WEBVTT - MBA Career Outcomes And The Gender Pay Gap 

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<v Speaker 1>Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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<v Speaker 1>my co host Matt Miller. Every business day, we bring

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<v Speaker 1>you interviews from CEOs, market pros, and Bloomberg experts, along

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<v Speaker 1>at Bloomberg dot com slash podcast. All right, let's switch

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<v Speaker 1>gears from the markets a little bit talk about pay

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<v Speaker 1>and the pay gaps, the gender pay gaps. We've heard

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<v Speaker 1>a lot about this issue. It's not getting better by

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<v Speaker 1>many standards, and maybe the pandemic made it even worse.

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<v Speaker 1>And it's certainly affecting all parts of the economy and

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<v Speaker 1>that includes uh NBA's as well. A Lissa Sangster joins us,

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<v Speaker 1>the CEO of Forte Foundation and Lista, thanks so much

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<v Speaker 1>for joining us here. So talk to us about the

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<v Speaker 1>NBA market. Um, I'm on the board of the NBA

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<v Speaker 1>School at Dukes, so I kind of know the day

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<v Speaker 1>to hear. But just share with us, what's the difference

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<v Speaker 1>the pay gender gap for NBA students when they get

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<v Speaker 1>out and then made even later in their career. Sure,

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<v Speaker 1>that's great. I I'd love to say that, you know,

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<v Speaker 1>we're seeing improvement across the board, but of course every

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<v Speaker 1>road has its thorn. UM And on the bright side,

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<v Speaker 1>we're seeing NBA gender pay gap overall shrinks from around

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<v Speaker 1>two years ago to about now so between men and women.

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<v Speaker 1>I'm not saying the GAP's gone, but it definitely has

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<v Speaker 1>um improved. And where is that improvement impetus coming from.

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<v Speaker 1>Is that on companies that these graduates are applying for.

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<v Speaker 1>Is it NBA schools themselves trying to help even things

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<v Speaker 1>out UM? You know, I think it's a combination of factors.

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<v Speaker 1>I think we're seeing more women in the NBA pipeline

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<v Speaker 1>pursuing these UM top careers, so I think you're seeing

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<v Speaker 1>them have access to more of those high paying salaries UM.

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<v Speaker 1>And I think you're seeing companies pay more attention to

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<v Speaker 1>it over the last few years about how they're advancing

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<v Speaker 1>UM employees internally and making sure that there is equitable

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<v Speaker 1>advance intimate across all of those top paying jobs. You know, Lissa,

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<v Speaker 1>one of the issue things that I've seen experienced personally

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<v Speaker 1>in my career having managed people UM, is that oftentimes,

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<v Speaker 1>you know NBA's will male and female will come in

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<v Speaker 1>at a similar or the exact same compensation package. UM,

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<v Speaker 1>But then things go arrive from there. Uh that's where

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<v Speaker 1>the women will lag in future years. And so when

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<v Speaker 1>you get to the partner or managing director level, there

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<v Speaker 1>is by far there's not a fair representation what are

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<v Speaker 1>the challenges there and what are some of the ways

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<v Speaker 1>to address those? Sure, So UM, I definitely think different

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<v Speaker 1>choices are made, and so I think there's kind of

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<v Speaker 1>a combination of uh decisions by the companies and also

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<v Speaker 1>by the individuals pursuing opportunities. And so I think we

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<v Speaker 1>see in our research that women end up several years

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<v Speaker 1>later having fewer direct reports, they have had fewer promotions

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<v Speaker 1>than their male counterparts. And so UM exactly what the

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<v Speaker 1>find all that UM is not specifically clear. Like I said,

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<v Speaker 1>it is a combination of things. But I also think

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<v Speaker 1>that women are often motivated by UM their impact on

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<v Speaker 1>the organization there UM, they're motivated by kind of the

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<v Speaker 1>value that they see that they're contributing. Their less motivated

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<v Speaker 1>by achieving that top salary and that being the indicator

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<v Speaker 1>of their success. And so I think that you see

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<v Speaker 1>women making maybe very different choices about which path they

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<v Speaker 1>take in their career, and often it might be walking

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<v Speaker 1>away from a top salary at a big company and

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<v Speaker 1>going to a smaller company where they feel like they

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<v Speaker 1>have bigger impact, maybe not as big as pay. If

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<v Speaker 1>we kind of step back and take a look at

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<v Speaker 1>the thirty thousand foot view, an NBA isn't cheap, right.

