1 00:00:00,080 --> 00:00:04,359 Speaker 1: There's a little bit of debate over Anton's own naval experience, 2 00:00:04,400 --> 00:00:06,760 Speaker 1: but we can get into that button. You have some 3 00:00:06,880 --> 00:00:10,600 Speaker 1: naval experience, sort of you're teeing. 4 00:00:10,280 --> 00:00:12,120 Speaker 2: It up for Margo to make fun of me, now, 5 00:00:12,119 --> 00:00:15,520 Speaker 2: because I was just a reservist. So I fully embraced 6 00:00:15,560 --> 00:00:19,520 Speaker 2: the fact that I do not have grand military experience. Okay, 7 00:00:19,520 --> 00:00:22,160 Speaker 2: I served, I was in reserves. I put on the uniform. 8 00:00:22,239 --> 00:00:23,239 Speaker 2: I wish I could still fit. 9 00:00:23,400 --> 00:00:25,440 Speaker 1: But you played a lot of tennis. 10 00:00:26,320 --> 00:00:28,520 Speaker 2: I played tennis and rode to Spain, you know, on 11 00:00:28,600 --> 00:00:32,000 Speaker 2: a NATO exercise. I'll have you know, Tracy, it was 12 00:00:32,040 --> 00:00:35,680 Speaker 2: a NATO military exercise, and I don't think. 13 00:00:36,760 --> 00:00:40,080 Speaker 3: Your exercise was tenant for your exercise. 14 00:00:40,600 --> 00:00:43,280 Speaker 2: By the way, I'd like to say that del Frona 15 00:00:43,600 --> 00:00:45,720 Speaker 2: was fantastic for wine and sherry. 16 00:00:45,840 --> 00:00:49,559 Speaker 4: So yeah, Joe, I. 17 00:00:49,479 --> 00:00:53,680 Speaker 1: Want a T shirt that says ruthless utility maximizer black GOLs. 18 00:00:53,960 --> 00:00:56,760 Speaker 1: Let's talk about losers poop. Sure, I've decided I'm going 19 00:00:56,800 --> 00:00:59,840 Speaker 1: to base my entire personality going forward on campaigning first 20 00:01:00,000 --> 00:01:01,440 Speaker 1: strategic pork reserve in the. 21 00:01:01,440 --> 00:01:02,840 Speaker 5: US Skull's unlimited. 22 00:01:03,200 --> 00:01:04,160 Speaker 1: What's the ticker for that? 23 00:01:04,319 --> 00:01:07,200 Speaker 6: No, I think that like in a couple of years, 24 00:01:07,360 --> 00:01:09,640 Speaker 6: the AI will do a really good job of making 25 00:01:09,640 --> 00:01:10,759 Speaker 6: the Odd Lots podcast. 26 00:01:10,840 --> 00:01:13,040 Speaker 1: How do I get more popular and successful? 27 00:01:13,360 --> 00:01:16,039 Speaker 5: One day that person will have the mandate of Heaven. 28 00:01:16,280 --> 00:01:17,480 Speaker 5: We do have the. 29 00:01:17,800 --> 00:01:21,760 Speaker 1: Perfect you're listening to lots More where we catch up 30 00:01:21,760 --> 00:01:24,680 Speaker 1: with friends about what's going on right now, because. 31 00:01:24,400 --> 00:01:27,399 Speaker 5: Even when Odd Lots is over, there's always lots More. 32 00:01:27,680 --> 00:01:35,600 Speaker 1: And we really do have the perfect guest, I feel 33 00:01:35,600 --> 00:01:39,600 Speaker 1: a little bit stupid. Go on, but on Monday, obviously. 34 00:01:39,840 --> 00:01:42,560 Speaker 5: You're just now for the first time, just. 35 00:01:42,600 --> 00:01:45,600 Speaker 1: Kidding, Thanks Jo, Thank you. Obviously, the war with Iran 36 00:01:46,000 --> 00:01:49,440 Speaker 1: happened on the weekend and is still happening. And on Monday, 37 00:01:49,480 --> 00:01:52,200 Speaker 1: I woke up and I was thinking about energy markets 38 00:01:52,400 --> 00:01:55,640 Speaker 1: and you know, geopolitics in the Middle East, and I 39 00:01:55,680 --> 00:01:57,520 Speaker 1: was trying to think of someone who would be really 40 00:01:57,560 --> 00:02:01,240 Speaker 1: good to talk about shipping. And I'm embarrassed to say 41 00:02:01,280 --> 00:02:04,040 Speaker 1: it took me a full twenty four hours to remember 42 00:02:04,280 --> 00:02:09,160 Speaker 1: that we actually have marine chaos experts basically on speed 43 00:02:09,200 --> 00:02:10,160 Speaker 1: dial at the moment. 44 00:02:10,360 --> 00:02:14,680 Speaker 6: Well, it's perfect because we are experiencing marine chaos. Obviously, 45 00:02:15,040 --> 00:02:19,560 Speaker 6: we're recording this March fourth. Yesterday, Trump posted on truth 46 00:02:19,639 --> 00:02:22,720 Speaker 6: Social talking about the US actually playing a role as 47 00:02:22,760 --> 00:02:25,160 Speaker 6: sort of an insurer of last resort, because one of 48 00:02:25,160 --> 00:02:27,800 Speaker 6: the things that we've been seeing is like setting aside 49 00:02:27,840 --> 00:02:31,400 Speaker 6: the sort of logistical ability to get goods out of 50 00:02:31,440 --> 00:02:34,160 Speaker 6: the region, get whatever out of the region. There's obviously 51 00:02:34,200 --> 00:02:36,560 Speaker 6: the question can you get insurance and we know that 52 00:02:36,680 --> 00:02:39,760 Speaker 6: you know, prices are soaring, et cetera. You know, insurance 53 00:02:39,800 --> 00:02:43,400 Speaker 6: costs getting too high could end trade flows regardless of 54 00:02:43,400 --> 00:02:46,119 Speaker 6: the actual logistics on the ground, and sort well. 55 00:02:45,960 --> 00:02:48,520 Speaker 1: Not just insurance premiums getting too high, but insurance being 56 00:02:48,560 --> 00:02:49,600 Speaker 1: pulled all together. 57 00:02:49,639 --> 00:02:52,240 Speaker 6: They're pulled all together, that's right. So they you know, 58 00:02:52,639 --> 00:02:55,400 Speaker 6: they are their own entity. That's sort of like separate 59 00:02:55,440 --> 00:02:58,680 Speaker 6: from national you know, there's nations and then there's insurers, 60 00:02:58,680 --> 00:03:00,520 Speaker 6: and they have quite a bit of sale over what 61 00:03:00,600 --> 00:03:02,560 Speaker 6: moves and when and where. Well, all of this. 62 00:03:02,720 --> 00:03:05,960 Speaker 1: Just confirms my long running suspicion as you know, that 63 00:03:06,080 --> 00:03:10,560 Speaker 1: insurers actually control the world in a very underappreciated way. 64 00:03:11,280 --> 00:03:13,840 Speaker 1: We should talk to We need to insert like a 65 00:03:13,919 --> 00:03:18,160 Speaker 1: sound effect here. Speed Dial are marine chaos experts. They are, 66 00:03:18,160 --> 00:03:20,840 Speaker 1: of course Margo Brock and Anton Posner. They are the 67 00:03:20,880 --> 00:03:24,400 Speaker 1: founders of Mercury Group, which specializes in dry cargo and 68 00:03:24,480 --> 00:03:27,480 Speaker 1: global freight logistics. So really the perfect people to talk 69 00:03:27,520 --> 00:03:30,359 Speaker 1: to about this moment. Let's just talk about what you're 70 00:03:30,400 --> 00:03:33,240 Speaker 1: seeing right now with the straight of horror moves. You 71 00:03:33,320 --> 00:03:35,400 Speaker 1: have a lot of clients who I assume have some 72 00:03:35,560 --> 00:03:38,640 Speaker 1: presence there. Again, you guys sort of specialize in dry 73 00:03:38,680 --> 00:03:41,600 Speaker 1: bulk dry cargo, but you have a good handle on 74 00:03:41,640 --> 00:03:44,280 Speaker 1: what's going on. What are you seeing and witnessing and 75 00:03:44,360 --> 00:03:45,600 Speaker 1: living through at the moment. 