YouSaid · the spoken record

Sal Mercogliano

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105
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2022-08-25
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2022-08-25
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  1. “Sure. So, I mean, the container was what got a lot of attention, obviously, because everybody saw the parking lot off of LA and Long Beach. Everybody saw a container shipping lines, rate spike, and they saw their stocks also increase dramatically. Companies like Zim, for example, were very popular. Everybody was watching them. In the bulk sector, you have dry bulk. And dry bulk can be anything from ore, you know, iron steel to coal. And then also grain, which is really a big issue right now with what's happening in the Black Sea and Russia and Ukraine. The bulk trade is a very interesting one to watch because it is the biggest growing sector in shipping. Nobody ever understands that. So fascinated by containers, but it's the bulk market that's really the biggest. And for example, most people tend to think China is a huge exporter. They're also a huge importer of raw materials, particularly coal.”

    2022-08-25 · Forward Guidance · The Global Shipping Crisis Is Not Over | Sal Mercogliano · IDENTIFIED FROM THE TRANSCRIPT

  2. “Spot raids start taking off because the ocean carrier sat there and said, Do you want to move your stuff to the front of the line? We can do it for you. You just got to pay an extra one, $5,000, whatever it happened to be. And then you had new entrants into the field and the ports were like, hey, we're wide open. Come on in. And they basically double booked. And so they couldn't accommodate everybody. And so there was a lot of issues that all went into that.”

    2022-08-25 · Forward Guidance · The Global Shipping Crisis Is Not Over | Sal Mercogliano · IDENTIFIED FROM THE TRANSCRIPT

  3. “A specific level of goods coming in. And what you literally saw was a tsunami wave of cargo hit the US supply chain to a point where you saw the issues come to bear not enough truck drivers, not enough warehouse capacity, not enough rail capacity. We could accommodate about a percent or two growth here and there with spikes, but this was across the board. And not only that, it was more than several percent. And you can build a ship in two years. You can't really rebuild an infrastructure for a port in a community in anything less than 10. And so what we saw was all of a sudden this wave of goods come over and then you got bidding wars going in to get their goods here. Well, I still need my goods coming in. Can I do the New York nightclub thing and pay the front guy a couple extra dollars to jump the front of the line? And that's where you saw the”

    2022-08-25 · Forward Guidance · The Global Shipping Crisis Is Not Over | Sal Mercogliano · IDENTIFIED FROM THE TRANSCRIPT

  4. “180 to 120 days already. So you had the pre COVID economy goods coming in, but then everything shifts and now people are ordering new things. They're ordering the office furniture. They're offering stuff for the home, you know, the different type of toilet paper than the commercial toilet paper. You need the residential. But nobody knew when that was going to end. And so what you had was really a series of issues that took place. Number one, on ships, there was a lot of excess capacity on shipping out there, on ocean shipping. And so the ocean ships could accommodate that, these container liners had been built to these ever larger numbers. You saw a vast economy of scale being implemented. And so the ships could take a pre-COVID load of goods plus a COVID load of goods on board at the same time. And the issue you had then is when that stuff arrived into U.S. ports, the ports were finite. They were set for...”

    2022-08-25 · Forward Guidance · The Global Shipping Crisis Is Not Over | Sal Mercogliano · IDENTIFIED FROM THE TRANSCRIPT

  5. “I think it's been a primary driver. It's not the sole driver by any means, of course, but it has definitely contributed to it. And if you go post COVID, the outbreak of COVID in March of 2020, and then all of a sudden this huge demand spike in goods, the growth of e-commerce takes off. And what we're seeing right now was freight rates increase dramatically, in some cases almost tenfold. And now what we're seeing is really a plateauing of the freight rates, but still at a pretty high level. And it wasn't even just a shift from services to consumer goods. It was the type of consumer goods changed. And the problem you had was nobody knew when COVID was going to end. And so you had goods coming across for an economy that was factored in. You got to remember the minute you push that button on your phone for Amazon, that good has been moving.”

    2022-08-25 · Forward Guidance · The Global Shipping Crisis Is Not Over | Sal Mercogliano · IDENTIFIED FROM THE TRANSCRIPT