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<v Speaker 1>It costs you a lot of money to invest in

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<v Speaker 1>getting that additional education. Does it still pay off? It

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<v Speaker 1>definitely doesn't and your long term career earnings and in

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<v Speaker 1>the opportunities that are available to you. And so I

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<v Speaker 1>think that often what you see, especially in these full

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<v Speaker 1>time programs you mentioned Duke students are coming through this

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<v Speaker 1>program as career switchers, and they're looking to pivot in

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<v Speaker 1>their career and go into something that they would not

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<v Speaker 1>have had an access to normally without that NBA experience

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<v Speaker 1>or pathway. So it's opportunity to top jobs working for

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<v Speaker 1>very important companies and places that they can do amazing things.

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<v Speaker 1>And so those opportunities aren't always available to you without

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<v Speaker 1>that pivot. And I will say that one of the

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<v Speaker 1>things Sporting Foundation does is supply scholarships through our Business

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<v Speaker 1>School for women pursuing those MBAs so they are given

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<v Speaker 1>opportunities those top women candidate to pursue these nbas with

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<v Speaker 1>a substantial scholarship support. So listen, can you give us

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<v Speaker 1>maybe some examples or an example of an industry or

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<v Speaker 1>a company that's doing this well that it's narrowing that

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<v Speaker 1>gender pay pay gap UM. I think that, uh that

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<v Speaker 1>I well, I don't know that I have a specific

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<v Speaker 1>a company or industry. I would say those the companies

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<v Speaker 1>that are out there working UM at this you know,

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<v Speaker 1>a graduation you mentioned, they're all on parity, but as

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<v Speaker 1>they progress through their career. I think the monitoring of

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<v Speaker 1>that is probably something that's the bigger companies are doing

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<v Speaker 1>better because they are required to pay attention to these

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<v Speaker 1>things from external forces UM and and additionally, they are

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<v Speaker 1>very internally committed to diversity, equity and inclusion, and so

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<v Speaker 1>they have big operations inside that are actually monitoring this.

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<v Speaker 1>And honestly, those who are monitoring it are the ones

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<v Speaker 1>that are going to be seeing this success. That doesn't

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<v Speaker 1>mean that they can eliminate all of the other factors

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<v Speaker 1>in terms of decision making by the women, but they

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<v Speaker 1>are looking at how they advance UM diverse UM employees

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<v Speaker 1>through that pipeline into leadership. All right, lista, thank you

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<v Speaker 1>so much, we appreciate it. Listened Sankster, CEO Forte Foundation,

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<v Speaker 1>talk about the gender pay gap. That is an issue

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<v Speaker 1>clearly for a lot of businesses and a lot of people,

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<v Speaker 1>including MBA's Consumer confidence came out for the month of September.

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<v Speaker 1>Still a pretty good number, but below expectations. Let's check

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<v Speaker 1>in with Lynn Franco, Director of Economic Indicators and Surveys

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<v Speaker 1>at the Conference Board to break down this data. So Lynn,

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<v Speaker 1>again a little bit less than what Wall Street was expecting,

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<v Speaker 1>but still a decent number. Help us put into context. Yes,

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<v Speaker 1>I mean, you know, we had a decline in confidence

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<v Speaker 1>and it's actually sort of going on a downward trend

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<v Speaker 1>for the last three months. But a lot of this

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<v Speaker 1>is really doing really the result of the delta variant,

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<v Speaker 1>which has really sort of been this dark cloud over consumers.

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<v Speaker 1>It continues to dampen optimism, but there's still optimistic enough

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<v Speaker 1>that they feel that the recovery is going to continue

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<v Speaker 1>not only for the remainder this year, but into two

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<v Speaker 1>as well. I find the dig around the labor market

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<v Speaker 1>particularly interesting. We were just listening to FED chairman Jerome

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<v Speaker 1>Pale testifying on Capitol Hill in front of the Senate

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<v Speaker 1>about how participate is still really low. There's a lot

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<v Speaker 1>of jobs out there, but not necessarily enough people to

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<v Speaker 1>fill them. And I see that in the survey, fifty

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<v Speaker 1>six of consumers said that jobs are plentiful. So people

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<v Speaker 1>know there's jobs out there, Yes, they do. And I

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<v Speaker 1>think what we're seeing is that some of these labor

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<v Speaker 1>shortages are in sort of you know, gu collar type jobs. Um.