76 00:03:46,720 --> 00:03:49,000 Speaker 2: Sure, yeah, it's always great for us to be on 77 00:03:49,080 --> 00:03:50,600 Speaker 2: during marine chaos time. 78 00:03:50,680 --> 00:03:50,840 Speaker 3: Right. 79 00:03:50,880 --> 00:03:53,120 Speaker 2: As I mentioned to Tracy yesterday, I think that's going 80 00:03:53,160 --> 00:03:56,320 Speaker 2: to be new business cards for margo and chaos experts. 81 00:03:56,400 --> 00:04:00,240 Speaker 2: So in addition, certainly they take things off right. Indition 82 00:04:00,560 --> 00:04:04,280 Speaker 2: to everyone knows oil and gas are flowing through straight 83 00:04:04,320 --> 00:04:06,960 Speaker 2: over moves in Persian Gulf, which is the always the 84 00:04:07,000 --> 00:04:10,680 Speaker 2: headline commodity sector that everyone talks about in the region, 85 00:04:11,000 --> 00:04:13,920 Speaker 2: you also have things like outbound fertilizers coming out of 86 00:04:13,920 --> 00:04:17,680 Speaker 2: the region. You have outbound aluminum being produced by Emirates 87 00:04:17,720 --> 00:04:21,760 Speaker 2: Global Aluminum and Quatulum and Alba Aluminum Bahrain. You have 88 00:04:21,920 --> 00:04:25,640 Speaker 2: inbound raw materials for the aluminum production lumin NAW that 89 00:04:25,800 --> 00:04:28,400 Speaker 2: goes into luminum production that needs to flow in. You 90 00:04:28,520 --> 00:04:32,680 Speaker 2: have containerized goods, right you have inbound grains going into 91 00:04:32,720 --> 00:04:35,200 Speaker 2: the Persian Gulf. So there's a lot more than just 92 00:04:35,360 --> 00:04:38,479 Speaker 2: oil and gas that's affected when there's a problem in 93 00:04:38,480 --> 00:04:41,400 Speaker 2: the region. Right now, we're seeing, you know, our world 94 00:04:41,440 --> 00:04:45,000 Speaker 2: that's heavy on metals, of course, is being affected by 95 00:04:45,040 --> 00:04:48,880 Speaker 2: the inability for golf aluminum producers to be able to 96 00:04:48,920 --> 00:04:51,440 Speaker 2: ship aluminum out and moving out of the Gulf. So 97 00:04:51,560 --> 00:04:55,640 Speaker 2: that's already created a spike in global aluminum markets, and 98 00:04:55,680 --> 00:04:57,440 Speaker 2: there's a shift at the. 99 00:04:57,360 --> 00:04:57,920 Speaker 4: Moment going on. 100 00:04:57,960 --> 00:05:00,000 Speaker 2: I think ever, it's Global Aluminum is the one that's 101 00:05:00,080 --> 00:05:05,000 Speaker 2: said they're going to start fulfilling orders with aluminum stock 102 00:05:05,040 --> 00:05:06,799 Speaker 2: pos that they have in other parts of the world. 103 00:05:06,839 --> 00:05:09,880 Speaker 2: So we're starting to see in effect on the markets 104 00:05:09,880 --> 00:05:13,719 Speaker 2: that we're involved in. Of course, overall diesel in the 105 00:05:13,760 --> 00:05:18,040 Speaker 2: United States jumped significantly over the past couple of days, 106 00:05:18,080 --> 00:05:20,800 Speaker 2: so we're going to see that trickle down effect coming 107 00:05:20,800 --> 00:05:23,839 Speaker 2: into the world of our In the logistics in North America, 108 00:05:23,960 --> 00:05:27,360 Speaker 2: barge freight on the river system, truck freight, rail freight, 109 00:05:27,360 --> 00:05:29,800 Speaker 2: where we're going to start seeing potentially start seeing fuel 110 00:05:29,839 --> 00:05:33,599 Speaker 2: surcharge clauses kick into effect as diesel starts. 111 00:05:33,320 --> 00:05:33,800 Speaker 4: To move up. 112 00:05:35,279 --> 00:05:38,560 Speaker 6: And then so talk to us about the insurance components, 113 00:05:38,600 --> 00:05:41,880 Speaker 6: because there's the obvious, Yeah, there's the sort of reality 114 00:05:41,920 --> 00:05:44,200 Speaker 6: of moving goods, and then there's the question of can 115 00:05:44,240 --> 00:05:45,440 Speaker 6: you get these shipments insured? 116 00:05:45,560 --> 00:05:48,200 Speaker 1: Well, can I just say I don't understand insurance? Where like, 117 00:05:48,240 --> 00:05:51,159 Speaker 1: you have a war risk insurance policy and then something 118 00:05:51,200 --> 00:05:53,919 Speaker 1: happens and the insurers are like, actually, we're going to 119 00:05:53,920 --> 00:05:55,560 Speaker 1: cancel all the war risk insurance. 120 00:05:55,640 --> 00:05:57,200 Speaker 5: Yeah, explain how this market works. 121 00:05:57,600 --> 00:06:03,040 Speaker 3: Yeah, Well, war risk is an interesting component of your 122 00:06:03,080 --> 00:06:06,960 Speaker 3: policy because depending upon where the policy is written and 123 00:06:07,040 --> 00:06:09,360 Speaker 3: what the custom is. If it's a London policy a 124 00:06:09,440 --> 00:06:14,520 Speaker 3: US policy, you'll have different terms within your policy, but 125 00:06:14,600 --> 00:06:18,520 Speaker 3: they all come with a short cancelation notice period on 126 00:06:18,720 --> 00:06:22,800 Speaker 3: specifically the war risk component. And that cancelation term can 127 00:06:22,839 --> 00:06:26,800 Speaker 3: be anywhere from say two to seven days I've heard, 128 00:06:26,800 --> 00:06:29,400 Speaker 3: depending upon whether it's written on London or a US 129 00:06:29,480 --> 00:06:34,159 Speaker 3: policy or so forth. And that's what's happened. Everyone put 130 00:06:34,160 --> 00:06:38,000 Speaker 3: out the notice immediately upon the war, and now this 131 00:06:38,040 --> 00:06:41,680 Speaker 3: week is when all those cancelation dates are hitting. So 132 00:06:42,440 --> 00:06:47,719 Speaker 3: after that cancelation date, you can rebuy war risk. But 133 00:06:47,800 --> 00:06:51,120 Speaker 3: now you're going to buy at a significantly increased premium. 134 00:06:51,800 --> 00:06:56,320 Speaker 3: So what I'm being told is the current market is 135 00:06:56,400 --> 00:07:02,320 Speaker 3: that where traditionally your premium, which is assessed on the value, 136 00:07:02,360 --> 00:07:05,720 Speaker 3: the declared value of your goods, that's what we're ensuring against. 