1
00:00:10,840 --> 00:00:14,160
Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

2
00:00:14,240 --> 00:00:18,840
Speaker 1: I'm Tracy Allaway and I'm Joe. Isn't Joe? Do you

3
00:00:18,840 --> 00:00:23,440
Speaker 1: remember that time I bought an actual barrel of oil?

4
00:00:23,920 --> 00:00:26,639
Speaker 1: I tried to. Yeah, I thought about that, and you know,

5
00:00:26,680 --> 00:00:28,120
Speaker 1: it's cool. I we used to sit right next to

6
00:00:28,160 --> 00:00:29,760
Speaker 1: each other. I mean, now we're on the opposite side

7
00:00:29,760 --> 00:00:32,040
Speaker 1: of the world. That was fun. We didn't appreciate that

8
00:00:32,080 --> 00:00:34,120
Speaker 1: was great. We actually I got to work next to

9
00:00:34,159 --> 00:00:36,120
Speaker 1: each other. And I remember you bought some oil and

10
00:00:36,159 --> 00:00:38,360
Speaker 1: you kept it on your desk for what Yeah, well,

11
00:00:38,400 --> 00:00:41,680
Speaker 1: I didn't really want to leave it in my apartment

12
00:00:41,720 --> 00:00:45,280
Speaker 1: because I'd heard and learned that crude oil evaporates into

13
00:00:45,280 --> 00:00:47,559
Speaker 1: the air and it's not very safe. So obviously I

14
00:00:47,560 --> 00:00:49,159
Speaker 1: took it to the office and I put it um

15
00:00:49,479 --> 00:00:52,120
Speaker 1: on the desk that was right next to you. But

16
00:00:52,760 --> 00:00:56,720
Speaker 1: the whole point of the whole point of that, actually,

17
00:00:56,760 --> 00:00:58,920
Speaker 1: you know I heard that that um, the little thing

18
00:00:58,920 --> 00:01:01,520
Speaker 1: of oil fully of operated. After a few years, it's

19
00:01:01,560 --> 00:01:04,080
Speaker 1: totally gone. Now it's kind of crazy. Oh man, wait

20
00:01:04,080 --> 00:01:07,120
Speaker 1: where did it go into the air? Oh someone else

21
00:01:07,120 --> 00:01:09,960
Speaker 1: at Bloomberg took it and then it evaporated, So I'm

22
00:01:10,000 --> 00:01:12,800
Speaker 1: sure it's in the trash now anyway. Okay, that was

23
00:01:12,959 --> 00:01:16,800
Speaker 1: a very um strange tangent. Okay, the point of doing

24
00:01:16,840 --> 00:01:20,200
Speaker 1: that story, to actually try to buy a barrel of

25
00:01:20,200 --> 00:01:24,280
Speaker 1: oil was to show exactly what was going on in

26
00:01:24,640 --> 00:01:28,440
Speaker 1: a key commodities market in crude oil. Of course, at

27
00:01:28,440 --> 00:01:31,440
Speaker 1: a really interesting time. This is when we had um

28
00:01:31,480 --> 00:01:36,440
Speaker 1: some interesting patterns in the market, the contango structure where

29
00:01:36,480 --> 00:01:39,399
Speaker 1: in theory you could buy oil and sit on it

30
00:01:39,480 --> 00:01:41,800
Speaker 1: and forward sell it to someone else and you could

31
00:01:41,840 --> 00:01:45,160
Speaker 1: pocket the difference and make some money just by buying

32
00:01:45,200 --> 00:01:47,400
Speaker 1: oil and then storing it for a while. Do you

33
00:01:47,440 --> 00:01:50,200
Speaker 1: remember that, I do? That was right, That was like

34
00:01:50,240 --> 00:01:52,760
Speaker 1: the whole point. It wasn't just that you wanted to

35
00:01:52,880 --> 00:01:55,320
Speaker 1: learn how to transfer oil, but there was like a

36
00:01:55,400 --> 00:01:58,840
Speaker 1: carry trade or a contango traders. So, you know, I've

37
00:01:58,840 --> 00:02:02,560
Speaker 1: taken an interest this year in logistics and transport and

38
00:02:02,800 --> 00:02:05,240
Speaker 1: the shipping chaos that we've seen. We've done a number

39
00:02:05,280 --> 00:02:12,080
Speaker 1: of episodes at this point on the gridlock in global shipping. Yeah,

40
00:02:12,120 --> 00:02:15,160
Speaker 1: this is uh the topic de jour. I mean, I

41
00:02:15,200 --> 00:02:17,880
Speaker 1: think there are many topics, but you know, it's all

42
00:02:17,919 --> 00:02:20,880
Speaker 1: the interesting stories this year have not been really in

43
00:02:20,960 --> 00:02:24,959
Speaker 1: anything related to uh, liquid markets or anything classically macro.

44
00:02:25,400 --> 00:02:28,480
Speaker 1: But in micro, how does shipping work, how does home

45
00:02:28,520 --> 00:02:31,480
Speaker 1: building work, how does saw mills work? Anything is sort

46
00:02:31,520 --> 00:02:35,240
Speaker 1: of like real on the ground economy is where it's

47
00:02:36,360 --> 00:02:38,800
Speaker 1: that's right. I'm so glad you said micro because we

48
00:02:38,840 --> 00:02:41,840
Speaker 1: are going to be going very very micro in this episode.

49
00:02:41,919 --> 00:02:45,200
Speaker 1: So in the spirit of actually buying a barrel of

50
00:02:45,240 --> 00:02:49,240
Speaker 1: oil or some oil, earlier this year, around January, I

51
00:02:49,400 --> 00:02:54,239
Speaker 1: set out to actually ship something via container from Hong

52
00:02:54,320 --> 00:02:58,400
Speaker 1: Kong to the west coast of the US. Did I

53
00:02:58,400 --> 00:03:01,200
Speaker 1: tell you about that. You brought it up on our

54
00:03:01,560 --> 00:03:04,480
Speaker 1: interview with the Flexi Port and that was sort of

55
00:03:04,639 --> 00:03:06,880
Speaker 1: but we didn't really get into what happened. I don't

56
00:03:06,880 --> 00:03:08,519
Speaker 1: even know. Did you ship it? I don't even know what?

57
00:03:09,200 --> 00:03:11,960
Speaker 1: Uh yeah, okay, so spoiler alert, we didn't ship it.

58
00:03:11,960 --> 00:03:14,560
Speaker 1: In the end, it turns out that the gridlock in

59
00:03:14,600 --> 00:03:18,240
Speaker 1: global shipping is so extreme that I couldn't make this work.

60
00:03:18,280 --> 00:03:20,680
Speaker 1: And we tried for about four or five months, and

61
00:03:20,720 --> 00:03:23,800
Speaker 1: I just kept getting bumped from ship to ship to ship.

62
00:03:23,919 --> 00:03:26,640
Speaker 1: So I gave up eventually. I'm sorry, but I know

63
00:03:26,800 --> 00:03:29,880
Speaker 1: that like all these ships are packed. However, I refused

64
00:03:29,880 --> 00:03:32,079
Speaker 1: to believe that there wasn't space for a Teddy Bear

65
00:03:32,120 --> 00:03:36,400
Speaker 1: on one ship. I mean, come on, come on, Okay,

66
00:03:36,480 --> 00:03:39,080
Speaker 1: we're going to get into exactly what happened. We're going

67
00:03:39,120 --> 00:03:42,720
Speaker 1: to go super micro, very granular and talk about what

68
00:03:42,840 --> 00:03:46,280
Speaker 1: it is actually like to try to ship something via

69
00:03:46,400 --> 00:03:50,560
Speaker 1: container from the east to the west at the moment um,

70
00:03:50,600 --> 00:03:52,280
Speaker 1: and I think it's going to be a really enjoyable

71
00:03:52,360 --> 00:03:57,280
Speaker 1: conversation in the spirit of you know, gonzo financial journalism. Great,

72
00:03:57,360 --> 00:04:00,160
Speaker 1: let's do it all right. So our guests on this

73
00:04:00,240 --> 00:04:04,040
Speaker 1: episode are two people that were very, very helpful to

74
00:04:04,080 --> 00:04:06,800
Speaker 1: me in trying to arrange this experiment, and I spent

75
00:04:06,800 --> 00:04:09,320
Speaker 1: an enormous amount of their time on this, and I

76
00:04:09,360 --> 00:04:11,160
Speaker 1: feel really bad that we couldn't make it work. But

77
00:04:11,760 --> 00:04:15,080
Speaker 1: we're gonna be speaking with Anton Posner, he's the chief

78
00:04:15,080 --> 00:04:19,000
Speaker 1: executive officer at the Mercury Group, and Margot Brock, she's

79
00:04:19,000 --> 00:04:22,760
Speaker 1: a president at Mercury Group as well. So Anton and Margot,

80
00:04:22,800 --> 00:04:25,400
Speaker 1: thank you so much for coming on, Thank you for

81
00:04:25,440 --> 00:04:28,680
Speaker 1: having us. Happy to be here, great, great to be on.

82
00:04:29,320 --> 00:04:32,320
Speaker 1: So uh, Anton, I sort of I set it up

83
00:04:32,320 --> 00:04:34,520
Speaker 1: a little bit there, but I'm trying to remember now

84
00:04:34,560 --> 00:04:39,240
Speaker 1: how we actually met and embarked on this whole experiment,

85
00:04:39,520 --> 00:04:44,440
Speaker 1: but shipping a single container that is mostly empty, and

86
00:04:44,480 --> 00:04:46,839
Speaker 1: you know, we settled on putting a teddy Bear in

87
00:04:46,880 --> 00:04:50,400
Speaker 1: it because it was easy to procure and kind of fun.

88
00:04:50,839 --> 00:04:53,520
Speaker 1: But that is not what you do day in and

89
00:04:53,640 --> 00:04:56,919
Speaker 1: day out at Mercury Group, is that, right? Right? We

90
00:04:57,240 --> 00:05:01,080
Speaker 1: very very rarely are putting one teddy Bear and the container.

91
00:05:01,160 --> 00:05:05,600
Speaker 1: It's almost almost never happens. Right. So you specialize in

92
00:05:05,800 --> 00:05:09,160
Speaker 1: bulk freight, right, correct, right, So I'll give you a

93
00:05:09,160 --> 00:05:12,880
Speaker 1: little back background. So Mercury Group are vast majority of

94
00:05:12,920 --> 00:05:17,280
Speaker 1: our business is bulk and break bulk freight and supply

95
00:05:17,360 --> 00:05:22,720
Speaker 1: chain management. We're commodity people, industrial commodity people. So so

96
00:05:22,800 --> 00:05:26,080
Speaker 1: our cargo that we're typically dealing with is aluminium and

97
00:05:26,160 --> 00:05:31,120
Speaker 1: steel and copper and copper concentrates and alumina which is

98
00:05:31,160 --> 00:05:36,359
Speaker 1: a material for aluminium aluminum production. Organic soybean meal in

99
00:05:36,480 --> 00:05:40,520
Speaker 1: bulk coming in from moving in UH containers transferred to

100
00:05:40,560 --> 00:05:44,039
Speaker 1: bulk moving up the Mississippi River system for example. So

101
00:05:44,760 --> 00:05:47,240
Speaker 1: so vast majority of what we do is on the

102
00:05:47,279 --> 00:05:51,400
Speaker 1: bulk side, which is just as and that that it

103
00:05:51,480 --> 00:05:53,760
Speaker 1: will get into it further, but that industry and that

104
00:05:53,880 --> 00:05:56,400
Speaker 1: part of the supply chain sector is just as crazy

105
00:05:56,640 --> 00:06:00,480
Speaker 1: these days as what the container world has seen. So

106
00:06:00,520 --> 00:06:02,360
Speaker 1: what why do you walk us through a little bit

107
00:06:02,400 --> 00:06:05,279
Speaker 1: of the differences. I mean, we uh recently talked to

108
00:06:05,640 --> 00:06:09,200
Speaker 1: Ryan Peterson, CEO Flexport, and you know, we sort of

109
00:06:09,240 --> 00:06:11,760
Speaker 1: have this idea of like, you know, I guess I'm

110
00:06:11,800 --> 00:06:13,480
Speaker 1: kind of feel like I can wrap my head around

111
00:06:13,839 --> 00:06:18,360
Speaker 1: how consumer goods moving from Asia to the US got

112
00:06:18,400 --> 00:06:21,360
Speaker 1: all kinds of messed up for many reasons during the crisis.

