WEBVTT - Lots More on Potentially Massive East Coast Port Strikes 0:00:03.120 --> 0:00:12.080 Bloomberg Audio Studios, podcasts, radio news. This strike is bananas. 0:00:12.360 --> 0:00:16.239 B A N A n A S. Strike is bananas. 0:00:16.720 --> 0:00:18.120 Remember bananas, Joe. 0:00:19.239 --> 0:00:21.400 Are you talking about the fruit or something else here? 0:00:21.800 --> 0:00:24.200 Well, I'm talking about the fruit, so. 0:00:24.120 --> 0:00:26.759 I don't know, like bananas. I remember bananas? 0:00:26.880 --> 0:00:29.600 Okay? Are you worried about the bananas supply chain? 0:00:31.080 --> 0:00:34.960 Enlighten? I believe we're dealing with this again. Oh my god, Yeah, 0:00:35.120 --> 0:00:37.440 it's another issue. 0:00:39.479 --> 0:00:42.400 I did a deadlift one, Jimmy. 0:00:42.479 --> 0:00:46.559 Okay, uh, barges. 0:00:46.680 --> 0:00:48.720 This isn't after school Special, except. 0:00:48.479 --> 0:00:51.000 I've decided I'm going to base my entire personality going 0:00:51.040 --> 0:00:54.240 forward on campaigning for a strategic pork reserve in the US. 0:00:54.360 --> 0:00:56.120 Where's the best imposta? 0:00:56.280 --> 0:00:58.840 These are the important question? Is that robots taking over 0:00:58.880 --> 0:00:59.160 the world. 0:00:59.320 --> 0:00:59.440 No. 0:00:59.520 --> 0:01:02.800 I think like in a couple of years, the AI 0:01:03.000 --> 0:01:04.920 will do a really good job of making the Odd 0:01:04.959 --> 0:01:08.280 lotch podcast and people Today. I don't really need to 0:01:08.319 --> 0:01:09.880 listen to Joe and Tracy anymore. 0:01:10.080 --> 0:01:15.520 We do have Touching the Perfect You're listening to lots 0:01:15.560 --> 0:01:17.960 more where we catch up with friends about what's going 0:01:18.000 --> 0:01:19.640 on right now, Because. 0:01:19.360 --> 0:01:22.440 Even when The Odd Lots is over, there's always lots more. 0:01:22.640 --> 0:01:28.160 And we really do have the perfect guest. So it 0:01:28.200 --> 0:01:32.560 looks like the International long Shoreman's Association ILA. There's going 0:01:32.640 --> 0:01:35.720 to be a lot of acronyms. They're kind of struggling 0:01:35.760 --> 0:01:38.560 to work out a deal with the United States Maritime 0:01:38.680 --> 0:01:44.400 Alliance USMX, and so we might have disruption at the ports. 0:01:44.480 --> 0:01:46.280 It's twenty twenty all over again. 0:01:46.200 --> 0:01:50.840 The entire East Coast. From my understanding, every port on 0:01:50.880 --> 0:01:52.920 the East Coast, which I think has all kinds of 0:01:53.000 --> 0:01:56.400 influence from bananas to cheries to auto parts, could be 0:01:56.440 --> 0:01:59.200 on strike as soon as October. Verse Craig, what's going 0:01:59.240 --> 0:02:00.440 to happen? What's going on? 0:02:00.960 --> 0:02:03.120 A lot of people asked years ago, how could you 0:02:03.160 --> 0:02:06.960 set up a media business based on supply chain? 0:02:07.160 --> 0:02:08.760 There's endless stuff, isn't there? 0:02:09.720 --> 0:02:13.560 This always happens, but nobody cared before twenty twenty. You know, 0:02:13.639 --> 0:02:16.919 everyone's aware that these supply chains are vultable and these 0:02:16.919 --> 0:02:19.440 issues happen. They've always It's always been this way. It's 0:02:19.480 --> 0:02:22.760 just that up until recently, no one really paid attention 0:02:22.840 --> 0:02:25.360 to them because they didn't experience them personally. But this 0:02:25.400 --> 0:02:27.320 stuff is always taking place. We are up to a 0:02:27.360 --> 0:02:31.480 new union contract, the ISLA is insisting that if their 0:02:31.480 --> 0:02:33.880 demands aren't met that they're going to strike, and that 0:02:33.919 --> 0:02:37.480 would be potentially catastrophic to supply chains if it goes 0:02:37.520 --> 0:02:38.799 on for a long period of time. 0:02:39.400 --> 0:02:42.960 We are, of course speaking Tracy. We are speaking with 0:02:43.160 --> 0:02:45.399 Craig Fuller. He is the founder and CEO of Freight 0:02:45.480 --> 0:02:48.680 Waves And to his point, Tracy, I don't think we 