Supply Chain Now Radio Episode 213
Supply Chain Now Radio, Episode 213
Broadcast live from eft’s Logistics CIO Forum, a Reuter’s Event
in Austin, Texas
Prefer to watch the podcast in action rather than just listen? Watch Scott and Greg as they interview Lee Klaskow for SCNR Episode 213 at eft’s Logistics CIO Forum, a Reuter’s Event, in Austin, Texas.
“Over the last cycle, we’ve seen a lot of shippers ‘embracing’ their capacity providers from a more cooperative standpoint, moving spot business to contractual business and moving contractual business to dedicated business.”
- Lee Klaskow, Senior Analyst for Bloomberg Intelligence
Right now in transportation logistics it is the ‘best of times and the worst of times’ depending on your perspective. For shippers, it is the best of times. For capacity providers, things aren’t so great. On the other hand, that has set general sentiment and expectations for providers low enough that they may be able to exceed them. Lee Klaskow, Senior Analyst for Bloomberg Intelligence, even predicts that spot rates may be going back up by the summer of 2020.
Logistics operating models have always solidified around the best opportunities for margin, growth and efficiency. As conditions and demand shift worldwide, those models will have to adjust in order to position themselves to meet alternate types and forms of demand.
In this interview, Supply Chain Now Radio co-hosts Greg White and Scott Luton welcome Lee back to the show to 2020 discuss trends and insights such as:
- The amount of investment pouring into the logistics tech/freight tech/supply chain tech space and how it is radically improving the way even independent operators conduct business
- The impact of the continued meteoric growth of eCommerce
- The effect that the macro environment is having on both shippers and capacity providers of all types
[00:00:05] It’s time for Supply Chain Now Radio. Broadcasting live from Supply chain capital of the country, Atlanta, Georgia. Supply Chain Now Radio spotlights the best in all things supply chain the people, the technology, the best practices and the critical issues of the day. And now here are your hosts.
[00:00:29] Hello, everybody. Scott Luton here with you. Supply Chain Now Radio. Welcome back to the show.
[00:00:34] On today’s show, though, we aren’t broadcasting from Atlanta, Georgia, but rather we’re broadcasting live from Austin, Texas, home with E.F. Logistics CEO Forum Awards event. Well, we we are interviewing some of the most innovative thought leaders. They’re doing big things across the inn in Supply chain industry. The influencers are Supply Chain Now Radio team is proud to continue to partner with Nick OSRF in the if team orders event team here in Austin. So let’s welcome in my fearless co-host here today. Greg White serial supply chain tech entrepreneur, kronic disruptor and trusted advisor. Greg, how are you doing?
[00:01:11] I’m doing great. Considering some of the companies that I advise, Kronic is more appropriate than you might imagine.
[00:01:20] Cannabis industry is hot. It is very hot. Smoking. So great.
[00:01:26] We’ve got a great repeat guest here today. You know, we were we covered the E.M.T. 15:00 Logistics summit in Atlanta. Supply chain City back in June. And one of our most highly rated episodes featured our guests here today. And we’re great. It’s great to have him bagli class KHOW senior analyst, transportation and Logistics at Bloomberg Intelligence. Lee, how you doing? I’m great. How are you doing? Fantastic. Great to have you back. Good to be here. So we’re gonna dove into a couple different things here today, but let’s start. You know, our listeners, we get feedback all the time. Our listeners really appreciate the ability to kind of get a sense of who they’re hearing from, kind of the background, the backstory. You know, page 3 and 4, as Paul Harvey might might sometimes put it. So, Lee, tell us more, a little more about yourself and your background and kind of your professional journey before joining joining Bloomberg.
[00:02:17] Sheer Well, I’ve been with Bloomberg and Bloomberg Intelligence for for nine years.
[00:02:21] Before that, I was a an Excel side analysts, which just means I worked on Wall Street, covered freight transportation for a number years. Before that, I covered the industrial sector more broadly. And I kind of fell in the research. Before that, I was doing investment banking on Wall Street for a number of years, about seven years before getting into the research game. So I’ve been in research for about 15 years now. And, you know, I didn’t go and grow up wanting to become a freight transportation Logistics analyst. It’s something I kind of stepped in, but it’s been an extremely rewarding career. You know, I get to meet a lot of interesting people. You know, well, a lot of people think it’s a, you know, an old industry. It’s instantly changing. And, you know, this is a great conference to highlight that because it’s, you know, tech focus. And you get a lot of CEOs here and you get to see what what people are doing, maybe not today and tomorrow, but maybe a couple of years down the road.