137 00:07:06,400 --> 00:07:11,600 Speaker 3: So your policy in total, inclusive of your war risk 138 00:07:12,160 --> 00:07:15,760 Speaker 3: maybe might be something around point zero zero five to 139 00:07:15,880 --> 00:07:20,440 Speaker 3: five percent of value. Now to carve out just the 140 00:07:20,640 --> 00:07:25,680 Speaker 3: add on for war risk, they're seeing offers coming anywhere 141 00:07:25,680 --> 00:07:28,600 Speaker 3: from point five to one point five. 142 00:07:28,400 --> 00:07:28,640 Speaker 1: And that. 143 00:07:30,360 --> 00:07:32,480 Speaker 5: Increase in that premium. 144 00:07:33,400 --> 00:07:36,240 Speaker 3: Yeah, so that's if you choose to have war risk, 145 00:07:36,520 --> 00:07:39,600 Speaker 3: and then you know that will push back into the 146 00:07:39,600 --> 00:07:43,520 Speaker 3: rest of the conversation that says what ships are actually 147 00:07:43,880 --> 00:07:48,040 Speaker 3: transiting in war risk areas at this point? Because we're 148 00:07:48,040 --> 00:07:50,720 Speaker 3: seeing the pivot we're seeing and we're seeing that that 149 00:07:50,760 --> 00:07:53,400 Speaker 3: market dropping off very steeply. 150 00:07:53,120 --> 00:07:56,400 Speaker 6: Right now, Well, what types of goods would continue to 151 00:07:56,600 --> 00:08:00,480 Speaker 6: flow logically or economically at these levels? 152 00:08:00,480 --> 00:08:01,240 Speaker 5: What is the pivot? 153 00:08:01,440 --> 00:08:03,880 Speaker 2: Yeah, Joe, I think a good answer to that question 154 00:08:03,960 --> 00:08:06,040 Speaker 2: right off the bat is, let's take the cargoes that 155 00:08:06,120 --> 00:08:09,800 Speaker 2: have no choice. One of our ocean freight team as 156 00:08:09,840 --> 00:08:13,480 Speaker 2: a client and a ship currently loading in Saudi Arabia 157 00:08:13,520 --> 00:08:16,960 Speaker 2: and the Gulf loading dry ball cargo. The ship's in port, 158 00:08:17,240 --> 00:08:20,520 Speaker 2: it's loading the ships p and I Club, the insurance 159 00:08:20,640 --> 00:08:23,600 Speaker 2: group that ensures the ship has issued the notification of 160 00:08:23,640 --> 00:08:27,280 Speaker 2: the cancelation on the ships the ship side insurance. Right, 161 00:08:27,280 --> 00:08:29,360 Speaker 2: you've got two sides. You have the cargo insurance Margo 162 00:08:29,440 --> 00:08:32,360 Speaker 2: is talking about in some detail, and then there's also 163 00:08:32,440 --> 00:08:33,760 Speaker 2: the insurance. 164 00:08:33,240 --> 00:08:33,760 Speaker 4: On the ship. 165 00:08:34,280 --> 00:08:37,480 Speaker 2: So that ship is loading, it's received the notice that 166 00:08:37,600 --> 00:08:42,680 Speaker 2: their existing war risk coverage under their ships p and 167 00:08:42,720 --> 00:08:46,480 Speaker 2: I protection an indemnity policy has been canceled, that they're 168 00:08:46,480 --> 00:08:48,720 Speaker 2: going to need to renew it. The ship has to 169 00:08:48,720 --> 00:08:53,280 Speaker 2: continue loading, has to eventually sail at some point, right 170 00:08:53,360 --> 00:08:56,760 Speaker 2: when she will who knows, But there's no choice but 171 00:08:56,920 --> 00:08:59,360 Speaker 2: to re up under the higher insurance premium. That ship 172 00:08:59,400 --> 00:09:02,280 Speaker 2: is already in the golf, it's already loaded cargo, So 173 00:09:02,320 --> 00:09:05,800 Speaker 2: you have the cargo, the cargo interest. The shipper who 174 00:09:05,880 --> 00:09:08,800 Speaker 2: owns the dry ball goods aboard the ship going to 175 00:09:08,920 --> 00:09:12,960 Speaker 2: need to have all risk cargo insurance on their cargo. 176 00:09:13,360 --> 00:09:16,520 Speaker 2: And then the ship owner also needs to renew their 177 00:09:16,600 --> 00:09:18,360 Speaker 2: P and I policy covering the ship. 178 00:09:18,480 --> 00:09:20,240 Speaker 4: And there's no choice ships there. 179 00:09:20,440 --> 00:09:22,400 Speaker 2: So now it's going to be as I think one 180 00:09:22,400 --> 00:09:25,240 Speaker 2: of the terms when catching up with our ocean freight 181 00:09:25,280 --> 00:09:28,480 Speaker 2: team earlier is a slug fest of who's going to 182 00:09:28,559 --> 00:09:32,600 Speaker 2: pay margo? And I old professor at the York Maritime 183 00:09:32,640 --> 00:09:36,200 Speaker 2: College of Maritime Law and Insurance with Jeffrey Weiss, would 184 00:09:36,200 --> 00:09:39,280 Speaker 2: have always said, everything we're going to talk about this 185 00:09:39,360 --> 00:09:42,760 Speaker 2: semester falls into the category of who pays right, who's 186 00:09:42,800 --> 00:09:46,120 Speaker 2: responsible to pay? Professor Weiss's famous for that. Then who 187 00:09:46,120 --> 00:09:50,040 Speaker 2: pays phrase, and it comes into play exactly these situations. 188 00:09:50,640 --> 00:09:52,720 Speaker 1: So just on this point, can I ask you to 189 00:09:52,840 --> 00:09:58,600 Speaker 1: explain very simply, I guess the ecosystem of insurance and 190 00:09:59,080 --> 00:10:01,720 Speaker 1: shipping and this idea that you know, you hear about 191 00:10:01,720 --> 00:10:05,320 Speaker 1: things like the club insurers and then you have the reinsurers, 192 00:10:05,360 --> 00:10:07,200 Speaker 1: and there seem to be all these different layers. There's 193 00:10:07,240 --> 00:10:09,760 Speaker 1: the insure for the cargo, there's the insurre for the ship, 194 00:10:09,840 --> 00:10:12,000 Speaker 1: as you laid out, and then there's this question of 195 00:10:12,360 --> 00:10:15,160 Speaker 1: who's actually going to pay it because you have, I 196 00:10:15,200 --> 00:10:19,040 Speaker 1: guess a chain that exists between you know, the charterers, 197 00:10:19,200 --> 00:10:22,400 Speaker 1: the ship owners and buyers of the cargo. Can you 198 00:10:22,480 --> 00:10:26,079 Speaker 1: just lay that out kind of very simply for us. 199 00:10:26,480 --> 00:10:31,040 Speaker 2: Yeah, And of course we're free people, not insurance experts, 200 00:10:31,080 --> 00:10:34,760 Speaker 2: and all going well without mentioning names and working on 201 00:10:34,840 --> 00:10:38,360 Speaker 2: connecting Tracy and I discussed yesterday working on connecting somebody 202 00:10:38,840 --> 00:10:42,160 Speaker 2: very key at one of the world leading P and 203 00:10:42,200 --> 00:10:43,000 Speaker 2: I clubs. 