0:02:48.760 --> 0:02:51.480 ever once talked to him before twenty twenty, and now we've. 0:02:51.320 --> 0:02:53.560 Probably talked to him like seven times or something like that. 0:02:53.680 --> 0:02:56.760 Yeah, I think that's very true. Okay, So Craig, what 0:02:56.880 --> 0:03:00.680 are the main sticking points here? Because the coverage that 0:03:00.760 --> 0:03:05.359 I'm reading about, like the tensions between the ISLA and USMX. 0:03:06.440 --> 0:03:11.120 I see issues on wages, issues on benefits, issues on 0:03:11.200 --> 0:03:14.000 port automation. When I read the list, it kind of 0:03:14.000 --> 0:03:17.760 feels like there's disagreement on everything pretty much. 0:03:18.040 --> 0:03:19.680 At the end of the day, I think it comes 0:03:19.680 --> 0:03:23.680 back to the fact that labor has more leverage today 0:03:23.720 --> 0:03:26.639 than they've had in decades. And it's really a couple 0:03:26.720 --> 0:03:30.960 of things. One is, you have a very friendly administration 0:03:31.120 --> 0:03:35.680 to labor, probably arguably the most labor friendly administration in decades. 0:03:35.720 --> 0:03:39.560 It's in the White House currently, and you have a 0:03:39.600 --> 0:03:42.240 lot of leverage because of a supply and demand problem. 0:03:42.320 --> 0:03:44.920 Is that they're just aren't enough workers that want these 0:03:44.960 --> 0:03:47.720 types of jobs, and that gives them enormous amount of 0:03:47.800 --> 0:03:51.440 leverage in these contract negotiations. But fundamentally their arguments are 0:03:51.520 --> 0:03:55.160 that they don't want automation and they want significant pay 0:03:55.200 --> 0:03:57.160 increases is really what it comes back to. Those are 0:03:57.160 --> 0:04:02.960 the fundamental disagreements here is really the economic and really technology, 0:04:03.000 --> 0:04:05.720 and it's concerned that it's taking jobs or potential jobs 0:04:05.760 --> 0:04:07.040 away from their members. 0:04:07.480 --> 0:04:10.920 Setting aside the politics, and we know the politics are 0:04:11.080 --> 0:04:14.160 going to be very complicated for a democratic administration that's 0:04:14.200 --> 0:04:18.400 prided itself on being a friend of labor but also 0:04:18.680 --> 0:04:21.400 doesn't want to have a massive economic disruption just a 0:04:21.400 --> 0:04:22.080 few weeks out. 0:04:22.000 --> 0:04:22.520 From the election. 0:04:22.600 --> 0:04:24.800 But setting all that aside, maybe we can talk about 0:04:24.800 --> 0:04:27.520 that a little bit more. Does the government have tools 0:04:27.560 --> 0:04:30.000 to stop a strike in the same way it apparently 0:04:30.040 --> 0:04:32.760 can sometimes with potential rail strikes. 0:04:33.600 --> 0:04:35.680 They can ask for a koling off period, So this 0:04:35.760 --> 0:04:40.359 is not subject to the same regulatory environment that you 0:04:40.400 --> 0:04:44.360 have with railroads. Have a very specific group that govern 0:04:44.560 --> 0:04:46.560 a lot of the relations with the railroads because they 0:04:47.560 --> 0:04:49.120 we can you know, there's a lot of history to that, 0:04:49.160 --> 0:04:51.719 but effectively, what is in the arsenal of the White 0:04:51.720 --> 0:04:55.000 House is the tatt Heartley Act. I mean, essentially, what 0:04:55.000 --> 0:04:58.000 they're able to do with that is force them into 0:04:58.000 --> 0:04:59.840 a kuling off period of eighty days, and so they 0:04:59.839 --> 0:05:02.919 can actually make them go back to work. The question is, 0:05:03.080 --> 0:05:05.520 if you make people who don't want to go back 0:05:05.560 --> 0:05:07.520 to work, how hard are they actually going to work? 0:05:07.560 --> 0:05:10.640 And I think that's the big concern is, yes, you 0:05:10.680 --> 0:05:13.239 can force them for at least eighty days to cool off, 0:05:13.600 --> 0:05:18.760 can force them into effectively a mediation and arbitration environment, 0:05:18.800 --> 0:05:21.719 but you can't force them to work if they're called 0:05:21.720 --> 0:05:22.080 back in. 0:05:22.680 --> 0:05:25.720 So I kind of think the interesting thing about the 0:05:25.720 --> 0:05:29.760 potential strike is it's already or it seems to already 0:05:29.760 --> 0:05:32.760 be having an impact on shipping. And I saw that 0:05:32.800 --> 0:05:35.800 announcement from Hapik Lloyd that they were going to implement 0:05:35.880 --> 0:05:41.919 a work interruption destination surcharge. How common are those? Is 0:05:41.920 --> 0:05:42.920 that like a normal thing? 