[00:03:16] Yeah. So out of all those different roles as different industries that that make up your background, what’s been the toughest to kind of your dove into research? Read the tea leaves and share insights. What’s been the most challenging? Well, I do I do think that one of the hardest things to do to get your arms around is on the technology side. Because, you know, like I just mentioned, I come from an Industrial background. I’ve been covering transportation.
[00:03:41] And when a trucking company or a railroad, they start talking about, you know, their software systems or their technologies. It’s kind of like a pie in the sky. Can’t touch. You can’t feel it. Right.
[00:03:50] You know, they’ll they’ll tell you that, oh, it’s going to be, you know, awesome sauce and help with earnings and margins. But it’s really hard to detect. But, you know, actually what I’m finding a lot of the companies that I cover, they’re opening the books a lot more and showing people the technology, because I think now while technology was a tool, technologies is becoming a differentiator where it’s becoming a competitive advantage. You know, you have some of the technology first companies like Uber Freight. Right. Right. Boy, coming on. And some of the older legacy companies are either, you know, reacting or being proactive and dealing with those new competitors. Right now, I think a lot of the ones that I cover, you know, like J.B. Hunt or Expedia, they’re well positioned, you know. But, you know, it does put a risks on the freight brokerage industry, kind of like the, you know, the older kind of type of business. You’re in a you know, in a room with a phone and a Rolodex and maybe a pack of Moros. And you’re just dialing for dollars, right. I mean, those days are disappearing. You know, as technology moves to the forefront and more and more. Chuck.
[00:04:59] Get comfortable with using technology, we have smartphones and really our trucking professionals are fastly many of them are already technologists. Right. And they’re getting more more. It’s becoming a technologist role. You mentioned Uber freight, a convoy. We’ve been fortunate to have both of those organizations on the show, in convoy in particular. They’ve been the news here lately as they have had a few challenges related to pricing and, well, a couple different things. But who doesn’t have challenges these days? Rod transportation industry. But they are they are both those organizations are such an innovative push in the bar. It seems like for both those organizations, technology is is table stakes. It’s not even a compete advantage. It’s just how they do business is core to their DNA. Yeah.
[00:05:48] You know, those technology first type brokers that you mentioned, you know, you know, they’re trying to win share, but they’re not winning share necessarily just with technology. They’re winning share with price. Right. So, you know, the big question is like when do they pivot towards profitability? What is that? You know, concentration on winning share with price. What does that do to the overall market? What does that do to the profitability of people that are trying to earn a living? That’s right. Because if you don’t if you’re a well-funded company like Uber has got some cash to burn or, you know, well-funded private companies like convoy that have cash to burn, they they can, you know, lose money to win share. Right. But, you know, the big question is like, you know, can you turn point? Can you turn the tanker around?
[00:06:30] Right. Right. At some point, you’ve got to get get on that profit credibility train. Yeah. Money matters. Yeah. Turns out. Yeah, if you’re in business, you kind of want to turn a profit. Coming from an expert. Yeah. Right. Yeah, yeah. I understand that. As it turns out, the public markets, they actually demand the technology companies make money. I’ve, I’ve heard that recently. And I think it’s a new thing isn’t it.
[00:06:52] Yeah. I mean like you know when you look at you know, I do not cover Uber as a company. One of my colleagues at be-I covers Uber. So he knows it a lot better than I do. But, you know, you know, investors have given them some leeway to kind of build a business. Right.
[00:07:08] But it just you know, and with Amazon, you saw that with Amazon, investors gave them a lot of rope of for themselves to and flexibility to build a business. And, you know, in some quarters it’s extremely profitable. In some quarters it’s not. Right. And a lot of that, the things that are weighing on their profitability falls into our wheelhouse. Transportation. Right. Right.
[00:07:27] Speaking of innovative companies, Rhodey just announced a deal with Delta Air cargo where they’re gonna be, you know. Brody, it’s been they’ve got this. Oh, by the way, we take this type of business model right, wherever you’re going. Well, they’ve just partnered with Delta Air cargo to borrow space in the belly. These aircraft is going to excite and then expand. That’s going to add a number of new markets and same day service, which is fascinating. In fact, Greg and I were kidding as we drove foot for transit van from Atlanta to Austin, shipping all of our stuff for a mobile studio. We should check that road and see if there’s anything else we call it. We had room. We had Q Yeah. Yeah. So. So before next time we talk. That’s right. Before we dove more into your observations related to the transportation market in the greater Indian Supply chain market, where do you live? I live in New Jersey and you’re outside of Manhattan. And what do you do when you’re not involved? Neck deep in an industry that changes by the minute, it seems. What do you enjoy doing outside of work?
