Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. I love to watch
Speaker 1: some cricket occasionally. Also love to play with Legos, or
Speaker 1: at least I did an I as a kid, and
Speaker 1: I recently saw that they also have a Seinfeld set,
Speaker 1: so I might get back into it. Has been Stark joins,
Speaker 1: us president of Lego Education to talk to us about
Speaker 1: the pandemics impact on learning and what back to school
Speaker 1: means um for Lego as well. It has a mission
Speaker 1: to transform the way kids learn. I guess I didn't
Speaker 1: even realize I was learning when I was doing it,
Speaker 1: but I grew up, as did probably everybody around me
Speaker 1: as been playing with Legos. It must be one of
Speaker 1: the staple toys, at least for American children. Absolutely, I
Speaker 1: think it's a UM. I think it's a stable toy
Speaker 1: in a lot of places around the world, and isn't
Speaker 1: it wonderful that that you can learn without knowing that
Speaker 1: you're learning, and you can learn without being instructed. Has
Speaker 1: been with the world still dealing with the pandemic, but
Speaker 1: from an educational perspective, you know, the last year, last
Speaker 1: academic year was for a lot of places around the
Speaker 1: world remote learning. How do you think learning is changing
Speaker 1: evolving as as you guys look at it from your
Speaker 1: perspective going forward the pandemic? What was the impact that
Speaker 1: it will have going forward? Do you think? Well? I
Speaker 1: think immediately what we know is we're going to welcome
Speaker 1: a lot of students back into the classroom that that
Speaker 1: have faced a learning loss. Their social, emotional learning and
Speaker 1: development has been impacted as in validity they've been at home,
Speaker 1: and I think also importantly to many, we've seen reduced
Speaker 1: engagement in learning and and very unfortunately that that the
Speaker 1: most severe impact of those most severely impacted are often
Speaker 1: those already most disadvantaged. So of course we have to
Speaker 1: face how how do we pick up those students and
Speaker 1: how do we give them a healthy approach to learning
Speaker 1: while closing those gaps. What kind of learning are we
Speaker 1: talking about? I mean, I um, I think probably the
Speaker 1: skills that I picked up the most were with engineering,
Speaker 1: especially as I became a teenager and started buying the
Speaker 1: more complicated um you know, like a car sets for example,
Speaker 1: what what what are? What? Are people learning the most
Speaker 1: with your products? Our solutions are products are designed of
Speaker 1: course of all too, the delivered towards the standards and
Speaker 1: learning goals in the classrooms so that they're really highly
Speaker 1: re usable. But then of course we're also focused around
Speaker 1: really developing twenty century skillers as well, also things like creativity,
Speaker 1: critical thinking, problem solving, and important social emotional skills, also
Speaker 1: like collaboration, resilience. So when you have to solve the
Speaker 1: real world problem in the classroom with with one of
Speaker 1: your mates, there's a lot of problems solving, there's a
Speaker 1: lot of negotiations. So it's not the technique because I
Speaker 1: have so my godson in I got I got him
Speaker 1: recently the Lego Doukati Panagali V four R. And he's
Speaker 1: just a kid, he's only I think seven years old.
Speaker 1: But after he got it put together with his daddy
Speaker 1: said look, if I turned the crank, the cylinders go
Speaker 1: up and down. And I thought it was so cool
Speaker 1: that there was just that much detail on the set. Yeah,
Speaker 1: I think imagine that and imagine imagine you know, the
Speaker 1: imagining of that joy and the engagement that he has.