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<v Speaker 1>Some of that is due a to you know, inability

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<v Speaker 1>to find labor. There's still some fears about COVID, there's

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<v Speaker 1>still some childcare issues which are preventing women in particular

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<v Speaker 1>from getting back into the labor force. So there are

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<v Speaker 1>some challenges um that we are still facing, and a

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<v Speaker 1>lot of those are delta related. So I think as

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<v Speaker 1>we begin to sort of hopefully see the variant retreat

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<v Speaker 1>a bit, I think we're seeing at least some indications

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<v Speaker 1>maybe that you know, the levels are starting to come down,

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<v Speaker 1>that will continue to recover, and that you know, the

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<v Speaker 1>employment growth will be a little bit more robust. And

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<v Speaker 1>the Expectations Index, which is based on consumers term outlook

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<v Speaker 1>for income, business and labor market conditions that fell to

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<v Speaker 1>eighty six point six from eight. Is that concerning to you.

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<v Speaker 1>I think what we're just saying here is a very

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<v Speaker 1>cautious consumer, right, So we've seen a little bit of

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<v Speaker 1>a decline in their expectations for the economy over the

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<v Speaker 1>short term jobs in particular, also a little less so

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<v Speaker 1>in income. So that's good news because we expect to

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<v Speaker 1>consumers to continue to spend and support economic growth. I

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<v Speaker 1>think it's going to be very important to see what

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<v Speaker 1>happens over the next month or two because I think

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<v Speaker 1>we've shifted gears from a very optimistic consumer early in

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<v Speaker 1>the summer to a more cautious optimistic heading into the fall.

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<v Speaker 1>How do inflation expectations factor into this as well, because

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<v Speaker 1>to this point, consumers have been pretty tolerant of the

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<v Speaker 1>fact that prices have been going up because of higher

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<v Speaker 1>input costs. But at a certain level, I would imagine

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<v Speaker 1>that they're going to become less tolerant in that Fears

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<v Speaker 1>around inflation with effect behavior, right, you know, generally tend

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<v Speaker 1>to impact a consumer sub perceptions of earning power, and

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<v Speaker 1>we would see that sort of in the income expectations.

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<v Speaker 1>Are interest rate expectations actually fell, So that's good news.

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<v Speaker 1>It's still elevated, um, but it's it's fallen off a

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<v Speaker 1>little bit, and so far we really haven't seen it

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<v Speaker 1>have a major impact on spending. Supplemental unemployment benefits began

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<v Speaker 1>expiring for a lot of people in early September. How

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<v Speaker 1>did that factor into the data or the expectations data?

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<v Speaker 1>I think you know, it really factors into perhaps income expectations,

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<v Speaker 1>but we didn't take a hard hit there in terms

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<v Speaker 1>of employment expectations. That's pretty much following business conditions, right.

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<v Speaker 1>We need better business conditions and in order to generate

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<v Speaker 1>more employment. So I think you know, in both ways,

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<v Speaker 1>consumers are just a little bit cautious. They've probably hit

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<v Speaker 1>the pause button temporarily, but we don't think this is

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<v Speaker 1>sort of a continued downward trend. All right, Lynn, thank

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<v Speaker 1>you so which we appreciate that. Linn Franco, Director of

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<v Speaker 1>Economic Indicators and Surveys at the conference board on the

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<v Speaker 1>consumer confidence data out this morning for the month of September.

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<v Speaker 1>That was Secretary of the Treasuric Jenny Yelling, along with

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<v Speaker 1>FED Chairman j Palell testimony in front of members of Congress. Uh,

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<v Speaker 1>let's get a little bit of a recap there, we

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<v Speaker 1>can do it that the Bloomberg's Economics editor Michael McKee. Michael,

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<v Speaker 1>first of all, why are these two individuals testifying in

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<v Speaker 1>front of Congress? Why are they bringing their testimony? This

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<v Speaker 1>is a relic of the Cares Act. When the Care's

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<v Speaker 1>Act was passed, it required the Secretary of the Treasury

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<v Speaker 1>and the Fed Chairman to come up to Capitol Hill

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<v Speaker 1>quarterly and report on how things are going in terms

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<v Speaker 1>of spending out the money and the rescue programs that

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<v Speaker 1>they had in place. So it's a bit of a

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<v Speaker 1>relic now since most of the money has been distributed,

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<v Speaker 1>but it's still in place, so so they are there.