[00:08:32] I have a 10 year old daughter and an eight year old son. So Ethan and Everson, they keep me busy. You know, my. And we we just got a dog. And I’m not a dog person.
[00:08:43] So you’re a cat person? No, I’m not. I’m just not an I’m not an animal person. You know, after dirty diapers, I was kind of done. Yeah. With that.
[00:08:51] And so, you know, it’s that’s been the biggest challenge in my life in the last couple weeks. But, you know, you look at dogs. Do you promise not to laugh? I promise. An Australian labradoodle.
[00:09:05] I’ve heard of the UPS. So this is a newer breed, not as curly. No, seriously. We were having this discussion with one of my neighbors who has or is getting.
[00:09:14] Yeah, they don’t share their hypoallergenic. You know, this one you can get mini’s. This one’s going to get up to like thirty five pounds. It’s not a mini. You know, he’s they’re smart because they have the lab in them and then you know. So yeah, that’s my dog and that’s cool. He’s he’s the prettiest boy dog I’ve ever seen.
[00:09:31] Well you know, at least it’s not a you know, a purse puppy, right. Yeah. So that’s good. Maybe that’s down the road. Yes.
[00:09:40] Ok, so moving from Labradoodles to hard hitting insight’s observations from especially the transportation, obviously transportation Logistics is where you spend a lot of your time. What’s been you know, when you look back at twenty nineteen as we’re here in November and we’re moving into Fast and Furious and moving into India, you wrap up what’s. Some of the most compelling observations or key takeaways for you.
[00:10:03] Well, there’s two stories here. It depends if you’re a capacity provider and it depends if you’re a shipper. Yeah, if you’re a shipper, it’s it’s fantastic. If you’re a capacity provider, things are horrible. Yeah, but that’s actually good news because sentiment is so low. Things are kind of seem to be bottoming. And, you know, we believe 2020. You know, it’s not going to be a 2000 as the second half 2017 through 2018 story like really gangbusters, but it’s gonna be a better year than 2019. Is what our tealeaves say, you know, when you’re seeing that and you know, stock performance is. So stocks tend to kind of lead the industry because people invest in stocks for what’s gonna happen six, six months to 12 months out. You know, the LTL industry, you know, our peer group is up for that for up 39 percent this year. Rails are up 32 percent, truck load is up 14 percent. And carriers, which is pretty much FedEx, U.P.S. and Deutsche Post. It’s just kind of limping along at 2 percent. And that’s versus the broader market of 23 percent. So, you know, Rails and LTL are outperforming the broader market. teals are still struggling, you know, and that’s really based on, you know, weak kind of pricing that we’ve been seeing in the spot markets and that’s been bleeding into the contractual markets. You know, we saw in August and September, rates were down, you know, low single digits on the contractual, contractual basis. And that followed about twenty eight months of increases. You know, but we do still think that, you know, you could squeak out in 2019, a slight increase right now.
[00:11:46] I think we’re trapped. We’re we’re about 2 percent up for the year. And, you know, we’ll have a couple more months left.
[00:11:50] So I think you can, you know, maybe squeak out something a little positive on the contractual side and on and on the LTL side. You know, pricing is pretty good. I mean, it’s more a consolidated markets, more rational. No one’s really fighting for share. People are actually looking at freight and wondering if it from a profitability standpoint, does it fit in there? Their their network, they’re willing to walk away from business that doesn’t have a certain return on investment or R-N.Y.
[00:12:17] Well, that’s a good place to be. Yeah. Yeah, I know. Rates are up mid-single digits. Yeah, that’s good. So before we talk 2020, I think one of the other trends seems like we’ve been seeing a lot, especially in the last couple of years, is just the amount of investment coming into the Logistics tech freight tech supply chain tech space. What do you make of that and that oriented continue to see that next few years.
[00:12:39] You think it’s really being driven by e-commerce? You know, you have a lot of, you know, companies like Projects or BlackRock. You know, these these huge financial companies or, you know, buying up warehousing, you know, kind of support e-commerce. You know, e-commerce is is going is supposed to grow four to five times GDP. You know, obviously that’s on a global basis and that’s going to be driven mostly out of Asia-Pacific. But in the U.S., you expect a two to three times above the overall economy. So so, I mean, people are just trying to take advantage of that. And, you know, as you know, we were talking about truckers. You know, truckers have cell phones and these cell phones are not the phones. You know, you and I had we were a little younger. These are supercomputers and know do a lot. And, you know, people are becoming more productive. People are making better decisions. You have a guy that owns a 10 year old truck, is able to use the elite algorithms from a J.B. Hunt 360 system and figure out what is the best load for that person, you know, not only for that person for that day, but what you know, I want to like, you know, eventually I got to get back to to Minnesota to see my kid’s football game.