113
00:06:21,680 --> 00:06:26,440
Speaker 1: What are the similarities and differences like that we see

114
00:06:26,520 --> 00:06:29,919
Speaker 1: or that just in general between sort of consumer goods

115
00:06:29,960 --> 00:06:35,400
Speaker 1: movements versus uh bulk Shipman's sure both bulkshipman's for for

116
00:06:35,440 --> 00:06:40,160
Speaker 1: those that may not may not understand the actual practical

117
00:06:40,320 --> 00:06:45,560
Speaker 1: difference of it is that includes me about got yeah,

118
00:06:45,800 --> 00:06:49,760
Speaker 1: so think about bulk in break bulk. It'll explain the

119
00:06:49,760 --> 00:06:52,000
Speaker 1: difference between two of them. Are the is the old

120
00:06:52,040 --> 00:06:54,760
Speaker 1: fashioned way of shipping where it's not in a nothing

121
00:06:54,839 --> 00:06:59,240
Speaker 1: moves in a container, So dry bulk or bulk is

122
00:06:59,640 --> 00:07:03,040
Speaker 1: thinking think about it as commodities that are measured in

123
00:07:03,279 --> 00:07:09,479
Speaker 1: tons or volume, right, like soybeans, corn, iron, ore, coal,

124
00:07:09,640 --> 00:07:12,280
Speaker 1: things like that that are just that are basically poured

125
00:07:12,320 --> 00:07:14,880
Speaker 1: into a ship's hole. That's bulk, or what we call

126
00:07:15,040 --> 00:07:17,760
Speaker 1: or bulk or dry bulk as we call it. Break

127
00:07:17,840 --> 00:07:23,080
Speaker 1: bulk is is items that you can actually count, so

128
00:07:23,320 --> 00:07:29,520
Speaker 1: steel coils, bundles of aluminum sows, crates of windows. We

129
00:07:29,640 --> 00:07:32,160
Speaker 1: just looked at recently, which is an interesting story, looking

130
00:07:32,160 --> 00:07:35,160
Speaker 1: to shift from containers to break bulk because of the

131
00:07:35,160 --> 00:07:38,640
Speaker 1: misery in China at the moment. So so if you're looting,

132
00:07:39,080 --> 00:07:41,560
Speaker 1: I think you think about the the old movies right

133
00:07:41,600 --> 00:07:45,720
Speaker 1: on the waterfront of the the longshoreman on the west

134
00:07:45,760 --> 00:07:49,880
Speaker 1: side of Manhattan loading crates, uh and and nets full

135
00:07:49,920 --> 00:07:54,280
Speaker 1: of cargo bags of cocoa. That's break bulk. If you

136
00:07:54,280 --> 00:07:57,280
Speaker 1: can count it, and you can count the number of pieces,

137
00:07:57,360 --> 00:08:00,000
Speaker 1: then it's break bulk. If if you have to measure

138
00:08:00,040 --> 00:08:03,760
Speaker 1: it in tons, that it's dribal essentially. And that's so

139
00:08:04,160 --> 00:08:07,200
Speaker 1: these are goods that where it's just not practical or

140
00:08:07,240 --> 00:08:10,720
Speaker 1: cost effective to work with container with containers. And so

141
00:08:11,480 --> 00:08:15,480
Speaker 1: Margaret and I both come from diverse background uh. Margaret

142
00:08:15,480 --> 00:08:18,320
Speaker 1: I both graduated from New York Maritime College in the

143
00:08:18,320 --> 00:08:21,720
Speaker 1: Bronx came out as ship's officers. Neither one of us

144
00:08:21,720 --> 00:08:25,680
Speaker 1: decided to go to sea as as a ship's officers.

145
00:08:25,680 --> 00:08:29,000
Speaker 1: We did our see time as cadets and uh and

146
00:08:29,000 --> 00:08:31,600
Speaker 1: and I always say, I decided I have no salt

147
00:08:31,600 --> 00:08:33,600
Speaker 1: in my veins. I'm ready to gready to stay short

148
00:08:33,679 --> 00:08:36,720
Speaker 1: side and I'm better navigating a cocktail party in London

149
00:08:36,800 --> 00:08:39,560
Speaker 1: during London Medal Exchange week that I am navigating a

150
00:08:39,600 --> 00:08:43,680
Speaker 1: ship to get to London. So so we went into both.

151
00:08:43,760 --> 00:08:47,640
Speaker 1: Both of us went into shore side business of of shipping.

152
00:08:47,800 --> 00:08:51,400
Speaker 1: Worked a few jobs together, but we both started in

153
00:08:51,440 --> 00:08:56,840
Speaker 1: the container side of the business, working in various retainer lines, Margot,

154
00:08:56,920 --> 00:08:59,440
Speaker 1: and they'll pass it over to you to like background on,

155
00:09:00,000 --> 00:09:03,320
Speaker 1: but you did that at school, very much on the

156
00:09:03,360 --> 00:09:08,040
Speaker 1: container side of the business, working for a container steamship line.

157
00:09:08,240 --> 00:09:11,400
Speaker 1: From there, I went to a trading company where we

158
00:09:11,480 --> 00:09:16,520
Speaker 1: moved containerized freight, but we also handled brake bulk UM

159
00:09:16,600 --> 00:09:19,760
Speaker 1: and that was cocoa beans UM and I have eventually

160
00:09:19,760 --> 00:09:22,520
Speaker 1: evolved into what we do now, which is much more

161
00:09:22,600 --> 00:09:27,880
Speaker 1: rooted in industrial products of raw materials or semi finished product.

162
00:09:28,120 --> 00:09:31,839
Speaker 1: So we do have a decent background of looking at

163
00:09:31,880 --> 00:09:36,280
Speaker 1: both sides of the shipping industry. And you know, to

164
00:09:36,400 --> 00:09:41,840
Speaker 1: Anton's point, it is all quite a mess, right now. Yeah,

165
00:09:42,040 --> 00:09:44,679
Speaker 1: there's a phrase I've been using. It's probably not podcast

166
00:09:44,720 --> 00:09:47,080
Speaker 1: friendly as to what's going on, so I'll leave that out.

167
00:09:47,160 --> 00:09:49,280
Speaker 1: But but Joe, I want to get to that that

168
00:09:49,360 --> 00:09:51,240
Speaker 1: heart of the question that different you're looking at the

169
00:09:51,800 --> 00:09:55,080
Speaker 1: difference between the two. So very often when we're looking

170
00:09:55,160 --> 00:10:00,520
Speaker 1: at moving, moving freight, moving these industrial commodities, where we're

171
00:10:00,520 --> 00:10:03,520
Speaker 1: evaluating do containers make sense or is this going to

172
00:10:03,720 --> 00:10:06,640
Speaker 1: make sense in bulk? For breakball, Let's say that we

173
00:10:06,679 --> 00:10:10,480
Speaker 1: had a trading company that was looking to move copper

174
00:10:10,559 --> 00:10:14,360
Speaker 1: cathodes from one of the copper producers like Freeport mcmaran

175
00:10:14,679 --> 00:10:19,480
Speaker 1: or Rio tinto Kennicott Copper right uh in the southwest US,

176
00:10:19,760 --> 00:10:22,280
Speaker 1: and they wanted to move those copper cathodes to Korea.

177
00:10:22,880 --> 00:10:26,480
Speaker 1: So we would evaluate whether or not it makes sense

178
00:10:26,520 --> 00:10:30,280
Speaker 1: to stuff those copper cathodes into containers and ship them

179
00:10:30,280 --> 00:10:33,959
Speaker 1: to Korea, or if the volume was significant enough, does

180
00:10:34,000 --> 00:10:37,199
Speaker 1: it make sense to rail those copper cathodes to l

181
00:10:37,240 --> 00:10:40,760
Speaker 1: a long beach and load them onto a breakbook vessel

182
00:10:40,800 --> 00:10:44,520
Speaker 1: bulk vessel to go to Korea. So that cost analysis

183
00:10:45,760 --> 00:10:47,880
Speaker 1: is a big part of it. But in this day

184
00:10:47,880 --> 00:10:50,000
Speaker 1: and age, it's not just the cost. It's also the

185
00:10:50,040 --> 00:10:54,920
Speaker 1: ability to actually get equipment to make something happen, which

186
00:10:55,000 --> 00:10:58,040
Speaker 1: leads leads me to that that that common I made

187
00:10:58,360 --> 00:11:02,080
Speaker 1: about the windows. We recently one of our commercial people

188
00:11:02,559 --> 00:11:06,760
Speaker 1: had a dialogue with a company that that imports some

189
00:11:07,000 --> 00:11:12,520
Speaker 1: windows for consumer windows from China, and they're these windows

190
00:11:12,559 --> 00:11:16,080
Speaker 1: are sitting in crates in northern China right now, just

191
00:11:16,200 --> 00:11:18,800
Speaker 1: waiting the same as the Teddy Bear. They're the same

192
00:11:18,800 --> 00:11:21,760
Speaker 1: fate as the Teddy Bear, missing ship after ship after ship,

193
00:11:22,240 --> 00:11:25,520
Speaker 1: massive delays. Right this is the reason why everything is

194
00:11:25,559 --> 00:11:29,360
Speaker 1: there's a shortage. So they had us look at taking

195
00:11:29,400 --> 00:11:32,040
Speaker 1: those crates and loading them onto a break bulk vessel

196
00:11:32,520 --> 00:11:35,480
Speaker 1: out of the port of tan gin Uh in China

197
00:11:35,559 --> 00:11:38,360
Speaker 1: to shift into east coast of the US, and then

198
00:11:38,360 --> 00:11:41,400
Speaker 1: we could truck them from there. They right now, on

199
00:11:41,440 --> 00:11:43,560
Speaker 1: that particular one, they did end up going for it.

200
00:11:43,600 --> 00:11:48,520
Speaker 1: The cost was fairly expensive in the transit time was

201
00:11:48,600 --> 00:11:52,760
Speaker 1: not not fantastic in that particular case. But curious to

202
00:11:52,800 --> 00:11:54,880
Speaker 1: see if they circle back to us after a few

203
00:11:54,920 --> 00:11:58,920
Speaker 1: more weeks of waiting for waiting for a container availability,

204
00:11:59,080 --> 00:12:03,240
Speaker 1: so we shall see. It's um. We're certainly getting phone

205
00:12:03,240 --> 00:12:07,680
Speaker 1: calls from people that we've never gotten phone calls from before. Well,

206
00:12:07,880 --> 00:12:10,680
Speaker 1: so that's a pretty good segue into the Teddy Bear

207
00:12:10,960 --> 00:12:16,120
Speaker 1: project or experiment. But we started talking back in January

208
00:12:16,280 --> 00:12:22,000
Speaker 1: when things were already pretty rough, but it seemed doable.

209
00:12:22,120 --> 00:12:25,440
Speaker 1: The idea of sending a container from Hong Kong to

210
00:12:26,640 --> 00:12:29,120
Speaker 1: I think were we aiming for l A. Yeah, I

211
00:12:29,160 --> 00:12:31,840
Speaker 1: think that's right. Yeah, we're looking for l A long beach.

212
00:12:31,880 --> 00:12:34,200
Speaker 1: We wanted, we chose, We chose the port that we

213
00:12:34,240 --> 00:12:37,480
Speaker 1: knew was going to be potentially the most miserable. Well,

214
00:12:37,679 --> 00:12:39,680
Speaker 1: we wanted that. We wanted that Teddy Bear to have

215
00:12:39,760 --> 00:12:43,760
Speaker 1: some good anchor at anchor time off off the California coast,

216
00:12:44,280 --> 00:12:49,000
Speaker 1: to have the real experience. That's right. So remind me

217
00:12:49,080 --> 00:12:52,240
Speaker 1: what was the cost quote around that time in January

218
00:12:52,280 --> 00:12:56,520
Speaker 1: when we first started talking. The all in cost for

219
00:12:56,960 --> 00:13:01,000
Speaker 1: the local truck include the local local handling in Hong

220
00:13:01,080 --> 00:13:06,520
Speaker 1: Kong and through to a warehouse to crack open the

221
00:13:06,559 --> 00:13:09,160
Speaker 1: container take Teddy Bear out long But you think it

222
00:13:09,160 --> 00:13:13,000
Speaker 1: was around seven thousand dollars at that point for that,

223
00:13:13,040 --> 00:13:16,040
Speaker 1: and we knew that that was starting the skyrocket, right,

224
00:13:16,080 --> 00:13:18,960
Speaker 1: it was heating heading upward, and we dealt with one

225
00:13:19,280 --> 00:13:23,000
Speaker 1: cost increase while we were waiting for the Teddy Better

226
00:13:23,040 --> 00:13:26,920
Speaker 1: Gets it is the space Book. Yeah, I think it

227
00:13:26,960 --> 00:13:30,319
Speaker 1: went up by five hundred Is that right? Yeah, I

228
00:13:30,320 --> 00:13:34,240
Speaker 1: think it went But even at that starting point, that

229
00:13:34,440 --> 00:13:37,480
Speaker 1: freight rate was much too high for what the lane is,

230
00:13:37,800 --> 00:13:41,559
Speaker 1: which is a common lane when you're talking Asia to

231
00:13:42,360 --> 00:13:45,880
Speaker 1: the United States West coast, and it was that starting

232
00:13:45,920 --> 00:13:50,400
Speaker 1: point was already so indicative of a skyrocketing market. It

233
00:13:50,520 --> 00:13:52,920
Speaker 1: was already too high for where it should have been,

234
00:13:53,360 --> 00:13:57,559
Speaker 1: say a year earlier, pre pandemic. And to your point,

235
00:13:57,679 --> 00:14:00,400
Speaker 1: it did just continue to go from there and it moved,

236
00:14:01,000 --> 00:14:03,880
Speaker 1: the rate moved north, and you still couldn't get your

237
00:14:03,920 --> 00:14:06,640
Speaker 1: slot on a ship. We still couldn't get your container moving.

238
00:14:07,280 --> 00:14:12,000
Speaker 1: So explain why you can't just buy your way onto it.

239
00:14:12,000 --> 00:14:14,439
Speaker 1: I mean, you know it's you mentioned the windows, and

240
00:14:14,520 --> 00:14:16,160
Speaker 1: I be you know, this is again a big thing

241
00:14:16,160 --> 00:14:19,640
Speaker 1: that we've been covering obviously homebuilders in the United States.