0:05:44.080 --> 0:05:47.040 Well, this is an interesting environment because not only have 0:05:47.360 --> 0:05:50.880 has labor gained an enormous metal leverage, but really since COVID, 0:05:51.440 --> 0:05:54.320 the ocean container lines have gained enormous metal leverage. I mean, 0:05:54.360 --> 0:05:57.080 what is untalked about are undiscussed in the public, and 0:05:57.120 --> 0:05:59.760 I think the Biden administration for all of the sort 0:05:59.800 --> 0:06:03.040 of you know, as a supply chain professional, we're pretty 0:06:03.040 --> 0:06:05.640 critical of, you know, every administration when it come to 0:06:05.680 --> 0:06:08.320 supply chain issues. But one thing that I think the 0:06:08.320 --> 0:06:12.040 Bide administration actually got correct was back in two thousand 0:06:12.080 --> 0:06:15.120 and when we had the big function in twenty twenty two, 0:06:15.800 --> 0:06:18.280 as sort of the peak or the sort of apex 0:06:18.480 --> 0:06:21.800 of the or the climax of all the supply chain 0:06:21.880 --> 0:06:25.159 challenges with the ports is they had correctly identified that 0:06:25.200 --> 0:06:28.000 the big port containers had an enormous amount of pricing 0:06:28.040 --> 0:06:31.599 power that really made them a cartel. And I think 0:06:31.600 --> 0:06:33.960 they have a lot of validity and data to support that. 0:06:34.000 --> 0:06:36.080 I mean, if you think about this, the top ten 0:06:36.520 --> 0:06:40.279 ocean container lines have ninety percent of the market share 0:06:40.680 --> 0:06:44.040 of international container movements. I mean, they have an enormous 0:06:44.080 --> 0:06:46.840 amount of power. Ten companies controlled ninety percent of the 0:06:46.880 --> 0:06:50.280 flow of cargo. To put that in perspective, OPAK is 0:06:50.320 --> 0:06:54.800 approximately forty percent of global oil supplies, and so if 0:06:54.839 --> 0:06:58.279 you could argue that OPEC is a cartel, you should 0:06:58.320 --> 0:07:00.080 be able to argue and I think rightfully so so 0:07:00.520 --> 0:07:03.360 that the ocean container lines are cartail. What's happened over 0:07:03.400 --> 0:07:06.320 the last really thirty to forty years, this has been 0:07:06.400 --> 0:07:10.520 massive consolidation in the international ocean container market. They're not 0:07:10.680 --> 0:07:14.560 subject to US antitrust rules the way that almost every 0:07:14.560 --> 0:07:16.880 other company is, and so they sort of live outside 0:07:16.920 --> 0:07:19.840 this framework where it enables them to do things that 0:07:19.960 --> 0:07:23.280 in every other industry you would have regulators pounded on 0:07:23.360 --> 0:07:25.200 the door. And so this is what the Biden administration 0:07:25.240 --> 0:07:28.280 identified back and came out and talked about it. There 0:07:28.360 --> 0:07:31.160 was some laws passing Congress that you know, we haven't 0:07:31.200 --> 0:07:33.840 seen any real outcome in terms of change of how 0:07:33.880 --> 0:07:36.280 these guys operate. But what you're seeing now is the 0:07:36.320 --> 0:07:39.800 ocean Contato Lioness have realized that they can use their 0:07:39.800 --> 0:07:44.480 pricing power and their leverage over shippers to really increase 0:07:44.600 --> 0:07:47.080 and put these search charges. We saw it during the 0:07:47.160 --> 0:07:49.640 attacks that happened to the Red Sea. We're now seeing 0:07:49.680 --> 0:07:52.680 it related to the Boord strike. And look, you know, 0:07:52.800 --> 0:07:54.800 off the record, a lot of folks that we've taught 0:07:54.840 --> 0:07:58.280 to sort