[00:13:47] You know, the next three loads is gonna get me there. Yeah. So there’s is still a lot of stuff on the technology side. And, you know, it’s just the technology keeps on growing and growing. You know, you have some stuff that’s, in my view, way off like drones and autonomous trucking. But then you also have things that are that are here today, like the algorithms. And I’m talking about that it can make a broker more productive or a trucker more productive or a warehouse stock, you know, person more productive, whether that’s a robot, whether it’s a handheld, that a less than truckload facility. There’s just a lot of things. You know, we got to do a virtual tour with with XPO on one of their facilities. And you know, what they’re doing with robots and automation for some of their customers is is pretty impressive. And, you know, you’re cutting the humans out. You still need humans, but you’re cutting, you know, warehouse workers, you know, and you’re bringing more technologists. And, you know, you’re also increasing their productivity and increasing the safety at the same time. And it’s pretty it’s pretty compelling stuff is going on.
[00:14:50] And, you know, speaking of bots is still providing opportunities for the workforce to do new things and do more advanced things. And to make more money. Some stories we featured in Atlanta and we talked a lot about the Industrial distributor that brought on a highly automated system in its large D.C. and West Atlanta in. Not only did no one lose a job. All the maintenance techs that were part of the team that keep the facility going. All of them received new training. Now they could program bots and they made more. They’re making more money.
[00:15:22] Yeah. And then I would point out also, like, you know, I don’t think this is a place where you’re taking people out of the workforce. You know, usually typically a warehousing or it’s a tight turnover business. Right. So, you know, you’re out. You’re protecting yourself from that as well. And having better reliability, better customer service as a result.
[00:15:43] Agreed. You know, the other interesting development that we’ve been reading and reporting on from a bot standpoint is just how many more companies are using a robot as a service approach, especially for peak season. So rather than investing in buying outright these bots, they’re basically leasing them, especially to get through peak. Have you seen more of that or about the same or any?
[00:16:04] Yeah. You don’t have to own the equipment. I mean, you can lease and flex up, obviously, when you’re when you’re flexing up in peak season. You’re going to be spending more money per bot per month or whatever the price you have with with your distributor. But yeah, I mean, it’s it’s pretty exciting time. I mean, instead of, you know, having to interview thousands and thousands of college college kids. Right. You know, you can just just call up your your provider of robots and bots and they can, you know, ship you 10 more R2D2 or whatever they’re going to. Yeah. Right. That’s right. Right. OK. D2, D2, distributor to distributor. Now you get some before we switch over to 2020.
[00:16:43] Anything else that you’ve really been looking back at twenty nineteen thus far. Anything else that really stands out related?
[00:16:50] I mean it’s, it’s really macro. You know, we’re living in an environment where things can change at least from my perspective, from a tweet. You know, we have trade wars, you have increased protectionism. You have Germany falling into a you know, possibly falling into a recession. You have U.S. and China growth slowing. You have GDP expectations that are continuing to be revised lower for 2019 and 2020. All of these things are not good for business. They’re not good for people that are going to invest capital for little long term because there’s extreme uncertainty. Right. You know, markets hate uncertainty. They certainly do. And. And so, you know, I think that is the biggest problem, because that really has driven everything else within the freight transportation sphere.
[00:17:35] I mean, I cover, you know, railroads, truckers, Maureen, shipping, you know, and that includes tanker drivable liner. I cover it all for the most part. And, you know, in every market is being impacted by this by this these trade tensions.
[00:17:51] You know, obviously, the the final outcome is I think we all can agree that, you know, we want to all be on the same playing field, but it’s been very disruptive to businesses. I’m not going to argue on the policies of what, you know, administration decides to do versus another. But it’s been disruptive. It’s created lumpy volumes, you know, because a lot of a lot we saw a lot of iron get pushed forward in the fourth quarter of 2018 and we’re coming up against those tough comps. And so now we have high inventory levels in the US, at least higher than the normal. Plus the difficult comp. So optically it’s not going to look great when you see volumes. And, you know, we’ve seen volumes. They start to decelerate, whether we’re talking about railroads, commodity carloads, railroad, intermodal carloads. And so, you know, we expect 2019 to be down for the rail industry. You know, we haven’t seen that since 2015. You know, because the first three quarters were negative.
[00:18:52] You know, we’ve we’ve also been reading about the precision shedded railroading, the PSR and in some of the challenges in and growing through some of those initiatives. Any any comments there?