242
00:14:19,960 --> 00:14:22,480
Speaker 1: Lumber is a problem, like you can't have a home

243
00:14:22,480 --> 00:14:25,120
Speaker 1: without windows, and so the windows are sitting in a

244
00:14:25,160 --> 00:14:28,400
Speaker 1: factory in China and can't get here, Like is this

245
00:14:29,200 --> 00:14:32,760
Speaker 1: is there? Essentially like there is no price too high?

246
00:14:33,120 --> 00:14:36,000
Speaker 1: Um for what? When what people need that those just

247
00:14:36,120 --> 00:14:38,440
Speaker 1: essentially paying anything, and that there's no way to like

248
00:14:38,880 --> 00:14:43,080
Speaker 1: bid yourself onto these ships. Like explain, maybe walk us

249
00:14:43,080 --> 00:14:45,760
Speaker 1: through a little bit the process, because the theory, it

250
00:14:45,800 --> 00:14:47,840
Speaker 1: seems like there should be some price where it's worth

251
00:14:47,840 --> 00:14:50,000
Speaker 1: it to ship a teddy bear. Actually why not, But

252
00:14:50,040 --> 00:14:52,240
Speaker 1: there really should be a some price where it's worth

253
00:14:52,240 --> 00:14:55,080
Speaker 1: it to ship windows at least because windows are crucial

254
00:14:55,120 --> 00:14:57,520
Speaker 1: for the entire home. So can you walk us through

255
00:14:57,520 --> 00:14:59,720
Speaker 1: the math and the calculations a little bit, whether it's

256
00:14:59,720 --> 00:15:02,080
Speaker 1: on the builders side or the factory side of why

257
00:15:02,120 --> 00:15:06,440
Speaker 1: they just can't move the windows. There's certainly becomes a

258
00:15:06,600 --> 00:15:10,320
Speaker 1: point where it just doesn't make economic sense to ship,

259
00:15:11,120 --> 00:15:14,120
Speaker 1: and that's why a lot of the cargo will sit.

260
00:15:15,480 --> 00:15:17,480
Speaker 1: What happens when you end up with so much port

261
00:15:17,520 --> 00:15:20,920
Speaker 1: congestion for loading, which is exactly what we're suffering now,

262
00:15:21,200 --> 00:15:24,600
Speaker 1: is often the highest bidder will get, you know, the

263
00:15:24,640 --> 00:15:27,840
Speaker 1: spot on the vessel when you're looking at it. Obviously,

264
00:15:27,920 --> 00:15:30,840
Speaker 1: everything boils down to a cost per metric ton for

265
00:15:30,880 --> 00:15:35,440
Speaker 1: any trader or any business, and or cost per unit.

266
00:15:36,040 --> 00:15:40,480
Speaker 1: And where's that break even where does it become too

267
00:15:40,520 --> 00:15:44,560
Speaker 1: expensive where it becomes a money losing proposition to pay

268
00:15:44,600 --> 00:15:47,480
Speaker 1: the number you have to pay to guarantee yourself a

269
00:15:47,520 --> 00:15:51,840
Speaker 1: slot on the ship. So it's much like, you know,

270
00:15:51,920 --> 00:15:55,000
Speaker 1: to compare it to the trucking industry in the United States.

271
00:15:55,480 --> 00:15:59,520
Speaker 1: Anyone can quote you a freight rate trucking or a

272
00:15:59,520 --> 00:16:02,720
Speaker 1: container freight and sat and the number looks great on paper,

273
00:16:03,360 --> 00:16:05,680
Speaker 1: but when it boils down to it and they're looking

274
00:16:05,760 --> 00:16:08,280
Speaker 1: at a steamship line is looking to load their ship,

275
00:16:08,400 --> 00:16:10,880
Speaker 1: and they have those ten containers over there willing to

276
00:16:10,920 --> 00:16:15,520
Speaker 1: pay ten thous dollars per container. Your five thousand dollars,

277
00:16:15,520 --> 00:16:19,920
Speaker 1: your seven thousand dollar freight rate container is not going

278
00:16:19,960 --> 00:16:21,720
Speaker 1: to get the slop? Can I just ask a quick

279
00:16:21,760 --> 00:16:26,360
Speaker 1: follow up? Then? What types of goods are crowding out

280
00:16:26,400 --> 00:16:29,120
Speaker 1: the others such that Okay, let's say ten thousand dollars,

281
00:16:29,440 --> 00:16:31,400
Speaker 1: What does it make sense to ship for ten thousand

282
00:16:31,440 --> 00:16:33,760
Speaker 1: dollars that it doesn't make sense? I guess I does

283
00:16:33,800 --> 00:16:36,080
Speaker 1: that question make sense? What are these high value goods

284
00:16:36,120 --> 00:16:38,520
Speaker 1: that are dominating the space on the ships? Right? And

285
00:16:38,560 --> 00:16:41,600
Speaker 1: it's not it's not so much high value as much

286
00:16:41,640 --> 00:16:44,520
Speaker 1: as you need high margin. You have to be able

287
00:16:44,560 --> 00:16:48,320
Speaker 1: to absorb that from the industrial products sector that we

288
00:16:48,440 --> 00:16:53,520
Speaker 1: sit in those margins are typically too small, so our

289
00:16:53,600 --> 00:16:56,520
Speaker 1: typical client base is not going to be who gets

290
00:16:56,560 --> 00:17:00,320
Speaker 1: the space on the ship. And we actually had a

291
00:17:00,400 --> 00:17:04,439
Speaker 1: client trying to ship a specialized rebar out of China.

292
00:17:04,640 --> 00:17:07,280
Speaker 1: It was test shipments coming into the US. We needed

293
00:17:07,560 --> 00:17:09,800
Speaker 1: and it was maybe a hundred tons or two hundred tons.

294
00:17:09,840 --> 00:17:15,040
Speaker 1: It was nothing tremendous, five to ten containers, and we

295
00:17:15,080 --> 00:17:17,160
Speaker 1: could not get the space on a ship for that

296
00:17:17,520 --> 00:17:20,159
Speaker 1: because they weren't willing to pay up. So once you

297
00:17:20,240 --> 00:17:26,520
Speaker 1: get to some of the higher sales point items or

298
00:17:26,760 --> 00:17:29,840
Speaker 1: higher volume items that you can, you know, get a

299
00:17:29,840 --> 00:17:33,240
Speaker 1: lot into the container, your margins are going up. I

300
00:17:33,280 --> 00:17:35,679
Speaker 1: don't know what that answer is specifically, but I'm going

301
00:17:35,760 --> 00:17:40,560
Speaker 1: to say it's probably more merchandise freight because that's where

302
00:17:40,560 --> 00:17:45,840
Speaker 1: you where you can push push your costs into the

303
00:17:45,920 --> 00:17:49,440
Speaker 1: price that's on the shelf. So when you're looking you're

304
00:17:49,440 --> 00:17:51,679
Speaker 1: looking at something that's produced in Asia and it's not

305
00:17:51,760 --> 00:17:56,119
Speaker 1: produced here or the production cost here to make I

306
00:17:56,160 --> 00:17:57,800
Speaker 1: don't know a container of Teddy Bears, I don't know

307
00:17:57,840 --> 00:18:01,120
Speaker 1: a container of of clothing would ever that product is

308
00:18:01,800 --> 00:18:04,920
Speaker 1: it's still so cheap to produce it in Asia ship

309
00:18:04,960 --> 00:18:08,840
Speaker 1: it here barely cost increase on the freight and then

310
00:18:08,840 --> 00:18:12,200
Speaker 1: get it to market. But for us, and when we're

311
00:18:12,240 --> 00:18:16,960
Speaker 1: working with traders that buy and sell point are are

312
00:18:17,080 --> 00:18:22,040
Speaker 1: already established when they're looking to load out of Asia,

313
00:18:22,240 --> 00:18:24,760
Speaker 1: and often the trade just doesn't have enough room to

314
00:18:24,880 --> 00:18:28,399
Speaker 1: bear the increased freight cost and still be profitable. And

315
00:18:29,400 --> 00:18:32,720
Speaker 1: often the industrial commodities that we're dealing with are produced

316
00:18:32,720 --> 00:18:37,600
Speaker 1: here copper, aluminum, steel, right, So there is a market,

317
00:18:37,680 --> 00:18:41,199
Speaker 1: domestic market to be able to make the deal at

318
00:18:41,240 --> 00:18:44,240
Speaker 1: that shift if they just can't, if imports just can't work.

319
00:18:44,440 --> 00:18:46,280
Speaker 1: And I think something else to add to add to

320
00:18:46,359 --> 00:18:52,280
Speaker 1: it also is take the window example right where we

321
00:18:52,280 --> 00:18:56,199
Speaker 1: were looking to shift that to break Ball. In that

322
00:18:56,240 --> 00:19:02,200
Speaker 1: particular case, the ship operator offer put put a number

323
00:19:02,240 --> 00:19:06,680
Speaker 1: out that was fairly really high for that that particular move.

324
00:19:06,840 --> 00:19:09,760
Speaker 1: But they're just like any ship operator and the container

325
00:19:09,800 --> 00:19:13,359
Speaker 1: ship operators are doing this also, they're going to allocate

326
00:19:13,400 --> 00:19:18,280
Speaker 1: space to their regular contract clients. So that space is

327
00:19:18,320 --> 00:19:21,320
Speaker 1: going to go to the to the producers that are

328
00:19:21,359 --> 00:19:24,399
Speaker 1: shipping to Walbart and a target right on a regular

329
00:19:24,800 --> 00:19:29,119
Speaker 1: regular basis. So just it's human nature, right essentially, in

330
00:19:29,520 --> 00:19:33,000
Speaker 1: business nature in that respect, you take care of your

331
00:19:33,600 --> 00:19:37,320
Speaker 1: of your largest clients at that point to give them

332
00:19:37,480 --> 00:19:40,120
Speaker 1: the space that they need, and the others will fall

333
00:19:40,119 --> 00:19:44,159
Speaker 1: by the wayside. So my understanding to that point is

334
00:19:44,200 --> 00:19:46,800
Speaker 1: there were really three things that were against us on

335
00:19:46,840 --> 00:19:51,240
Speaker 1: the Teddy Bear project. Number one was Bloomberg, you know,

336
00:19:51,280 --> 00:19:55,920
Speaker 1: contrary to popular belief, was cost sensitive, and every time

337
00:19:55,920 --> 00:19:57,720
Speaker 1: we had a price hike, I had to go back

338
00:19:58,160 --> 00:20:01,280
Speaker 1: to the editor who approves our expenses and explained that,

339
00:20:01,359 --> 00:20:04,520
Speaker 1: you know, freight costs were just out of control and

340
00:20:04,560 --> 00:20:07,480
Speaker 1: that this thing that should cost a few thousand dollars

341
00:20:07,560 --> 00:20:11,720
Speaker 1: was now closer to seven thousand. And then secondly, we

342
00:20:11,720 --> 00:20:15,240
Speaker 1: weren't doing this as a massive client, so we weren't Walmart,

343
00:20:15,520 --> 00:20:18,679
Speaker 1: we weren't Ikea or someone like that. We were just

344
00:20:18,800 --> 00:20:22,919
Speaker 1: a single container, not even a full size container, but

345
00:20:23,359 --> 00:20:26,160
Speaker 1: um half size I think twenty ft, which was also

346
00:20:26,200 --> 00:20:29,520
Speaker 1: a problem because it's harder to get those onto a ship.

347
00:20:29,680 --> 00:20:32,480
Speaker 1: So I guess my question is like, were we sort

348
00:20:32,520 --> 00:20:37,520
Speaker 1: of doomed from the start in the current environment. Yeah,

349
00:20:37,560 --> 00:20:39,520
Speaker 1: I wouldn't say we were doomed from the start, but

350
00:20:39,680 --> 00:20:44,720
Speaker 1: it became apparent that the doom was coming right after

351
00:20:44,760 --> 00:20:48,280
Speaker 1: waiting for the for the time that we that we did. Uh,

352
00:20:48,400 --> 00:20:50,199
Speaker 1: for sure, there was going to be there was going

353
00:20:50,280 --> 00:20:55,120
Speaker 1: to be delays. But but the delays were building and

354
00:20:55,400 --> 00:20:59,720
Speaker 1: compounding right as we got further to the point where today,

355
00:21:00,240 --> 00:21:03,720
Speaker 1: if we tried to do that today, uh we would

356
00:21:03,840 --> 00:21:06,080
Speaker 1: we would say forget it, let's let's not even touch it.