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<v Speaker 1>Obviously this is used in part to do some political

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<v Speaker 1>posturing on the behalf of these senators. A lot of

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<v Speaker 1>debate on the fiscal conversation that doesn't necessarily have bearing

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<v Speaker 1>for the Fed Chairman. But asked about the debt ceiling

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<v Speaker 1>was the Treasury secretary and she warned about it being

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<v Speaker 1>potentially disastrous if it isn't raised, saying that these are

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<v Speaker 1>bills that are already due for money that's already been spent.

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<v Speaker 1>Why does the market seem to not care about it? Then,

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<v Speaker 1>at this point, because we've been through this before and

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<v Speaker 1>a number of times over the past couple of decades,

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<v Speaker 1>and Congress has always extended the debt ceiling at the

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<v Speaker 1>very last minute. It's a political football. Both sides like

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<v Speaker 1>to attack the other side for being profligant. Uh, they

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<v Speaker 1>only want to spend money when they're in power, and

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<v Speaker 1>when they're not in power, they want to cut back

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<v Speaker 1>on spending because they think it makes them look better politically.

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<v Speaker 1>So that's what's going on. It's just, as you mentioned,

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<v Speaker 1>a political debate, and the market is fairly convinced that

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<v Speaker 1>they will settle this because they always have. And meanwhile,

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<v Speaker 1>on the sidelines, the commentators, as they usually do, say well, gee,

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<v Speaker 1>this time could be different. Well what could be a

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<v Speaker 1>little bit different this time is it's all kind of

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<v Speaker 1>tied in with the fiscal stimulus legislation, the spending plan

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<v Speaker 1>that Congress is also looking at, the taxation plan to

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<v Speaker 1>pay for it. Could this all get tied up? Is

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<v Speaker 1>this something that the market maybe should be more concerned about. Well,

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<v Speaker 1>if if we get to that point, the market will

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<v Speaker 1>suddenly become concerned. It is it is a little more

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<v Speaker 1>problematic this time. There's a little bit of a Rube

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<v Speaker 1>Goldberg effect of how they're going to have to do this.

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<v Speaker 1>Because the Democrats put forth a combined continuing Resolution to

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<v Speaker 1>keep the government funded and debt sailing last night, Republicans

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<v Speaker 1>wouldn't even let them have a vote on it. And

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<v Speaker 1>so now the Democrats have to decide are they going

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<v Speaker 1>to take out the Continuing Resolution and vote on that separately,

0:12:40.160 --> 0:12:42.680
<v Speaker 1>which they probably will, which still leaves the debt limit.

0:12:42.760 --> 0:12:45.680
<v Speaker 1>Republicans still say they will not allow the Democrats to

0:12:45.760 --> 0:12:48.920
<v Speaker 1>vote on extending it, and so the Democrats can put

0:12:49.000 --> 0:12:52.400
<v Speaker 1>it into the Continuing Resolution or rather continue into the

0:12:52.440 --> 0:12:56.080
<v Speaker 1>reconciliation bill that holds the Biden plan. But the problem

0:12:56.120 --> 0:12:57.839
<v Speaker 1>with that is then they need to pass a new

0:12:57.880 --> 0:13:00.480
<v Speaker 1>budget first with that as an instruction, and then they

0:13:00.520 --> 0:13:03.079
<v Speaker 1>need to go through a whole the whole day of

0:13:03.120 --> 0:13:05.360
<v Speaker 1>what they call vote rama, where anybody is allowed to

0:13:05.800 --> 0:13:09.319
<v Speaker 1>offer amendments. And so it will take time for that

0:13:09.400 --> 0:13:11.760
<v Speaker 1>to happen. And I think that's why Janet Yellen put

0:13:11.760 --> 0:13:15.160
<v Speaker 1>a date on at this time, because she's saying, basically, um, guys,

0:13:15.200 --> 0:13:17.200
<v Speaker 1>don't screw around. This is how much if you're gonna

0:13:17.240 --> 0:13:19.120
<v Speaker 1>do this, is how much time you have? Yeah, that's

0:13:19.120 --> 0:13:21.520
<v Speaker 1>all on the fiscal side, Mike on the monetary policy side,

0:13:21.559 --> 0:13:24.920
<v Speaker 1>and those who have the ability to decide monetary policy