204 00:10:42,679 --> 00:10:45,760 Speaker 1: To potentially Well, now you've said it in public, so 205 00:10:45,800 --> 00:10:47,240 Speaker 1: the pressure the pressures on. 206 00:10:48,440 --> 00:10:51,560 Speaker 2: Notice, I'm not mentioning a gender or a name or 207 00:10:51,600 --> 00:10:54,320 Speaker 2: anything that gives away anything other than that, so we'll 208 00:10:54,320 --> 00:10:57,880 Speaker 2: see fingers crossed it. 209 00:10:58,840 --> 00:11:03,400 Speaker 6: Exactly, we've already you've already gendered the ships, which is 210 00:11:04,920 --> 00:11:06,959 Speaker 6: I was just reading something about how you know it's 211 00:11:07,040 --> 00:11:09,960 Speaker 6: very you know the English doesn't have gendered now with 212 00:11:10,040 --> 00:11:12,160 Speaker 6: the exception of ships anyway, Sorry, keep. 213 00:11:12,040 --> 00:11:15,880 Speaker 2: Going, yeah, exactly, so yeah, to make it, to break 214 00:11:15,880 --> 00:11:19,360 Speaker 2: it down very simply, right, the shipowner carries protection and 215 00:11:19,440 --> 00:11:24,000 Speaker 2: indemnity insurance, hull insurance, those policies that cover the ship 216 00:11:24,080 --> 00:11:26,920 Speaker 2: and its engines and so forth, all of the physical 217 00:11:26,920 --> 00:11:29,520 Speaker 2: attributes of the vessel and so forth. That's what the 218 00:11:29,559 --> 00:11:33,240 Speaker 2: shipowner carries on it. Now, in a contract of carriage, 219 00:11:33,240 --> 00:11:36,440 Speaker 2: whether it's a charter party or a bill of lading, 220 00:11:36,480 --> 00:11:40,000 Speaker 2: a liner bill of lading that has a limitation of 221 00:11:40,080 --> 00:11:45,440 Speaker 2: liability to the cargo owner in that contractive carriage. The 222 00:11:45,559 --> 00:11:48,320 Speaker 2: US laws covered by the Carriage of Goods by Seas 223 00:11:48,360 --> 00:11:51,960 Speaker 2: Act COGSA, which typically carries a five hundred dollars per 224 00:11:52,040 --> 00:11:56,040 Speaker 2: package or per Ton limitation of liability, so the ship 225 00:11:56,040 --> 00:11:59,800 Speaker 2: owner is only liable to a certain extent of value 226 00:12:00,080 --> 00:12:03,560 Speaker 2: of the goods that the shipper is carrying on the ship. 227 00:12:04,000 --> 00:12:05,360 Speaker 4: Now we flip over it to the. 228 00:12:05,240 --> 00:12:09,080 Speaker 2: Cargo owner side, and the cargo owner, knowing that the 229 00:12:09,160 --> 00:12:12,520 Speaker 2: ship owner only has a certain limitation of liability, the 230 00:12:12,600 --> 00:12:17,120 Speaker 2: cargo owner will go out with the right guidance. We'll 231 00:12:17,160 --> 00:12:21,040 Speaker 2: get all risks cargo insurance, and that's to provide them 232 00:12:21,480 --> 00:12:24,760 Speaker 2: the coverage for the value of the goods that they're 233 00:12:24,800 --> 00:12:28,320 Speaker 2: carrying on board the ship, over and above whatever the 234 00:12:28,360 --> 00:12:32,640 Speaker 2: shipowner's limitation of liability is. When there's a casualty and 235 00:12:32,640 --> 00:12:35,000 Speaker 2: a loss, as a cargo owner, you want to be 236 00:12:35,040 --> 00:12:39,079 Speaker 2: able to collect from your ll risk cargo insurance policy 237 00:12:39,200 --> 00:12:41,560 Speaker 2: and let them fight it out with the shipowner, not 238 00:12:41,720 --> 00:12:46,280 Speaker 2: be stuck in arbitration in London or in Singapore or 239 00:12:46,600 --> 00:12:49,120 Speaker 2: New York fighting it out later on. And then there's 240 00:12:49,160 --> 00:12:52,719 Speaker 2: another type of insurance too. When you're chartering a ship 241 00:12:52,160 --> 00:12:56,840 Speaker 2: as a cargo interest, you get charters liability insurance is 242 00:12:57,280 --> 00:13:01,280 Speaker 2: pretty common, and that covers the ship or the cargo 243 00:13:01,360 --> 00:13:05,960 Speaker 2: interest from other liability elements. Let's say the ship has 244 00:13:05,960 --> 00:13:09,640 Speaker 2: a casualty and people are killed or hurt. There's going 245 00:13:09,679 --> 00:13:12,560 Speaker 2: to be lawsuits filed against everyone involved in the ship, 246 00:13:12,600 --> 00:13:18,280 Speaker 2: and charter's liability insurance covers the charter, the cargo interests 247 00:13:18,720 --> 00:13:22,680 Speaker 2: liability as it relates to other damages or if the 248 00:13:22,720 --> 00:13:25,200 Speaker 2: ship is damaged by their steven or is loading the 249 00:13:25,240 --> 00:13:27,760 Speaker 2: ship or discharging the ship, so other other things that 250 00:13:27,880 --> 00:13:30,599 Speaker 2: can come into play there too. So I tried to 251 00:13:30,679 --> 00:13:33,240 Speaker 2: lay it out as kind of clear as possible. 252 00:13:32,720 --> 00:13:41,280 Speaker 1: But you know, it's yeah, there's a lot of moving parts. 253 00:13:49,400 --> 00:13:51,920 Speaker 6: Talk to us about the announcement from Trump that the 254 00:13:52,040 --> 00:13:54,600 Speaker 6: US could get involved and be some sort of play 255 00:13:54,600 --> 00:13:58,480 Speaker 6: an insurance role here. What can that do? 256 00:13:58,520 --> 00:14:00,640 Speaker 5: Is that? And is that novel? Is that? Is there 257 00:14:00,640 --> 00:14:02,120 Speaker 5: any precedent for anything like that? 258 00:14:02,679 --> 00:14:08,640 Speaker 2: Yeah, this news just came out. The President will often 259 00:14:08,679 --> 00:14:12,199 Speaker 2: say things that then need to be implemented by the bureaucrats, right, 260 00:14:12,280 --> 00:14:15,760 Speaker 2: so the mechanics of it are always complicated. There's precedent 261 00:14:15,960 --> 00:14:20,320 Speaker 2: for US government agencies providing insurance. The Export Import Bank, 262 00:14:20,360 --> 00:14:24,280 Speaker 2: for example, offers trade credit insurance. Let's take that for example. 263 00:14:24,360 --> 00:14:24,560 Speaker 4: Right. 264 00:14:24,960 --> 00:14:28,240 Speaker 2: As for protection in Demni P and I insurance on ships, 265 00:14:28,640 --> 00:14:32,720 Speaker 2: I'm sure, although I don't have any specific instances, but 266 00:14:33,280 --> 00:14:36,200 Speaker 2: I'm sure there's been precedent for that in history. So 267 00:14:36,240 --> 00:14:38,560 Speaker 2: I don't think that that's too much of a stretch 268 00:14:38,600 --> 00:14:41,360 Speaker 2: for the government to necessarily come in and offer some 269 00:14:41,480 --> 00:14:43,640 Speaker 2: kind of safety net for ships to be able to 270 00:14:43,680 --> 00:14:46,840 Speaker 2: get P and I insurance. But maybe more complicated is 271 00:14:47,440 --> 00:14:51,400 Speaker 2: maybe having US Navy or Coastguard escorting ships through this 272 00:14:51,720 --> 00:14:54,880 Speaker 2: straight up poor moves. That's not an easy task. 273 00:14:55,000 --> 00:14:56,800 Speaker 4: That was done. I think what was in the nineteen 274 00:14:56,840 --> 00:14:57,600 Speaker 4: eighties when. 275 00:14:57,440 --> 00:15:02,280 Speaker 2: We reflagged tankers on American flags on them to protect 276 00:15:02,280 --> 00:15:04,880 Speaker 2: them from the Iran Iraq war at the time, when 277 00:15:04,880 --> 00:15:07,440 Speaker 2: we had Navy ships escorting ships through the straight oh 278 00:15:07,520 --> 00:15:11,240 Speaker 2: arm moves. But that is an expensive proposition. It's not 279 00:15:11,400 --> 00:15:15,920 Speaker 2: perfect right, Missiles and attacks can get through. You're putting 280 00:15:16,200 --> 00:15:19,320 Speaker 2: US Navy ships, you're taking them out of circulation and 281 00:15:19,400 --> 00:15:22,360 Speaker 2: out of deployment for other purposes, and you're putting them 282 00:15:22,480 --> 00:15:25,280 Speaker 2: very much in harm's way. That approach to the straight 283 00:15:25,320 --> 00:15:29,360 Speaker 2: uh arm moves. Navigationally speaking, is delicate to say the least, 284 00:15:29,360 --> 00:15:30,880 Speaker 2: and it can be very exposing. 