[00:19:06] Yeah. I mean, PSR, you know, is really, you know, for anyone that’s investing in rails is on the tip of everyone’s tongue. How low can you get that? Ah, oh, ah, oh, ah, ah, ah. Operating ratio. A little dyslexic in my head right now.
[00:19:22] But you know, it’s all about how you get that lower and, you know, precisions scaring Rod really worked for the Canadian rails at work for CNN c.p. It’s working for CSX. Now we have three new U.S. rails that are trying, one with some Mexican exposure with with Kansas City, Southern and Union Pacific, Norfolk Southern. And, you know, the reality is, is that we’re not going to really know the true benefit because they’re doing this in a time where volumes are down. When volumes are down.
[00:19:50] Your variable costs go down. You have less congestion on your network. So it’s so we really don’t know what the true benefits are. For those railroads, you know, their results in the third quarter were a little disappointing. You know, most rails improve their operating ratio by about one hundred and fifty basis points in the third quarter versus the year prior. But USP and then s kind of disappointed in the pace of the productivity. You know, we believe longer term that, you know, it’s going to weather you. Yeah. You know, it’s going to bear fruit and it’s going to really provide for the next level of a railroad that we’re seeing at Canadian National, Canadian Pacific. There are other more pivoting towards growth. You know, profitable growth. They’re not up myopically focused on there and everybody. Well, yeah, and the margins, too. Right. So, you know, they’re willing to take on business. That’s only 35 percent, you know, EBIT margin, which is pretty high for an Industrial company.
[00:20:45] You know, we read it. We were reading where one of the CEOs of one longe you mentioned was addressing what was special when they launched their PSR initiative, at least publicly. They were talking about how they were also going to have to choose smart business more effectively. And they couldn’t serve everybody and keep 100 percent of their current customers because some of these these changes and is harder, harder looks are looking at the business. So really cursi kind of that path ahead and how things continue to ripple out as PSR might revolutionize industry anyway.
[00:21:15] Yeah. Yeah. I mean, the perfect example is CSX.
[00:21:18] I mean, they, you know, maybe didn’t implement PSR with their customers in the best possible way. And I think the the the the NSA, as you please, and can see southerns learned from the mistakes that CSX made. But what CSX did is they you know, instead of focusing on a hub and spoke intermodal network, they want to focus on three main lanes, which is kind of like a triangle on their network and kind of build density on those lanes and kind of, you know, everything else they kind of walked away from. You know, my guess is that next year we’ll probably see them pivot towards maybe trying to grow that business versus trying to contract that business. You know, and I think over time, you know, you might see them go back into some of the markets that they left. But when I say over time, I mean, like, you know, three years from now when you know, because, you know, they need to grow and, you know, they can only grow as much as what’s on their network. But they have access to them.
[00:22:13] So speaking of next year, perfect Segway opportunity, looking at 2020 or not just 2020, looking at just kind of the short term outlook. Break out your crystal ball, Lee, and tell us some things you’re expecting to happen.
[00:22:31] Well, like like I said earlier, you know, I think that, you know, I think we’re going to see a bottoming of the spot truckload market. And, you know, I think that, you know, maybe by the summertime we could start seeing rates start increasing again.
[00:22:46] That’s going to be, you know, driven not necessarily on the demand side, but more on the supply side. You know, a lot of guys and gals got into the business when rates were pretty high. And the first half of 2018. So they lease trucks. They they did all these things for a certain business model for rates that were, you know, 20 percent higher than they are today. And does it make sense now? So you’re going to see those people say, you know, it’s not necessarily gonna be a bankruptcy. They could just be like, you know something? I’m not doing this. Anyone going to park my truck or maybe return the lease or, you know, or just maybe go to bankruptcy. So you’re going to see know players come out of the market. You know, I think as more and more trucking companies implement a hair follicle drug testing, that’s going to reduce the pool of qualified drivers. And also, we’ve seen a huge increase in insurance, you know.