357
00:21:06,119 --> 00:21:09,560
Speaker 1: You see what's happening right right over the border from

358
00:21:09,600 --> 00:21:12,760
Speaker 1: Hong Kong and Shenzen, at the part of Yen Tan,

359
00:21:13,720 --> 00:21:19,200
Speaker 1: they have now a COVID outbreak that's causing some delays,

360
00:21:19,320 --> 00:21:24,960
Speaker 1: massive congestion ship owners, the container container ship operators are

361
00:21:25,160 --> 00:21:29,840
Speaker 1: now avoiding Yan Tan and and the and the congestion

362
00:21:29,920 --> 00:21:32,240
Speaker 1: is starting to roll over into other local ports in

363
00:21:32,280 --> 00:21:36,359
Speaker 1: the Pearl River delta. Uh So, if we tried to

364
00:21:36,960 --> 00:21:39,920
Speaker 1: make that happen right now, I think we might even

365
00:21:39,920 --> 00:21:43,480
Speaker 1: see container lines saying, you know, forget it, come let's

366
00:21:43,480 --> 00:21:47,520
Speaker 1: look at it next year. Right at this point, so so, yeah,

367
00:21:47,840 --> 00:21:51,240
Speaker 1: it was getting worse by the day, and uh and

368
00:21:51,280 --> 00:21:56,720
Speaker 1: looking looking today, it's exponentially more of a problem right

369
00:21:56,720 --> 00:22:01,120
Speaker 1: now based on what's happening locally there. So yeah, right

370
00:22:01,160 --> 00:22:05,399
Speaker 1: next to Hong Kong is a complete and utter transportation

371
00:22:05,480 --> 00:22:08,960
Speaker 1: congestion disaster at the moment. You know, but when we

372
00:22:09,000 --> 00:22:12,120
Speaker 1: started talking about this back in January, and maybe it's

373
00:22:12,280 --> 00:22:16,879
Speaker 1: really um quite parallel to this COVID world that we

374
00:22:16,960 --> 00:22:20,359
Speaker 1: lived in the in the last year your plus, where

375
00:22:21,160 --> 00:22:25,320
Speaker 1: you know, you you see the difficulty for many months ahead,

376
00:22:25,359 --> 00:22:27,240
Speaker 1: and everyone's talking about it, and we know it be

377
00:22:27,280 --> 00:22:30,760
Speaker 1: at COVID, be at shipping, but you know, we're always

378
00:22:30,840 --> 00:22:34,040
Speaker 1: kind of hopeful, and the talking points have been on everything,

379
00:22:34,359 --> 00:22:37,320
Speaker 1: but you know, maybe in six months out it's better

380
00:22:37,680 --> 00:22:39,920
Speaker 1: or whatever that time frame is. So when we were

381
00:22:39,920 --> 00:22:43,879
Speaker 1: talking in January, we knew it was bad, and we

382
00:22:43,960 --> 00:22:47,359
Speaker 1: knew it wasn't getting great anytime soon. But the projection

383
00:22:47,440 --> 00:22:52,080
Speaker 1: at that point for when possibly recovery would start coming

384
00:22:52,520 --> 00:22:56,080
Speaker 1: and normalization to these shipping lanes would resume in the

385
00:22:56,119 --> 00:23:02,240
Speaker 1: containerized market was a much rosier picture then what reality

386
00:23:02,280 --> 00:23:05,919
Speaker 1: has been. So too for Anton to be correct in saying,

387
00:23:06,440 --> 00:23:10,280
Speaker 1: we wouldn't even think about this today, because since January

388
00:23:10,480 --> 00:23:14,359
Speaker 1: it's done nothing but stay horrible, this this prospect of

389
00:23:14,400 --> 00:23:18,000
Speaker 1: trying to ship in containers. But back in January, we

390
00:23:18,440 --> 00:23:23,520
Speaker 1: the conversation was talking about normalcy or you know, moving

391
00:23:23,560 --> 00:23:27,040
Speaker 1: towards normalcy. By this point in the year, it just

392
00:23:27,080 --> 00:23:45,320
Speaker 1: hasn't happened. It's not getting better yet. So this is

393
00:23:45,359 --> 00:23:49,119
Speaker 1: really just to be clear, A it's its worst today.

394
00:23:49,600 --> 00:23:51,840
Speaker 1: We're recording this June nine that will be out pretty soon.

395
00:23:52,440 --> 00:23:55,960
Speaker 1: It's its worst today as it's uh been all year.

396
00:23:56,480 --> 00:23:58,600
Speaker 1: There's no sign that it's getting better, and still the

397
00:23:58,640 --> 00:24:01,480
Speaker 1: trajectory is going the wrong way in your view, why

398
00:24:01,600 --> 00:24:03,600
Speaker 1: is that? Why has it? Why have we not seen

399
00:24:03,720 --> 00:24:06,880
Speaker 1: any normalization? And what is what is the current outlook

400
00:24:06,880 --> 00:24:09,919
Speaker 1: look look like right now? I would say that you know,

401
00:24:09,960 --> 00:24:14,879
Speaker 1: what we're still experience and experiencing rather is that the

402
00:24:15,000 --> 00:24:19,000
Speaker 1: volumes just haven't slowed. So there's definitely a shortage of

403
00:24:19,040 --> 00:24:22,560
Speaker 1: space on ships. There's just you know, so many ships

404
00:24:22,560 --> 00:24:25,960
Speaker 1: and so many slots to fill. And you can see

405
00:24:26,040 --> 00:24:30,440
Speaker 1: articles now that the orders into shipyards for new vessels

406
00:24:30,760 --> 00:24:34,720
Speaker 1: is absolutely increased and it is a reaction to what

407
00:24:34,880 --> 00:24:37,600
Speaker 1: is happening now ship owner. Ship owners are seeing the

408
00:24:37,680 --> 00:24:41,159
Speaker 1: opportunities to build ships. One statistic on Allenburgo just to

409
00:24:41,240 --> 00:24:44,680
Speaker 1: jump over secon as just reading the new container ship

410
00:24:44,880 --> 00:24:49,800
Speaker 1: orders into shipyards for the first five months of one

411
00:24:51,040 --> 00:24:55,640
Speaker 1: are the amount is double the entire numbers of new

412
00:24:55,680 --> 00:25:00,399
Speaker 1: ship orders for container ships of all twenty money so

413
00:25:00,520 --> 00:25:03,240
Speaker 1: just the first five months. So I kind of goes

414
00:25:03,240 --> 00:25:06,000
Speaker 1: to the housing market that I mentioned Joe right does

415
00:25:06,520 --> 00:25:12,120
Speaker 1: the inventory right issue. So sorry, but that cure is reactionary,

416
00:25:12,400 --> 00:25:14,760
Speaker 1: but it's not a it's a long term goal to

417
00:25:14,920 --> 00:25:17,360
Speaker 1: you know, this is a big book of ship building

418
00:25:17,440 --> 00:25:20,600
Speaker 1: that is now on the table. It doesn't resolve it today.

419
00:25:21,240 --> 00:25:24,760
Speaker 1: And what we can't resolve is that we are still

420
00:25:24,880 --> 00:25:30,119
Speaker 1: ordering a ton of online goods from you know that

421
00:25:30,200 --> 00:25:34,200
Speaker 1: are all sourcing out of Asia. There is this residual

422
00:25:34,520 --> 00:25:38,760
Speaker 1: congestion that is very, very difficult to overcome. And then

423
00:25:38,800 --> 00:25:42,040
Speaker 1: a lot of the congestion is also due to the

424
00:25:42,080 --> 00:25:44,320
Speaker 1: massive size of these vessels that are trying to get

425
00:25:44,320 --> 00:25:48,440
Speaker 1: into these ports, and there just simply isn't enough physical

426
00:25:48,480 --> 00:25:53,800
Speaker 1: space at these ports to accommodate the volume of containers

427
00:25:53,920 --> 00:25:55,879
Speaker 1: that are going to come off a ship and what

428
00:25:56,080 --> 00:25:58,359
Speaker 1: is potentially going to try and reload to a ship

429
00:25:58,400 --> 00:26:02,639
Speaker 1: at any point. So that also continues to keep it

430
00:26:02,720 --> 00:26:06,199
Speaker 1: a slow a slow clean up at the ports to

431
00:26:06,280 --> 00:26:09,880
Speaker 1: try and get all this material through because they got

432
00:26:09,880 --> 00:26:12,240
Speaker 1: to push out the loaded containers to make space for

433
00:26:12,280 --> 00:26:16,080
Speaker 1: the next vessel to offload, but the railroad can't take

434
00:26:16,119 --> 00:26:19,320
Speaker 1: them out fast enough and until they're out, we can't

435
00:26:19,359 --> 00:26:22,359
Speaker 1: get the next ship in. So it's really quite the

436
00:26:22,400 --> 00:26:25,000
Speaker 1: domino effect, which means the ships are not getting back

437
00:26:25,040 --> 00:26:28,840
Speaker 1: to Asia to pick up the next round of loaded cargo.

438
00:26:29,720 --> 00:26:34,199
Speaker 1: So what's the resolve, what's the timeline? I don't know

439
00:26:34,240 --> 00:26:36,919
Speaker 1: what that is. I don't even know what people are

440
00:26:37,000 --> 00:26:41,680
Speaker 1: realistically expecting at this point. We are seeing. Um, there

441
00:26:41,720 --> 00:26:44,200
Speaker 1: was actually an email that came through our inbox yesterday

442
00:26:44,280 --> 00:26:46,840
Speaker 1: to myself and Anton from someone we know that we

443
00:26:46,920 --> 00:26:51,840
Speaker 1: know we do break ball work with them, but they

444
00:26:51,840 --> 00:26:54,840
Speaker 1: have one of their colleagues trying to put together freight

445
00:26:55,119 --> 00:27:00,240
Speaker 1: for a six month term containerized running through the end

446
00:27:00,280 --> 00:27:03,119
Speaker 1: of the year, and asking us for help if we

447
00:27:03,160 --> 00:27:05,680
Speaker 1: can direct them to anyone who will put a contract

448
00:27:05,680 --> 00:27:09,200
Speaker 1: in place for them, which is never going to happen.

449
00:27:09,600 --> 00:27:12,760
Speaker 1: As you know, Tracy, we couldn't. We couldn't maintain a

450
00:27:12,800 --> 00:27:15,720
Speaker 1: price for your one container of a Teddy Bear. The

451
00:27:15,800 --> 00:27:19,160
Speaker 1: prices are skyrocketing. What's what container Line today is going

452
00:27:19,200 --> 00:27:22,320
Speaker 1: to say? Yes, I will take your brand new contract

453
00:27:22,480 --> 00:27:25,600
Speaker 1: for six months to ship at a guaranteed rate in

454
00:27:25,640 --> 00:27:29,879
Speaker 1: this total mess of a market. Guarantee you space, guarantee

455
00:27:29,920 --> 00:27:33,800
Speaker 1: you a rate the whole the market could just continues

456
00:27:33,920 --> 00:27:36,920
Speaker 1: to be to be quite a mess. Should we Should

457
00:27:36,920 --> 00:27:40,560
Speaker 1: we do a whole another episode guys on infrastructure too,

458
00:27:40,600 --> 00:27:42,800
Speaker 1: because you know, and Margot touched on it, the size

459
00:27:42,800 --> 00:27:44,920
Speaker 1: of these container ships. When when we first got out

460
00:27:44,920 --> 00:27:47,080
Speaker 1: of school and I went to work for used to

461
00:27:47,080 --> 00:27:50,320
Speaker 1: be Neptune Orient Lines now it's American President lines uh

462
00:27:50,440 --> 00:27:54,200
Speaker 1: I was working in Port Newark working ships. That word

463
00:27:54,200 --> 00:27:58,719
Speaker 1: five six thousand t EU container ships. Those are Tu

464
00:27:59,119 --> 00:28:01,880
Speaker 1: means twenty ft equivalent units, So that means that that

465
00:28:01,960 --> 00:28:06,320
Speaker 1: ship could hold five or six thousand twenty ft containers

466
00:28:06,760 --> 00:28:09,320
Speaker 1: right now, and then that was a like kind of

467
00:28:09,359 --> 00:28:10,919
Speaker 1: all the ship on the on a little bit of

468
00:28:10,960 --> 00:28:14,399
Speaker 1: a larger size of medium size. At that point that

469
00:28:14,600 --> 00:28:17,040
Speaker 1: ship they ever given that got stuck in the US

470
00:28:17,080 --> 00:28:21,960
Speaker 1: Canal was what twenty thousand ties I mean massive. The

471
00:28:22,520 --> 00:28:27,199
Speaker 1: So imagine that ship calling in a port that hasn't

472
00:28:27,200 --> 00:28:31,200
Speaker 1: been sufficiently upgraded to deal with not not only the

473
00:28:31,520 --> 00:28:35,840
Speaker 1: actual ship operations right, but but the as Margot's said,

474
00:28:35,880 --> 00:28:39,720
Speaker 1: also to just the flow of the containers off the

475
00:28:39,760 --> 00:28:43,200
Speaker 1: ship out the door, out off the dock, conto trucks

476
00:28:43,240 --> 00:28:46,640
Speaker 1: and the flow back back flow of empty containers coming

477
00:28:46,640 --> 00:28:48,960
Speaker 1: back to those ports. Some ports in the in the

478
00:28:49,040 --> 00:28:53,240
Speaker 1: United States have have significantly upgraded in some areas they

479
00:28:53,280 --> 00:28:57,360
Speaker 1: made large improvements to deal with these very large container ships,

480
00:28:57,400 --> 00:29:01,280
Speaker 1: but nowhere nearly enough. So, uh, you know, it certainly

481
00:29:01,400 --> 00:29:07,000
Speaker 1: leads into the infrastructure discussion. Right. So we're seeing the

482
00:29:07,000 --> 00:29:12,120
Speaker 1: I forty bridge right in Memphis fell falling apart, and

483
00:29:12,400 --> 00:29:15,040
Speaker 1: it stopped up the barge traffic on the Mississippi River

484
00:29:15,760 --> 00:29:18,600
Speaker 1: for days because of the chunks of bridge falling and

485
00:29:18,640 --> 00:29:22,280
Speaker 1: truck mentally that the trucks couldn't can't transit over it.

