1 00:00:07,760 --> 00:00:10,680 Speaker 1: Hi everyone, this is Lee Clasgow and we're Talking Transports. 2 00:00:10,680 --> 00:00:14,400 Speaker 1: Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:14,480 --> 00:00:18,840 Speaker 1: Lee Klascow, Senior Freight Transportation Logistics Salles at Bloomberg Intelligence, 4 00:00:19,200 --> 00:00:22,080 Speaker 1: Bloomberg's in house research arm of almost five hundred analysts 5 00:00:22,079 --> 00:00:26,120 Speaker 1: and strategists around the globe. Quick public service announcement before 6 00:00:26,160 --> 00:00:29,720 Speaker 1: we dive in. Your support is instrumental to keep bringing 7 00:00:29,760 --> 00:00:33,280 Speaker 1: great guests and conversations to you, our listeners, and we 8 00:00:33,360 --> 00:00:36,360 Speaker 1: need your support. So please, if you enjoy this podcast, 9 00:00:36,520 --> 00:00:40,199 Speaker 1: share it, like it and leave a comment. Also, if 10 00:00:40,200 --> 00:00:43,839 Speaker 1: you've got ideas, feedback, or just want to talk transports, 11 00:00:44,040 --> 00:00:46,239 Speaker 1: I'm always happy to connect. You can find me on 12 00:00:46,360 --> 00:00:50,600 Speaker 1: the Bloomberg terminal, LinkedIn or on x at Logistics. Lee, 13 00:00:51,040 --> 00:00:53,760 Speaker 1: I'm very excited to have with us today. Peter Sand 14 00:00:54,080 --> 00:00:57,560 Speaker 1: Chief analyst at Sanata, a position he's held since joining 15 00:00:57,560 --> 00:01:01,680 Speaker 1: the firm in twenty twenty one. To Sanetta, Peter spent 16 00:01:01,840 --> 00:01:05,400 Speaker 1: over a decade at Bimco, where he's responsible for analyzing 17 00:01:05,400 --> 00:01:09,120 Speaker 1: commercial markets based on the global economic situations and its 18 00:01:09,160 --> 00:01:12,560 Speaker 1: influence on tree. He also previously worked at ds Nordon, 19 00:01:12,640 --> 00:01:16,000 Speaker 1: a Danish shipping company. Operating in the dry cargo and 20 00:01:16,040 --> 00:01:21,280 Speaker 1: tanker segments worldwide as a senior analyst. Welcome to Talking transports, Peter. 21 00:01:21,360 --> 00:01:22,400 Speaker 1: It's good to see you again. 22 00:01:22,640 --> 00:01:25,199 Speaker 2: It's amazing to be and could come your good company 23 00:01:25,280 --> 00:01:28,280 Speaker 2: lie and always have it to talk transports. 24 00:01:27,880 --> 00:01:31,600 Speaker 1: All right, So Sanatta, you know it's not spelled how 25 00:01:31,600 --> 00:01:34,640 Speaker 1: it sounds. It starts with an X. Why don't you 26 00:01:34,680 --> 00:01:36,160 Speaker 1: tell people a little bit about the firm? 27 00:01:36,560 --> 00:01:40,080 Speaker 2: Yeah, I mean, now, we're basically also here to disrupt, 28 00:01:40,200 --> 00:01:42,440 Speaker 2: not in the way that the supply chains are disrupted 29 00:01:42,480 --> 00:01:46,000 Speaker 2: on a daily basis, but we are pretty new kids 30 00:01:46,000 --> 00:01:48,720 Speaker 2: on the block of being around for some twelve thirteen years, 31 00:01:49,200 --> 00:01:51,800 Speaker 2: and basically our mission is to transform the way that 32 00:01:51,920 --> 00:01:54,480 Speaker 2: freight in the form of container shipping and f freight 33 00:01:54,560 --> 00:01:59,080 Speaker 2: is bored and sold. So we seek to be the independent, 34 00:01:59,240 --> 00:02:03,920 Speaker 2: neutral voice in the industry that allows all our industry 35 00:02:04,360 --> 00:02:09,000 Speaker 2: partners and customers basically to dive into the ocean and 36 00:02:09,040 --> 00:02:12,919 Speaker 2: air of market intelligence and benchmark how they are performing 37 00:02:13,160 --> 00:02:16,280 Speaker 2: when they're when they buy and sell freight. So so 38 00:02:16,360 --> 00:02:19,000 Speaker 2: in an autill that's that's what we're all about. And 39 00:02:19,040 --> 00:02:21,600 Speaker 2: we're constantly, of course trying to improve on what we 40 00:02:21,680 --> 00:02:28,280 Speaker 2: did yesterday recently acquiring also Easy also a household name 41 00:02:28,320 --> 00:02:31,720 Speaker 2: for those working within container shipping. I'm sure, of course 42 00:02:31,960 --> 00:02:35,359 Speaker 2: on our trail to to bring even an even better 43 00:02:35,400 --> 00:02:36,120 Speaker 2: platform around. 44 00:02:36,960 --> 00:02:39,160 Speaker 1: So are you guys a freight forwarder. 45 00:02:38,960 --> 00:02:43,840 Speaker 2: Not at all. We are basically here for mainly the 46 00:02:43,919 --> 00:02:47,120 Speaker 2: largest shippers of the world, those with the most complex 47 00:02:47,200 --> 00:02:51,079 Speaker 2: supply chains, those in need not only to select the 48 00:02:51,160 --> 00:02:54,480 Speaker 2: right carrier or select the right freight forwarder, but also 49 00:02:54,520 --> 00:02:58,560 Speaker 2: to benchmark the carriers against one another and against a 50 00:02:58,800 --> 00:03:02,880 Speaker 2: raft of of key indicators. Just about to launch a 51 00:03:03,600 --> 00:03:08,760 Speaker 2: carrier score card for basically doing that. But no, we're 52 00:03:08,760 --> 00:03:11,880 Speaker 2: not handling freight like that, but we are empowering our 53 00:03:11,919 --> 00:03:16,120 Speaker 2: customers to do their job even better, to improve their 54 00:03:16,160 --> 00:03:19,079 Speaker 2: decision making. Of course, critically, as we move into the 55 00:03:19,120 --> 00:03:21,840 Speaker 2: fourth quarter of twenty twenty five, now a lot of 56 00:03:22,240 --> 00:03:27,200 Speaker 2: shippers with a stake in EUROPEA now getting their feet 57 00:03:27,600 --> 00:03:32,280 Speaker 2: into the contract negotiations with the largest carriers and forwarders 58 00:03:32,320 --> 00:03:35,760 Speaker 2: of the world. So you better prepare yourself for negotiations 59 00:03:35,800 --> 00:03:39,120 Speaker 2: like that. And that's where we bring in say the 60 00:03:39,160 --> 00:03:44,200 Speaker 2: neutral and the neutral basically market the intelligence so they 61 00:03:44,200 --> 00:03:47,400 Speaker 2: can talk about the services rather than rip each other 62 00:03:47,440 --> 00:03:49,640 Speaker 2: off with misquotations. 63 00:03:49,960 --> 00:03:54,040 Speaker 1: And so your customers are the capacity owners, the shippers 64 00:03:54,280 --> 00:03:56,080 Speaker 1: and the forwarders exactly. 65 00:03:56,360 --> 00:04:01,320 Speaker 2: We basically seek to deal with or you may say, 66 00:04:01,400 --> 00:04:05,839 Speaker 2: three parties of the logistics, the ship as b c os, 67 00:04:06,400 --> 00:04:09,839 Speaker 2: the forwarders and and the carriers bread and Butter being 68 00:04:10,120 --> 00:04:12,280 Speaker 2: being the b c os from from a starting point, 69 00:04:12,320 --> 00:04:16,400 Speaker 2: but but recently of course also we we have a 70 00:04:16,440 --> 00:04:19,880 Speaker 2: high profile within index link contracts. Of course we we 71 00:04:19,960 --> 00:04:22,920 Speaker 2: do our own index and and in order to have 72 00:04:23,880 --> 00:04:27,440 Speaker 2: an index you need to be trusted by either party 73 00:04:27,720 --> 00:04:31,239 Speaker 2: because then of course without that trust you you can't 74 00:04:31,279 --> 00:04:34,960 Speaker 2: really agree on on what's the right index to do 75 00:04:35,000 --> 00:04:38,640 Speaker 2: your contract right. So so that's h that's basically the 76 00:04:38,760 --> 00:04:41,600 Speaker 2: element of trust that we could put in between all 77 00:04:41,680 --> 00:04:42,800 Speaker 2: parties of of. 78 00:04:42,800 --> 00:04:47,400 Speaker 1: The industry and uh Zentrara is it's it's a privately 79 00:04:47,400 --> 00:04:52,200 Speaker 1: held company, are you private equity, venture capital, it's founders, 80 00:04:52,360 --> 00:04:54,200 Speaker 1: who's who owns the company? 