285 00:15:31,200 --> 00:15:33,640 Speaker 1: What's it like actually sailing through the strait? 286 00:15:35,600 --> 00:15:38,440 Speaker 4: I have not sailed to the straight margo, has it either? Right? 287 00:15:38,480 --> 00:15:39,240 Speaker 4: Both of us were. 288 00:15:39,800 --> 00:15:41,800 Speaker 2: Both of us stayed a lot shore side after I 289 00:15:41,800 --> 00:15:45,120 Speaker 2: sailed through the Panama Canal on a Navy tanker, which 290 00:15:45,200 --> 00:15:48,800 Speaker 2: was which really was a fun topic with Tom Keen 291 00:15:48,840 --> 00:15:51,120 Speaker 2: and Paul Sweeney one morning when looked like we were 292 00:15:51,120 --> 00:15:53,200 Speaker 2: going to take over Panama the day before. 293 00:15:53,920 --> 00:15:57,720 Speaker 1: Sorry, Margot wars well, Okay, Actually this reminds me, just 294 00:15:57,760 --> 00:16:01,720 Speaker 1: setting aside the insurance component, do people want to be 295 00:16:01,880 --> 00:16:05,200 Speaker 1: moving stuff through the strait of horror moves at the moment? 296 00:16:05,240 --> 00:16:08,880 Speaker 1: I imagine if you're captaining or crewing a ship. I 297 00:16:08,880 --> 00:16:10,960 Speaker 1: would love to captain a ship, by the way, but 298 00:16:11,280 --> 00:16:13,360 Speaker 1: you wouldn't want to be in the strait at the moment. 299 00:16:13,480 --> 00:16:13,640 Speaker 4: Right. 300 00:16:13,680 --> 00:16:17,040 Speaker 1: There are human considerations beyond just how am I going 301 00:16:17,120 --> 00:16:20,400 Speaker 1: to get compensation for the cargo or a lost vessel. 302 00:16:21,040 --> 00:16:24,400 Speaker 3: Obviously it's a logistical nightmare to get through. Their safety 303 00:16:24,480 --> 00:16:29,440 Speaker 3: is concerned personnel This morning, a small container vessel I 304 00:16:29,440 --> 00:16:33,760 Speaker 3: think it was eighteen hundred TuS twenty foot units was hit, 305 00:16:33,880 --> 00:16:38,200 Speaker 3: with their saying an unknown projectile hit it above the 306 00:16:38,240 --> 00:16:40,800 Speaker 3: water line, put the engine room on fire. They just 307 00:16:40,840 --> 00:16:43,120 Speaker 3: abandoned ship. They took they pulled the whole crew off 308 00:16:43,680 --> 00:16:46,200 Speaker 3: and abandoned ship. I mean, you don't even stay there 309 00:16:46,240 --> 00:16:48,480 Speaker 3: to fight the fire. You just get out of there. 310 00:16:48,800 --> 00:16:52,400 Speaker 3: So yeah, people don't want to be there. And if 311 00:16:52,440 --> 00:16:57,160 Speaker 3: you were on the liquid side petroleums crewed, you have 312 00:16:57,160 --> 00:17:01,280 Speaker 3: a harder time avoiding going through that region because of 313 00:17:02,040 --> 00:17:03,720 Speaker 3: what it is. Right, that's the source of a lot 314 00:17:03,720 --> 00:17:07,920 Speaker 3: of our global oil, but other commodities dry in large 315 00:17:07,960 --> 00:17:12,879 Speaker 3: part we can avoid it. So to Anton's comments, the 316 00:17:13,119 --> 00:17:18,040 Speaker 3: aluminum sector has a large part shifted deviated from that 317 00:17:18,160 --> 00:17:21,959 Speaker 3: area for now. But in addition, ships are navigating away 318 00:17:22,640 --> 00:17:25,840 Speaker 3: and it means a longer transit time, which means a 319 00:17:25,880 --> 00:17:30,320 Speaker 3: more costly voyage, so it's less desirable. It does increase 320 00:17:30,359 --> 00:17:35,760 Speaker 3: freight rates, but it's safer. Your goods are safer, And 321 00:17:36,520 --> 00:17:39,200 Speaker 3: when you start adding on these new war risk premiums, 322 00:17:39,200 --> 00:17:41,480 Speaker 3: if you're going to take them, i'd venture to guess 323 00:17:41,480 --> 00:17:43,640 Speaker 3: it's still cheaper to take the long way around now. 324 00:17:43,800 --> 00:17:46,080 Speaker 6: So it's the kind of thing for certain liquids there's 325 00:17:46,080 --> 00:17:48,960 Speaker 6: no choice, like it has to flow through there. It 326 00:17:49,080 --> 00:17:53,080 Speaker 6: sounds like for some of these other things aluminum otherwise 327 00:17:53,640 --> 00:17:57,040 Speaker 6: for now, either there's going to be some long route 328 00:17:57,160 --> 00:17:59,639 Speaker 6: or it's just that is not going to be a source. 329 00:18:00,040 --> 00:18:02,800 Speaker 6: If it would just be less, they'll just be less 330 00:18:02,880 --> 00:18:06,720 Speaker 6: aluminum in the world, or some existing source of aluminum 331 00:18:06,760 --> 00:18:07,320 Speaker 6: will ramp. 332 00:18:07,200 --> 00:18:07,800 Speaker 5: Up their production. 333 00:18:08,280 --> 00:18:10,879 Speaker 2: Right Like you take Emirates School wal Aluminum for example, 334 00:18:11,000 --> 00:18:13,880 Speaker 2: Joe that the United our Remembirates have the luxury of 335 00:18:13,920 --> 00:18:17,399 Speaker 2: having ports and the ability to potentially load hips on 336 00:18:17,400 --> 00:18:20,520 Speaker 2: the Gulf of Oman side outside of the Persian golf rights. 337 00:18:20,520 --> 00:18:24,600 Speaker 2: As Margo said, longer route potentially not ideal. This is 338 00:18:24,600 --> 00:18:27,120 Speaker 2: not where they typically load. One thing I haven't looked 339 00:18:27,119 --> 00:18:29,560 Speaker 2: at is Emirates School of Aluminum shifting some of that 340 00:18:29,600 --> 00:18:32,240 Speaker 2: aluminum loading to ports on the Gulf of Omans. 