[00:23:35] You know, Werner had a huge judgment against it. You know, I don’t remember the exact number, but it’s something like 40 million dollars, which was, you know, huge. And a tragic accident, you know, that that happened with one of their drivers. But, you know, you’re seeing insurance companies leave the market because all of a sudden you’re seeing plaintiff lawyers, you know, kind of salivate a little bit. But they say, oh, you know, we can get into this trucking. You know, we can start suing truckers because some of them have deep pockets. All right. And so insurance costs are going up significantly. And, you know, if insurance is too expensive, that’s going to push other some smaller drivers out of the market, because a lot of the large companies are self-insured over certain to a certain extent. Right. And they buy insurance for anything over that little guy or gal. You know, they’re buying it on the open market. And it’s it’s you know, they don’t have the pricing power at all to to benefit. So I think supply is going to come out of the market. That’s going to increase rates. It should generate profit positive contract rates in the very low single digits. You know, I think that, you know, you could see a rebound of intermodal on the commodity side for four rails. There’s really no shining star that like, oh, it’s Hanga had on. You know, when I first started covering the industry, it was it was ethanol. You know, it was the big growth driver. You know, now really the only good thing going is crude by rail. And you know, but that doesn’t. Everybody, just a couple. The rails, so crude by rail could be good. Good, which would mitigate the weakness that we’re seeing and less utility coal.
[00:25:09] All right. So today you’re you’ve got a breakout session. I do. And I think you had a session or a keynote. We were in Atlanta last June as well. Everyone’s vying for your insights. And yeah, we’re we’re having, you know, having a couple times here on Supply Chain Now Radio. So what are you going to be talking about as part of that break? Yeah.
[00:25:29] So I’m just going to be, you know, hitting a lot of the points that we hit here today and kind of our outlook. You know, where we’ve been in freight transportation, kind of wait a little heavier on the trucking market. But you know, where we’ve been, where we think we’re going. You know, like I said, you the good news is sentiment is horrible, at least severe. You know, when an investor and a transportation company or if you’re operating a transportation company, you know, for shippers, they should expect, you know, you know, rates not to be as low as they are this year.
[00:26:00] And, you know, you’ve we’ve seen, you know, over the last cycle, a lot of shippers kind of embracing their capacity providers within more of a cooperative standpoint, you know, moving spot business to contractual business and moving contractual business to dedicated business. And that’s also one of the reason why the spot market is kind of weak. You’ve seen, you know, loads that traditionally went into the spot market go into contractual market, because, like, you know, if you’re you know, you’re in charge of Birgit transportation, you can’t go into your CFO office every year and say, you know, my costs went up 20 percent more than what I thought. You want some consistency. And being the contractual market provides you that level of consistency. Yeah. So, you know, that that’s that’s kind of what we’re gonna be focusing on. Hopefully people show up and listen.
[00:26:49] Hey, talking to myself, I did a lot of that much this, you know, I bet it will be filled from. From wall to wall. I mean, I think folks are craving what we’ve seen to small room.
[00:27:03] Well, I make it easier to fill. That’s right.
[00:27:05] Now, we have seen leaders are craving these insights. They’re craving folks that are willing to read the tea leaves and assert and give an opinion. You give a give them what’s going to happen, not a not a lot of couching or what’s where I’m looking for walking the line. The way that they’re looking for folks are willing to look at the data. Look at, you know, read the market and then offer up opinions about where we’re going or whether it’s around the corner or keep your Zen route. One of the topic. 1 pick your brain only is IIM-A 20, 20 or a few. How deep you know you are needed needs. OK, good. Well, any yet that’s going to be a huge challenge in which maybe sane at least. But I think a lot of folks may not realize that it’s not just about the technology and not just about the changeover to what’s next. It’s also a big supply chain challenge called Sheer, whatever it moves to. You’ve got to have that readily available at ports globally to any quick hit and observation zone.
[00:28:11] Yeah, the reality with IIM-A 20 20 is that, you know, the price for diesel fuel will probably spike in the first quarter.
[00:28:19] It’ll probably find some normalization late in the second quarter. Least that’s our guesstimate, promising anything. And you know, and that is going to be because, you know, while we think that the supply chain is well suited right now, there is going to be a learning curve in terms of availability. You know, there are some subsegments of the Maureen shipping industry that are like, you know, all and with scrubbers and they’re just going to use the dirty fuel and try to clean it. And then, you know, that’s kind of more the dry bulk industry or tanker industry where the liner industry, like only 10 percent of their fleets, are gonna be using scrubbers. So they’re going to need the clean fuel. And not every one of these container liners go in to the port of L.A. or, you know, Hong Kong or Singapore, one of these major ports. You know, they’re also doing a lot of interest off. So the availability is definitely key. So the knock off effect, like I said, higher diesel prices here in the U.S. for truckers and for railroads and everyone involved. You know, the good news for those companies is that they have fuel surcharges implemented that kind of mitigate not all, but some of those increases. So hopefully won’t bite into margins too badly, but it’s roughly going to be a headwind in the first half of next year. But like I said, I think that, you know, A, it’s a good move because, you know, if Maureen shipping was a country, it would be the sixth or seventh largest polluter. Right. Of carbon emissions. So, you know, it’s a dirty industry. The the the fuel that they use is just really the the sludge leftover. Refining and it’s just it’s just it’s good that they’re getting away from it.