81 00:04:54,560 --> 00:04:57,320 Speaker 2: Yeah, it's a little bit of all the things that 82 00:04:57,360 --> 00:05:00,400 Speaker 2: you mentioned there. So so we still have Patrick Workland, 83 00:05:00,440 --> 00:05:05,280 Speaker 2: co founder and CEO of Seneta as as leading the pack. 84 00:05:05,600 --> 00:05:11,359 Speaker 2: We have we have a solid solid board and full 85 00:05:11,400 --> 00:05:15,600 Speaker 2: with with with with experts into not only sas, but 86 00:05:15,680 --> 00:05:20,760 Speaker 2: certainly also logistics and and and and moving off cargo 87 00:05:21,360 --> 00:05:24,640 Speaker 2: in every single aspect. So so we try to move 88 00:05:24,680 --> 00:05:28,200 Speaker 2: forward and our ambition, of course is to get that 89 00:05:28,200 --> 00:05:31,880 Speaker 2: that unicorn evaluation at that some point in time. So 90 00:05:31,880 --> 00:05:33,960 Speaker 2: so that's what we work hard on to do every 91 00:05:33,960 --> 00:05:36,400 Speaker 2: single day. And I'll say it's a it's really a 92 00:05:36,400 --> 00:05:39,440 Speaker 2: tough job, but we're also on the right track, so 93 00:05:39,440 --> 00:05:42,520 Speaker 2: so well we'll keep crying on all right. 94 00:05:42,600 --> 00:05:44,440 Speaker 1: And you know, Peter, one of the main reasons why 95 00:05:44,440 --> 00:05:48,200 Speaker 1: we want to have you on is Zenna and I 96 00:05:48,279 --> 00:05:50,800 Speaker 1: guess yourself and your team you recently put out your 97 00:05:50,800 --> 00:05:54,560 Speaker 1: twenty twenty six outlook for the liner market. Kind of 98 00:05:54,600 --> 00:05:57,200 Speaker 1: can you talk about the major takeaways from your your 99 00:05:57,200 --> 00:06:00,720 Speaker 1: report and your expectations as we, you know, head into 100 00:06:00,839 --> 00:06:01,320 Speaker 1: next year. 101 00:06:01,640 --> 00:06:04,760 Speaker 2: I think it's always relevant to to to share our 102 00:06:04,839 --> 00:06:07,000 Speaker 2: thoughts on that as a part of the Senate's thought 103 00:06:07,080 --> 00:06:11,120 Speaker 2: leadership in global logistics. So obviously we set the scene 104 00:06:11,160 --> 00:06:13,719 Speaker 2: as early as we can, which is often around our 105 00:06:14,800 --> 00:06:19,359 Speaker 2: large customer summit that that is held in Well, this 106 00:06:19,480 --> 00:06:22,120 Speaker 2: year we went to to Barcelona and that's basically where 107 00:06:22,160 --> 00:06:26,520 Speaker 2: we where we sneak peak for the customers. What do 108 00:06:26,640 --> 00:06:30,080 Speaker 2: we expect to be the factors that will impact the 109 00:06:30,120 --> 00:06:33,680 Speaker 2: container shipping market and f right for that matter, But 110 00:06:34,400 --> 00:06:39,080 Speaker 2: for my area of expertise it's ocean only. We go 111 00:06:39,279 --> 00:06:43,359 Speaker 2: into those elements that will make break or shake the 112 00:06:43,440 --> 00:06:47,760 Speaker 2: market the next year. Of course, the Red Sea disruption 113 00:06:48,080 --> 00:06:52,159 Speaker 2: is the one elephant in the room uh and for 114 00:06:52,240 --> 00:06:55,279 Speaker 2: all practical purposes, but also because we still believe so 115 00:06:55,320 --> 00:07:00,600 Speaker 2: regardless of the the Gaza ceasefire Gaza Agreement that that 116 00:07:00,720 --> 00:07:05,720 Speaker 2: is now coming into into play, our expectations are still 117 00:07:05,760 --> 00:07:09,039 Speaker 2: for no large scale return of carriers to the Red Sea. 118 00:07:09,440 --> 00:07:13,679 Speaker 2: So as also being outspoken about what are assumptions, because 119 00:07:13,800 --> 00:07:16,560 Speaker 2: in the end of the day, that's of course the 120 00:07:16,680 --> 00:07:21,000 Speaker 2: underlying metrics that means the most to to to a 121 00:07:21,040 --> 00:07:25,400 Speaker 2: forecast that seems to be one again once again heavy 122 00:07:25,440 --> 00:07:30,080 Speaker 2: on the on the fleet size, where carriers are taking 123 00:07:30,120 --> 00:07:34,200 Speaker 2: delivery of more capacity than our forecast of demand actually 124 00:07:34,480 --> 00:07:37,800 Speaker 2: requires them to do so. So in that account, we 125 00:07:37,840 --> 00:07:42,000 Speaker 2: are moving into an area where supply will exceed that 126 00:07:42,120 --> 00:07:46,840 Speaker 2: of demand and our expectations are thus rates to to 127 00:07:46,920 --> 00:07:49,880 Speaker 2: come down from from where they have been most most 128 00:07:49,920 --> 00:07:53,360 Speaker 2: recently spot rates down more than than those of long 129 00:07:53,440 --> 00:07:57,960 Speaker 2: term container rates partly due to a mismatched mismatch in 130 00:07:57,960 --> 00:07:59,720 Speaker 2: in in revenue and cost of the carriers. And we 131 00:07:59,720 --> 00:08:03,480 Speaker 2: can more about that in a minute, but at least 132 00:08:03,560 --> 00:08:07,400 Speaker 2: that's that's our world forecast to fundamental weakening that will 133 00:08:07,440 --> 00:08:10,400 Speaker 2: bring rates down from from where they have recently been. So, 134 00:08:10,720 --> 00:08:14,440 Speaker 2: but of course, always with a caveat black sworms can 135 00:08:14,480 --> 00:08:18,240 Speaker 2: still come about in various forms and geopolitics. I think 136 00:08:18,280 --> 00:08:20,640 Speaker 2: it's probably the one fact so that we that we 137 00:08:20,720 --> 00:08:24,000 Speaker 2: expect the most significant disruption to to to come from. 138 00:08:25,120 --> 00:08:28,280 Speaker 1: And so you know, your your assumption is, you know, 139 00:08:28,320 --> 00:08:30,560 Speaker 1: as you mentioned, based that the Sewez Canal is not 140 00:08:30,640 --> 00:08:34,839 Speaker 1: going to open up, or at least carriers or or 141 00:08:36,360 --> 00:08:40,320 Speaker 1: ship owners will still avoid it. What has to happen 142 00:08:40,480 --> 00:08:44,080 Speaker 1: for you know, that to change in your mind? Obviously 143 00:08:44,080 --> 00:08:46,880 Speaker 1: we don't know if the rec piece deal UH in 144 00:08:46,880 --> 00:08:49,160 Speaker 1: the Middle East is going to hold, hopefully it does, 145 00:08:49,720 --> 00:08:54,200 Speaker 1: so you know what has to happen for acid owners 146 00:08:54,200 --> 00:08:56,600 Speaker 1: to be more comfortable with going through the Suez. 147 00:08:57,120 --> 00:08:59,040 Speaker 2: Yeah. I like the fact that you also point to 148 00:08:59,040 --> 00:09:03,000 Speaker 2: a sid owners because in the end it very much 149 00:09:03,480 --> 00:09:08,840 Speaker 2: rests on insurance companies being able to cover of course, 150 00:09:08,880 --> 00:09:12,480 Speaker 2: the assets Holland machinery, but certainly also cargo and crew 151 00:09:12,520 --> 00:09:17,559 Speaker 2: of course, so until that happens for for all, we 152 00:09:17,720 --> 00:09:20,880 Speaker 2: see no large scale return. But having said that, I 153 00:09:20,880 --> 00:09:24,640 Speaker 2: mean we know that that contin ships also do transit 154 00:09:24,920 --> 00:09:28,120 Speaker 2: the Babel Mandeb straight in the southernmost part of Red Sea, 155 00:09:28,160 --> 00:09:31,800 Speaker 2: but also seuis Cannal to the extent of some fifteen 156 00:09:31,840 --> 00:09:34,680 Speaker 2: to twenty percent if you go by numbers as compared 157 00:09:34,720 --> 00:09:38,080 Speaker 2: to pre Red Sea disruptions. So there is still business 158 00:09:38,520 --> 00:09:42,920 Speaker 2: carried out there, but those are smaller niche players, not 159 00:09:43,320 --> 00:09:47,240 Speaker 2: the top ten carriers for the lions of their networks. 