0:13:25.160 --> 0:13:29.200
<v Speaker 1>center shared. Brown asked both Yelling and pal about diversity

0:13:29.200 --> 0:13:31.040
<v Speaker 1>on the FED Board of Governors and whether it's time

0:13:31.080 --> 0:13:33.719
<v Speaker 1>to have a black woman and especially in light of

0:13:33.760 --> 0:13:36.599
<v Speaker 1>the resignations of Rose and Grenham Kaplan yesterday in the

0:13:36.640 --> 0:13:38.520
<v Speaker 1>wake of the trading scandal, how could we be looking

0:13:38.520 --> 0:13:41.439
<v Speaker 1>at a different FED going forward. Well, I think you're

0:13:41.440 --> 0:13:43.720
<v Speaker 1>going to see in the search committees for both Dallas

0:13:43.760 --> 0:13:46.880
<v Speaker 1>and Boston a strong effort to find minorities, whether it's

0:13:46.920 --> 0:13:50.440
<v Speaker 1>a black or whether it's a woman, it could be Hispanic,

0:13:51.040 --> 0:13:54.240
<v Speaker 1>uh and Alis in particular would be a sort of

0:13:54.280 --> 0:13:57.439
<v Speaker 1>logical move. So I think you're going to see that,

0:13:57.720 --> 0:14:00.559
<v Speaker 1>and I think the FED Board will try to influence

0:14:00.679 --> 0:14:04.240
<v Speaker 1>that the FED has historically been a refuge of old

0:14:04.240 --> 0:14:07.840
<v Speaker 1>white males, and as was pointed out, there are very

0:14:07.880 --> 0:14:11.520
<v Speaker 1>few black economists at the board. And I think Congress

0:14:11.559 --> 0:14:13.480
<v Speaker 1>is going to continue to keep the pressure on and

0:14:13.800 --> 0:14:17.880
<v Speaker 1>we will see some changes in a historic day yesterday.

0:14:17.920 --> 0:14:19.480
<v Speaker 1>You know it's not every day you see two FED

0:14:19.520 --> 0:14:24.760
<v Speaker 1>presidents step down. Is this going to change the way

0:14:24.840 --> 0:14:28.600
<v Speaker 1>the FED man, you know, it puts people onto the

0:14:28.600 --> 0:14:32.880
<v Speaker 1>board or just or tracts talent. It could. I think

0:14:32.920 --> 0:14:34.720
<v Speaker 1>what you'll see is the FED put in place a

0:14:34.800 --> 0:14:38.760
<v Speaker 1>much more robust set of ethics requirements. Perhaps anybody coming

0:14:38.800 --> 0:14:41.840
<v Speaker 1>in would be required to put their holdings in a

0:14:41.880 --> 0:14:46.040
<v Speaker 1>blind trust something like that, uh, which you know you

0:14:46.080 --> 0:14:49.320
<v Speaker 1>can easily argue should have been done before. What they

0:14:49.360 --> 0:14:53.280
<v Speaker 1>don't want to do is completely keep anybody who's made

0:14:53.320 --> 0:14:57.720
<v Speaker 1>any money off the board, because yes, the board needs diversity,

0:14:57.720 --> 0:14:59.720
<v Speaker 1>but that also means they need some people with market

0:14:59.760 --> 0:15:03.040
<v Speaker 1>ex variants and so uh you know Rob kaplan K

0:15:03.160 --> 0:15:05.040
<v Speaker 1>from Goldvin Sachs, he was one of the strong market

0:15:05.080 --> 0:15:08.640
<v Speaker 1>voices and that's a loss for them at this point. Yea,

0:15:08.800 --> 0:15:12.400
<v Speaker 1>all right. Michael McKee, economics editor for Bloomberg TV and Radio,

0:15:12.400 --> 0:15:18.080
<v Speaker 1>thank you so much for your thoughts. We appreciate that. Well,

0:15:18.120 --> 0:15:20.600
<v Speaker 1>just about twenty minutes ago, Kaylee and I were just

0:15:20.640 --> 0:15:23.800
<v Speaker 1>sitting here chatting, saying, boy, the supply chain, this is

0:15:23.840 --> 0:15:26.600
<v Speaker 1>a big issue, the challenges we're facing on a global scale.