Speaker 1: I'm sure he spent sort of hours really deeply engaged
Speaker 1: in that. And then you layer over intentional content and
Speaker 1: to then take out learning outcomes of that. So while
Speaker 1: it's not do CARDI we bring into the classroom, it
Speaker 1: is hands on legal based solutions. They are also quoting
Speaker 1: elements in it where students then solve real world problems
Speaker 1: having subject based learning, but again also bringing on a
Speaker 1: lot of those twenty first century skills. And I could
Speaker 1: imagine that he's also practiced quite a bit of resilience
Speaker 1: as he's played built that big one and you know,
Speaker 1: finding the right elements and and ultimately succeeding. So I
Speaker 1: think take that magic, add the purposefulness of delivering towards
Speaker 1: specific outcomes, and then bring it into the classroom. That's
Speaker 1: what we look to deliver. So what is Lego Education
Speaker 1: you know doing specifically? I mean you think, I'll think
Speaker 1: about the last year we had that remote learning and
Speaker 1: I know you guys support Lego education supports learning through play.
Speaker 1: I'm guessing that took a pretty big hit last year
Speaker 1: as kids were working remotely. Um, of course, we try
Speaker 1: to do what we can to support teachers to have
Speaker 1: a learning wherever it takes place. But you're right, our
Speaker 1: solutions are optimized for using in the classroom where the
Speaker 1: students can engage in collaborative, iterative problem solving. And I
Speaker 1: think we've also seen through the pandemic actually the magic
Speaker 1: that the classroom has and what students are missing there
Speaker 1: and what's then really important for us to say, how
Speaker 1: can we make that even stronger? How can we optimize
Speaker 1: the learning potential in the classroom. And that's why we
Speaker 1: talk about the importance of rethinking learning. So again, how
Speaker 1: can we make learning engaging, personally meaningful, iterative, socially collaborative,
Speaker 1: so we can really press the students with the skills
Speaker 1: they need. It said, a very important healthy approach to them.
Speaker 1: Ashman Stark, thank you so much for joining us. Really
Speaker 1: appreciate a fascinating discussion here, ashpan Stark, President of Lego Education.
Speaker 1: And again, kids going back to school, that's the really
Speaker 1: good news, and getting them back into the classroom, getting
Speaker 1: back into activities after school, activities and clubs and sports,
Speaker 1: and that's the good news. And Lego is a big
Speaker 1: part of that. We had some better than expected manufacturing
Speaker 1: I s M data came out this morning. Good news
Speaker 1: there for the manufacturing front. Let's break it down with
Speaker 1: Tim Fury, chairman of the Manufacturing Business Survey for the
Speaker 1: Institute of Supply Management based in Miami. Tim, thanks so
Speaker 1: much for joining us here. Better than expected numbers give
Speaker 1: us the highlights. Yeah, really good demand again and the
Speaker 1: month of August uh, better than the month of July.
Speaker 1: And plus I mean that's a great number. The new
Speaker 1: export order number was really strong. To supporting that new
Speaker 1: order number. Backlog was again near records, second highest number
Speaker 1: ever since we've been keeping record since the nineties. And
Speaker 1: the customer inventory again was swallow months below forty which
Speaker 1: is a super too low. Empty cells everywhere. If you've
Speaker 1: been in any of the stores lately, try to buy
Speaker 1: a car, you can't. There's a went to a department store,
Speaker 1: going to a grocery store sells a rampy everywhere, and
Speaker 1: it's kind of indicative of what this reporter is signed.
Speaker 1: Our delivery side us a little bit uh, and prices
Speaker 1: are backing off there. There is some positive signs for
Speaker 1: the future go ahead well, I just um spent the
Speaker 1: my lunch hour trying to order a titanium um connecting
Speaker 1: pipe for um an a Kropovitch exhaust. And who doesn't
Speaker 1: do that in their lunch Well, it's just they're impossible
Speaker 1: to find. I called a ton of distributors and dealerships
Speaker 1: and they say, you know what, you're gonna be waiting weeks,
Speaker 1: like hope to get it at the earliest end of October.
Speaker 1: And it just feels like that's a long way away
Speaker 1: from you know, I feel like we just finished August.
Speaker 1: Um when is this going to When are we gonna
Speaker 1: see a recovery? Well, so let's let's expand on that.