160 00:09:47,400 --> 00:09:50,920 Speaker 2: Even though we also know that CMACGM, the French carrier 161 00:09:51,040 --> 00:09:55,880 Speaker 2: under the protection of French Navy, ships do transit occasionally, 162 00:09:56,600 --> 00:10:00,000 Speaker 2: but it's not something that you can that you can 163 00:10:00,520 --> 00:10:03,240 Speaker 2: say expect going forward. So so what what is really 164 00:10:03,280 --> 00:10:06,640 Speaker 2: needed is a small peace in the Middle East, the 165 00:10:06,640 --> 00:10:10,360 Speaker 2: wider Middle East region. It's it's been going in the 166 00:10:10,360 --> 00:10:13,800 Speaker 2: wrong direction for more than two years now, uh, And 167 00:10:13,880 --> 00:10:16,040 Speaker 2: I think it's fair to say that the international shipping 168 00:10:16,840 --> 00:10:20,600 Speaker 2: is an unfortunate collateral damage being held hostage by the 169 00:10:20,600 --> 00:10:23,040 Speaker 2: hoothy rebels in particular, but it's all a part of 170 00:10:23,080 --> 00:10:26,600 Speaker 2: the bigger, more complex and network in the local power 171 00:10:26,640 --> 00:10:32,040 Speaker 2: interest of Iran, Saudi Arabia, Israel. And then we just 172 00:10:32,080 --> 00:10:35,880 Speaker 2: got the hoothy rebels also. So that's why we, whenever 173 00:10:35,920 --> 00:10:38,640 Speaker 2: we had have the chance, put the attention to the 174 00:10:38,640 --> 00:10:42,720 Speaker 2: fact that that don't put your hopes up high. Even 175 00:10:42,720 --> 00:10:45,920 Speaker 2: though it's much welcome to to see now this is 176 00:10:45,960 --> 00:10:50,319 Speaker 2: fire in Gaza, there's still many more steps and roads 177 00:10:50,360 --> 00:10:53,720 Speaker 2: to to walk before we get to a point where 178 00:10:53,760 --> 00:10:58,600 Speaker 2: we can say, okay, Houthi rebels will present no material 179 00:10:58,720 --> 00:11:03,240 Speaker 2: risk to international ship and particular containerships and also gas 180 00:11:03,240 --> 00:11:06,760 Speaker 2: carriers that have shied away. Car carriers also to almost 181 00:11:06,800 --> 00:11:08,960 Speaker 2: one hundred percent extent will return. 182 00:11:09,800 --> 00:11:11,960 Speaker 1: And so you know, you mentioned a part of your 183 00:11:11,960 --> 00:11:14,840 Speaker 1: analysis you believe supply growth is going to outpaced demand. 184 00:11:15,080 --> 00:11:17,199 Speaker 1: That's driven by that, you know, the order book and 185 00:11:17,520 --> 00:11:21,120 Speaker 1: obviously I'm assuming tepid demand. Do you have a spread 186 00:11:21,160 --> 00:11:23,560 Speaker 1: in terms of what that you know, how many percentage 187 00:11:23,559 --> 00:11:27,720 Speaker 1: points or basis points are you guys expecting supply to 188 00:11:27,720 --> 00:11:28,520 Speaker 1: outpaced demand? 189 00:11:28,800 --> 00:11:32,040 Speaker 2: Yeah, for sure, our expectations for demand growth in twenty 190 00:11:32,080 --> 00:11:36,920 Speaker 2: twenty six is right around three percent. We expect the 191 00:11:36,920 --> 00:11:40,679 Speaker 2: fleet to grow by three point six percent so now, 192 00:11:41,080 --> 00:11:46,160 Speaker 2: so it's not by massive difference that we that we 193 00:11:46,240 --> 00:11:48,480 Speaker 2: measure over capacity to grow in twenty twenty six. And 194 00:11:48,520 --> 00:11:52,240 Speaker 2: that may actually be the positive spin to what comes 195 00:11:52,240 --> 00:11:54,640 Speaker 2: about in twenty twenty six, because if we look further ahead, 196 00:11:55,280 --> 00:11:57,600 Speaker 2: you and I only that we got the world's largest 197 00:11:57,679 --> 00:12:00,680 Speaker 2: container shipping order book right here, right now, we have 198 00:12:00,760 --> 00:12:03,560 Speaker 2: more than a thousand container ships, more than ten million 199 00:12:03,640 --> 00:12:06,920 Speaker 2: t use on order, and that will be delivered in 200 00:12:07,040 --> 00:12:10,640 Speaker 2: twenty twenty seven and mostly in twenty twenty eight. So 201 00:12:12,120 --> 00:12:15,520 Speaker 2: say the supply side is basically stacked against carriers in 202 00:12:15,840 --> 00:12:18,640 Speaker 2: the foreseeable future. And if we are to, let me 203 00:12:18,640 --> 00:12:21,079 Speaker 2: give you an example of how significant that is, because 204 00:12:21,080 --> 00:12:25,240 Speaker 2: we got a fleet right round seven thousand ships, thirty 205 00:12:25,360 --> 00:12:28,520 Speaker 2: two thirty three million TU. But in order to offset 206 00:12:28,559 --> 00:12:31,000 Speaker 2: the entire ty of the order book, you need to 207 00:12:31,200 --> 00:12:34,840 Speaker 2: demolish or scrap every single container ship built prior to 208 00:12:34,880 --> 00:12:39,080 Speaker 2: twenty ten. It will never ever happen. But just to 209 00:12:39,120 --> 00:12:42,760 Speaker 2: put in the year scale of this, we have twenty 210 00:12:42,800 --> 00:12:47,079 Speaker 2: twenty six now where the difference between demand and supply 211 00:12:47,840 --> 00:12:51,160 Speaker 2: is the smallest it has been for a long time. 212 00:12:51,640 --> 00:12:55,679 Speaker 2: We had the COVID years, crazy strong on demand due 213 00:12:55,760 --> 00:13:01,120 Speaker 2: to basically the American consumers going absolutely about us and 214 00:13:01,160 --> 00:13:03,720 Speaker 2: a lot of congestion in the wake of that, and 215 00:13:03,880 --> 00:13:07,000 Speaker 2: all of a sudden we saw, hey, let's uh, let's 216 00:13:07,120 --> 00:13:10,280 Speaker 2: let's get back to what once was normal. And then 217 00:13:10,320 --> 00:13:13,600 Speaker 2: around comes ret see right, So so there's always something 218 00:13:13,640 --> 00:13:17,720 Speaker 2: to to to manage, always triggy triggy supply chains. And 219 00:13:17,760 --> 00:13:20,520 Speaker 2: that's basically also why a disrupted like the Red Sea. 220 00:13:20,559 --> 00:13:22,520 Speaker 2: I think it's it's it's worthwhile to pay attention to 221 00:13:22,559 --> 00:13:26,440 Speaker 2: the fact that that shipping is so much more than ocean. 222 00:13:26,559 --> 00:13:29,920 Speaker 2: It's also rail, it's also truck, it's also air and 223 00:13:30,200 --> 00:13:33,439 Speaker 2: various combination of that. Right so, so early in the 224 00:13:33,440 --> 00:13:37,040 Speaker 2: Red Sea crisis we saw the invention of of c 225 00:13:37,320 --> 00:13:41,480 Speaker 2: and air combinations to to get goods into to Europe 226 00:13:41,920 --> 00:13:45,240 Speaker 2: faster than than than would otherwise be the case. Why 227 00:13:45,240 --> 00:13:48,000 Speaker 2: I do buy for instance. So so all that kind 228 00:13:48,000 --> 00:13:53,280 Speaker 2: of i'll say, reinventing the wheel so to speak, has 229 00:13:53,320 --> 00:13:56,360 Speaker 2: been coming into force. But for twenty twenty six, probably 230 00:13:56,760 --> 00:13:59,480 Speaker 2: one thing that we hear from most chippers is that 231 00:13:59,600 --> 00:14:02,840 Speaker 2: they are looking more to ocean freight than that of 232 00:14:02,880 --> 00:14:07,320 Speaker 2: air freight. Uh. And it comes from from from various places, 233 00:14:07,360 --> 00:14:10,680 Speaker 2: but of course, not least because air raid is so 234 00:14:10,800 --> 00:14:14,760 Speaker 2: much more expensive, and cost cutting is an initiative. It's 235 00:14:14,800 --> 00:14:17,880 Speaker 2: an initiative that you hear from from left, right and center. 