of through channels that are very close to 0:07:58.560 --> 0:08:01.200 some of the executive leadership at these lines will tell 0:08:01.240 --> 0:08:03.440 you that they in some ways kind of want a 0:08:03.520 --> 0:08:06.680 strike to happen. They would never admit that customers, but 0:08:07.040 --> 0:08:09.760 they actually gain an enormous amount of levers. Think about 0:08:09.760 --> 0:08:12.720 the capacity that pulls off the market, like these are 0:08:12.800 --> 0:08:17.680 capacity constraining businesses. If you have ships that are sitting 0:08:17.680 --> 0:08:21.120 fully loaded outside of US ports and can't be moved 0:08:21.240 --> 0:08:25.240 or offloaded, then you've pulled off an enormous amount of 0:08:25.280 --> 0:08:28.000 capacity out of the market. That demand is still going 0:08:28.040 --> 0:08:30.480 to be flowing, and so for them, it gives them 0:08:30.480 --> 0:08:33.280 an enormous amount of pricing power. A search charge is 0:08:33.320 --> 0:08:36.080 only one, you know, one piece in that arsenal. What 0:08:36.200 --> 0:08:39.280 you'll also start seeing is aggressive spot pricing if that 0:08:39.320 --> 0:08:42.000 capacity gets pulled out, And what will happen is all 0:08:42.040 --> 0:08:44.200 of those container ships will sit off the coast, they 0:08:44.240 --> 0:08:46.880 will wait to be unloaded. And let's say this strike 0:08:46.960 --> 0:08:49.480 goes on for a couple of days, probably not a 0:08:49.520 --> 0:08:51.760 big impact. You may see, you know, a week of 0:08:51.800 --> 0:08:53.960 slow down. You may it may take a week or 0:08:53.960 --> 0:08:55.920 two to get back to where we're at. But if 0:08:55.920 --> 0:08:58.040 this goes on for a few weeks, it could be 0:08:58.240 --> 0:09:02.280 months before we see the system sort of adjust to 0:09:02.360 --> 0:09:05.960 those changes, simply because all those container ships have to 0:09:05.960 --> 0:09:08.920 be unloaded. They all get loaded in a sort of 0:09:08.920 --> 0:09:13.080 as a big bottleneck, and so there's a significant delay 0:09:13.120 --> 0:09:15.440 to unload those because it's a finite amount of capacity 0:09:15.480 --> 0:09:18.559 to actually do so. And then those ships then have 0:09:18.600 --> 0:09:21.200 to go back to pick up more cargo, and so 0:09:21.280 --> 0:09:23.080 that will pull a lot of capacity out the market, 0:09:23.080 --> 0:09:25.600 and so that I think the ship lines actually it's 0:09:25.600 --> 0:09:29.080 in their interest to actually see labor disruptions. 0:09:29.280 --> 0:09:32.640 Yeah, Joe, this reminds me so much of sam Brine's's 0:09:32.880 --> 0:09:36.000 argument about price over volume and this idea that in 0:09:36.080 --> 0:09:39.600 an environment of disruptions and capacity constraints, as Craig just 0:09:39.640 --> 0:09:43.160 put it, you can raise prices to offset the loss 0:09:43.160 --> 0:09:46.400 of volume and still make a decent amount of margin. 0:10:00.080 --> 0:10:00.720 I'm just curious. 0:10:00.720 --> 0:10:02.840 This is actually a little bit separate from the strike. 0:10:03.240 --> 0:10:07.280 What are we seeing right now with trade flows that 0:10:07.440 --> 0:10:11.199 perhaps are anticipatory of trying to get ahead of possible 0:10:11.679 --> 0:10:13.080 increase in tariffs next year. 0:10:14.160 --> 0:10:17.760 Look, I think the facts are that we have record 0:10:17.840 --> 0:10:21.000 container volumes into the United States like this is. You know, 0:10:21.000 --> 0:10:23.120 if you we had talked about this, I think in 0:10:23.200 --> 0:10:27.080 twenty three and I had argued and I was wrong, 0:10:27.360 --> 0:10:30.240 clearly wrong in this that we've seen record volumes in 0:10:30.280 --> 0:10:32.480 the ocean container market. This is what I argue back 0:10:32.520 --> 0:10:34.640 in twenty two, and we were unlikely to see a 0:10:34.679 --> 0:10:37.160 repeat of that. Well, that's clearly not true, because this 0:10:37.320 --> 0:10:41.200 year we've actually seen records broke or at least matched 0:10:41.240 --> 0:10:43.520 back where