[00:30:02] Outstanding. OK, so let’s talk about as we kind of wrap up this segment with Lee Classico, with Bloomberg Intelligence. Let’s talk about the next big show on your radar. Here you’re going to be up in Chicago soon. And next week I’m going to be at the freight waves.
[00:30:15] It’s my first freight wave con concert conference. Maybe there will be a concert. Maybe. You know, I’m doing a wave talk. And that’s kind of like a version of a TED talk. So like a lot of pacing. Let a hand gesturing. You have to wave. Yes. Yes.
[00:30:29] But I’m looking forward to that. They’ve been nice enough to to have me the last two weeks ago. I did J.O. season land conference. And before that, I did capital links. Maureen shipping conference. So, you know, I’ve been on the on the road a little bit. And, you know, I’m kind of active on LinkedIn. So if people want to reach out to me, they can. My last name is K.L. A-s, KUOW first, namely Ali. And, you know, I talk to, you know, correspond pretty much anyone.
[00:30:58] I’m a lonely person. You know, I get a dog now, you know? Yeah.
[00:31:04] And so. Yeah. So, you know, whether you’re a capacity provider, someone working for a large company, you know, a shipper, you know, an owner operator. I just I just love hearing from people. That’s the great thing about doing research you learn every day. Yeah. And you know, I’m in my ivory tower. And so, you know, I’m not actually, you know, behind the wheel or, you know, in in a rail yard or work in a ship.
[00:31:27] But, you know, it’s talking to the people in the industry that that makes me smarter and helps my research, you know, have more insight for for our customers of Bloomberg.
[00:31:36] That’s good. We sure do enjoy it. I mean, clearly, you’re someone that not just does your homework, but, you know, you’re you’re well-connected. I feel like I can ask you just about anything related to the world of Inon Supply chain. I’m a get an informed answer, so I appreciate you spending some time here with us. My pleasure, Scott. OK, so listeners, you already heard kind of how to connect with Lee. He is active on social media, especially linked in. And I’m sure he’d he’d love to hear from you. Check out his articles and perspectives at Bloomberg Intelligence, right? Yeah. So.
[00:32:09] So Bloomberg, the Bloomberg terminal is a subscription only service. We have about three hundred and thirty thousand subscribers globally. Lots of subscribers are decision makers from the C-suite to, you know, floor traders. And you know, what we do at Bloomberg Intelligence, which is Bloomberg’s research arm, is we provide kind of insight and on our industries that we cover, we have about 280 analysts globally. We cover about 180 sectors I think now and about 2000 companies. And, you know, we cover from an equity standpoint, a credit standpoint or regulatory standpoint, economic standpoint. So that’s a great resource. You know, our research goes exclusively on that. And then you also see some of our stuff, whether we’re quoted or, you know, they put it on the Bloomberg.com Web site. And you might see. So my colleagues on TV and radio, you know, talking about the industries that they cover.
[00:33:04] Outstanding. OK. So I’ll get to final hard-hitting questions actually for both of y’all to wrap up the segment. So breakout your sports crystal ball. Who’s going to win the NFL Super Bowl this season? And Greg, once you go first.
[00:33:20] Patriots. The Patriots. It hurts me to say it. Thought for sure. We heard the chief. It hurts me to say it. Their defense is just way too strong.
[00:33:27] Ok. I mean, look what you think I might say. San Fran. San Fran? Yeah, I’m a giant fan and they’re horrible. Well, we’re Falcons fans and not maybe the worst season thus far in the NFL. So we’ve got one Niners and we’ve got the Patriots.
[00:33:45] Don’t say it again. Yeah, well, I don’t know. I don’t think it’s easy. I mean, this year, look, I mean, the chiefs are going to come back because Mahomes will be back this week. And they played well with Matt Moore, who, to thunk it, a high school high school assistant coach turned NFL quarterback. That guy is going to get a check. Love those stories in the NFL, by the way.
[00:34:08] But, yeah, they’re just too good. I mean, and this is probably Brady’s last season. So.
[00:34:14] All right. So second question, college culturebox. Who’s gonna win it all?
[00:34:19] So I’m gonna I’m gonna I’m gonna talk about college wrong and take a couple of steps back in division three. Also in two weeks, the quarter get jug bowls going on. That’s between Ithaca and Cortland. I went to college. OK. So they’re good playing at MetLife. They’re expected. What? The airplane at MetLife? Yeah. So like all of my you know, I’ve been out of college for quite some time. It’s it’s a great opportunity to to get together with some old friends. And, you know, they’ll be Paul for ethics. So for the quarter, get Jugg that that’s it all. And that I’m pulling for Arcega.