236 00:14:18,040 --> 00:14:23,000 Speaker 2: So and speaking of demand, speaking of as a economic changes, 237 00:14:23,800 --> 00:14:26,720 Speaker 2: often you see container shipping being very much about Europe 238 00:14:26,760 --> 00:14:30,400 Speaker 2: and North America, but North America for sure. I have 239 00:14:30,720 --> 00:14:34,720 Speaker 2: been in reverse with the Trump administration setting up barriers 240 00:14:34,720 --> 00:14:38,280 Speaker 2: to trade, in particular against China, so so so that 241 00:14:38,520 --> 00:14:43,640 Speaker 2: in itself have brought around some some staggering numbers to 242 00:14:43,800 --> 00:14:49,240 Speaker 2: the table, and then just to bring forward what we 243 00:14:49,280 --> 00:14:53,720 Speaker 2: see now into twenty twenty six, this have resulted in 244 00:14:53,760 --> 00:14:56,560 Speaker 2: a lot of changes to the trade batons. So if 245 00:14:56,600 --> 00:14:59,040 Speaker 2: I'm just to throw a few numbers that you here, 246 00:14:59,080 --> 00:15:02,920 Speaker 2: if we look at all in itself, we saw three 247 00:15:03,000 --> 00:15:07,680 Speaker 2: hundred thousand containers that used to go to North America 248 00:15:07,960 --> 00:15:10,600 Speaker 2: not going to North America from China. So we saw 249 00:15:10,640 --> 00:15:13,960 Speaker 2: a drop of three hundred thousand containers in August alone 250 00:15:14,000 --> 00:15:16,560 Speaker 2: when compared to August last year. But we also saw 251 00:15:16,680 --> 00:15:20,920 Speaker 2: US imports dropped across the board, mainly from the Far East, 252 00:15:20,960 --> 00:15:23,680 Speaker 2: but across the board. So a lot of things have 253 00:15:24,120 --> 00:15:26,320 Speaker 2: changed here. Regardless of the fact that we also saw 254 00:15:26,680 --> 00:15:30,880 Speaker 2: record hide demand in August. So the things are changing. 255 00:15:31,160 --> 00:15:33,680 Speaker 2: It's not only the usual suspects in North America and 256 00:15:33,720 --> 00:15:37,640 Speaker 2: Europe anymore. It's becoming say more broad go, it's becoming 257 00:15:37,640 --> 00:15:41,600 Speaker 2: Middle East, becoming South America as becoming also Southeast Asia 258 00:15:41,680 --> 00:15:44,800 Speaker 2: as an export region more than more than China or 259 00:15:45,280 --> 00:15:49,000 Speaker 2: next to China, I would say, because unplugging China. That's 260 00:15:49,040 --> 00:15:49,960 Speaker 2: Safar Tam right. 261 00:15:50,640 --> 00:15:53,360 Speaker 1: So you just talk about a lot of different stuff. 262 00:15:53,400 --> 00:15:54,960 Speaker 1: I wanted to go back to, you know, when you 263 00:15:55,000 --> 00:15:57,800 Speaker 1: were talking about supply growth at three point six percent. 264 00:15:57,840 --> 00:15:59,440 Speaker 1: You know, I know it's not your base case, but 265 00:15:59,760 --> 00:16:02,240 Speaker 1: you know, the Suez Canal or open up, you know, 266 00:16:02,400 --> 00:16:07,040 Speaker 1: how much more would supply increase given the fact that 267 00:16:07,400 --> 00:16:11,840 Speaker 1: you know, ships would have to go around you know, 268 00:16:12,160 --> 00:16:17,000 Speaker 1: Africa and you know, near term if that were to happen, 269 00:16:17,000 --> 00:16:19,680 Speaker 1: it would obviously have some congestion issues at the port, 270 00:16:20,240 --> 00:16:23,000 Speaker 1: But like, would that have a significant impact on your 271 00:16:23,040 --> 00:16:24,680 Speaker 1: supply growth expectations? 272 00:16:25,040 --> 00:16:26,960 Speaker 2: I will have a massive impact. And that's something of 273 00:16:27,000 --> 00:16:30,000 Speaker 2: course we also share in our twenty twenty six Outlook report. 274 00:16:30,000 --> 00:16:33,120 Speaker 2: We basically bring forward three scenarios because we like to 275 00:16:33,440 --> 00:16:40,120 Speaker 2: to to train and learn our readership of the the 276 00:16:40,200 --> 00:16:44,040 Speaker 2: analytical mind thinking about market. Right, So we basically bring 277 00:16:44,080 --> 00:16:48,800 Speaker 2: around three scenarios return, full return to red Sea, no 278 00:16:48,920 --> 00:16:52,120 Speaker 2: return at all, and what comes in between. Right, So 279 00:16:52,720 --> 00:16:55,040 Speaker 2: if we are to see carriers return to red Sea, 280 00:16:55,360 --> 00:16:59,560 Speaker 2: we'll probably see a de facto release of capacity that 281 00:16:59,640 --> 00:17:02,280 Speaker 2: would be equal to some ten to fifteen percent of 282 00:17:02,320 --> 00:17:05,040 Speaker 2: the active fleet because it's no longer needed to go 283 00:17:05,119 --> 00:17:07,840 Speaker 2: the longer way around the cave of good hope. Obviously, 284 00:17:07,880 --> 00:17:11,520 Speaker 2: these numbers are like a rubber band, so they may 285 00:17:11,520 --> 00:17:14,560 Speaker 2: be one point eight million cu, they may be two 286 00:17:14,560 --> 00:17:19,080 Speaker 2: point five million tu, but for all practical purposes, it 287 00:17:19,320 --> 00:17:23,120 Speaker 2: will undermine that balance that we see in the market now, 288 00:17:23,359 --> 00:17:27,399 Speaker 2: favoring lower rates and of course being a huge disadvantage 289 00:17:27,400 --> 00:17:30,320 Speaker 2: to the carriers that all of a sudden find no 290 00:17:30,440 --> 00:17:35,480 Speaker 2: need for their massive fleets that went well into secure 291 00:17:35,680 --> 00:17:39,160 Speaker 2: supply chains and make them more resilient with the rerouting. 292 00:17:39,280 --> 00:17:45,240 Speaker 2: But surely that will be a massive jump in supply 293 00:17:45,359 --> 00:17:48,840 Speaker 2: growth and the flip side. Of course, also when measuring 294 00:17:48,840 --> 00:17:52,080 Speaker 2: demand in shipping, and that goes for container shipping and beyond, 295 00:17:52,600 --> 00:17:54,800 Speaker 2: it's not only the boxes you move, but also how 296 00:17:54,840 --> 00:17:58,080 Speaker 2: long you move them, right, so demand will definitely also 297 00:17:58,200 --> 00:18:01,480 Speaker 2: drop when you all of a sudden cut the sailing 298 00:18:01,520 --> 00:18:04,400 Speaker 2: distance in terms of nautical miles from from forest into 299 00:18:04,400 --> 00:18:08,440 Speaker 2: the Mediterranean or North Europe by some five thousand utical miles, 300 00:18:08,640 --> 00:18:12,560 Speaker 2: so you'll see a massive, say, swing back. Whereas the 301 00:18:13,520 --> 00:18:18,120 Speaker 2: Red Sea disruption brought around high demand growth in terms 302 00:18:18,119 --> 00:18:22,960 Speaker 2: of longer sailing distances, but also ships bringing in more 303 00:18:23,000 --> 00:18:30,199 Speaker 2: goods to inventory even before say, wider geopolitics also in 304 00:18:30,200 --> 00:18:33,240 Speaker 2: North America caused them to do so, but also the 305 00:18:33,960 --> 00:18:37,560 Speaker 2: supply side that will collapse, So basically they will cross 306 00:18:37,600 --> 00:18:41,040 Speaker 2: each other on with that will say, in exactly the 307 00:18:41,040 --> 00:18:43,840 Speaker 2: opposite way as they did it back in the early 308 00:18:43,920 --> 00:18:47,640 Speaker 2: days of twenty twenty four. So I think we were 309 00:18:47,680 --> 00:18:51,680 Speaker 2: in for rough ride everyone, and you allude to yourself 310 00:18:52,359 --> 00:18:55,200 Speaker 2: the operation challenges also, Lee, We don't touch on them 311 00:18:55,240 --> 00:18:58,639 Speaker 2: here now, but they will definitely also be large scale, 312 00:18:58,640 --> 00:19:02,560 Speaker 2: but not last forever once we get that return. 313 00:19:02,720 --> 00:19:05,400 Speaker 1: And you mentioned earlier, you know you expect spot rates 314 00:19:05,440 --> 00:19:07,840 Speaker 1: to be weaker the tractual rates. Do you guys have 315 00:19:07,880 --> 00:19:10,080 Speaker 1: an estimate in terms of you know, where you see 316 00:19:10,160 --> 00:19:10,760 Speaker 1: rates going? 