486
00:29:22,360 --> 00:29:26,280
Speaker 1: So we're seeing, we're seeing everything and note the no

487
00:29:26,560 --> 00:29:29,640
Speaker 1: chunks fell off the bridge. You're right, it was a chunk.

488
00:29:29,720 --> 00:29:31,920
Speaker 1: It was a crack in the steel said it was

489
00:29:31,960 --> 00:29:34,480
Speaker 1: a crack. It was a crack you could see daylight through.

490
00:29:34,480 --> 00:29:39,440
Speaker 1: It was kind of massive right into the river. Either way,

491
00:29:39,520 --> 00:29:41,680
Speaker 1: I don't want to be on a tugboat going under it.

492
00:29:41,720 --> 00:29:46,360
Speaker 1: Put it that way, Joe. I was just thinking, like,

493
00:29:46,440 --> 00:29:51,520
Speaker 1: maybe the solution um to all our problems is infrastructure spending.

494
00:29:51,640 --> 00:29:54,440
Speaker 1: Right Like, it's not. It might not actually be inflationary.

495
00:29:54,520 --> 00:29:57,520
Speaker 1: It might solve the inflation problem if we could upgrade

496
00:29:57,560 --> 00:30:01,120
Speaker 1: the ports that's the argument, right, And even instream economists

497
00:30:01,120 --> 00:30:03,920
Speaker 1: make this argument that like, you know, you don't have

498
00:30:03,960 --> 00:30:06,440
Speaker 1: to you know, it pays for itself if it reduces

499
00:30:06,480 --> 00:30:10,240
Speaker 1: the cost of everything by making by making everything cheaper,

500
00:30:10,320 --> 00:30:12,880
Speaker 1: by making everything more available. So I have at least

501
00:30:12,920 --> 00:30:16,080
Speaker 1: like a dozen questions, um that I want to ask.

502
00:30:16,200 --> 00:30:19,080
Speaker 1: I'm trying to focus it. So I guess, like my

503
00:30:19,120 --> 00:30:21,840
Speaker 1: main question is when you're talking to your clients now,

504
00:30:22,120 --> 00:30:25,160
Speaker 1: what sort of preparations are they making for the future

505
00:30:25,440 --> 00:30:28,640
Speaker 1: and how creative are they being when it comes to

506
00:30:29,320 --> 00:30:32,800
Speaker 1: actually transporting stuff, Because for instance, we talked about maybe

507
00:30:32,840 --> 00:30:35,800
Speaker 1: trying to ship the Teddy Bear out of China. Um.

508
00:30:35,840 --> 00:30:38,800
Speaker 1: Eventually we decided against that because Bloomberg doesn't actually have

509
00:30:38,840 --> 00:30:41,000
Speaker 1: an export license and I didn't want to get my

510
00:30:41,280 --> 00:30:44,040
Speaker 1: entire company in trouble for the purposes of, you know,

511
00:30:44,080 --> 00:30:47,480
Speaker 1: a stunt journalism article. But is that the kind of

512
00:30:47,480 --> 00:30:49,640
Speaker 1: stuff you're seeing now? Like are people just going to

513
00:30:49,800 --> 00:30:53,800
Speaker 1: lengths or two roots that they wouldn't normally do? Yeah,

514
00:30:54,320 --> 00:30:58,120
Speaker 1: we're seeing we're seeing all all of the above. Right,

515
00:30:58,560 --> 00:31:03,800
Speaker 1: Some clients that that that are are adjusting well and

516
00:31:04,080 --> 00:31:08,480
Speaker 1: are understand what's going on and working on a practical

517
00:31:08,480 --> 00:31:12,320
Speaker 1: ways to to deal with it, to to set expectations

518
00:31:12,320 --> 00:31:16,520
Speaker 1: properly with their with their customers. And then there's others

519
00:31:16,600 --> 00:31:18,960
Speaker 1: right that are like the deer in the headlights, right

520
00:31:19,400 --> 00:31:23,720
Speaker 1: that that what do you mean, why can't this happen? Uh?

521
00:31:24,120 --> 00:31:27,120
Speaker 1: This has always been this. Uh, this has always worked.

522
00:31:27,120 --> 00:31:30,760
Speaker 1: Why not now? And so the education process of what's

523
00:31:30,760 --> 00:31:33,920
Speaker 1: going on where I'm spending a lot of time sending

524
00:31:34,160 --> 00:31:37,800
Speaker 1: articles out to clients to show them what's what's happening

525
00:31:37,840 --> 00:31:41,960
Speaker 1: in the market and explaining what others are, what others

526
00:31:41,960 --> 00:31:45,280
Speaker 1: are seeing, and how it's not just a unique situation

527
00:31:45,480 --> 00:31:49,600
Speaker 1: to not not a unique issue with their particular situation.

528
00:31:50,400 --> 00:31:54,120
Speaker 1: So speaking of infrastructure and the degradation of the infrastructure

529
00:31:54,200 --> 00:31:56,920
Speaker 1: or the fact that the infrastructure hasn't come up and

530
00:31:56,960 --> 00:31:59,200
Speaker 1: Anton you kind of handed at it briefly, but you

531
00:31:59,240 --> 00:32:02,200
Speaker 1: mentioned how has ing And one of the biggest themes

532
00:32:02,240 --> 00:32:04,720
Speaker 1: that we talked about on the on the show was

533
00:32:04,960 --> 00:32:13,720
Speaker 1: essentially been the supply side degradation two capacity, industrial, um, residential, etcetera.

534
00:32:14,200 --> 00:32:17,360
Speaker 1: During the ten years basically between the eleven years between

535
00:32:17,400 --> 00:32:19,680
Speaker 1: the end of the Great Financial Crisis and the start

536
00:32:19,720 --> 00:32:22,360
Speaker 1: of COVID and how much we're paying for that now,

537
00:32:22,400 --> 00:32:25,160
Speaker 1: and so I'm curious like sort of like your perspective

538
00:32:25,200 --> 00:32:28,880
Speaker 1: on that from the from the transport perspective. I think

539
00:32:28,880 --> 00:32:30,520
Speaker 1: we've talked about it a little bit, but how much

540
00:32:30,760 --> 00:32:34,160
Speaker 1: did we essentially pay the price for a very big

541
00:32:34,200 --> 00:32:37,200
Speaker 1: bear market in global trade and the way that that

542
00:32:37,280 --> 00:32:41,200
Speaker 1: discourages fresh investment? Yeah, for sure, it's you know, in

543
00:32:41,320 --> 00:32:43,920
Speaker 1: doing this for Margaret, I've been doing this for thirty

544
00:32:44,000 --> 00:32:47,560
Speaker 1: years now, right, and uh so we we we've seen

545
00:32:47,800 --> 00:32:52,040
Speaker 1: a we have a good historical overview of how things

546
00:32:52,040 --> 00:32:54,640
Speaker 1: have been flowing. Let's take take the river system, right,

547
00:32:54,920 --> 00:32:56,840
Speaker 1: and and this is something that allot of the listeners

548
00:32:56,880 --> 00:32:59,600
Speaker 1: may not be too familiar with because it's not in

549
00:32:59,760 --> 00:33:03,840
Speaker 1: day today in the day to day news, right, but

550
00:33:03,840 --> 00:33:08,560
Speaker 1: but enormous amounts of commodities and cargoes move up and

551
00:33:08,600 --> 00:33:12,440
Speaker 1: down the river system the Mississippi River. Ships coming into

552
00:33:12,440 --> 00:33:19,520
Speaker 1: New Orleans loading out export greens and other commodities from

553
00:33:19,560 --> 00:33:23,560
Speaker 1: barges to direct to ship for export, and then inbound

554
00:33:23,640 --> 00:33:27,200
Speaker 1: ships going into into the New Orleans area the Mississippi

555
00:33:27,280 --> 00:33:31,840
Speaker 1: River and transferring their cargoes direct from ships into barges

556
00:33:32,040 --> 00:33:34,960
Speaker 1: to move up the river, going up the Mississippi River

557
00:33:35,080 --> 00:33:38,640
Speaker 1: all the way as far as St. Paul, Minnesota, as

558
00:33:38,680 --> 00:33:42,280
Speaker 1: far as Chicago on the Illinois River, and then moving

559
00:33:42,320 --> 00:33:45,440
Speaker 1: up the Ohio River as far as Pittsburgh. You can

560
00:33:45,440 --> 00:33:48,960
Speaker 1: get to Tulsa, Oklahoma via via the river system, going

561
00:33:49,000 --> 00:33:51,800
Speaker 1: up the Missippi River and then making a left onto

562
00:33:51,800 --> 00:33:55,160
Speaker 1: the Arkansas River essentially right. So so it's just this

563
00:33:55,360 --> 00:34:00,400
Speaker 1: enormous marine highway right that that runs the run through

564
00:34:00,840 --> 00:34:04,440
Speaker 1: the heart of the United States. Now we have seen

565
00:34:04,840 --> 00:34:09,880
Speaker 1: just growing list of problems with the locks and dams

566
00:34:10,360 --> 00:34:13,799
Speaker 1: throughout the river system. The U. S. Army Corps of

567
00:34:13,800 --> 00:34:17,799
Speaker 1: Engineers maintains those, they're reliant on the federal budget to

568
00:34:17,880 --> 00:34:23,160
Speaker 1: pay for those upgrades. And but so we're seeing now

569
00:34:23,880 --> 00:34:28,800
Speaker 1: some some infrastructure upgrades happening, locks of dams being shut

570
00:34:28,880 --> 00:34:33,000
Speaker 1: down in order to to affect those prepare repair work

571
00:34:33,040 --> 00:34:36,319
Speaker 1: that's needed because there there are some real crumbling situations

572
00:34:36,320 --> 00:34:39,320
Speaker 1: in these locks and dams. So the tugs and barges

573
00:34:39,719 --> 00:34:42,840
Speaker 1: that are moving moving throughout the river system have reliant

574
00:34:42,960 --> 00:34:47,279
Speaker 1: on moving through this system of locks and dams in

575
00:34:47,360 --> 00:34:52,000
Speaker 1: order to transit. So the this is an infrastructure area

576
00:34:52,040 --> 00:34:54,880
Speaker 1: that has just been so neglected over the years. But

577
00:34:54,960 --> 00:34:58,080
Speaker 1: it's so so much a part of vital commerce for

578
00:34:58,120 --> 00:35:02,120
Speaker 1: the United States. So iron ore to go into making

579
00:35:02,200 --> 00:35:07,560
Speaker 1: steel grain, all the agricultural commodities that move move on

580
00:35:07,640 --> 00:35:11,560
Speaker 1: barges and moving it's such a cost effective way. The

581
00:35:11,760 --> 00:35:16,240
Speaker 1: cost to move move goods on barges compared to rail

582
00:35:16,320 --> 00:35:22,080
Speaker 1: freight or truck freight is just exponentially lower because you

583
00:35:22,160 --> 00:35:25,520
Speaker 1: can take one tug boat and put with that one

584
00:35:25,560 --> 00:35:30,520
Speaker 1: tug boat it can push a unit of thirty barges

585
00:35:30,840 --> 00:35:34,600
Speaker 1: at a time along the main line rivers. So going

586
00:35:34,719 --> 00:35:39,400
Speaker 1: from New Orleans up to Cairo, Illinois, for example, which

587
00:35:39,440 --> 00:35:42,560
Speaker 1: is a main transit point, you'll have a line tug boat,

588
00:35:42,560 --> 00:35:45,279
Speaker 1: a large tug boat pushing thirty barges in each of

589
00:35:45,320 --> 00:35:52,040
Speaker 1: those barges carrying let's say about sixte tons in those

590
00:35:52,120 --> 00:35:56,160
Speaker 1: in each barge. So one tug boat pushing thirty barges

591
00:35:56,560 --> 00:36:00,040
Speaker 1: at six tons each on average. You can imagine the

592
00:36:00,120 --> 00:36:04,560
Speaker 1: efficiency in that the fuel efficiency right compared to an

593
00:36:04,640 --> 00:36:07,719
Speaker 1: over over the road truck or even compared to rail throat.

594
00:36:07,800 --> 00:36:11,719
Speaker 1: So that cost is low. So this infrastructure on the

595
00:36:11,800 --> 00:36:16,000
Speaker 1: river system, the neglect that that's been there, we're now

596
00:36:16,080 --> 00:36:18,680
Speaker 1: starting to pay the price for that we're seeing more

597
00:36:18,719 --> 00:36:21,360
Speaker 1: and more delays. The barge lines that operate on the

598
00:36:21,440 --> 00:36:25,680
Speaker 1: river system are passing along those costs to the shippers.