Speaker 1: You know, our our number one industry sector that's expanding
Speaker 1: its furniture. And you go into a furn is to
Speaker 1: store these days and they'll tell you, well, maybe four weeks,
Speaker 1: but I don't really know. And even the day before
Speaker 1: we supposed to deliver, they'll call you up and say
Speaker 1: it's going to be another three weeks. A lot of
Speaker 1: that has to do with poor congestion. I think we're
Speaker 1: gonna be dealing with this uncertainty for quite some time.
Speaker 1: You know the fact that the Dela variant raised through
Speaker 1: UH the US to such an extent it didn't so
Speaker 1: much impact our panelists, but it's definitely impacting sentiment and
Speaker 1: you can see it in the conference board in the
Speaker 1: University of Michigan. So, and that's not a good thing.
Speaker 1: Our lead times are out so far we set record
Speaker 1: Romatory of lead times again, and what's happening is that's
Speaker 1: driving up our new order number. How much I can't
Speaker 1: really tell, but you can probably assume it's five points
Speaker 1: of it. So, and that's essentially advanced demands. That's if
Speaker 1: you have lead times that are typically six weeks, they're
Speaker 1: now twelve or fifteen. You're committing to higher prices at
Speaker 1: some point longer in the future than you normally do.
Speaker 1: And that's kind of risky. But but I think you know,
Speaker 1: overall suppliedment balances, we're in balance, but we're making progress.
Speaker 1: The input side mad some progress price disease that although
Speaker 1: they're still expanding not as fast rate as they were
Speaker 1: in July and June, the suppliers delibered better. You can
Speaker 1: see that in the rometary inventory account. We manufacturing inventory account.
Speaker 1: We got to fifty five first time in quite some time.
Speaker 1: So but I think We've got a new normal here
Speaker 1: that we're gonna be dealing with for at least a year.
Speaker 1: And that's the impacts of variants coming out and the
Speaker 1: attitude that it has on people tim manufacturing. What are
Speaker 1: they saying about their labor force? Are they getting the
Speaker 1: labor they need? Well, that's the big story for the months.
Speaker 1: We are still struggling attracting people. Hired to fire ratio
Speaker 1: is still eight or nine to one, Uh no, one is.
Speaker 1: I think I had one respond in talking about layoffs.
Speaker 1: Everybody else is talking about trying to hire. Of the people,
Speaker 1: I think eight two percent of my comments were higher
Speaker 1: related and of that, thirty five of those said that
Speaker 1: they were having difficulty, which is up five points from July.
Speaker 1: So that's that says a lot of The biggest thing
Speaker 1: on the labor side, I think in August is that
Speaker 1: what started in July turnover is now accelerating. So of
Speaker 1: those hiring clans is related to turnover, including retirements, and
Speaker 1: that's a big number. So you hire two, somebody retires,
Speaker 1: you have to hire three. It's and in most cases
Speaker 1: it's people chasing wages, and that's a direct result of
Speaker 1: people raising wages to try to fill up their staffing levels.
Speaker 1: All right, very interesting stuff. Great to get your take
Speaker 1: on this, Tim, thanks so much for joining us. The
Speaker 1: usual Tim Fiori, there's the chairman of the Manufacturing Business
Speaker 1: Survey out of the Institute for Supply Management in Miami.
Speaker 1: Of course, we've got that number. You can see it
Speaker 1: if you type eCos space US go UM, or you
Speaker 1: can type w E c O go in the blueboard terminal,
Speaker 1: click on the American flag and you will see I
Speaker 1: s M Manufacturing came in at fifty nine point function
Speaker 1: of nine from fifty eight the survey was fifty eight
Speaker 1: point five, so beating the survey and more than the
Speaker 1: prior reading of point five. We have had a ton
Speaker 1: of stories, well just daily deluge of stories about the
Speaker 1: changing regulatory environment and China, and a lot of investors
Speaker 1: have just said it's uninvestable at this point, but some
Speaker 1: are seeing opportunities, and Ashroff huck is among them. Among them.