317 00:19:11,119 --> 00:19:15,399 Speaker 2: Yeah, if we are to look into the global spot 318 00:19:15,480 --> 00:19:18,760 Speaker 2: rate average as we measured with our own data, our 319 00:19:19,080 --> 00:19:22,520 Speaker 2: global spot rate estimate for twenty twenty six is down 320 00:19:22,600 --> 00:19:26,920 Speaker 2: by twenty to thirty so quite a sizable chunk. Let 321 00:19:26,960 --> 00:19:30,240 Speaker 2: alone that we expect no red sea return, right, so 322 00:19:30,960 --> 00:19:34,280 Speaker 2: long term rates probably down by some five to fifteen percent. 323 00:19:34,640 --> 00:19:37,240 Speaker 2: Also in that range, of course, it differs from from 324 00:19:37,240 --> 00:19:40,719 Speaker 2: one trade into the next. But these are global global 325 00:19:41,320 --> 00:19:45,320 Speaker 2: say errows for direction in terms of where rates will 326 00:19:45,480 --> 00:19:49,800 Speaker 2: will go down. And you might ask, I do that myself. Now, 327 00:19:49,920 --> 00:19:52,720 Speaker 2: why do we not see long term rates coming down 328 00:19:53,040 --> 00:19:58,000 Speaker 2: faster or more significant than long term? Because when I 329 00:19:58,040 --> 00:20:01,720 Speaker 2: mentioned these numbers, we will see that short term rates 330 00:20:01,720 --> 00:20:04,640 Speaker 2: will drop below those of the long term. But but hey, 331 00:20:05,119 --> 00:20:08,879 Speaker 2: if we look at the carriers profit law statements, if 332 00:20:08,920 --> 00:20:15,000 Speaker 2: we look at their revenue revenue measurements against their cost measurements, 333 00:20:15,560 --> 00:20:19,520 Speaker 2: we see a bit of disconnect in in the most 334 00:20:19,520 --> 00:20:22,719 Speaker 2: recent year, look at the time charter rates. They have 335 00:20:23,000 --> 00:20:26,440 Speaker 2: held steady almost for for a year now at quite 336 00:20:26,440 --> 00:20:30,159 Speaker 2: a high level, not dropping as we have seen global 337 00:20:30,200 --> 00:20:34,280 Speaker 2: freight rates do. So, so that mismatch, in our book 338 00:20:34,520 --> 00:20:41,040 Speaker 2: translates into carriers probably being tough on going too low 339 00:20:41,320 --> 00:20:43,280 Speaker 2: or at least not going too low on the long 340 00:20:43,320 --> 00:20:47,199 Speaker 2: term contracts they need to to to save guard a 341 00:20:47,240 --> 00:20:50,840 Speaker 2: bit of profit from from their long term contracts against 342 00:20:50,840 --> 00:20:54,920 Speaker 2: that that high level of cost when when when revenue 343 00:20:54,960 --> 00:20:56,120 Speaker 2: seems to be falling. 344 00:20:55,840 --> 00:20:57,640 Speaker 1: How do you define a long term contract? 345 00:20:57,880 --> 00:21:01,119 Speaker 2: Yeah, yeah, in our in our idology, we go for 346 00:21:01,240 --> 00:21:03,640 Speaker 2: a long term contract, which is which is at least 347 00:21:03,680 --> 00:21:07,399 Speaker 2: eighty eight days for practical purposes, that's at least a 348 00:21:07,440 --> 00:21:11,080 Speaker 2: contract that has a validity of three quarters sorry three 349 00:21:11,119 --> 00:21:14,280 Speaker 2: months of course, but it can be up to one year. 350 00:21:14,359 --> 00:21:18,440 Speaker 2: Sometimes she was in forwards and garious agree on contracts 351 00:21:18,480 --> 00:21:23,160 Speaker 2: that are also longer than one year, but anything other 352 00:21:23,200 --> 00:21:26,240 Speaker 2: than that is short. We basically define the short market 353 00:21:26,800 --> 00:21:29,360 Speaker 2: with a validity up to one month, so a very 354 00:21:29,359 --> 00:21:33,320 Speaker 2: few contracts falls within that gap you can see in 355 00:21:33,640 --> 00:21:36,199 Speaker 2: the market here. So either you go very short or 356 00:21:36,200 --> 00:21:40,120 Speaker 2: you go longer in either of something that is adjusted 357 00:21:40,160 --> 00:21:43,439 Speaker 2: on a quarterly basis or having a fixed rate throughout. 358 00:21:44,080 --> 00:21:47,159 Speaker 2: But as we spoke about nearly here, really part of 359 00:21:47,200 --> 00:21:52,520 Speaker 2: the talking transport session right, indexed in contract seems also 360 00:21:52,600 --> 00:21:56,439 Speaker 2: to be a way where the parties of the shipping 361 00:21:56,480 --> 00:21:59,920 Speaker 2: industry finds a way to get around the volatility of 362 00:21:59,920 --> 00:22:03,760 Speaker 2: the market and talk about service levels instead of hackling 363 00:22:03,800 --> 00:22:06,960 Speaker 2: about per fraight rates constantly when they when the markets. 364 00:22:06,680 --> 00:22:10,040 Speaker 1: Change, and you know in your demand forecasts, you know 365 00:22:10,200 --> 00:22:15,280 Speaker 1: you mentioned all the different regions, which regions are growing 366 00:22:15,320 --> 00:22:20,800 Speaker 1: more than or leading the growth versus which regions are lagging. 367 00:22:21,080 --> 00:22:24,120 Speaker 2: What we have seen in twenty twenty five have been 368 00:22:24,359 --> 00:22:29,360 Speaker 2: a staggering high growth of imports into Europe from Far 369 00:22:29,440 --> 00:22:34,040 Speaker 2: East in particular, but also from China mostly, but we 370 00:22:34,080 --> 00:22:37,520 Speaker 2: have certainly also seen other parts of the world taking 371 00:22:38,640 --> 00:22:47,480 Speaker 2: much more conteneral azed goods than ever before. Indian sub 372 00:22:47,520 --> 00:22:51,680 Speaker 2: Continent and Middle East. That is, that is not only 373 00:22:51,840 --> 00:22:54,080 Speaker 2: a trend that we have seen in twenty twenty five, 374 00:22:54,119 --> 00:22:57,399 Speaker 2: but we've seen it early on as well, massive growth 375 00:22:57,480 --> 00:23:02,960 Speaker 2: rates on a relatively shorlder, shorter front hall, but definitely 376 00:23:03,200 --> 00:23:08,439 Speaker 2: an important hall South, South and Central America certainly also 377 00:23:08,600 --> 00:23:14,439 Speaker 2: where you have seen demand growing briskly, when when you 378 00:23:14,520 --> 00:23:18,879 Speaker 2: have seen demand not growing into into North America. And 379 00:23:18,920 --> 00:23:21,480 Speaker 2: it's I think it's important for me to also at 380 00:23:21,480 --> 00:23:23,680 Speaker 2: this point in time put a finger to the fact 381 00:23:23,720 --> 00:23:27,360 Speaker 2: that that we're not talking about any any any container 382 00:23:27,440 --> 00:23:31,280 Speaker 2: moves that that try to evade the origin of the 383 00:23:31,320 --> 00:23:34,960 Speaker 2: goods inside ending up in the US in the final 384 00:23:35,000 --> 00:23:38,280 Speaker 2: location no, these are final destination numbers that I'm sharing 385 00:23:38,320 --> 00:23:42,439 Speaker 2: with you. So we actually see something that have developed 386 00:23:42,440 --> 00:23:45,840 Speaker 2: into much stronger markets over the past couple of years. 387 00:23:45,840 --> 00:23:50,000 Speaker 2: But of course the Chinese have canvassed those markets for 388 00:23:49,680 --> 00:23:53,040 Speaker 2: for for a decade now, since the first Trump administration 389 00:23:53,160 --> 00:23:57,880 Speaker 2: in twenty sixteen. Right, So this is by no mean 390 00:23:58,240 --> 00:24:00,480 Speaker 2: a sudden surprise and a sudden move. This is this 391 00:24:00,640 --> 00:24:03,320 Speaker 2: is probably harvesting from from from many years of hard 392 00:24:03,320 --> 00:24:06,280 Speaker 2: work in order to find out where to send our 393 00:24:06,359 --> 00:24:08,800 Speaker 2: manufactured goods when they when they go no longer to 394 00:24:08,920 --> 00:24:10,640 Speaker 2: it to North America and US in particular. 395 00:24:10,960 --> 00:24:15,960 Speaker 1: Right, you mentioned earlier some of the pro protectionists things 396 00:24:16,000 --> 00:24:19,520 Speaker 1: going on here in the United States. You know, recently 397 00:24:19,880 --> 00:24:24,200 Speaker 1: China announced its own port fees on US ships UH 398 00:24:24,240 --> 00:24:27,240 Speaker 1: to counter with the U. S t R put in place. 