we were in twenty two, and so we 0:10:43.559 --> 0:10:45.760 are seeing record volume of imports and there's been a 0:10:45.760 --> 0:10:47.960 lot of question about what's causing that. A lot of 0:10:48.000 --> 0:10:51.400 theory is that the port strikes that are causing shepherds 0:10:51.400 --> 0:10:54.560 to move right in advance. Certainly some of that's happening 0:10:54.960 --> 0:10:58.120 no one. You know, these labor issues are not black 0:10:58.160 --> 0:11:01.839 swan events. They aren't expected. They're dissipate. Everybody knows when 0:11:01.840 --> 0:11:04.120 the contract comes up, and everybody knows that there's going 0:11:04.160 --> 0:11:07.920 to be some level of pressure in terms of both 0:11:08.000 --> 0:11:10.960 parties sort of posturing. There's a lot of stuff that 0:11:11.440 --> 0:11:13.480 was behind the scenes that we don't actually get to 0:11:13.480 --> 0:11:16.000 see or hear about that's actually taking place. But the 0:11:16.040 --> 0:11:18.839 reality is these two sides are very far apart, as 0:11:18.840 --> 0:11:21.480 Tracy correctly identified, and that's one issue that supply chain 0:11:21.520 --> 0:11:24.640 professionals have had to account for, and that's causing some 0:11:24.760 --> 0:11:28.640 volume surges. The second is this threat of tariffs. Donald 0:11:28.679 --> 0:11:31.800 Trump has come out and talked about increasing tariffs on 0:11:31.920 --> 0:11:34.000 China by as much as sixty percent or has been 0:11:34.000 --> 0:11:36.959 reported as much as sixty percent and ten percent for 0:11:37.040 --> 0:11:39.920 everywhere else. That is part of the calculus. And even 0:11:40.000 --> 0:11:43.199 if Harris wins the election, as we've seen with Biden, 0:11:43.520 --> 0:11:46.440 he didn't reverse any of Donald Trump's original trade policies 0:11:46.520 --> 0:11:50.000 or in original tariffs, so we will. I think can 0:11:50.400 --> 0:11:53.640 see a continuation and doubling down of tariffs as an 0:11:53.720 --> 0:11:58.600 instrument in policy that makes supply chain organizations prepare for 0:11:58.640 --> 0:12:01.720 these types of events. I mean, Donald Trump's changes would 0:12:01.760 --> 0:12:05.600 be pretty significant, or not even pretty would be very significant, 0:12:06.760 --> 0:12:08.960 whereas Harris is probably going to take a little bit 0:12:08.960 --> 0:12:12.359 more of a measured approach in terms of her But 0:12:12.400 --> 0:12:14.040 the reality is we're dealing with this. And then the 0:12:14.080 --> 0:12:16.840 other thing that I think is really interesting is that 0:12:17.080 --> 0:12:20.320 if you look at the Chinese economy, and I know 0:12:20.360 --> 0:12:23.480 you guys have covered this a few times, is Chinese 0:12:23.480 --> 0:12:28.360 consumers are suffering one of the biggest recessions and downturns 0:12:28.360 --> 0:12:31.520 and activity that we've seen since it opened up trade. 0:12:31.559 --> 0:12:33.880 And so we're seeing a situation with China where they 0:12:33.880 --> 0:12:37.640 have all this excess capacity and production capacity that some 0:12:37.720 --> 0:12:41.120 of that was built for domestic consumption, that frankly, none 0:12:41.120 --> 0:12:43.440 of that stuff is being bought. So they're producing these 0:12:43.480 --> 0:12:47.480 manufactured goods and they're effectively dumping them on US consumers. 0:12:47.679 --> 0:12:50.680 Because what's happened is the big box retailers have gone shopping. 0:12:51.200 --> 0:12:54.920 They're loading up the ships with a lot of discounted 0:12:55.000 --> 0:12:58.720 merch to sell to US consumers. And because what happened 0:12:58.760 --> 0:13:02.439 during COVID is we saw these record inflationary impacts for 0:13:03.200 --> 0:13:05.800 about two years, the retailers just took it. They didn't 0:13:05.800 --> 0:13:08.079 have a choice. Is the fear of running out was 0:13:08.920 --> 0:13:12.640 a bigger issue than actually paying high prices, so that 0:13:12.640 --> 0:13:16.280 showed up inflation. But over the last eighteen months, because 0:13:16.320 --> 0:13:20.280 of what's happening in the domestic Chinese economy, we're seeing 0:13:20.559 --> 0:13:25.120 significant price concessions offered to US retailers, and US retailers 0:13:25.160 --> 0:13:27.959 have taken advantage. So that's why we're seeing a lot 0:13:28.000 --> 0:13:31.920 of additional volume. All of the geopolitical stuff is certainly 0:13:31.960 --> 0:13:34.920 real and it's happening, but I also think that there's 0:13:34.960 --> 0:13:39.199 a pure economic driver due to just significant price concessions 0:13:39.200 --> 0:13:40.559 offered by Chinese manufacturers. 