Speaker 1: He's a senior portfolio manager at Sands Capital, and he
Speaker 1: joins us to talk about um the companies that could
Speaker 1: benefit from the regulatory revisions that we're seeing. Ashroff, thanks
Speaker 1: very much for joining us. What are you seeing as
Speaker 1: kind of the overall theme here in terms of what
Speaker 1: China is doing. Hey, Matt and Paul, thank you for
Speaker 1: having me on UM. You know, it's been a rocky
Speaker 1: and the regulation has been fast and furious, and you know,
Speaker 1: we've taken some hits, but we think the government is
Speaker 1: focused on strategic priority these improving its demographics, reducing income equality,
Speaker 1: moving to higher value manufacturing industries. And we don't think
Speaker 1: it's a case where they're trying to destroy capitalism or
Speaker 1: punish the wealthy. And so the attractive areas that they're pushing, uh,
Speaker 1: you know, they're encouraging more athletic participation, better access to
Speaker 1: affordable drugs and healthcare, and cleaning the environment. But when
Speaker 1: I take a look at big companies like Ali Baba,
Speaker 1: like ten Cent, which have been such winners not just
Speaker 1: for shareholders but also arguably for China itself on a
Speaker 1: global scale, seemed to reflect very well on China. It's
Speaker 1: surprised a lot of people that the government went after
Speaker 1: it was such a heavy hand. Those again, those companies
Speaker 1: that were really representing I thought China well on a
Speaker 1: global scale. How do you make make out or make
Speaker 1: peace with kind of how they're viewing some of their
Speaker 1: traditional stalwart companies. Yeah, I think that those tech companies
Speaker 1: have gotten so big, and a lot of the issues
Speaker 1: that the Chinese regulators are dealing with are the same
Speaker 1: issues that American and European regulators have with the big
Speaker 1: tech companies. Here the differences that China can regulate them
Speaker 1: much more efficiently and effectively. UM So, I don't think
Speaker 1: they're trying to destroy the ten cents and the baba's,
Speaker 1: but they want to ensure fair competition. They want to
Speaker 1: ensure that that the you know, the term that everyone's
Speaker 1: talking about common prosperity. They want to ensure that there's
Speaker 1: more equal participation in the growth that's being generated by
Speaker 1: those platforms. Are you concerned about the fact that, you know,
Speaker 1: things can change in a dime here? I mean it's
Speaker 1: not like, um, we get a plan that's laid out
Speaker 1: and we know in advance, they could just change their
Speaker 1: mind at any point. Yeah, I mean it is a
Speaker 1: little bit more dynamic. It's complicated, but I also think
Speaker 1: China's is too compelling to ignore. Um And as I mentioned,
Speaker 1: there are they're you know, right now the tech platforms
Speaker 1: and education, for example, are in the spotlight but there's
Speaker 1: a lot of growth in consumer businesses there that the
Speaker 1: government will regulate to make sure that it's it's fair competition,
Speaker 1: but they're not trying to control those businesses maybe as much.
Speaker 1: Uh So. For example, we own a business called Anta,
Speaker 1: which is one of our largest ways. It's a athletic
Speaker 1: footwear company. Uh and that's gonna grow as the as
Speaker 1: the government's pushing more uh kids into you know, stop
Speaker 1: playing video games and play more soccer. Um so uh
Speaker 1: And China's about to host the Winter Olympics. They're encouraging
Speaker 1: people to go skiing and things like that. So Anta,
Speaker 1: which you see Clay Thompson wearing, will be a big
Speaker 1: beneficiary of that. And um you know, it's something that
Speaker 1: we've helped for a long time with growth twenty over
Speaker 1: the next five years per year. So astra in in
Speaker 1: terms of new capital going into China, my guests would
Speaker 1: be it's gonna go in and demand a much higher
Speaker 1: risk premium. I'll pay a much lower multiple for my equities,
Speaker 1: a called demand a higher yield on my credit. Talk
Speaker 1: to us about what you're seeing in the capital markets there,
Speaker 1: the financial markets, the funding markets for China. Yeah, that's
Speaker 1: certainly in the case, and you're seeing that even reflected
Speaker 1: in the public company multiples. I mean, you look at
Speaker 1: a business like Ali Baba versus Amazon UM, you know,
Speaker 1: very similar growth rates. In fact, Baba is growing probably
Speaker 1: faster in its core business, and it trades that a
Speaker 1: much lower multiple, higher risk premiums and than Amazon. So
Speaker 1: it's certainly something we're seeing, uh, in both private and
Speaker 1: public funding markets. Interesting when you see UM everyone sort
Speaker 1: of rushing out of China heading for the exit, does
Speaker 1: that provide any kind of UM, any kind of opportunity?