399 00:24:27,680 --> 00:24:30,560 Speaker 1: How is all that going to impact, you know, the 400 00:24:30,560 --> 00:24:33,600 Speaker 1: global shipping markets from your perspective. 401 00:24:33,680 --> 00:24:37,240 Speaker 2: Such an exchange of fire, I mean, UH is in 402 00:24:37,280 --> 00:24:40,760 Speaker 2: the first place, if we drilled back to the early 403 00:24:40,760 --> 00:24:42,639 Speaker 2: start of this year, a lot of shippers were actually 404 00:24:42,640 --> 00:24:46,879 Speaker 2: paralyzed when when a raft of disruptions hit them anywhere 405 00:24:46,920 --> 00:24:49,240 Speaker 2: from from from terraces at that point in time. But 406 00:24:49,280 --> 00:24:53,280 Speaker 2: also the early days of of the Ships Act of 407 00:24:53,359 --> 00:24:56,199 Speaker 2: America and what we know now as as the U 408 00:24:56,240 --> 00:25:00,760 Speaker 2: s TR the US red representative port fees. Right up 409 00:25:00,840 --> 00:25:05,120 Speaker 2: until now we have seen some well you can call 410 00:25:05,119 --> 00:25:08,760 Speaker 2: it retaliation or basically a response to to to to 411 00:25:08,760 --> 00:25:12,560 Speaker 2: to the American UH trade policy set against China. Now 412 00:25:12,600 --> 00:25:15,960 Speaker 2: also going in the different direction, we speak on fourteen October, 413 00:25:16,000 --> 00:25:19,280 Speaker 2: which is basically the first day in UH in action 414 00:25:19,560 --> 00:25:23,080 Speaker 2: for for the U s GR port fits UH, and 415 00:25:23,119 --> 00:25:26,240 Speaker 2: we've basically just seen that that that the Chinese have 416 00:25:26,240 --> 00:25:29,720 Speaker 2: have set up the same against against that of of 417 00:25:29,760 --> 00:25:33,640 Speaker 2: American entities and well American bills. Ships can they can 418 00:25:33,640 --> 00:25:35,760 Speaker 2: be counted on on a few hands. But but in 419 00:25:35,840 --> 00:25:39,600 Speaker 2: terms of ownerships, UH, that's of course what what will 420 00:25:39,680 --> 00:25:44,159 Speaker 2: impact and disrupt mostly others actors than that than container shipping. 421 00:25:44,160 --> 00:25:47,000 Speaker 2: But but it's a wide it's a wide range of 422 00:25:47,000 --> 00:25:49,920 Speaker 2: of trouble and it also requires of course ships to 423 00:25:49,920 --> 00:25:53,199 Speaker 2: to find new markets but also perhaps just to to 424 00:25:53,280 --> 00:25:58,400 Speaker 2: redirect some of their manufacturing into different markets than than 425 00:25:58,440 --> 00:26:02,480 Speaker 2: they did earlier on. Right, So if you have production 426 00:26:02,640 --> 00:26:06,640 Speaker 2: facilities in India, in Vietnam and in China, you probably 427 00:26:06,640 --> 00:26:09,680 Speaker 2: bring those in built in China or manufacturers in China 428 00:26:10,119 --> 00:26:14,160 Speaker 2: elsewhere than US, and you make sure that the goods 429 00:26:14,359 --> 00:26:19,880 Speaker 2: made in Malaysia, Thailand, Vietnam, India for that matter, they 430 00:26:19,920 --> 00:26:23,320 Speaker 2: go to the US. So that kind of changing trade 431 00:26:23,320 --> 00:26:27,280 Speaker 2: patterns we also see. And basically if I'm just to 432 00:26:27,280 --> 00:26:30,359 Speaker 2: reflect a little bit on how carriers have reacted in 433 00:26:30,680 --> 00:26:34,800 Speaker 2: most recent years, the main part of the order book 434 00:26:34,840 --> 00:26:39,760 Speaker 2: going forward is for ships in the mid large sector 435 00:26:40,040 --> 00:26:43,199 Speaker 2: of twelve thousands to some seventeen thousands of use, so 436 00:26:43,440 --> 00:26:47,800 Speaker 2: quite big ships, but also versatile and flexible, not only 437 00:26:47,840 --> 00:26:51,320 Speaker 2: suited for one trade. So carriers are ready to to 438 00:26:51,359 --> 00:26:55,280 Speaker 2: also set up a different trade pattern and a service 439 00:26:55,320 --> 00:27:00,800 Speaker 2: network going forward in order to cater for or for these, uh, 440 00:27:00,840 --> 00:27:03,400 Speaker 2: these changes in the in the in demandflows. 441 00:27:03,600 --> 00:27:07,440 Speaker 1: And do you think that the capacity owners are going 442 00:27:07,480 --> 00:27:09,639 Speaker 1: to be able to pass on the additional costs because 443 00:27:09,640 --> 00:27:11,560 Speaker 1: I mean, obviously you know you said the spot rates 444 00:27:11,560 --> 00:27:13,520 Speaker 1: are going to be down twenty thirty percent next year. 445 00:27:13,640 --> 00:27:17,919 Speaker 1: Is that included kind of shippers trying to recoup some 446 00:27:18,000 --> 00:27:21,399 Speaker 1: of these fees because uh, you know, as you know, 447 00:27:21,480 --> 00:27:24,200 Speaker 1: when when when a shipping company puts a search hours 448 00:27:24,280 --> 00:27:26,639 Speaker 1: on and in these kinds of markets, they don't really, 449 00:27:26,720 --> 00:27:27,640 Speaker 1: it's not very sticky. 450 00:27:27,960 --> 00:27:32,359 Speaker 2: You're absolutely right. The the terraces are really tricky to 451 00:27:32,520 --> 00:27:36,679 Speaker 2: uh to I mean those those will be here to 452 00:27:36,920 --> 00:27:39,960 Speaker 2: uh to to to get into the goods at some 453 00:27:40,000 --> 00:27:41,920 Speaker 2: point in time. We know some of the very large 454 00:27:42,240 --> 00:27:45,360 Speaker 2: imports and shippers have been able to negotiate a little 455 00:27:45,359 --> 00:27:48,720 Speaker 2: bit of lower costs from from their manufacturing units. Right 456 00:27:49,440 --> 00:27:52,159 Speaker 2: some companies have also been able to absorb some of 457 00:27:52,160 --> 00:27:55,640 Speaker 2: this their own profits, while the lion share have been 458 00:27:56,640 --> 00:28:00,600 Speaker 2: in the necessency to it to pass along those those costs. 459 00:28:01,119 --> 00:28:04,280 Speaker 2: But in terms support fees getting back to those what 460 00:28:04,359 --> 00:28:07,600 Speaker 2: we see there as basically, at least with the implementation 461 00:28:07,680 --> 00:28:14,520 Speaker 2: of today, no carriers have asked for specific USTRSER charge 462 00:28:14,800 --> 00:28:17,640 Speaker 2: from day one. That may change later down the road, 463 00:28:17,880 --> 00:28:24,880 Speaker 2: because those are those legislative fees are also changing over 464 00:28:24,920 --> 00:28:27,040 Speaker 2: time from where they are now to where they will 465 00:28:27,040 --> 00:28:30,200 Speaker 2: be in twenty twenty eight. And of course center stage 466 00:28:30,200 --> 00:28:35,159 Speaker 2: here Cosmon double ocl the Chinese units, but also perhaps 467 00:28:35,200 --> 00:28:38,080 Speaker 2: a little bit further down the road, if if that 468 00:28:38,080 --> 00:28:42,760 Speaker 2: that fee structure needs some titans, we we may see 469 00:28:42,800 --> 00:28:47,080 Speaker 2: that that the the units also owned and charted in 470 00:28:47,840 --> 00:28:52,160 Speaker 2: by the by the carriers, by by Chinese financing houses 471 00:28:52,480 --> 00:28:55,880 Speaker 2: will get it more directly going forward than that then 472 00:28:55,920 --> 00:28:58,960 Speaker 2: we see it currently because those ships may not be 473 00:28:58,960 --> 00:29:01,600 Speaker 2: built in China, they may be operated by a Chinese union, 474 00:29:01,760 --> 00:29:06,880 Speaker 2: but if they are in the end financed in China, 475 00:29:07,400 --> 00:29:11,200 Speaker 2: that's that's a game changeup. But hey, trade will always 476 00:29:11,240 --> 00:29:14,000 Speaker 2: find a way financing. I'm pretty sure we'll also find 477 00:29:14,000 --> 