0:13:41.480 --> 0:13:44.720 Wait, so just going back to the idea of record 0:13:44.920 --> 0:13:48.640 volumes meets a potential strike. But how much volume could 0:13:48.640 --> 0:13:52.280 be diverted away from the East coast, Like if I 0:13:52.320 --> 0:13:55.760 go back to shipping a Teddy Bear from Hong Kong 0:13:55.920 --> 0:13:58.200 to the US, can I just I'll just ship it 0:13:58.240 --> 0:14:00.959 to la instead of I don't know, Baltimore. 0:14:01.280 --> 0:14:04.840 You would certainly think you could. Unfortunately, the West Coast 0:14:05.120 --> 0:14:08.640 Union that is under a different contract has said that 0:14:08.720 --> 0:14:13.520 they will not unload any ships that were diverted to coast. 0:14:13.600 --> 0:14:14.360 So now we have a. 0:14:14.320 --> 0:14:17.480 Real solidarity coast to port solidarity. 0:14:17.559 --> 0:14:20.560 Yeah. Absolutely, they are not going to cross the line. 0:14:20.680 --> 0:14:23.960 And so effectively what you have is this refusal to 0:14:24.160 --> 0:14:28.120 unload cargo at US ports on both sides of the coasts. 0:14:28.760 --> 0:14:31.080 And you do have some non unit You know, Savannah 0:14:31.120 --> 0:14:33.040 is an interesting sort of city because it's sort of 0:14:33.120 --> 0:14:35.520 not a union. I mean, it's a southern city and 0:14:35.560 --> 0:14:37.560 it's not a part of the isle A. So we 0:14:37.680 --> 0:14:40.240 have this sort of couple of exceptions that are not 0:14:40.680 --> 0:14:43.200 don't have to play ball if you will or won't 0:14:43.200 --> 0:14:45.800 play and participate in the labor issues. But for the 0:14:45.840 --> 0:14:51.479 most part. This is a situation where retailers and importers 0:14:51.520 --> 0:14:53.400 don't have a lot of optionality, and this is a 0:14:53.480 --> 0:14:55.800 relatively new development. There have been whispers about this for 0:14:55.880 --> 0:14:59.240 some time. It's been conversations, but now they've come out 0:14:59.280 --> 0:15:02.600 and said basic in solidarity, they're not going to unload ships. 0:15:02.840 --> 0:15:06.400 That is a huge development. I think if you'd asked 0:15:06.400 --> 0:15:09.400 me a month ago, I had believed that the Biden 0:15:09.440 --> 0:15:11.760 administration was going to force a cooling off period for 0:15:11.800 --> 0:15:14.520 eighty days. But we've seen recent reports where they've said 0:15:14.520 --> 0:15:16.040 they're not going to do that. How much of that 0:15:16.120 --> 0:15:19.520 is official posturing of hey, we're not going to intervene. 0:15:19.640 --> 0:15:22.800 But as Joe correctly identified, this is an election season 0:15:22.800 --> 0:15:26.400 in a very contested election, and it's really a no 0:15:26.480 --> 0:15:29.120 win situation for the Biden administration or the Democrats. I 0:15:29.120 --> 0:15:30.880 shoulday because the bi adminstration is are the way out. 0:15:31.280 --> 0:15:34.160 It's really a no win situation if they don't intervene. 0:15:34.200 --> 0:15:37.760 We have potential massive supply chain issues right before the holidays, 0:15:38.120 --> 0:15:40.800 which I think they would prefer not to have those headlines. 