Speaker 1: And I noticed there's some companies I think of ever
Speaker 1: Grand for example, that are having fire sales. Yeah, we're
Speaker 1: not really interested in UM businesses like that. You know,
Speaker 1: we run global growth portfolios or distressed or distressed assets. Now, yeah,
Speaker 1: we're really looking for great growth franchises. Some of those
Speaker 1: are on sale, but I think less than the fire sale.
Speaker 1: We're more interested in how innovation and technology are creating
Speaker 1: new opportunities, and that's certainly happening in China as well
Speaker 1: as many other parts. I mean, China is a small
Speaker 1: part portion of our of our global internationally and portfolios UM,
Speaker 1: so it is I think less you know, the fire
Speaker 1: sell more the opportunity that's been created by innovation invest
Speaker 1: what we're focused on right now. Alright, as, thank you
Speaker 1: so much. We appreciate that. Getting some thoughts there on China.
Speaker 1: And again the real question is to what extent, uh
Speaker 1: is China investable? Is it still investable? But it's such
Speaker 1: a big part of the m s c I index
Speaker 1: that you kind of have to be there as astrof,
Speaker 1: said Ashraff hawk Uh, senior portfolio manager for Sance Capital.
Speaker 1: Thanks so much. I love the joint. I love the
Speaker 1: the athletics shoe point. You know, because if kids are
Speaker 1: going to stop playing video games and yep, I think
Speaker 1: that's a very big if. Um, they are going to
Speaker 1: have to do something else, and it's probably going to
Speaker 1: involve running around, um, wearing shoes, especially if they're playing basketball,
Speaker 1: which they love to do. They're getting pushed down on
Speaker 1: the ski slopes and need new boots. Yeah, it should
Speaker 1: be interesting it but I'll be like like you said, Mattabie,
Speaker 1: I don't know how they're going to regulate Uh, the
Speaker 1: uh kids are gonna have parents can't do it. Good
Speaker 1: luck to the Chinese government. We'll have more coming up
Speaker 1: this is Bloomberg, But we have a good old fashioned
Speaker 1: price war in the m and a space this time
Speaker 1: for Kansas City Southern Railway. We've got the two Canadian railways,
Speaker 1: Canadian Pacific Railway and Canadian National, both vying for this asset.
Speaker 1: Would give them a great Canada through the US into
Speaker 1: Mexico line. There lots of opportunity. Let's dig deep into
Speaker 1: this deal. We can do it with nobody better than
Speaker 1: Tony Hatch. He has been covering these rails and truckers
Speaker 1: for decades on Wall Street, one of the top analysts there.
Speaker 1: He is knee deep in this deal. Tony again, it
Speaker 1: makes a lot of sense to buy for one of
Speaker 1: these Canadian companies to buy Kansas City Southern. What's the
Speaker 1: problem here for these two players. It seems like Canadian
Speaker 1: National had a kind of a setback, So Cannadian and
Speaker 1: I saying hey, Paul, Canadian National kind of like a
Speaker 1: combination in the ring yesterday, a straight left by the
Speaker 1: STB rejecting their voting truest and then a roundhouse by
Speaker 1: t c I trying to change the manager team out.
Speaker 1: So it was not a good day to be in Montreal.