341 00:18:32,560 --> 00:18:33,960 Speaker 4: Take a look to take a look at that. 342 00:18:34,160 --> 00:18:37,560 Speaker 2: But I wanted to say, you know Tracy's question about 343 00:18:37,600 --> 00:18:40,760 Speaker 2: what a cruise captains of ships thinking on this too. 344 00:18:41,119 --> 00:18:43,320 Speaker 2: I'm going to take you back, Tracy to way to 345 00:18:43,320 --> 00:18:46,600 Speaker 2: answer your question. Imagine two crazy people came up with 346 00:18:46,680 --> 00:18:48,879 Speaker 2: a scheme to load a Teddy Bear and a container 347 00:18:49,320 --> 00:18:51,960 Speaker 2: and then end of the Persian Gulf. Do you want 348 00:18:51,960 --> 00:18:54,119 Speaker 2: to risk your life as a ship's crew like for 349 00:18:54,200 --> 00:18:56,159 Speaker 2: somebody's Teddy Bear, you know, stuck in the middle of 350 00:18:56,160 --> 00:18:59,320 Speaker 2: a twenty foot container, or you're getting off the ship and. 351 00:18:59,280 --> 00:19:01,920 Speaker 4: Saying, yeah, I'm not risking my life for that, right. 352 00:19:03,400 --> 00:19:05,040 Speaker 3: I was going to say, as a side note though 353 00:19:05,480 --> 00:19:08,800 Speaker 3: to that alternate plan on the Gulf of Oman, I 354 00:19:08,880 --> 00:19:12,159 Speaker 3: was reading that they're reporting missiles and drones in the 355 00:19:12,200 --> 00:19:15,680 Speaker 3: Gulf of Oman as well, so in addition to the 356 00:19:15,720 --> 00:19:16,359 Speaker 3: Straits apartment. 357 00:19:16,880 --> 00:19:19,000 Speaker 6: So, by the way, listeners, it's helpful to pull up 358 00:19:19,000 --> 00:19:22,720 Speaker 6: a map during some of these conversations, because yes, you 359 00:19:22,720 --> 00:19:26,160 Speaker 6: can see very clearly Oman has the benefit by and large. 360 00:19:26,320 --> 00:19:28,600 Speaker 6: I don't know exactly what the reports are on its coast, 361 00:19:28,640 --> 00:19:31,240 Speaker 6: but yes, the Strait of Horror moods is less of 362 00:19:31,240 --> 00:19:33,880 Speaker 6: an issue for them, whereas for the UAE, they're right 363 00:19:33,920 --> 00:19:34,200 Speaker 6: in it. 364 00:19:35,119 --> 00:19:38,520 Speaker 4: Yeah unless that who Thi's start up again, right, so who? 365 00:19:38,560 --> 00:19:40,439 Speaker 2: These have been an interesting one and Margaret I were 366 00:19:40,520 --> 00:19:43,080 Speaker 2: just talking about this out of the head of coming 367 00:19:43,119 --> 00:19:45,399 Speaker 2: on the Hohothius have put the threat out there that 368 00:19:45,400 --> 00:19:47,720 Speaker 2: they're going to restart the tacks in the Red Sea 369 00:19:48,080 --> 00:19:51,800 Speaker 2: and off the coast of Yemen and potentially significantly deterred 370 00:19:51,840 --> 00:19:54,040 Speaker 2: traffic from heading to the US Canal. But they haven't 371 00:19:54,080 --> 00:19:57,280 Speaker 2: started any attacked hit. The threats out there already. You 372 00:19:57,359 --> 00:20:01,200 Speaker 2: see container ships, container lines diverting ships to the Cape 373 00:20:01,200 --> 00:20:03,879 Speaker 2: of Good Hope to round southern tip of Africa to 374 00:20:04,000 --> 00:20:06,159 Speaker 2: avoid heading into the Red Sea in case that who 375 00:20:06,200 --> 00:20:09,000 Speaker 2: these do start start up with the missiles and attacks 376 00:20:09,119 --> 00:20:13,600 Speaker 2: and boarding ships again, but they as of at least 377 00:20:13,640 --> 00:20:17,280 Speaker 2: fifteen minutes ago before we get started this podcast. It's 378 00:20:17,359 --> 00:20:19,560 Speaker 2: out there as a threat, but who these haven't done 379 00:20:19,600 --> 00:20:23,920 Speaker 2: anything yet. The threat in and of itself already causes 380 00:20:23,960 --> 00:20:24,880 Speaker 2: reactions though. 381 00:20:25,040 --> 00:20:27,399 Speaker 1: Right yeah, I remember, I think the big port in 382 00:20:27,480 --> 00:20:31,280 Speaker 1: Oman is Solala, and I only know this because I 383 00:20:31,400 --> 00:20:35,520 Speaker 1: visited there once, but like it's pretty close to Yemen, right, Like, 384 00:20:35,560 --> 00:20:37,840 Speaker 1: I don't think there have been any direct attacks, but 385 00:20:38,440 --> 00:20:42,359 Speaker 1: certainly relatively close. This reminds me, though, have you seen 386 00:20:42,520 --> 00:20:48,200 Speaker 1: any early signs of people doing maybe insurance arbitrage where 387 00:20:48,440 --> 00:20:52,879 Speaker 1: you know, like certain flags or certain jurisdictions or entities 388 00:20:53,160 --> 00:20:55,840 Speaker 1: are willing to run the horror moves in a way 389 00:20:55,880 --> 00:20:58,320 Speaker 1: that I guess Western companies just aren't at the moment, 390 00:20:58,480 --> 00:21:02,600 Speaker 1: or is it too soon for that uncertain Yeah, I. 391 00:21:02,640 --> 00:21:06,040 Speaker 2: Think too soon for that, Tracy, not horror moves, right, 392 00:21:06,080 --> 00:21:08,359 Speaker 2: we did see on the horror move situation of the 393 00:21:08,400 --> 00:21:12,360 Speaker 2: Persian Gulf. Haven't seen that happening. There's some ships moving through, 394 00:21:12,400 --> 00:21:16,200 Speaker 2: so it maybe happening maybe with some of the very 395 00:21:16,200 --> 00:21:19,120 Speaker 2: few ships that are moving through. But maybe a good 396 00:21:19,160 --> 00:21:22,399 Speaker 2: anecdote to kind of bring up here was when we 397 00:21:22,400 --> 00:21:25,600 Speaker 2: were dealing with, you know, a year or plus or 398 00:21:25,640 --> 00:21:30,359 Speaker 2: so ago, when the Houthis were really really ramping up 399 00:21:30,400 --> 00:21:33,399 Speaker 2: their attacks, there was a lot of chatter about the 400 00:21:33,400 --> 00:21:37,720 Speaker 2: fact that the Chinese had essentially the Chinese easy Pass 401 00:21:37,880 --> 00:21:41,640 Speaker 2: pull transponder to get past the Houthis. So we're seeing 402 00:21:42,320 --> 00:21:45,360 Speaker 2: talk at that time of working with Chinese ship operators 403 00:21:45,359 --> 00:21:48,159 Speaker 2: and Chinese ship owners that were more competitive because they 404 00:21:48,160 --> 00:21:51,280 Speaker 2: could still send their ships through the Red Sea and 405 00:21:51,400 --> 00:21:56,320 Speaker 2: into the sus Canal, whereas more Western operated vessels that 406 00:21:56,480 --> 00:21:59,159 Speaker 2: could be tied to countries that were unfriendly to the 407 00:21:59,200 --> 00:22:02,960 Speaker 2: Houthis really target on them, right. So so we're seeing 408 00:22:03,080 --> 00:22:05,960 Speaker 2: some of that arbitrage a bit during the when these 409 00:22:05,960 --> 00:22:06,800 Speaker 2: word full swim. 410 00:22:07,080 --> 00:22:23,400 Speaker 6: So one of the impressions that I get with when 411 00:22:23,440 --> 00:22:25,960 Speaker 6: we have incidents such as this is that there's a 412 00:22:26,000 --> 00:22:29,960 Speaker 6: certain nonlinearity or that like things really compound over time. 413 00:22:30,080 --> 00:22:33,680 Speaker 6: That you know, one day disruption is one thing, or 414 00:22:33,720 --> 00:22:36,200 Speaker 6: two day disruption is another thing. But by the time 415 00:22:36,280 --> 00:22:38,720 Speaker 6: it gets to ten days or two weeks or a month, 416 00:22:39,119 --> 00:22:41,679 Speaker 6: then it really is it gets exponential. 