0:15:26.640 --> 0:15:28.920
<v Speaker 1>And uh, I wonder to what extent that they're contributing

0:15:28.920 --> 0:15:30.520
<v Speaker 1>to some of this inflation we're seeing out there and

0:15:30.520 --> 0:15:32.880
<v Speaker 1>I said, we need to get smarter on what's going

0:15:32.960 --> 0:15:34.800
<v Speaker 1>on out there with the ships and the trains and

0:15:34.840 --> 0:15:39.040
<v Speaker 1>the trucks. And luckily we have Bloomberg Intelligence with us,

0:15:39.040 --> 0:15:40.880
<v Speaker 1>and they have the experts on all these industries. At

0:15:40.960 --> 0:15:45.200
<v Speaker 1>lea classical he's the senior transport logistics and shipping analysts,

0:15:45.200 --> 0:15:50.000
<v Speaker 1>one of the most popular analysts these days at Bloomberg Intelligence. Solely,

0:15:50.320 --> 0:15:52.800
<v Speaker 1>I'm looking at map go on my term and I

0:15:52.880 --> 0:15:55.320
<v Speaker 1>see a bunch of cargo ships anchored off the coast

0:15:55.320 --> 0:15:57.880
<v Speaker 1>of Los Angeles. And then even if they get their

0:15:57.920 --> 0:16:00.880
<v Speaker 1>cargo unloaded, then the trucks have to get the containers

0:16:00.880 --> 0:16:03.600
<v Speaker 1>and the railroads have to get the containers. Give us

0:16:03.640 --> 0:16:06.520
<v Speaker 1>an overview of how bad things are out there in

0:16:06.600 --> 0:16:10.760
<v Speaker 1>terms of global shipping, global logistics. UH, and how do

0:16:10.800 --> 0:16:15.000
<v Speaker 1>we get here? The supply chains are truly gummed up?

0:16:15.040 --> 0:16:18.720
<v Speaker 1>And you know the how we got to this point,

0:16:19.440 --> 0:16:23.880
<v Speaker 1>which the shocks to the system have really been unprecedented

0:16:24.280 --> 0:16:27.680
<v Speaker 1>and just one after the other. I mean, obviously economy

0:16:27.720 --> 0:16:31.360
<v Speaker 1>shut down with the pandemic, and then China recovered quicker

0:16:31.640 --> 0:16:34.440
<v Speaker 1>and earlier than the US, and that created a lot

0:16:34.480 --> 0:16:38.280
<v Speaker 1>of imbalances. UH. And the trans specific trade. So there

0:16:38.320 --> 0:16:42.720
<v Speaker 1>were ships coming to the southern California and other points

0:16:43.240 --> 0:16:47.160
<v Speaker 1>unloading um containers, but there were no empty containers to

0:16:47.160 --> 0:16:51.720
<v Speaker 1>bring back, and that created a capacity crunch on the water.

0:16:52.200 --> 0:16:55.720
<v Speaker 1>And also the container liner industry has a long history

0:16:55.760 --> 0:16:59.760
<v Speaker 1>of just being completely irrational players. They got a little

0:16:59.800 --> 0:17:02.360
<v Speaker 1>this a plan during this down cycle and they took

0:17:02.400 --> 0:17:05.720
<v Speaker 1>some ships out uh and they slowly brought them back,

0:17:06.400 --> 0:17:10.520
<v Speaker 1>so that created um also some some choke points uh.

0:17:10.520 --> 0:17:12.960
<v Speaker 1>And then it was like one black swan after the next.

0:17:13.040 --> 0:17:16.040
<v Speaker 1>You know, you had the the the ever given blocking

0:17:16.080 --> 0:17:20.040
<v Speaker 1>this to West Canal. Um. You had, um, you just

0:17:20.359 --> 0:17:23.400
<v Speaker 1>one thing after that, you had the rail industry embraced

0:17:23.440 --> 0:17:27.440
<v Speaker 1>something called precisions scattering railroading, which is really just six

0:17:27.480 --> 0:17:31.679
<v Speaker 1>stigma for the rails, and that impacted service, probably not

0:17:31.800 --> 0:17:34.199
<v Speaker 1>in the best way as well, because they were you know,

0:17:34.280 --> 0:17:37.960
<v Speaker 1>taking assets off of their network and then when demand

0:17:38.040 --> 0:17:40.800
<v Speaker 1>came up, you know, they were slow to bring back