Speaker 1: Say the deal is that c N was proposing this
Speaker 1: under new rules, the so called new rules for the
Speaker 1: STB which came about in two thousand one and require
Speaker 1: enchanced competition, not not just preventing reduced CP skated by
Speaker 1: any of the old rules and see and also had
Speaker 1: horrible timing. This STB is activist and wants to get
Speaker 1: out to get in the ring and punch it railroads,
Speaker 1: and c N has provided them with that opportunity. Is
Speaker 1: it damaging to have this kind of deal up in
Speaker 1: the air? I mean, um, what does the management do
Speaker 1: what when there's so much uncertainty. It's a very good question,
Speaker 1: you know. I think you would say that there's some
Speaker 1: lost time really maybe all three carriers involved, because certainly
Speaker 1: the top strategy lines were focused on on this and
Speaker 1: in Washington, d C rather than out in the field.
Speaker 1: I don't think it's you know, ultimately damaging. I think
Speaker 1: they all have good prospects. You know, we may see
Speaker 1: change and see ed which would in some ways be unfortunate,
Speaker 1: but I think they can get past that level of damage.
Speaker 1: These deals would whoever would win, would be transformative and
Speaker 1: may have been worth the time risk, if not the
Speaker 1: dollar risk. So Canadian Pacific. Now I guess from a
Speaker 1: regulatar perspective, seems to be in the driver's seat here.
Speaker 1: But there offers actually lower than what Canadian National did.
Speaker 1: So are they have to raise their offer or can
Speaker 1: there twenty seven billion dollar offers still win the day?
Speaker 1: I think at this point it probably wins the day.
Speaker 1: So the key thing, and you may remember, Paul, is
Speaker 1: the UH the voting trust issue if if C he
Speaker 1: has approved. If you if you were a Ryott Pennsy Southern,
Speaker 1: your board and your chry was voted to approve the
Speaker 1: CP deal, you could get paid almost instantly if you
Speaker 1: were to continue with the CN deal, which I don't
Speaker 1: think will happen, but if you work to you would
Speaker 1: have to take the entire regulatory review process, time and risk.
Speaker 1: So the question is is you know it's three hundred
Speaker 1: today or maybe in a year or more. So that's
Speaker 1: why they feel they don't need to raise that they
Speaker 1: can win with a lower face price face price offer,
Speaker 1: are there? UH this deal would have gone to Canadian
Speaker 1: National Railway and maybe it goes to Canadian Pacific now
Speaker 1: losing Kansas City Southern. It just strikes me as an
Speaker 1: American that we seem to be seating power to the north.
Speaker 1: The railroaders, you may recall, have always viewed this as
Speaker 1: a North American venture. After all, the CEO of the
Speaker 1: Canadian Pacific UH is an American. Most of the transformation
Speaker 1: of c N under Hunter Harrison and American were Americans. So, um,
Speaker 1: you know, from a rail shipper and a rail investor,
Speaker 1: you could buy Canadian Pacific and sell Union Pacific or
Speaker 1: vice versa. That we don't view it that way. In fact,
Speaker 1: it would be more likely if somebody were to go
Speaker 1: buy an American were trying to buy one of the
Speaker 1: two Canadian headquartered railroads, that would raise nationalistic fears than
Speaker 1: a fear about somebody buying the smallest American railroad, which
Speaker 1: really is a play in Mexico, the third country we
Speaker 1: haven't talked about. Yes, let's talk about this deal strategically.
Speaker 1: Let's say Canadian Pacific gets Kansas City Southern. Talk to
Speaker 1: us about the benefits of putting those two roads together. Well,
Speaker 1: you know, and I want to say this to if
Speaker 1: c N had been able to do this without competition
Speaker 1: or under the old rules, they would have gotten this
Speaker 1: the old rules, and this does not reduce competition questions
Speaker 1: as to enhance it for CP under the rules of
Speaker 1: nearly presenting that it does and hurt anything that currently exists.
Speaker 1: Would link you know, every railroad now wants to get
Speaker 1: access to more water, so it would get them to
Speaker 1: the US Gulf and get them all the way to Mexico.