417 00:22:41,760 --> 00:22:44,240 Speaker 5: Like talk about talk to us about the. 418 00:22:44,240 --> 00:22:47,560 Speaker 6: Risks and how they compound. The longer the war goes 419 00:22:47,600 --> 00:22:50,960 Speaker 6: on or the longer the disruptions are in this particular part. 420 00:22:50,800 --> 00:22:51,200 Speaker 1: Of the world. 421 00:22:52,240 --> 00:22:55,959 Speaker 6: Well, is that the risk to yeah, yeah, global support 422 00:22:56,200 --> 00:22:58,320 Speaker 6: supply chain, the risk of global. 423 00:22:58,040 --> 00:23:00,600 Speaker 5: Supply chains for all of this stuff. The longer this goes. 424 00:23:00,440 --> 00:23:04,880 Speaker 3: On, Well, I think we reflect back, we've lived it 425 00:23:05,400 --> 00:23:10,320 Speaker 3: very recently in a non war situation in just what 426 00:23:10,359 --> 00:23:15,399 Speaker 3: we saw during the aftermath of COVID when shipping just 427 00:23:15,560 --> 00:23:19,160 Speaker 3: and I think we actually spoke then about this, shipping 428 00:23:19,280 --> 00:23:23,679 Speaker 3: just grew out of control and we saw all the 429 00:23:23,720 --> 00:23:30,199 Speaker 3: subsequent delays and that was really just because of system overuse, congestion, 430 00:23:30,640 --> 00:23:33,840 Speaker 3: and ultimately, you know, a bit of failure because our 431 00:23:33,840 --> 00:23:35,639 Speaker 3: system just wasn't big enough for as much as we 432 00:23:35,640 --> 00:23:39,040 Speaker 3: were trying to ship during that period. That was when 433 00:23:39,080 --> 00:23:42,879 Speaker 3: we had container ships and cargo ships stacked off the 434 00:23:42,920 --> 00:23:46,520 Speaker 3: port of la We had clients with steel coming in 435 00:23:46,680 --> 00:23:49,159 Speaker 3: where they said you could be on you could be 436 00:23:49,200 --> 00:23:53,040 Speaker 3: on anchor for four to six weeks waiting for your birth. 437 00:23:53,240 --> 00:23:55,119 Speaker 3: What do you want to do? Then you start to 438 00:23:55,160 --> 00:23:58,560 Speaker 3: have to look at the bottom line of your dollars 439 00:23:58,640 --> 00:24:01,919 Speaker 3: and cents, and that's what we're going to see again. 440 00:24:03,040 --> 00:24:07,040 Speaker 3: Like anything, it just continues to back up, right, so 441 00:24:07,080 --> 00:24:11,040 Speaker 3: we have cargo on vessels that aren't getting where they 442 00:24:11,040 --> 00:24:14,560 Speaker 3: need to be. If it does, it's at a significantly 443 00:24:14,800 --> 00:24:19,120 Speaker 3: increased cost. Going forward. If you want to book your 444 00:24:19,160 --> 00:24:23,800 Speaker 3: freight the baseline, the starting cost is going to be 445 00:24:24,240 --> 00:24:29,400 Speaker 3: that much higher because of risk, because of increased sailing 446 00:24:29,880 --> 00:24:32,640 Speaker 3: distances that you have to go. And once you start 447 00:24:32,720 --> 00:24:35,879 Speaker 3: using up your assets for longer periods of time, supply 448 00:24:35,960 --> 00:24:40,400 Speaker 3: and demand now capacity starts to shrink. So it really 449 00:24:40,400 --> 00:24:43,480 Speaker 3: becomes quite the domino effect. And the longer it goes, 450 00:24:44,320 --> 00:24:47,400 Speaker 3: the more out of whack our system gets. The prices 451 00:24:47,480 --> 00:24:52,200 Speaker 3: go up. And that's where we can talk about this 452 00:24:52,400 --> 00:24:57,880 Speaker 3: short term is the price of commodities, and that's where 453 00:24:57,880 --> 00:25:01,160 Speaker 3: our jumping jumping off point is. As we talk about 454 00:25:01,440 --> 00:25:05,320 Speaker 3: oil and we're talking about aluminum and fertilizers and cements 455 00:25:05,400 --> 00:25:09,119 Speaker 3: and all these raw materials or semi finished goods. But 456 00:25:09,280 --> 00:25:12,119 Speaker 3: down the line we all start to feel it as 457 00:25:12,160 --> 00:25:16,359 Speaker 3: we did in post COVID, because that effect does start 458 00:25:16,400 --> 00:25:19,120 Speaker 3: to trickle into our retail as well. 459 00:25:19,200 --> 00:25:22,439 Speaker 6: As you know, this has the potential to be a 460 00:25:22,480 --> 00:25:26,600 Speaker 6: disruption on the scale of COVID or like we're talking 461 00:25:26,640 --> 00:25:27,640 Speaker 6: about that ballpark. 462 00:25:27,680 --> 00:25:28,360 Speaker 5: If this goes on. 463 00:25:28,400 --> 00:25:31,440 Speaker 3: Long enough, I think that's the wild card. How long 464 00:25:31,480 --> 00:25:32,280 Speaker 3: does it go on for? 465 00:25:32,840 --> 00:25:35,600 Speaker 4: Yeah, there's going to be winners and losers, right, in 466 00:25:35,640 --> 00:25:36,720 Speaker 4: addition to the losers. 467 00:25:36,840 --> 00:25:39,919 Speaker 2: Yeah, also always winners too. Right, going back to the 468 00:25:39,920 --> 00:25:43,520 Speaker 2: Hoo TMS, no one was more excited than ship fuel 469 00:25:43,560 --> 00:25:47,400 Speaker 2: suppliers down in Southern Africa, right with all the ships 470 00:25:47,440 --> 00:25:51,320 Speaker 2: moving moving through the area that needed to refuel in 471 00:25:51,560 --> 00:25:54,560 Speaker 2: South African ports rather than in ports in the Red 472 00:25:54,600 --> 00:25:59,840 Speaker 2: Sea and so forth, So supply chains shift and eventually 473 00:26:00,080 --> 00:26:02,879 Speaker 2: start to set in. Is this going to your question, Joe, right, 474 00:26:02,960 --> 00:26:04,240 Speaker 2: is this going to be at the scale of what 475 00:26:04,320 --> 00:26:07,800 Speaker 2: we saw with COVID, Boy, I hope not. I COVID 476 00:26:07,800 --> 00:26:11,600 Speaker 2: would hit every part of the world, every port in 477 00:26:11,640 --> 00:26:14,680 Speaker 2: the world had problems and so forth, So I think 478 00:26:14,840 --> 00:26:16,639 Speaker 2: I would think it would take quite a bit for 479 00:26:16,680 --> 00:26:20,040 Speaker 2: it to get to that stage. We're but already, as 480 00:26:20,040 --> 00:26:22,359 Speaker 2: I mentioned earlier, with the price of diesel fuel in 481 00:26:22,400 --> 00:26:26,199 Speaker 2: the US jumping, that's already going to start hitting transport 482 00:26:26,280 --> 00:26:29,320 Speaker 2: of local goods going from distribution centers to the public 483 00:26:29,520 --> 00:26:33,800 Speaker 2: local public supermarket here in Florida. So it's going it's 484 00:26:33,840 --> 00:26:36,560 Speaker 2: trickling down already. We're going to start seeing some margo 485 00:26:36,600 --> 00:26:39,679 Speaker 2: and I'm bracing for the fuel surch charges coming up. 486 00:26:39,880 --> 00:26:40,400 Speaker 4: Yeah. 487 00:26:40,720 --> 00:26:44,840 Speaker 1: This also reminds me I think even before recent events, 488 00:26:44,880 --> 00:26:48,159 Speaker 1: we were starting to see freight rates pick up a 489 00:26:48,200 --> 00:26:50,480 Speaker 1: little bit in the US, and some people were talking 490 00:26:50,480 --> 00:26:54,320 Speaker 1: about a potential turn in the cycle. I imagine higher 491 00:26:54,400 --> 00:26:59,639 Speaker 1: oil prices will you eat into some of the industry's profits. 