0:17:40.800 --> 0:17:43.639
<v Speaker 1>those assets. UM. You know, you have you have huge

0:17:43.720 --> 0:17:46.520
<v Speaker 1>log jams in Chicago, which has always been a problem

0:17:47.000 --> 0:17:50.160
<v Speaker 1>UM and the rails have been doing what they can

0:17:50.680 --> 0:17:53.520
<v Speaker 1>uh to kind of alleviate those choke points and not

0:17:53.560 --> 0:17:56.240
<v Speaker 1>to just to to to ramble on too long, but

0:17:56.400 --> 0:18:00.240
<v Speaker 1>really it's all about available labor. Um. You know, every

0:18:00.280 --> 0:18:04.000
<v Speaker 1>transportation company is facing a labor shortage. Uh. You know

0:18:04.040 --> 0:18:07.400
<v Speaker 1>your listeners might remember last week when FedEx released their earnings,

0:18:07.920 --> 0:18:11.840
<v Speaker 1>they pointed out about four fifty million dollars of a headwind. Um.

0:18:11.880 --> 0:18:14.440
<v Speaker 1>That's a lot of coin. Uh. And that's just trying

0:18:14.480 --> 0:18:17.960
<v Speaker 1>to find enough people to deliver the packages. And when

0:18:17.960 --> 0:18:20.600
<v Speaker 1>they have holes in their system, you know, it creates

0:18:20.600 --> 0:18:23.800
<v Speaker 1>a much less efficient network for them. So Lee is

0:18:23.840 --> 0:18:25.639
<v Speaker 1>basically what you're telling us here that it is a

0:18:25.640 --> 0:18:28.920
<v Speaker 1>lot easier to create kinks in the supply chain than

0:18:28.960 --> 0:18:32.720
<v Speaker 1>it is to smooth them back out. Yeah, and and

0:18:32.720 --> 0:18:35.359
<v Speaker 1>and and that is a because we're more of you know,

0:18:35.480 --> 0:18:39.119
<v Speaker 1>it's for digital globalization. I mean, we're still a global economy.

0:18:39.400 --> 0:18:42.280
<v Speaker 1>The nikes that you might be wearing are being manufactured

0:18:42.280 --> 0:18:45.760
<v Speaker 1>in Vietnam or in China. And with China's zero tolerance

0:18:46.240 --> 0:18:49.920
<v Speaker 1>towards COVID outbreaks, you know you're seeing them shutting down

0:18:50.040 --> 0:18:54.240
<v Speaker 1>terminals at various ports, very busy ports, and that's creating

0:18:54.320 --> 0:18:56.840
<v Speaker 1>headwinds as well. And then you know when you have

0:18:57.040 --> 0:18:59.679
<v Speaker 1>on the U S side, Um, you know, you just

0:18:59.680 --> 0:19:03.040
<v Speaker 1>don't have enough people to to kind of face that backlog.

0:19:03.119 --> 0:19:04.840
<v Speaker 1>I mean, I read the other day on Bloomberg there

0:19:04.880 --> 0:19:07.960
<v Speaker 1>was something like seventy eight ships waiting outside of l

0:19:08.000 --> 0:19:11.480
<v Speaker 1>A Long Beach. These are unprecedented times, uh, and it's

0:19:11.480 --> 0:19:14.439
<v Speaker 1>gonna take a long time, you know, our call for

0:19:14.920 --> 0:19:17.359
<v Speaker 1>UM rates on at least on the liner side. You know,

0:19:17.440 --> 0:19:19.159
<v Speaker 1>we believe things will get a little better into the

0:19:19.240 --> 0:19:22.840
<v Speaker 1>Chinese New Year, but rates will remain a like at

0:19:22.880 --> 0:19:26.359
<v Speaker 1>these unsustainable levels probably through the first half of the

0:19:26.440 --> 0:19:30.680
<v Speaker 1>year and then kind of moderate uh into the second half. UM.