[00:34:46] So tell our listeners the history of the jug.
[00:34:49] I don’t really know how far back it goes, but literally it was a college game where the winner would get a jug and then the call in the college name on it. I think they’re up to. The third jugg. Yeah, it’s like this ceramic pottery thing and it’s a robbery, you know, because, you know, it’s a division three school, but they’ve they’ve had their sports programs there.
[00:35:07] So their kids are really, really smart. They’re the future head coaches. So. Okay, Greg, so you’ve got a way in an epic you can do D3, D2, D1, whatever.
[00:35:18] What’s your what’s your NF? I’m sorry. Football. Yes. College football. I. I don’t care how you rank him. I still think Clemson is the best team in the in the incident. I love it. Love it. Okay. So that is a right. And I’m not a fan. Boga. Yeah, and it’s not it’s not because he is a fan. But look, I think, you know, Bama is as vulnerable without to a right and Georgias pretender hurts me to say that also. And Ohio State, I hate them. I’m a Michigan fan, so I can’t pull for them. I love Justin Fields. He went to high school with my daughters. But George, he’s he is undoubtedly the best quarterback in NC Double-A football right now. But and they are a well-rounded team. But I just don’t think you can stop Dabo Swinney from grabbing it. Grab that guy. I love that.
[00:36:09] But well, on that note, again, big thanks to our guests here today for the segment we class Kyle with Bloomberg Intelligence. Be sure to check him out across social media. You will enjoy it as much as we did. I’m sure to our listeners. Stay tuned as we continue our coverage of the T Logistics SEO form rorters event right here in Austin, Texas. And be sure to check out all of our upcoming events, replays of our interviews of the resources at Supply Chain Now Radio dot com. Great. We may have just published a little milestone episode number 200. Yes. Congratulations on that. That may not mean anything to anyone else, but we know all the blood, sweat and tears that went into, you know, what is conversation.
[00:36:47] It made number two, a one, the posting of number two and one even that much more rewarding because that was a really special episode as well. Absolutely. Absolutely. And check out all the library of episodes to say what knows this? This will. Well, we don’t know that. We don’t know. I don’t know. Right. It depends on the order in which it’s published, but it’ll be taken to twenty’s.
[00:37:08] I’m going to say two twenty two. Well you can make that happen. That’s not fair. Let’s make it happen. Let’s break this one to 20. That’s right. Twenty feet seems like thirty. That’s like three weeks. Yeah, that’s right. So after all Sheer some four futures market song podcast numbers might lead children to a baby every good way.
[00:37:27] Listeners checks out at Supply Chain Now Radio dot com again. You can find us on Apple podcast, SoundCloud, YouTube or wherever else you get your podcast from. Be sure to subscribe to that. Miss anything on behalf of our entire team. Scott Luton here wishing you a wonderful week ahead and we will see you next time on Supply Chain Now Radio. Thanks everybody.
Lee A. Klaskow is a senior analyst for Bloomberg Intelligence, a unique platform for in-depth analysis, ideas, and data sets on industries and companies, as well as credit, government, ESG, and litigation factors that impact decision-making available on the Bloomberg Professional services at BI . He specializes in freight transportation and logistics, including global marine shipping, air freight and logistics sectors as well as the North American trucking and railroad industries. Klaskow provides primary company coverage on CSX, CP, CNI, CHRW, DPW GY, EURN, FDX, JBHT, KSU, KNX, LSTR, MAERSKB DC, NSC, ODFL, UNP, UPS, WERN and XPO, for Bloomberg Intelligence. Engaged in extensive contact with management teams, investors, sell-side analysts, bankers, industry contacts and Bloomberg customers to develop and refine research and analysis. Prior to joining Bloomberg, Klaskow was a senior analyst at Longbow Research and Prudential Equity Group, where he covered freight transportation and logistics companies. He has also worked at Prudential Equity Group as an industrial associate prior to being promoted to senior analyst. Klaskow helped originate and execute global equity transactions for both ABN Amro Rothschild and J.P. Morgan. Klaskow began his career at McCarthy, Crisanti & Maffei analyzing and reporting on the primary equity markets. Klaskow earned his bachelor of science degree in finance and management from Ithaca College, and his master’s in business from Fordham University.
Greg White serves as Principle & Host at Supply Chain Now Radio. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now Radio and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
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