00:29:17,400 Speaker 2: a way. And but it makes it more compass and 478 00:29:17,560 --> 00:29:20,200 Speaker 2: more expensive all the time. Right, So in the end 479 00:29:20,200 --> 00:29:22,240 Speaker 2: of the day, it's only you and I as consumers 480 00:29:22,320 --> 00:29:25,320 Speaker 2: do it to pay for all these these extra pfticles 481 00:29:25,560 --> 00:29:26,560 Speaker 2: being being put up. 482 00:29:26,960 --> 00:29:29,480 Speaker 1: So just switching gears a little bit. I know it's 483 00:29:29,520 --> 00:29:33,720 Speaker 1: not your area of expertise per se, but you know 484 00:29:34,120 --> 00:29:39,200 Speaker 1: what is Sanata saying about the air freight markets for 485 00:29:39,280 --> 00:29:40,120 Speaker 1: twenty twenty six. 486 00:29:40,440 --> 00:29:43,600 Speaker 2: Yeah, we we cover continuer shipping as well as as 487 00:29:43,680 --> 00:29:48,080 Speaker 2: air freight for our customer base. So if we look 488 00:29:48,120 --> 00:29:52,080 Speaker 2: into to that of air cargo demand and supply growth 489 00:29:52,080 --> 00:29:57,880 Speaker 2: for twenty twenty six, we see development that that kind 490 00:29:57,920 --> 00:30:00,920 Speaker 2: of mirrors the development that we see at least on 491 00:30:01,040 --> 00:30:05,240 Speaker 2: rates for ocean freight. So if we if we go 492 00:30:05,320 --> 00:30:08,680 Speaker 2: by the numbers for demand in twenty twenty five, in 493 00:30:08,760 --> 00:30:13,200 Speaker 2: air cargo. We estimate for the full year demand growth 494 00:30:13,600 --> 00:30:16,040 Speaker 2: to the extent of three to four percent that we 495 00:30:16,120 --> 00:30:20,000 Speaker 2: see falling to between two and three percent next year, 496 00:30:20,120 --> 00:30:22,760 Speaker 2: So so lower demand growth next year than what we 497 00:30:22,800 --> 00:30:26,120 Speaker 2: see this year. If we go for supply, it goes 498 00:30:26,160 --> 00:30:29,560 Speaker 2: in the opposite direction. We have supply growth of two 499 00:30:29,600 --> 00:30:32,000 Speaker 2: to three percent this year, but three to four percent 500 00:30:32,080 --> 00:30:35,240 Speaker 2: expected for next year. So you can clearly see that 501 00:30:35,240 --> 00:30:38,760 Speaker 2: that are projected demand and supply growth rate hints towards 502 00:30:39,120 --> 00:30:42,720 Speaker 2: a downward pressure on the air cargo rates for twenty 503 00:30:42,840 --> 00:30:47,360 Speaker 2: twenty six, but it's also a market that still see 504 00:30:47,680 --> 00:30:52,600 Speaker 2: rates flying pretty high, so there's a there's at least 505 00:30:52,680 --> 00:30:56,840 Speaker 2: some some room before we get down to anything that 506 00:30:56,880 --> 00:31:02,080 Speaker 2: looks like pre COVID levels. I mean that's not also 507 00:31:02,120 --> 00:31:04,120 Speaker 2: a little bit of ready of course for for global 508 00:31:04,160 --> 00:31:07,560 Speaker 2: air market. But those are the the main the main 509 00:31:07,640 --> 00:31:11,440 Speaker 2: numbers and how we see the globally air cargo market 510 00:31:11,480 --> 00:31:12,920 Speaker 2: for for twenty twenty six early. 511 00:31:13,320 --> 00:31:15,840 Speaker 1: Is there anything else on your radar when it relates 512 00:31:15,840 --> 00:31:18,240 Speaker 1: to global trade and and ocean and air markets. 513 00:31:18,400 --> 00:31:23,880 Speaker 2: Yeah, I think I think the the constant need to 514 00:31:23,880 --> 00:31:28,280 Speaker 2: to to to basically pick and choose between the service 515 00:31:28,320 --> 00:31:31,360 Speaker 2: providers in the market. And and and ensure that that 516 00:31:31,400 --> 00:31:33,920 Speaker 2: you that you get what you actually pay for. I 517 00:31:33,920 --> 00:31:37,160 Speaker 2: think is probably the one thing that's that's on most 518 00:31:37,160 --> 00:31:40,760 Speaker 2: people's mind because we're not only talking about pricing as 519 00:31:40,880 --> 00:31:43,600 Speaker 2: as dynamic as as it may be, and and making 520 00:31:44,160 --> 00:31:47,360 Speaker 2: say supply chains resilience all the time, but but it's 521 00:31:47,400 --> 00:31:50,400 Speaker 2: also a matter of ensuring that that cargo actually get 522 00:31:50,680 --> 00:31:55,920 Speaker 2: gets moving. Uh, and and and the the constant change 523 00:31:56,240 --> 00:32:00,960 Speaker 2: in order to to to to to basically to your 524 00:32:01,000 --> 00:32:04,600 Speaker 2: market in wherever it may may find and needs to 525 00:32:04,640 --> 00:32:09,400 Speaker 2: be supported by the work done in the logistics department 526 00:32:09,440 --> 00:32:12,240 Speaker 2: of every single company. Right. So, you do not have 527 00:32:12,760 --> 00:32:16,160 Speaker 2: a sizeable company in the world today that doesn't rely 528 00:32:17,040 --> 00:32:21,120 Speaker 2: fully on the expertise from either in house procurement of 529 00:32:21,600 --> 00:32:24,480 Speaker 2: a freight or at least global logistics. Right. So I 530 00:32:24,480 --> 00:32:27,760 Speaker 2: would say back five years, nobody knew who worked in 531 00:32:28,240 --> 00:32:32,040 Speaker 2: freight or shipping within your own family, maybe, but where 532 00:32:32,080 --> 00:32:35,680 Speaker 2: we are now in late twenty twenty five, those are 533 00:32:35,720 --> 00:32:39,080 Speaker 2: the unsung heroes, right, Those are basically those people that 534 00:32:39,560 --> 00:32:43,760 Speaker 2: makes the world move while while we just still consume 535 00:32:43,840 --> 00:32:47,720 Speaker 2: what we need amidst all the uncertainty in the market. 536 00:32:47,800 --> 00:32:52,680 Speaker 2: So hey, a moment two cherish for those hardworking people 537 00:32:52,720 --> 00:32:56,320 Speaker 2: wherever they may be found in the truck or at 538 00:32:56,320 --> 00:32:58,040 Speaker 2: the docks or sailing. 539 00:32:58,120 --> 00:33:01,360 Speaker 1: This is absolutely And in the beginning of the conversation 540 00:33:01,440 --> 00:33:05,120 Speaker 1: when I made the introduction, you know, I said that, 541 00:33:05,480 --> 00:33:08,360 Speaker 1: you know, you started, or at least before Bimco, you 542 00:33:08,400 --> 00:33:11,520 Speaker 1: were at ds Nord And how did you find your 543 00:33:11,560 --> 00:33:14,000 Speaker 1: way into the freight markets? 544 00:33:14,000 --> 00:33:18,160 Speaker 2: Really by coincident actually so but but hey, Hotel California 545 00:33:18,240 --> 00:33:21,960 Speaker 2: have been a part of my uh my place to 546 00:33:22,040 --> 00:33:24,120 Speaker 2: twelve for a long time. So so once I got 547 00:33:24,240 --> 00:33:28,360 Speaker 2: my my my head around shipping, it was something that 548 00:33:28,400 --> 00:33:31,040 Speaker 2: I couldn't leave behind. So I'm just pretty fortunate to 549 00:33:31,400 --> 00:33:34,040 Speaker 2: be able to work in in all the main shipping sectors. 550 00:33:34,520 --> 00:33:39,239 Speaker 2: And uh and hey, I'm a I'm an economist by 551 00:33:39,480 --> 00:33:45,520 Speaker 2: by by training, so so really excited about global geography 552 00:33:45,640 --> 00:33:48,880 Speaker 2: and politics, and no better place than that than shipping 553 00:33:48,920 --> 00:33:51,960 Speaker 2: to to to get your head around those those interests. 554 00:33:52,040 --> 00:33:56,760 Speaker 2: So so working with economics just just yeah, go with 555 00:33:56,800 --> 00:34:00,480 Speaker 2: the flow and and and see what the what comes next. Fortunately, 556 00:34:00,520 --> 00:34:06,000 Speaker 2: shipping is is one where strong relationships are forged on 557 00:34:06,040 --> 00:34:08,840 Speaker 2: a daily basis, So just please do it to be 558 00:34:08,880 --> 00:34:12,080 Speaker 2: a part of the industry for a couple of decades now, right. 