going on in 167 00:07:43,040 --> 00:07:44,640 Speaker 1: our industry, we're moving. 168 00:07:44,800 --> 00:07:46,640 Speaker 3: You're getting energy from This is. 169 00:07:48,160 --> 00:07:48,480 Speaker 1: John. 170 00:07:48,480 --> 00:07:52,480 Speaker 2: I greatly appreciate it. I'm thrilled to have them with us, 171 00:07:53,080 --> 00:07:57,120 Speaker 2: the gentlemen of Los Angeles and all of this important discussion. 172 00:07:57,240 --> 00:08:01,720 Speaker 2: Jeens Sorocas, Chief Executive Officer Port of Los Angeles