599
00:36:26,120 --> 00:36:29,680
Speaker 1: Did the cargo interests like never before? Right? And Bargo

600
00:36:30,160 --> 00:36:33,280
Speaker 1: some examples. Right. Margo's dealing with the barge land voices

601
00:36:33,360 --> 00:36:37,160
Speaker 1: day to day and seeing what our clients are seeing. Well,

602
00:36:37,200 --> 00:36:40,879
Speaker 1: it is a it is an ongoing problem and there

603
00:36:41,080 --> 00:36:43,680
Speaker 1: is you know, there's a couple of different cost points

604
00:36:43,719 --> 00:36:46,920
Speaker 1: that it hits, and it is the cost and curd

605
00:36:46,960 --> 00:36:50,439
Speaker 1: for the weight time that is born or passed onto

606
00:36:50,480 --> 00:36:53,200
Speaker 1: the cargo owner. But there's also a delay in getting

607
00:36:53,200 --> 00:36:55,880
Speaker 1: to market. So you know, we had some we have

608
00:36:55,960 --> 00:36:59,279
Speaker 1: barges that are trying to get up the Cumberland right

609
00:36:59,320 --> 00:37:04,120
Speaker 1: now to get into Nashville, and those barges are suffering

610
00:37:04,280 --> 00:37:09,839
Speaker 1: because of locks that are down with intermittent openings that

611
00:37:09,880 --> 00:37:11,520
Speaker 1: you really have to hustle to try and get your

612
00:37:11,560 --> 00:37:14,360
Speaker 1: barge scheduled on one of those openings. It's kind of

613
00:37:14,400 --> 00:37:17,640
Speaker 1: like trying to get a container onto a ship in Asia. Um,

614
00:37:17,640 --> 00:37:20,799
Speaker 1: it's pulling some strings and talking to some friends at

615
00:37:20,800 --> 00:37:22,560
Speaker 1: the barge lines to say, can you get get a

616
00:37:22,600 --> 00:37:25,840
Speaker 1: couple of my clients barges through but there's limited space.

617
00:37:26,080 --> 00:37:29,279
Speaker 1: So now we have a cost of carry borne by

618
00:37:29,800 --> 00:37:34,080
Speaker 1: or not born by, but uh suffered for the cargo owner,

619
00:37:34,200 --> 00:37:37,120
Speaker 1: so they're paying additional fees. Then there they have cost

620
00:37:37,160 --> 00:37:40,279
Speaker 1: of carry and they have a commercial tender that they're

621
00:37:40,320 --> 00:37:44,279
Speaker 1: trying to not default on. It's it's very stressful to

622
00:37:44,440 --> 00:37:47,239
Speaker 1: the market. It's not just that river. And at any

623
00:37:47,280 --> 00:37:50,360
Speaker 1: point you can look at the barge lines weekly updates

624
00:37:50,360 --> 00:37:52,879
Speaker 1: as to what is up and coming. And while I'm

625
00:37:52,880 --> 00:37:57,600
Speaker 1: dealing with the Cumberland currently for one client, I'm also

626
00:37:58,160 --> 00:38:02,160
Speaker 1: yesterday I was sending emails to other clients for cargo

627
00:38:02,239 --> 00:38:05,600
Speaker 1: that they have scheduled up the Arkansas River this summer,

628
00:38:06,120 --> 00:38:08,879
Speaker 1: which will also be closed for a period of time

629
00:38:09,239 --> 00:38:14,359
Speaker 1: August into September. It is it is um just a

630
00:38:14,440 --> 00:38:16,960
Speaker 1: moving a moving target at this point on where the

631
00:38:17,000 --> 00:38:20,919
Speaker 1: next closure will be. Last year, it was Chicago for

632
00:38:20,960 --> 00:38:22,880
Speaker 1: a couple of months that you couldn't get in and

633
00:38:22,880 --> 00:38:25,960
Speaker 1: out of Chicago by barge. And the river system, as

634
00:38:26,000 --> 00:38:31,520
Speaker 1: Anton has has mentioned, is really quite the super highway

635
00:38:31,600 --> 00:38:34,680
Speaker 1: within Middle America that most of us don't know about.

636
00:38:35,239 --> 00:38:37,600
Speaker 1: And you know, Anton and I only have an education

637
00:38:37,640 --> 00:38:39,800
Speaker 1: in it for what we do, but until we started

638
00:38:39,840 --> 00:38:43,400
Speaker 1: doing this. I I did not grow grow up understanding

639
00:38:43,840 --> 00:38:47,239
Speaker 1: how much of the United States, how much of our

640
00:38:47,280 --> 00:38:50,480
Speaker 1: trade relies on our river system. So it is really

641
00:38:50,520 --> 00:39:10,759
Speaker 1: critical to to us, Tracy. I think we definitely now

642
00:39:10,840 --> 00:39:14,440
Speaker 1: have to do another episode. Seriously, Like I had never liked,

643
00:39:14,560 --> 00:39:16,640
Speaker 1: you know, in all the conversations. I think I was

644
00:39:16,680 --> 00:39:19,560
Speaker 1: kind of aware, you know, like grains other things, but

645
00:39:19,600 --> 00:39:22,799
Speaker 1: the degree to which a it's so crucial still and

646
00:39:22,920 --> 00:39:27,080
Speaker 1: be so structurally degraded and congested right now, I had

647
00:39:27,120 --> 00:39:29,719
Speaker 1: not appreciated that at all. So now we're adding that

648
00:39:29,800 --> 00:39:34,840
Speaker 1: to the list of supply chain, logistics, infrastructure stories episodes

649
00:39:34,880 --> 00:39:37,000
Speaker 1: that we have to do. I think we need to, uh,

650
00:39:37,239 --> 00:39:40,279
Speaker 1: we need to charter like a tugboat up in Mississippi. Right,

651
00:39:40,320 --> 00:39:43,400
Speaker 1: That'll be our next all thoughts event I'm ready to

652
00:39:43,520 --> 00:39:45,960
Speaker 1: take that on, Tracy. I want to I want to

653
00:39:45,960 --> 00:39:48,319
Speaker 1: throw I want to throw another curve all at you, right,

654
00:39:48,960 --> 00:39:54,240
Speaker 1: throw in situation, and throw in the climate change issue

655
00:39:54,840 --> 00:39:59,839
Speaker 1: too into where you have uh, you know, affecting the

656
00:40:00,000 --> 00:40:03,840
Speaker 1: of her system, right, and ice melt that that the

657
00:40:04,000 --> 00:40:06,359
Speaker 1: spring ice ice melt that then goes into the river

658
00:40:06,360 --> 00:40:10,200
Speaker 1: system in the Mississippi River up north and creates, uh

659
00:40:10,400 --> 00:40:13,000
Speaker 1: creates problems for us all the way down river to

660
00:40:13,080 --> 00:40:16,160
Speaker 1: New Orleans because of high river conditions. Right, you have

661
00:40:16,200 --> 00:40:19,040
Speaker 1: ships coming in that need to have stand by tugboats

662
00:40:19,400 --> 00:40:22,440
Speaker 1: just to keep them in place because while they're working

663
00:40:22,440 --> 00:40:25,839
Speaker 1: the ships because of just extreme high river high it's

664
00:40:25,880 --> 00:40:28,600
Speaker 1: just high river flows at that point. So, um, I

665
00:40:28,600 --> 00:40:32,280
Speaker 1: wouldn't even take take a stab at how climate change

666
00:40:32,280 --> 00:40:34,920
Speaker 1: is going is affecting that, has been affecting that, and

667
00:40:34,960 --> 00:40:37,840
Speaker 1: will continue to to affect and make that worse. But

668
00:40:37,920 --> 00:40:40,080
Speaker 1: you could add a whole another element into the into

669
00:40:40,160 --> 00:40:44,120
Speaker 1: the story of transportation. So our little part of our

670
00:40:44,160 --> 00:40:47,000
Speaker 1: little part of the world of business is becoming all

671
00:40:47,040 --> 00:40:50,399
Speaker 1: the more interesting these days. I think absolutely. I mean,

672
00:40:50,480 --> 00:40:53,359
Speaker 1: it definitely sounds like it. But Okay, so a big

673
00:40:53,440 --> 00:40:58,560
Speaker 1: question for you, given your expertise and given your very

674
00:40:58,680 --> 00:41:02,560
Speaker 1: unique vantage point where you're looking at global shipping, you're

675
00:41:02,600 --> 00:41:05,080
Speaker 1: looking at what a big a lot of big commodities

676
00:41:05,120 --> 00:41:07,239
Speaker 1: players are doing. You're looking at things that are going

677
00:41:07,320 --> 00:41:11,160
Speaker 1: up and down US rivers. I know you're not economists

678
00:41:11,400 --> 00:41:15,040
Speaker 1: per se, but you're very aware of the inflation discussion

679
00:41:15,080 --> 00:41:18,839
Speaker 1: at the moment. How much are these logistics snarls, these

680
00:41:18,840 --> 00:41:23,839
Speaker 1: transport issues playing into pure commodity prices just from your

681
00:41:23,960 --> 00:41:28,360
Speaker 1: sort of with your shipping hat on. Oh uh yeah,

682
00:41:28,480 --> 00:41:31,920
Speaker 1: I mean there's no question, right the the cost the

683
00:41:31,920 --> 00:41:36,400
Speaker 1: commodity price costs are our direct correlation to what's happening

684
00:41:36,400 --> 00:41:40,600
Speaker 1: in the world of freight and transportation. Absolutely, you're seeing

685
00:41:41,160 --> 00:41:45,480
Speaker 1: prices we're working. Let's take, um, take an example right

686
00:41:45,480 --> 00:41:48,040
Speaker 1: now of one of our one of our clients, a

687
00:41:48,480 --> 00:41:51,840
Speaker 1: steel trader that's looking to bring in to play coil

688
00:41:52,120 --> 00:41:55,120
Speaker 1: from the far East into the States, and that tim

689
00:41:55,160 --> 00:41:59,759
Speaker 1: plate coil is used for making cans, right, cans and

690
00:42:00,200 --> 00:42:03,400
Speaker 1: for consumer goods, right. So we're trying to put a

691
00:42:03,440 --> 00:42:06,920
Speaker 1: freight contract together for them right now for multiple shipments

692
00:42:06,960 --> 00:42:10,480
Speaker 1: a few thousand tons each of these template coils. And

693
00:42:10,520 --> 00:42:14,360
Speaker 1: the discussion right that they're having with the with the

694
00:42:14,360 --> 00:42:17,920
Speaker 1: their end customer that's going to be using this steel

695
00:42:19,400 --> 00:42:23,360
Speaker 1: is the how to price the cost of the steel

696
00:42:23,480 --> 00:42:26,640
Speaker 1: with the freight fluctuation. Right. So you know, we're we're

697
00:42:26,719 --> 00:42:29,719
Speaker 1: very used to seeing fuel search arges, right, which are

698
00:42:29,760 --> 00:42:34,680
Speaker 1: directly correlated to a base benchmark fuel price, maybe the

699
00:42:34,719 --> 00:42:38,160
Speaker 1: price of diesel at at rouge, right for for barge freight,

700
00:42:38,480 --> 00:42:43,200
Speaker 1: or the U s Department of Commerce right for based

701
00:42:43,239 --> 00:42:47,480
Speaker 1: diesel prices for truck fuel search arges. So now starting

702
00:42:47,520 --> 00:42:52,040
Speaker 1: to see UH, starting to see commercial contracts UH with

703
00:42:52,600 --> 00:42:55,000
Speaker 1: on these com on these types of commodities that have

704
00:42:55,640 --> 00:42:58,920
Speaker 1: allowances for flight, for freight adjustments on there, so not

705
00:42:59,000 --> 00:43:02,799
Speaker 1: just fuel adjustments but also for freight adjustments to to

706
00:43:02,920 --> 00:43:07,120
Speaker 1: take into consideration that the container price for maybe in

707
00:43:07,320 --> 00:43:11,440
Speaker 1: July maybe ten tho dollars, but in August it may

708
00:43:11,440 --> 00:43:14,560
Speaker 1: be fifteen dollars, so that cost needs to be passed

709
00:43:14,840 --> 00:43:18,920
Speaker 1: passed on. So we're not in a commercial role in

710
00:43:18,920 --> 00:43:22,040
Speaker 1: this respect rate. So so we could talk talk a

711
00:43:22,040 --> 00:43:24,360
Speaker 1: little bit to what we're seeing and how our clients

712
00:43:24,360 --> 00:43:28,000
Speaker 1: are dealing with that freight uncertainty. If that kind of

713
00:43:28,080 --> 00:43:35,200
Speaker 1: helps answer the question, I think, yeah, yeah, steal aluminum, right, copper,

714
00:43:35,280 --> 00:43:39,319
Speaker 1: Everything is getting getting hit. So those those prices are

715
00:43:39,360 --> 00:43:43,400
Speaker 1: just flowing flowing through and eventually it's flowing through to

716
00:43:43,520 --> 00:43:46,720
Speaker 1: what's on the shelves. Right. So one of the themes

717
00:43:46,760 --> 00:43:50,760
Speaker 1: again that we have is that you know, obviously some players,

718
00:43:50,800 --> 00:43:52,879
Speaker 1: maybe shippers are in a position to make a lot

719
00:43:52,880 --> 00:43:56,200
Speaker 1: of money right now with this incredible demand, But does

720
00:43:56,280 --> 00:44:00,200
Speaker 1: everyone still think this is like sugar high or as

721
00:44:00,239 --> 00:44:02,440
Speaker 1: a tory, or that it's totally a matter of time

722
00:44:03,000 --> 00:44:05,560
Speaker 1: before the bottom falls out again and we return to

723
00:44:05,640 --> 00:44:09,600
Speaker 1: something like normal, or will is this a kind of

724
00:44:09,640 --> 00:44:13,520
Speaker 1: boom that would cause companies in this space to invest

725
00:44:13,560 --> 00:44:17,839
Speaker 1: more and expand capacity in some way, something that leads

726
00:44:17,960 --> 00:44:20,400
Speaker 1: or leads to sort of durable changes and how the

727
00:44:20,440 --> 00:44:24,879
Speaker 1: industry does business. Let's remember that question a year from now,

728
00:44:25,400 --> 00:44:29,960
Speaker 1: right and look back, because the cycle is is it

729
00:44:30,080 --> 00:44:33,000
Speaker 1: just like the housing you know, housing, which it was

730
00:44:33,040 --> 00:44:35,279
Speaker 1: a great episode, by the way, guys, I like, I

731
00:44:35,320 --> 00:44:38,080
Speaker 1: really like that. The ship owners, as we said, right,

732
00:44:38,120 --> 00:44:41,320
Speaker 1: the ship ship owners now are putting these orders into

733
00:44:41,520 --> 00:44:45,279
Speaker 1: the shipyards to build, build, build, sure enough, just like

734
00:44:45,400 --> 00:44:48,400
Speaker 1: drunken sailors of the past. Right, the money goes flowing

735
00:44:48,440 --> 00:44:51,520
Speaker 1: out and it will only be a matter of time

736
00:44:51,560 --> 00:44:54,480
Speaker 1: before they're looking at too many ships and they're killing

737
00:44:54,520 --> 00:44:56,480
Speaker 1: each other for the for the freight. When that's going

738
00:44:56,560 --> 00:45:00,920
Speaker 1: to happen, I won't uh that that that's above above

739
00:45:01,040 --> 00:45:06,919
Speaker 1: my level of economic intelligence, I think. But it is sick.