559 00:34:11,920 --> 00:34:17,279 Speaker 1: And where where can people find you know, uh, the 560 00:34:17,320 --> 00:34:19,880 Speaker 1: outlook that you guys just published, is it? Is it 561 00:34:19,920 --> 00:34:20,880 Speaker 1: available online? 562 00:34:21,040 --> 00:34:24,400 Speaker 2: Yeah? Basically we uh we we we treat our customers 563 00:34:24,680 --> 00:34:27,360 Speaker 2: a little bit more nicely when when we issue something 564 00:34:27,400 --> 00:34:29,719 Speaker 2: like this right now. So so not only did they 565 00:34:29,719 --> 00:34:31,960 Speaker 2: get a digest of it at our summit last week, 566 00:34:32,280 --> 00:34:35,360 Speaker 2: but they also get like a jumpstart for for around 567 00:34:35,360 --> 00:34:39,640 Speaker 2: ten days reading it and really as a maybe even 568 00:34:39,760 --> 00:34:42,279 Speaker 2: acting on it. But I can only encourage you to 569 00:34:42,320 --> 00:34:44,840 Speaker 2: go into this and that a dot com website, because 570 00:34:44,880 --> 00:34:48,600 Speaker 2: we will throw out a webinar for for you guys 571 00:34:48,640 --> 00:34:52,759 Speaker 2: on on twenty three October, and immediately following that where 572 00:34:52,800 --> 00:34:55,400 Speaker 2: we talk about the outlook, we will also release it 573 00:34:55,480 --> 00:34:59,680 Speaker 2: to everybody else who wants to uh to to read 574 00:34:59,680 --> 00:35:03,400 Speaker 2: about and and look into to all the details let alone. 575 00:35:03,480 --> 00:35:06,360 Speaker 2: We uh we touch a lot of ground here. But 576 00:35:06,360 --> 00:35:09,520 Speaker 2: but there's there's so much more to find into the report. 577 00:35:09,640 --> 00:35:12,719 Speaker 2: So so check out sentenceor dot com and uh check 578 00:35:12,719 --> 00:35:15,760 Speaker 2: out the webinar and subsequent release of the report. 579 00:35:16,239 --> 00:35:20,160 Speaker 1: Sure, and I have to ask are you into heavy metal? 580 00:35:20,200 --> 00:35:22,440 Speaker 1: Because is that is that an Iron Maiden shirt you're wearing. 581 00:35:24,600 --> 00:35:29,239 Speaker 2: It's not Iron Maiden, it's Therapy. It's uh, it's a 582 00:35:29,280 --> 00:35:32,520 Speaker 2: death metal band from from Denmark. But but I'm very 583 00:35:32,560 --> 00:35:35,279 Speaker 2: much into it to metal music and Iron Maiden. This 584 00:35:35,680 --> 00:35:38,360 Speaker 2: is coming to Coople Hill next year, so so I 585 00:35:38,400 --> 00:35:41,000 Speaker 2: will buy a ticket for for that for that metal 586 00:35:41,040 --> 00:35:44,520 Speaker 2: festival which has been around for a decade in Denmark now. 587 00:35:44,560 --> 00:35:47,040 Speaker 2: So but thanks for a noting. It's it's one of 588 00:35:47,120 --> 00:35:47,799 Speaker 2: my favorite chops. 589 00:35:48,239 --> 00:35:51,960 Speaker 1: Well, enjoy the concert before we go. I always like 590 00:35:52,000 --> 00:35:54,560 Speaker 1: to ask my guest, this is there a book about 591 00:35:54,719 --> 00:35:58,120 Speaker 1: the freight markets or management. It's kind of close to 592 00:35:58,160 --> 00:36:01,040 Speaker 1: your heart that you would recommend our nursed that they 593 00:36:01,080 --> 00:36:03,600 Speaker 1: should take a take a look at. 594 00:36:04,080 --> 00:36:07,760 Speaker 2: Being being an economist working in shipping. I can only 595 00:36:08,000 --> 00:36:10,120 Speaker 2: pay a little bit tribute to to to stuff for 596 00:36:10,400 --> 00:36:15,360 Speaker 2: maritime economics of course. Uh. The most recent releases is 597 00:36:15,920 --> 00:36:18,879 Speaker 2: from two thousand and eight, so so it's a it's 598 00:36:18,880 --> 00:36:22,080 Speaker 2: an old book these days, but still the fundamentals of 599 00:36:22,080 --> 00:36:25,280 Speaker 2: the industry remain the same. And then ponders like myself 600 00:36:25,320 --> 00:36:29,520 Speaker 2: and and like minded people around and yourself have have 601 00:36:29,640 --> 00:36:33,080 Speaker 2: built on on that kind of thinking for decades onwards. 602 00:36:33,160 --> 00:36:35,400 Speaker 2: So so that's probably the one thing that that you 603 00:36:35,440 --> 00:36:38,760 Speaker 2: need to get your head around, uh when when looking 604 00:36:38,840 --> 00:36:42,000 Speaker 2: into it to the maritime field, and then just embrace 605 00:36:42,040 --> 00:36:45,000 Speaker 2: the fact that you learned something new every single day 606 00:36:45,160 --> 00:36:49,600 Speaker 2: when you when you work in shipping. In terms of leadership, well, 607 00:36:49,840 --> 00:36:53,560 Speaker 2: I I trust in the talent that that I uh 608 00:36:53,800 --> 00:36:56,640 Speaker 2: that went pleased to work with and then seek to 609 00:36:56,640 --> 00:37:03,000 Speaker 2: to develop their expertise slowly, but but also thoroughly knowing 610 00:37:03,040 --> 00:37:06,680 Speaker 2: that it is immensely tricky to to work in shipping 611 00:37:06,680 --> 00:37:10,960 Speaker 2: because everything moves, everything flows so so so you never 612 00:37:11,000 --> 00:37:14,360 Speaker 2: really get your head thoroughly around it all. But but 613 00:37:14,360 --> 00:37:17,240 Speaker 2: but play you can. You can come in many forms 614 00:37:17,239 --> 00:37:21,640 Speaker 2: into shipping. You'll have fun. But but but know your stuff, 615 00:37:22,600 --> 00:37:26,680 Speaker 2: know your fundamentals, then you're probably pretty good off and 616 00:37:26,680 --> 00:37:29,080 Speaker 2: and and I'll be happy to lead you if if 617 00:37:29,080 --> 00:37:30,680 Speaker 2: you go by those those rules. 618 00:37:31,040 --> 00:37:33,160 Speaker 1: All right, Peter, Well, I really want to thank you 619 00:37:33,160 --> 00:37:35,760 Speaker 1: for your time and your insights today, and I would 620 00:37:35,920 --> 00:37:38,360 Speaker 1: suggest folks to take a look at, you know, the 621 00:37:38,400 --> 00:37:40,680 Speaker 1: outlook that you guys published online and when they have 622 00:37:40,719 --> 00:37:41,200 Speaker 1: a chance. 623 00:37:41,480 --> 00:37:44,960 Speaker 2: I can only welcome everyone with with a keen interest 624 00:37:45,000 --> 00:37:47,879 Speaker 2: into that to to to read it and to pop 625 00:37:47,920 --> 00:37:50,640 Speaker 2: any any questions you you may have either two to 626 00:37:50,719 --> 00:37:53,800 Speaker 2: me or anyone else at Sanela, because we're just happy 627 00:37:54,360 --> 00:37:58,120 Speaker 2: to to debate also well our fundamentals and and I'll 628 00:37:58,200 --> 00:38:00,279 Speaker 2: look just as we've done here. And so thank you 629 00:38:00,400 --> 00:38:03,040 Speaker 2: so much for for having me on to Talking to 630 00:38:03,320 --> 00:38:04,600 Speaker 2: Transport podcast. 631 00:38:05,000 --> 00:38:06,799 Speaker 1: All right, and I want to thank you for tuning in. 632 00:38:06,840 --> 00:38:09,880 Speaker 1: If you liked the episode, please subscribe and leave a review. 633 00:38:10,480 --> 00:38:12,800 Speaker 1: We've lined up a number of great guests for the podcast, 634 00:38:12,800 --> 00:38:18,720 Speaker 1: so please check back to hear conversations with C suite executives, shippers, regulators, 635 00:38:18,760 --> 00:38:22,360 Speaker 1: and decision makers within the freight markets. Also, if you 636 00:38:22,400 --> 00:38:26,040 Speaker 1: want to learn more about the freight transportation markets, check 637 00:38:26,080 --> 00:38:29,360 Speaker 1: out our work on the Bloomberg Terminal at Bigo and 638 00:38:29,480 --> 00:38:33,760 Speaker 1: on social media. This is Lee Clasgal signing off. Thanks 639 00:38:33,760 --> 00:38:36,280 Speaker 1: for talking transports with me. Talk to you next week.