0:19:30.760 --> 0:19:33.200
<v Speaker 1>And then you have on on the roadside. For trucking

0:19:33.200 --> 0:19:36.320
<v Speaker 1>in North America, the spot rates are up something like

0:19:37.119 --> 0:19:41.160
<v Speaker 1>this year, contractual rates are up double digits. UM. They

0:19:41.160 --> 0:19:43.399
<v Speaker 1>have pricing power because they can't find the people to

0:19:43.480 --> 0:19:46.560
<v Speaker 1>drive the trucks to deliver the stuff. So when you

0:19:46.600 --> 0:19:49.639
<v Speaker 1>talk to these transportation companies, whether the big shipping companies

0:19:49.640 --> 0:19:52.200
<v Speaker 1>are the rails and trucks, is this a supply chain

0:19:52.200 --> 0:19:55.240
<v Speaker 1>problem that's going to go into next year? I mean

0:19:55.359 --> 0:19:59.600
<v Speaker 1>hard stop. Yeah, It's it's gonna be uh an impact.

0:19:59.600 --> 0:20:03.399
<v Speaker 1>I mean I think that it will moderate, you know, um,

0:20:03.440 --> 0:20:05.359
<v Speaker 1>you know, and but that's assuming a lot of things.

0:20:05.359 --> 0:20:09.359
<v Speaker 1>That's assuming not another black Swan event or another you know,

0:20:09.840 --> 0:20:14.160
<v Speaker 1>variant of the coronavirus which could shut down whether it's manufacturing,

0:20:14.520 --> 0:20:17.719
<v Speaker 1>um or or reports. And then you also have right now,

0:20:17.760 --> 0:20:19.560
<v Speaker 1>I mean you have another kind of crazy thing. We're

0:20:19.560 --> 0:20:23.440
<v Speaker 1>talking about China having not enough power, um so they

0:20:23.480 --> 0:20:26.680
<v Speaker 1>have to manage their economy and they might close the manufacturing.

0:20:26.760 --> 0:20:29.240
<v Speaker 1>So you know, if you're expecting you know, some furniture

0:20:29.400 --> 0:20:32.959
<v Speaker 1>from from China, you might have to wait another month. Alright, Lee,

0:20:33.000 --> 0:20:35.320
<v Speaker 1>thanks so much for jumping on with us. Really appreciated.

0:20:35.359 --> 0:20:37.680
<v Speaker 1>This is a global issue. It as a one that's

0:20:37.680 --> 0:20:40.840
<v Speaker 1>been developing since the pandemic began, and it doesn't appear

0:20:40.880 --> 0:20:45.240
<v Speaker 1>to be uh easing anytime soon. Lee Classgow, Senior Transport

0:20:45.280 --> 0:20:48.159
<v Speaker 1>Logistics and Shipping Annals from Bloomberg Intelligence. He joins us

0:20:48.200 --> 0:20:51.800
<v Speaker 1>on the phone from Bloomberg's Princeton office. Uh and Kaylee,

0:20:51.880 --> 0:20:54.160
<v Speaker 1>this is something you know. I'm sure it's earnings coming

0:20:54.200 --> 0:20:57.080
<v Speaker 1>up here. Once again, we're going to have companies probably

0:20:57.480 --> 0:21:01.720
<v Speaker 1>blaming this using as an excuse perhaps for the weather. Right, Yeah,

0:21:01.800 --> 0:21:03.760
<v Speaker 1>but I think we're going to see some serious margin

0:21:03.800 --> 0:21:07.040
<v Speaker 1>pressures coming in, which is to be expected that profit

0:21:07.080 --> 0:21:09.760
<v Speaker 1>margins would contract. It's what a lot of analysts, strategists

0:21:09.760 --> 0:21:12.359
<v Speaker 1>are expecting. But when you talk about those higher input costs,

0:21:12.400 --> 0:21:15.920
<v Speaker 1>higher freight costs, higher labor costs, all that is cost

0:21:16.080 --> 0:21:18.320
<v Speaker 1>and is it transit where That's going to be the

0:21:18.440 --> 0:21:21.680
<v Speaker 1>big question. Thanks for listening to the Bloomberg Markets podcast.

0:21:22.040 --> 0:21:25.280
<v Speaker 1>You can subscribe and listen to interviews with Apple Podcasts

0:21:25.400 --> 0:21:29.280
<v Speaker 1>or whatever podcast platform you prefer. I'm Matt Miller. I'm

0:21:29.320 --> 0:21:33.520
<v Speaker 1>on Twitter at Matt Miller. Put on false Sweeney. I'm

0:21:33.520 --> 0:21:36.159
<v Speaker 1>on Twitter at pt Sweeney before the podcast. You can

0:21:36.200 --> 0:21:38.440
<v Speaker 1>always catch us worldwide at Bloomberg Radio