740
00:45:07,120 --> 00:45:10,360
Speaker 1: It is cyclical, right, downton. I mean it's it's the

741
00:45:10,440 --> 00:45:14,600
Speaker 1: shipping community seems to hang their hat really on a

742
00:45:14,640 --> 00:45:18,320
Speaker 1: supply and demand, but you're building a ship, the reaction

743
00:45:18,400 --> 00:45:21,600
Speaker 1: time you just it's just not that quick, right, So

744
00:45:21,600 --> 00:45:25,759
Speaker 1: so it's great on this high too. Then throw your

745
00:45:25,760 --> 00:45:29,680
Speaker 1: money into new equipment, new vessels, which is wonderful, but

746
00:45:30,320 --> 00:45:31,960
Speaker 1: you know you're not going to get it for a

747
00:45:32,000 --> 00:45:34,799
Speaker 1: couple of years. And where's the market that. Let me

748
00:45:34,840 --> 00:45:37,600
Speaker 1: throw an example out at your right to sticks in

749
00:45:37,680 --> 00:45:41,359
Speaker 1: my head. Barge freight market. Um, but it was an

750
00:45:41,440 --> 00:45:45,280
Speaker 1: unusually heavy grain season. Grain season is the harvest time

751
00:45:45,320 --> 00:45:49,760
Speaker 1: when the grain producers and trading companies are moving grain

752
00:45:49,960 --> 00:45:54,080
Speaker 1: southbound from from the harvest areas in the States down

753
00:45:54,160 --> 00:45:58,480
Speaker 1: to down to the New Orleans area for export. Right,

754
00:45:58,520 --> 00:46:01,160
Speaker 1: So typically that's a time when in barge freight market

755
00:46:01,239 --> 00:46:05,440
Speaker 1: just moves upward in general. So let's say that barge

756
00:46:05,480 --> 00:46:10,880
Speaker 1: freight per ton from New Orleans to Chicago northbound is

757
00:46:11,520 --> 00:46:14,840
Speaker 1: running in the mid teens per per short ton on

758
00:46:14,880 --> 00:46:21,040
Speaker 1: a on a typical year basis. In that green season,

759
00:46:21,120 --> 00:46:23,680
Speaker 1: those rates, it was such a shortage of barges in

760
00:46:23,840 --> 00:46:27,279
Speaker 1: such a such a surge of southbound green that the

761
00:46:27,320 --> 00:46:30,080
Speaker 1: barge lines were much more happy to move their barges

762
00:46:30,120 --> 00:46:33,760
Speaker 1: empty northbound just to keep them in place. In position

763
00:46:33,800 --> 00:46:36,960
Speaker 1: for the green So we saw barge rates to Chicago

764
00:46:37,120 --> 00:46:41,480
Speaker 1: in the mid forties per ton instead of set of fifteen,

765
00:46:41,840 --> 00:46:47,680
Speaker 1: try forty five. Right fast forward from there was no

766
00:46:47,760 --> 00:46:50,800
Speaker 1: grain season, it was it was a bust, right, So

767
00:46:51,239 --> 00:46:55,000
Speaker 1: how many new barges were built by barge lines after

768
00:46:55,200 --> 00:46:57,919
Speaker 1: that boom grain season? Right, I'm not sure. I don't

769
00:46:57,920 --> 00:47:02,000
Speaker 1: know that statistic. But we see this this cycle, just

770
00:47:02,120 --> 00:47:05,719
Speaker 1: this cycle constantly of of the ocean freight market, the

771
00:47:05,760 --> 00:47:10,440
Speaker 1: bulk ocean freight market moving. But what's unusual about right now,

772
00:47:10,680 --> 00:47:14,840
Speaker 1: and they think everyone would agree, is we haven't seen

773
00:47:15,800 --> 00:47:21,080
Speaker 1: this across the board global surge the way we're seeing

774
00:47:21,080 --> 00:47:24,680
Speaker 1: it now. It seems it seems far more broad. Right. Sure,

775
00:47:24,719 --> 00:47:30,440
Speaker 1: I can relate that green season situation, but that was

776
00:47:30,440 --> 00:47:33,040
Speaker 1: isolated to the barge freight market. And you know, we've

777
00:47:33,080 --> 00:47:37,880
Speaker 1: seen truck drivers shortages. That's been building for years more.

778
00:47:37,920 --> 00:47:40,120
Speaker 1: When I were talking this morning, that's not a new story.

779
00:47:40,239 --> 00:47:42,960
Speaker 1: That's that's been I've been I've had that slide up

780
00:47:42,960 --> 00:47:45,120
Speaker 1: on every presentation I've given it at a steal and

781
00:47:45,160 --> 00:47:48,080
Speaker 1: Aluminum conference over the past few years about the shortage

782
00:47:48,080 --> 00:47:50,919
Speaker 1: and truck drivers. So so that was that was coming

783
00:47:50,960 --> 00:47:53,280
Speaker 1: I have a trucking episode coming up, so we already

784
00:47:53,280 --> 00:47:56,640
Speaker 1: have that one in play. So two things here like

785
00:47:56,719 --> 00:48:01,000
Speaker 1: really drilling down into the nature of these shipping industry.

786
00:48:01,120 --> 00:48:04,120
Speaker 1: So number one, is there something about shipping that makes

787
00:48:04,160 --> 00:48:09,000
Speaker 1: it inherently cyclical? And is there a reason overall that

788
00:48:09,040 --> 00:48:12,000
Speaker 1: we get these big booms and bus And then secondly

789
00:48:12,160 --> 00:48:15,920
Speaker 1: to something that Margot was talking about earlier, why can't

790
00:48:16,040 --> 00:48:19,799
Speaker 1: you walk in a rate for you know, later in

791
00:48:19,840 --> 00:48:23,600
Speaker 1: the year, Like, why can I not book space on

792
00:48:24,239 --> 00:48:27,280
Speaker 1: a ship that's due to go out in December at

793
00:48:27,360 --> 00:48:29,960
Speaker 1: some sort of pre agreed rate. Why is it so

794
00:48:30,800 --> 00:48:34,800
Speaker 1: difficult When you know, I assume other types of business,

795
00:48:34,880 --> 00:48:38,719
Speaker 1: other industries, you are able to lock in um some

796
00:48:38,760 --> 00:48:41,880
Speaker 1: sort of forward agreement so that you can have certainty

797
00:48:42,120 --> 00:48:44,759
Speaker 1: and an outlook on on what you're supposed to be doing. So,

798
00:48:45,000 --> 00:48:47,399
Speaker 1: but shipping seems to be very different. So I guess

799
00:48:47,400 --> 00:48:51,480
Speaker 1: my question is why is the shipping industry so different? Well,

800
00:48:51,520 --> 00:48:54,879
Speaker 1: if we're going to look at containers, if you lock

801
00:48:54,960 --> 00:48:58,359
Speaker 1: in today, it goes back to us trying to get

802
00:48:58,400 --> 00:49:01,520
Speaker 1: a container with a Teddy Bear for seven thousand dollars

803
00:49:01,520 --> 00:49:03,960
Speaker 1: on a vessel. You didn't get a slot because there

804
00:49:04,000 --> 00:49:06,520
Speaker 1: was someone else probably willing to pay eight thousand dollars

805
00:49:06,640 --> 00:49:10,640
Speaker 1: and your freight gut bumped. So the shipping market is

806
00:49:10,719 --> 00:49:14,560
Speaker 1: like all others, and it really reacts to supply and demand,

807
00:49:14,920 --> 00:49:18,560
Speaker 1: which is the production of vessels. Because money is flowing.

808
00:49:19,080 --> 00:49:23,040
Speaker 1: Eventually we will have too much capacity and freight rates

809
00:49:23,239 --> 00:49:28,000
Speaker 1: will be so so low because there's ships everywhere with

810
00:49:28,120 --> 00:49:32,040
Speaker 1: empty slots that we can load onto. So I could

811
00:49:32,360 --> 00:49:36,000
Speaker 1: get someone to lock in a rate and say, sure,

812
00:49:36,320 --> 00:49:38,120
Speaker 1: China's a long beach, we're going to do that for

813
00:49:38,200 --> 00:49:40,600
Speaker 1: five thousand dollars. We're going to book it. But do

814
00:49:40,640 --> 00:49:43,160
Speaker 1: you get a guaranteed slot and are you guaranteed to

815
00:49:43,200 --> 00:49:47,479
Speaker 1: load on a vessel? Probably not so right now where

816
00:49:47,480 --> 00:49:50,520
Speaker 1: your market, where the market is, and to what Anton

817
00:49:50,600 --> 00:49:55,600
Speaker 1: spoke to earlier, the you need to be the Walmarts

818
00:49:55,640 --> 00:49:58,360
Speaker 1: and the Nikes and the big players, the i Keas

819
00:49:58,400 --> 00:50:02,160
Speaker 1: of the world to have those garanteed slots at your

820
00:50:02,480 --> 00:50:06,439
Speaker 1: contracted rate. But the rest of us that aren't don't

821
00:50:06,440 --> 00:50:11,160
Speaker 1: have that contract in place, nor that annual guaranteed volume

822
00:50:11,200 --> 00:50:14,719
Speaker 1: to ship. That's that's who's living in the free for all,

823
00:50:15,000 --> 00:50:17,000
Speaker 1: and that's what that's what the market has been is

824
00:50:17,000 --> 00:50:18,640
Speaker 1: a free for all. I remember, like when we were

825
00:50:18,640 --> 00:50:21,919
Speaker 1: talking to Ryan Peterson, the Flex Sports CEO, and and

826
00:50:21,960 --> 00:50:24,040
Speaker 1: I and I was actually, I'm glad you brought that up.

827
00:50:24,080 --> 00:50:25,719
Speaker 1: And I wanted to like he was saying that, like

828
00:50:25,760 --> 00:50:28,600
Speaker 1: the shipping industry is still sort of like it really

829
00:50:28,600 --> 00:50:31,160
Speaker 1: helps to like if you just know a random guy

830
00:50:31,239 --> 00:50:35,120
Speaker 1: in Denmark and like or like it helps to like

831
00:50:35,640 --> 00:50:40,600
Speaker 1: know someone relationships, relationships, relationships probably named like Lars or

832
00:50:40,600 --> 00:50:43,160
Speaker 1: something like that, and to like that, like if you

833
00:50:43,200 --> 00:50:45,120
Speaker 1: really need to get your windows shipped out of China,

834
00:50:45,200 --> 00:50:47,600
Speaker 1: like you gotta call it Lars. And so I'm curious, like,

835
00:50:48,040 --> 00:50:51,440
Speaker 1: is it because the industry so so concentrated that it

836
00:50:51,520 --> 00:50:55,640
Speaker 1: hasn't had the need to create a more competitive booking process?