492 00:26:59,680 --> 00:27:03,520 Speaker 1: But before this week's events, did it feel like we 493 00:27:03,520 --> 00:27:05,680 Speaker 1: were starting to see a little bit of a turn. 494 00:27:06,960 --> 00:27:10,119 Speaker 2: Yeah, we're just reallyously working on twenty twenty six Barche 495 00:27:10,640 --> 00:27:14,639 Speaker 2: Barche contracts for particularly for northbound goods like steel metals 496 00:27:14,640 --> 00:27:17,119 Speaker 2: that are part of our typical business market was on 497 00:27:17,160 --> 00:27:19,840 Speaker 2: the front lines on that and we didn't see much 498 00:27:19,880 --> 00:27:22,080 Speaker 2: in the way of significant increases. 499 00:27:21,640 --> 00:27:25,200 Speaker 3: Right, What do I think for Okay, Yeah, no, no, 500 00:27:25,680 --> 00:27:29,399 Speaker 3: routine increases. It was nothing. 501 00:27:29,600 --> 00:27:31,480 Speaker 5: Yeah, it seems like there's a lot on the idea 502 00:27:31,720 --> 00:27:32,600 Speaker 5: the trucking the freight. 503 00:27:33,200 --> 00:27:37,160 Speaker 3: Yeah, truck freight has been yeah, where things are more volatile. 504 00:27:37,600 --> 00:27:40,800 Speaker 3: Trucking is so so reactive to the market, much. 505 00:27:40,600 --> 00:27:44,439 Speaker 2: More liquid market, right with thousands of small carriers and 506 00:27:44,560 --> 00:27:46,119 Speaker 2: operators and so forth. 507 00:27:46,280 --> 00:27:47,480 Speaker 4: And then rail freight. 508 00:27:47,560 --> 00:27:50,880 Speaker 2: Rail freight is the exact opposite of the truck freight market, 509 00:27:50,960 --> 00:27:56,440 Speaker 2: from liquidity to monopolies let's not call them monopolies actually, right, but. 510 00:27:56,400 --> 00:27:58,840 Speaker 6: We know in trucks that you have a down period 511 00:27:58,880 --> 00:28:02,160 Speaker 6: and then thousand, thousands of owner operators will come out 512 00:28:02,200 --> 00:28:04,320 Speaker 6: of the market and go out of business, and so 513 00:28:04,720 --> 00:28:08,600 Speaker 6: supply swings down and up in trucking in a way 514 00:28:08,640 --> 00:28:12,679 Speaker 6: that would be unimaginable and something like, right exactly for 515 00:28:12,800 --> 00:28:13,439 Speaker 6: those reasons. 516 00:28:13,600 --> 00:28:16,800 Speaker 1: Yeah, So I know we've we've said multiple times now 517 00:28:16,800 --> 00:28:19,240 Speaker 1: that the wildcard is really the length and how long 518 00:28:19,280 --> 00:28:21,600 Speaker 1: this goes on for it. But are there any I guess, 519 00:28:21,800 --> 00:28:25,359 Speaker 1: proactive steps that you're taking in your own business to 520 00:28:25,600 --> 00:28:27,920 Speaker 1: prepare for further disruption? 521 00:28:28,880 --> 00:28:34,120 Speaker 3: Good question, because where we fit into the supply chain 522 00:28:34,280 --> 00:28:39,360 Speaker 3: is that our clients are the traders, so we're managing 523 00:28:39,440 --> 00:28:45,160 Speaker 3: their supply chain. What protective actions or course correctors they 524 00:28:45,200 --> 00:28:48,880 Speaker 3: have in mind really will relate to their trading book, 525 00:28:49,360 --> 00:28:55,000 Speaker 3: which is going to probably be sourcing in alternate locations 526 00:28:55,080 --> 00:28:58,200 Speaker 3: as needed if you can't get your commodity out of 527 00:28:58,200 --> 00:29:01,640 Speaker 3: the Middle East or an affected region. When we dial 528 00:29:01,720 --> 00:29:07,800 Speaker 3: into domestic logistics here North American logistics, we will see 529 00:29:07,880 --> 00:29:12,520 Speaker 3: everything continue to flow, and we don't expect as much 530 00:29:12,600 --> 00:29:18,240 Speaker 3: a disruption of capacity. The disruption will be prices, but 531 00:29:18,320 --> 00:29:21,200 Speaker 3: we'll still be moving moving things, and we will still 532 00:29:21,240 --> 00:29:25,320 Speaker 3: see truck, rail, barge, and you know, ocean freight will 533 00:29:25,360 --> 00:29:28,960 Speaker 3: be more of the swing item here on what are 534 00:29:29,000 --> 00:29:31,040 Speaker 3: the lanes where the freight is moving? 535 00:29:31,760 --> 00:29:33,640 Speaker 1: Joe, did you ever hear about the story of the 536 00:29:33,680 --> 00:29:36,720 Speaker 1: ships that were stuck in I think the Suez Canal 537 00:29:36,960 --> 00:29:39,200 Speaker 1: for like years and years and years during the Six 538 00:29:39,280 --> 00:29:42,400 Speaker 1: Day War. No, so the crews that were stuck on 539 00:29:42,440 --> 00:29:45,240 Speaker 1: the ships like started their own postal service, so like 540 00:29:45,360 --> 00:29:50,440 Speaker 1: built their own little society. But it's a very interesting story. 541 00:29:50,480 --> 00:29:53,880 Speaker 1: I certainly hope nothing like that happens this time around. 542 00:29:55,440 --> 00:29:58,640 Speaker 6: Lots More is produced by dash Ol, Bennett Kerman, Rodriguez, 543 00:29:58,680 --> 00:29:59,520 Speaker 6: and cal Brooks. 544 00:29:59,680 --> 00:30:02,760 Speaker 1: Please rate, review, and subscribe to odd, lots and lots 545 00:30:02,760 --> 00:30:04,760 Speaker 1: more on your favorite podcast platforms. 546 00:30:04,760 --> 00:30:07,360 Speaker 6: And for even more beyond lots more, go to bloomberg 547 00:30:07,400 --> 00:30:10,160 Speaker 6: dot com slash odlogs and chat with fellow listeners in 548 00:30:10,280 --> 00:30:13,200 Speaker 6: our discord Discord dot gg slash odlogs. 549 00:30:13,360 --> 00:30:16,200 Speaker 1: And don't forget that, Bloomberg subscribers can listen to all 550 00:30:16,240 --> 00:30:19,480 Speaker 1: of our podcasts absolutely ad free. All you have to 551 00:30:19,480 --> 00:30:22,440 Speaker 1: do is find the Bloomberg channel on Apple Podcasts and 552 00:30:22,560 --> 00:30:25,000 Speaker 1: follow the instructions there. Thanks for listening.