0:15:40.960 --> 0:15:44.240 Just generally, nobody really wants me coming back on odd 0:15:44.280 --> 0:15:47.000 lots to talk about disasters. We do we do because 0:15:47.040 --> 0:15:50.160 these things happen so like in the reality, like you 0:15:50.240 --> 0:15:54.080 want things to be kind of boring. Yeah, but then 0:15:54.080 --> 0:15:58.240 you have these union membership, which is incredibly contested this 0:15:58.360 --> 0:16:01.160 time around. You know, Trump actually is winning a lot 0:16:01.160 --> 0:16:04.080 of union support in rank and file, and so the 0:16:04.200 --> 0:16:06.400 question becomes it's a no in situation in my opinion 0:16:06.440 --> 0:16:09.080 for the Bide administration. They really don't have a winning 0:16:09.160 --> 0:16:11.800 answer on how they sort of resolve this, and so 0:16:11.920 --> 0:16:14.760 I would assume that there are a ton of back 0:16:15.040 --> 0:16:17.400 conversations that we're not pretty to. You know, those take 0:16:17.400 --> 0:16:19.200 place anyways, Yeah, but I would assume there's a lot 0:16:19.240 --> 0:16:22.920 of stuff is happening to try to get some resolution here, Craig. 0:16:23.120 --> 0:16:25.680 The official ports is they're not meeting, but the reality 0:16:25.760 --> 0:16:27.239 is they certainly having conversations. 0:16:27.640 --> 0:16:27.960 Craig. 0:16:28.160 --> 0:16:31.120 If you know, you woke up tomorrow and you're in 0:16:31.160 --> 0:16:34.720 a different life and it turned out your job is 0:16:35.080 --> 0:16:38.680 a spokesperson for the Long Short Men, needing to convince 0:16:38.800 --> 0:16:42.960 me that there's some reason not to aggressively automate our 0:16:43.040 --> 0:16:45.760 ports and that this risk of occasional strikes. 0:16:45.520 --> 0:16:46.400 Is worthwhile risk. 0:16:46.920 --> 0:16:49.760 I'm curious. I'd say we should have someone from the 0:16:49.760 --> 0:16:53.080 Long short men on to talk about this. My experience 0:16:53.200 --> 0:16:56.160 practically is that actually they're hard to get a hold of, 0:16:56.240 --> 0:16:59.680 and don't aren't that easy from a media perspective. But that's, 0:16:59.720 --> 0:17:02.520 you know, no excuse to stop trying. Is there a 0:17:02.560 --> 0:17:06.560 Steelman argument you could come up with for this system 0:17:06.600 --> 0:17:09.479 that we have in place, which is relatively light on 0:17:09.600 --> 0:17:15.080 automation and relatively heavy on a handful of powerful, solidly 0:17:15.119 --> 0:17:16.879 well paid blue collar jobs of. 0:17:16.880 --> 0:17:20.200 The ports, Joe, It's hard for me to make that transition, okay, 0:17:20.200 --> 0:17:23.080 because I find some of these arguments completely absurd. And 0:17:23.160 --> 0:17:26.520 so if we're talking about full automation and getting rid 0:17:26.600 --> 0:17:29.600 of absolutely all of the jobs, then I think you 0:17:29.720 --> 0:17:31.800 have a valid argument. Like I think as a log 0:17:31.880 --> 0:17:35.760 choreman having human labor, I could understand, you know, talking 0:17:35.760 --> 0:17:39.000 about eliminating these jobs. These are obviously high quality jobs, 0:17:39.040 --> 0:17:42.000 are high paid. I can understand and empathize where it's 0:17:42.040 --> 0:17:44.160 coming from. But a lot of the automation that's actually 0:17:44.200 --> 0:17:47.240 been talked about is stuff that is really not Humans 0:17:47.280 --> 0:17:50.800 don't add a ton of value in these types of 0:17:50.800 --> 0:17:54.160 structures anyways. Are these types of events anyway? So one 0:17:54.160 --> 0:17:57.920 example of this is RFID technology. When the trucks come 0:17:58.000 --> 0:18:00.440 in and out of the ports. These drayage trucks come in. 0:18:01.600 --> 0:18:04.399 You have toll passes that we all experience. You know, 0:18:04.400 --> 0:18:06.320 when I walked in the building this morning, I used 0:18:06.320 --> 0:18:09.119 a key, I use an RTIF I D badge to 0:18:09.160 --> 0:18:11.000 get in the building. What's great about that is you 0:18:11.000 --> 0:18:13.840 get all this data. Well, there are humans today that 0:18:13.920 --> 0:18:16.840 actually do the check in process. And frankly, humans are 0:18:17.240 --> 0:18:19.840 we all know this is that humans are prone to 0:18:19.920 --> 0:18:22.840 a lot of you know, we're not the most optable solution. 