Speaker 1: It would link the autoly industry from parts coming in
Speaker 1: manufacturing in Mexico. Detroit as well as in Ontario would
Speaker 1: all be linked. In addition, corn grown into the code
Speaker 1: is as the largest US import into Mexico and so
Speaker 1: they have infertile growing fields there and the end up
Speaker 1: single line service. So you know the it would create
Speaker 1: real power north South and most of the rail industry
Speaker 1: as you well call as focused east West. You know,
Speaker 1: containers from l A inbound to Chicago and that type
Speaker 1: of thing. Does it, though, um reduce the amount of
Speaker 1: competition in the industry, I mean it must it's CP
Speaker 1: if CPA were to win at the answer is no,
Speaker 1: because they only touch at one point in Kansas City.
Speaker 1: So you know, it does create more competitive options, it
Speaker 1: doesn't really reduce rail competition. One of them. You bring
Speaker 1: up a point the STV views this as railroad competition.
Speaker 1: There's fewer railroads now, etcetera. They ignore the fact that
Speaker 1: this North South railroad parallels the Mississippi River, which is
Speaker 1: a huge freight you know highway, as well as the
Speaker 1: actual highway system, the subsidized you know, interstate highway system.
Speaker 1: So from the shipper point of view, really neither reduces
Speaker 1: competition in a big overall in a big, big way,
Speaker 1: but CP certainly does not. Hey, Tony, we hear a
Speaker 1: lot are doing adds to it? Yeah, we we we
Speaker 1: hear a lot from across the industry's really over the
Speaker 1: last couple of quarters. And we listen to earnings calls
Speaker 1: about the supply chain issues in this country. Give us
Speaker 1: a sense of mer perspective from the railroad and the
Speaker 1: trucker's kind of how bad is it? Uh? When is
Speaker 1: it going to get better? Do you think? So? It
Speaker 1: is bad, but it's not fatal. Um, you and I
Speaker 1: have lived through worse. Um. This is, you know, a
Speaker 1: total supply chain issue in which continuing events. Think of
Speaker 1: this is not a rock and pond, but you know
Speaker 1: the biggest boulder you've seen. So the waves come and
Speaker 1: then they come again. If you shut a port down
Speaker 1: in China because of a new COVID. You know outbreak
Speaker 1: that affects ships coming into l a Long Beach. They're
Speaker 1: they're forty three stacked outside of the Valley Long, which
Speaker 1: it looks like a D Day photo. You have shortages
Speaker 1: of warehouse people, shortage support people. You have railroad issues
Speaker 1: because the boxes are staying in their terminals which are
Speaker 1: meant to be through stations, and they're not enough truck
Speaker 1: drivers or wherehouse people to handle those boxes. So it
Speaker 1: is a system one problem. Rails are not covering themselves
Speaker 1: in glory uh this year. They did pretty well last
Speaker 1: year in the first stages of the recovery. But they're
Speaker 1: they're they're part of the issue now. They get a
Speaker 1: lot of press. Remember Churchill's quote, they've let a good
Speaker 1: crisis go and used So ship or trade associations are
Speaker 1: piling on on railroads because they can. That's how the
Speaker 1: game is played. When will it get done? Probably done
Speaker 1: until early next year. But it is not something that
Speaker 1: Wilwoods themselves can solve, and if that they may be done.
Speaker 1: If you talk to most international shippers, it's the water.
Speaker 1: This is the biggest problem not to land all right, Tony,
Speaker 1: thank you so much for joining us to appreciate it
Speaker 1: as always expert opinion Tony Hatch railroad, trucking, transportation, animals
Speaker 1: for a b H Consulting. He's recovering this sector for decades.
Speaker 1: He's got the goods there. We appreciate it. Thanks for
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt
Speaker 1: Miller three. On Fall Sweeney, I'm on Twitter at pt
Speaker 1: Sweeney before the podcast. You can always catch us worldwide
Speaker 1: at Bloomberg Radio