837
00:50:56,160 --> 00:50:59,439
Speaker 1: Is it a simple technological fix, Like why not sort

838
00:50:59,440 --> 00:51:01,360
Speaker 1: of like up it in a bed such that people

839
00:51:01,400 --> 00:51:04,800
Speaker 1: can just sort of have a more dynamic auction for

840
00:51:04,800 --> 00:51:08,960
Speaker 1: for first space. Yeah, there's not a lot, not a

841
00:51:09,040 --> 00:51:14,200
Speaker 1: lot of transparency in that respect. That dynamic auction type

842
00:51:14,239 --> 00:51:18,959
Speaker 1: situation um been tried in many different many different ways,

843
00:51:19,000 --> 00:51:22,200
Speaker 1: right platforms to be able to uh take a bulkship,

844
00:51:22,560 --> 00:51:25,200
Speaker 1: it's just talk about bulkshipping for a second, right there's

845
00:51:25,239 --> 00:51:31,440
Speaker 1: been many different uh attempts by technology companies are technologically

846
00:51:31,480 --> 00:51:35,239
Speaker 1: focused people in the shipping industry to put together a

847
00:51:35,280 --> 00:51:40,840
Speaker 1: more open auction, transparent platform exchange and exchange to some

848
00:51:40,960 --> 00:51:45,160
Speaker 1: extent right for for actual booking freight. But it always

849
00:51:45,160 --> 00:51:48,640
Speaker 1: seems to revert back to the herror, back to the

850
00:51:48,680 --> 00:51:52,040
Speaker 1: old old fashioned of right, knowing the right guy in

851
00:51:52,320 --> 00:51:56,000
Speaker 1: Copenhagen type thing, which is kind of you know what

852
00:51:56,160 --> 00:51:58,560
Speaker 1: keeps us in business, right to some extent as a

853
00:51:58,640 --> 00:52:02,160
Speaker 1: third party intermediate right, which is what we what we are,

854
00:52:02,320 --> 00:52:05,840
Speaker 1: right or logistics management company. Right, our our value. We

855
00:52:05,880 --> 00:52:07,960
Speaker 1: don't own ships, we don't own barges, we don't own

856
00:52:08,040 --> 00:52:11,840
Speaker 1: rail cars. Right, So so there's a value in having

857
00:52:11,920 --> 00:52:16,560
Speaker 1: expertise and knowing where to go for for that. That's

858
00:52:16,560 --> 00:52:19,400
Speaker 1: so yeah, there's been a natural right resistance to the

859
00:52:19,440 --> 00:52:23,760
Speaker 1: to that. Well, let's and anton its expertise and relationships.

860
00:52:24,560 --> 00:52:27,479
Speaker 1: M M yeah, exactly, I tell you it. Just another

861
00:52:27,520 --> 00:52:30,440
Speaker 1: thing too on the bulk fright, looking backlistic that that

862
00:52:30,560 --> 00:52:33,600
Speaker 1: steel coming out of out of the Far East I

863
00:52:33,640 --> 00:52:37,080
Speaker 1: mentioned in that particular case, we're working to get a

864
00:52:37,400 --> 00:52:45,799
Speaker 1: three three shipment contract together right for October December and

865
00:52:46,080 --> 00:52:49,560
Speaker 1: February to move to move that steep, to move that steel.

866
00:52:50,040 --> 00:52:54,279
Speaker 1: We're seeing resistance from ship operators for offering that far out,

867
00:52:54,360 --> 00:52:59,319
Speaker 1: and the ones that have are pricing it quite significantly

868
00:52:59,800 --> 00:53:04,120
Speaker 1: higher right that they're taking certainly a big premium on that. Um,

869
00:53:04,200 --> 00:53:07,279
Speaker 1: you have a situation to on the bulk side, and

870
00:53:07,320 --> 00:53:09,200
Speaker 1: it's it's a little bit if this is where it

871
00:53:09,280 --> 00:53:12,680
Speaker 1: differs from the container side. Bulk ship operators and I'm

872
00:53:12,719 --> 00:53:16,920
Speaker 1: using the term operators rather than owners here are often

873
00:53:17,440 --> 00:53:21,919
Speaker 1: not the actual owners of the ship. They operate as

874
00:53:21,920 --> 00:53:25,480
Speaker 1: a as a as a ship ship operator, but they

875
00:53:25,520 --> 00:53:29,640
Speaker 1: take the ships that they're using on time charter. Essentially

876
00:53:29,719 --> 00:53:34,000
Speaker 1: they're renting those ships, they're chartering those ships. So, um,

877
00:53:34,000 --> 00:53:37,720
Speaker 1: we have a situation at the moment where the handy

878
00:53:37,800 --> 00:53:40,880
Speaker 1: size market which is a handy size market rate for

879
00:53:40,960 --> 00:53:43,480
Speaker 1: ships and handy size of these ships that are running

880
00:53:43,480 --> 00:53:48,480
Speaker 1: in the twenty thousand ton capacity range. Right, these ships

881
00:53:48,560 --> 00:53:51,279
Speaker 1: were going on the market at the very beginning of

882
00:53:51,280 --> 00:53:53,320
Speaker 1: the year in January, and maybe you've got ten thousand

883
00:53:53,800 --> 00:53:56,920
Speaker 1: dollars a day to time charter one of those ships.

884
00:53:57,160 --> 00:54:00,480
Speaker 1: They're now in the thirty dollars to day in the

885
00:54:00,520 --> 00:54:05,279
Speaker 1: Pacific market. So, if you're a ship operator, let's say

886
00:54:05,280 --> 00:54:12,279
Speaker 1: your your ABC Shipping, and you priced moving steel from

887
00:54:12,280 --> 00:54:15,719
Speaker 1: the Far East to the US Gulf at let's say

888
00:54:16,080 --> 00:54:19,800
Speaker 1: a sixty five dollars a ton. But you you based

889
00:54:19,960 --> 00:54:23,520
Speaker 1: that sixty a ton rate that you gave to the

890
00:54:23,560 --> 00:54:26,400
Speaker 1: steel mill. You based that rate on a ten tho

891
00:54:26,760 --> 00:54:29,799
Speaker 1: dollar a day ship being able to get a ship

892
00:54:29,840 --> 00:54:33,120
Speaker 1: at ten thousand dollars a day. And now you have

893
00:54:33,239 --> 00:54:36,880
Speaker 1: to go out and perform under that contract. Right, you

894
00:54:36,920 --> 00:54:40,440
Speaker 1: agreed to sixty five dollars to that steel. Now you've

895
00:54:40,440 --> 00:54:42,960
Speaker 1: got to go charter in a ship at thirty dollars

896
00:54:42,960 --> 00:54:47,520
Speaker 1: a day. That sixty doesn't make economic sense anymore. And

897
00:54:47,560 --> 00:54:52,000
Speaker 1: we're seeing some very very serious problems in delays with

898
00:54:52,280 --> 00:54:55,880
Speaker 1: ship operators that that are not performing at the moment

899
00:54:56,760 --> 00:55:00,240
Speaker 1: because of because of this. Right. And this is where

900
00:55:00,719 --> 00:55:03,399
Speaker 1: this type of market situation has happened in the past. Right,

901
00:55:03,440 --> 00:55:06,839
Speaker 1: But it's where it separates the professionals and the ship

902
00:55:06,920 --> 00:55:10,799
Speaker 1: operating side from the from the amateurs, the ones that

903
00:55:11,239 --> 00:55:15,839
Speaker 1: prepared at a time, that had ships on sufficient long

904
00:55:15,960 --> 00:55:20,840
Speaker 1: enough time charter periods to perform under their contracts, versus

905
00:55:20,880 --> 00:55:25,200
Speaker 1: the cowboys that book that sixt with the mill but

906
00:55:25,680 --> 00:55:29,280
Speaker 1: hoped that the market didn't didn't anticipate the market jumping

907
00:55:29,360 --> 00:55:33,279
Speaker 1: like this and that now that now can't perform and

908
00:55:33,280 --> 00:55:37,640
Speaker 1: are leaving cargoes behind strewn about the Far East, which

909
00:55:37,680 --> 00:55:39,360
Speaker 1: is one of the situations for dealing with at the

910
00:55:39,400 --> 00:55:43,839
Speaker 1: moment too. All right, Aunton and Margot, thank you so much.

911
00:55:43,920 --> 00:55:47,200
Speaker 1: Really appreciate your time on the podcast and also your

912
00:55:47,640 --> 00:55:50,560
Speaker 1: months of hard work trying to get the shipment out

913
00:55:50,560 --> 00:55:53,680
Speaker 1: of Hong Kong and all your patients with with the

914
00:55:54,080 --> 00:55:57,480
Speaker 1: US doing the paperwork. So thank you so much. Thanks everyone.

915
00:55:57,840 --> 00:56:00,640
Speaker 1: That was fun. Hold onto that. How do you barry Tracy,

916
00:56:00,680 --> 00:56:02,359
Speaker 1: because when you get the Hong Kong next time to visit,

917
00:56:02,440 --> 00:56:06,680
Speaker 1: I will personally carry it back to the States. Okay, yeah,

918
00:56:06,719 --> 00:56:09,920
Speaker 1: we'll get really creative with our transport situations. All right,

919
00:56:09,960 --> 00:56:23,000
Speaker 1: thank you. That was great, So Joe, you can probably

920
00:56:23,000 --> 00:56:26,080
Speaker 1: tell I very much enjoyed that conversation. It was nice

921
00:56:26,120 --> 00:56:29,640
Speaker 1: to get more of a breakdown between the container shipping

922
00:56:29,680 --> 00:56:33,080
Speaker 1: world versus bulk because I hadn't considered that. It was

923
00:56:33,120 --> 00:56:36,000
Speaker 1: also interesting to hear about what's going on in US

924
00:56:36,120 --> 00:56:40,000
Speaker 1: rivers because that was definitely something I hadn't considered before. Yeah,

925
00:56:40,080 --> 00:56:42,880
Speaker 1: I hadn't. I hadn't thought about that at all before.

926
00:56:43,080 --> 00:56:46,000
Speaker 1: But I also and I feel like each time I

927
00:56:46,040 --> 00:56:49,040
Speaker 1: love these series because I feel like, um, you know,

928
00:56:49,080 --> 00:56:53,279
Speaker 1: we started with Mark Levinson with the Box, which you know,

929
00:56:53,360 --> 00:56:56,480
Speaker 1: look at really big picture of shipping. We keep getting

930
00:56:56,520 --> 00:56:59,920
Speaker 1: more granular and then keep and it keeps turning over

931
00:57:00,040 --> 00:57:02,680
Speaker 1: new leaves. Obviously we've got to talk about the canals

932
00:57:02,719 --> 00:57:04,680
Speaker 1: and the river systems and how important they still are,

933
00:57:05,400 --> 00:57:07,400
Speaker 1: but I feel like both of them. Antona Margo just

934
00:57:07,440 --> 00:57:12,440
Speaker 1: had so many sort of like specific insights, specific details

935
00:57:12,440 --> 00:57:16,560
Speaker 1: about what makes the situation so tricky that was super helpful. Absolutely,

936
00:57:16,600 --> 00:57:19,080
Speaker 1: and um, I should do this before I forget. But

937
00:57:19,160 --> 00:57:22,080
Speaker 1: I just want to give a big shout out slash

938
00:57:22,120 --> 00:57:25,280
Speaker 1: thank you to some of the Bloomberg staff that helped

939
00:57:25,400 --> 00:57:28,200
Speaker 1: with the Teddy Bear project. UM, in particular dil en

940
00:57:28,280 --> 00:57:32,040
Speaker 1: Rico and Coco Live from our supply chain office in

941
00:57:32,120 --> 00:57:36,240
Speaker 1: Hong Kong, who very patiently answered all these questions about

942
00:57:36,240 --> 00:57:39,360
Speaker 1: how to like secure a teddy Bear, a single teddy

943
00:57:39,360 --> 00:57:43,280
Speaker 1: Bear in a crate UM and worked on organizing uh,

944
00:57:43,360 --> 00:57:47,080
Speaker 1: you know, the the transport within Hong Kong as well,

945
00:57:47,120 --> 00:57:50,040
Speaker 1: so she was amazing. Of course, um the guy who

946
00:57:50,080 --> 00:57:52,800
Speaker 1: approves my expense accounts as well, which is Reddo. So

947
00:57:52,960 --> 00:57:56,200
Speaker 1: thank you DdO for allowing us to spend thousands of

948
00:57:56,240 --> 00:57:58,880
Speaker 1: dollars on this um even though we didn't actually do

949
00:57:58,920 --> 00:58:02,800
Speaker 1: it in the end. There you go. Well, let's try again,

950
00:58:02,840 --> 00:58:05,280
Speaker 1: and let's let's try again in the year. Hopefully there

951
00:58:05,280 --> 00:58:08,160
Speaker 1: will be some stability and they'll find they'll find some

952
00:58:08,200 --> 00:58:10,840
Speaker 1: space for you on a ship. How much do you

953
00:58:10,840 --> 00:58:14,720
Speaker 1: think a tugboat costs of the Mississippi? I don't know.

954
00:58:14,800 --> 00:58:18,560
Speaker 1: Do you know the answer? No? I think you like

955
00:58:18,880 --> 00:58:20,160
Speaker 1: I thought you're like going to give you like a

956
00:58:20,160 --> 00:58:24,000
Speaker 1: trivia question or something like that. All right, we got

957
00:58:24,160 --> 00:58:27,560
Speaker 1: Let's let's get to work on booking that episode. Okay,

958
00:58:28,080 --> 00:58:30,840
Speaker 1: all right, shall we leave it there? Let's leave it there.

959
00:58:31,960 --> 00:58:34,640
Speaker 1: This has been another episode of the All Thoughts Podcast.

960
00:58:34,720 --> 00:58:37,240
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

961
00:58:37,240 --> 00:58:40,520
Speaker 1: Tracy Alloway and I'm Joey Isn't Though. You can follow

962
00:58:40,560 --> 00:58:44,320
Speaker 1: me on Twitter at the Stalwart. Follow our producer on Twitter,

963
00:58:44,440 --> 00:58:48,160
Speaker 1: Laura Carlson. She's at Laura M. Carlson. Followed the Bloomberg

964
00:58:48,200 --> 00:58:52,120
Speaker 1: head of podcast, Francesco Levi at Francesco Today and check

965
00:58:52,160 --> 00:58:55,080
Speaker 1: out all of our podcasts at Bloomberg under the handle

966
00:58:55,440 --> 00:59:11,200
Speaker 1: at podcasts. Thanks for listening to