0:18:23.320 --> 0:18:25.720 Computers can do a much better job in these types 0:18:25.760 --> 0:18:29.160 of situations where you're dealing with consistency. So it's hard 0:18:29.200 --> 0:18:32.080 for me to make the case that some levels of 0:18:32.119 --> 0:18:35.760 automation should not be promoted. And that's really what I think. 0:18:35.760 --> 0:18:38.760 The long shoremen have said, we're absolutely not going to 0:18:38.800 --> 0:18:43.160 allow automation, and that's sort of the public official stance. 0:18:43.760 --> 0:18:47.520 Over time, they do soften some of those positions. If 0:18:47.520 --> 0:18:50.000 you look at historically, they will allow for some levels 0:18:50.000 --> 0:18:53.320 of automation. But this is a is an ongoing issue. 0:18:53.359 --> 0:18:55.399 I mean, we saw it during the Hollywood strikes. Is 0:18:55.400 --> 0:18:59.560 that you know, actors and actresses were really concerned about 0:18:59.560 --> 0:19:03.920 AI replacing them entirely and creating these automated you know, 0:19:03.960 --> 0:19:07.399 the animated movies that looked very real with you know, 0:19:07.440 --> 0:19:11.320 the likeness of a real human actor. So I think 0:19:11.359 --> 0:19:14.080 this is going to be an ongoing problem, an ongoing 0:19:14.119 --> 0:19:18.320 dispute between labor is always going to be fearful of 0:19:18.560 --> 0:19:23.160 automation of any level because to them, it's a slippery slope, right. 0:19:23.280 --> 0:19:26.639 They're concerned that if they allow, you know, or if 0:19:26.680 --> 0:19:28.440 I do technology to check you in and check you 0:19:28.480 --> 0:19:30.760 out of the port, that that means that we're just 0:19:30.840 --> 0:19:34.200 one step closer to full automation. And that just isn't 0:19:34.240 --> 0:19:36.680 the case. I mean, Rotterdam I get the chance to 0:19:36.760 --> 0:19:39.080 visit a while ago, and there's ports in Asia as 0:19:39.080 --> 0:19:40.240 well that are. 0:19:40.280 --> 0:19:42.879 You know, rot down running. 0:19:43.840 --> 0:19:46.560 But if you look at the place where those there 0:19:46.600 --> 0:19:50.639 are still humans running the machines. They just happen to 0:19:50.640 --> 0:19:54.040 be doing it remotely. And there's an argument that the 0:19:54.160 --> 0:19:57.720 port runs far more efficient in terms of time and out. 0:19:57.880 --> 0:20:00.400 There's a lot less delays. You don't these machine aren't 0:20:00.400 --> 0:20:04.160 getting sick. But also safety is a really big factor 0:20:04.200 --> 0:20:07.679 in this. I mean, think about moving big boxes of 0:20:08.160 --> 0:20:13.520 twenty thousand pounds across cranes. There's a lot of potential 0:20:13.680 --> 0:20:16.240 for safety issues, and so I have a hard time 0:20:16.840 --> 0:20:19.879 sort of empathizing with this argument. I understand the labor 0:20:19.920 --> 0:20:24.040 cost situation, and I was empathetic to the railroad some 0:20:24.119 --> 0:20:26.920 of the rules around health days and sick days. It's 0:20:27.000 --> 0:20:30.120 kind of empathetic to their cause. I have a problem 0:20:30.359 --> 0:20:33.000 or a real sort of issue Joe making the case 0:20:33.000 --> 0:20:35.399 that some levels of automation shouldn't happen. 0:20:36.800 --> 0:20:40.800 So this episode is coming out on September twenty seventh, 0:20:40.920 --> 0:20:44.119 and the deadline for negotiation is the end of the month, 0:20:44.359 --> 0:20:46.720 so just a few days left. What should we be 0:20:46.920 --> 0:20:51.360 watching in terms of gauging not just the outcome of 0:20:51.400 --> 0:20:55.920 this whole situation, but also the immediate impacts. Are there 0:20:56.000 --> 0:20:58.880 one or two things that you're looking at on a 0:20:59.000 --> 0:21:03.080 daily or even hourly basis at this point, you know. 0:21:03.080 --> 0:21:06.280 It's so hard Tracy having studied enough. I mean, one 0:21:06.400 --> 0:21:08.879 thing about my industry is we're always sort of in 0:21:08.880 --> 0:21:12.080 the front lines of labor issues because they do disrupt. So, 0:21:12.920 --> 0:21:15.480