Instagram- @jeffdavis_bridgestone
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Twitter- @bridgestonecap
https://www.youtube.com/@ChainReaction-vh7rm
www.bridgestoneinvest.com
Instagram- @jeffdavis_bridgestone
YouTube- JeffDavis_Bridgestone
Twitter- @bridgestonecap
https://www.youtube.com/@ChainReaction-vh7rm
www.bridgestoneinvest.com
welcome everybody to another episode of Chain Reaction Tales from the supply chain Front lines. And today we're getting to some big projects. The cool stuff. Toco projects, Dave White, he is running sales over there. Thor Co. We've worked with him since my previous life. We work with him now and I'm excited to have him I to hear about what's going on in the world of big CapEx projects and I want to hear what's happening now and what he kind of forecasts over the next three to five years really. Where's the money being spent, so we can go and chase that Dave, can you kind of introduce yourself and tell us a little bit about how you got in here? Thanks Jeff. Thank you for having me. It's really great to be here and I'm excited about what you're doing and, and just really as a privilege to be on the, on your, on your podcast. Here I am. My, I come from the ocean carrier background. I used to work for Atlantic Railroad Carriers who was a Russians Steamship line and recently have, Transitioned over into Toco projects. We are an ocean carrier, however, we're, we are a lot different in the way we operate. We own a fleet of approximately 45 to 50 multipurpose vessels and bolt carriers. It's a mix of, and it's been a, it's been a crazy couple years for us, an ocean carrier and others as well. We've, we've made a lot of money. We've done a lot of business and things have. Rates have been very high up until about the end of last year. Yes, yes. So yeah, high on the, so same thing that's happening on all other freight modes as in the projects, right? Right. Yeah. The projects, we do a lot of projects. We move a lot of bulk as well, and freight rates for. They've just been very high and, and we've made good profits, but at the same time we see the reason for that is there was a lot of bottlenecks in the, in the ports and especially on the west coast, US West coast. And so we were, have to sit out there at Anchor for a while and that cost money. So, yeah. You know, that was, so let's talk about you, man. How did you kinda. Get into the freight world. So I went to Texas a and m University. I was locksmith in my previous life. I was in Galveston and the locksmith just met, ran into some a and m students there. Yeah. And transferred from, I was getting my degree in accounting from a and m main campus. And so I switched majors and went to work for, well, I wanted to go to work Forwe when I graduated. Edison's West. Edison's West, yes. So that was my goal. Of course, back in those days, the oil market, it was booming. And then while I was in school, it well went from about a hundred dollars a barrel to$52 a barrel, and I think it's gone way below that. But yeah, so that, well, at one point it went negative, so Yeah, I heard. Yeah. Yeah, it's wild. So you ran into some Aggies. Yeah. So they obviously didn't like you and they told you to go into freight? They did. Yeah. No, it actually, I had no idea what kind of logistics degree I was getting. I, I'd had no idea what I was stepping into. So started going to school and met some of my professors. John Hark was, was very instrumental and, and inspiring me to go into brokerage and chartering type of work and yeah. Okay. I'm sure you've probably heard the name before, but that's No. But I would like to talk with him. Yeah, that's another one that would be a good contact for you to have. So got to taken in some classes, some port operations classes and I just enjoyed it very much. A and m is really good school. They sponsor students that give you the opportunity to, to do more beyond the classroom. So they sponsored some of us students to go to the break bowl conference in Houston. Mm-hmm. And it was there that I met my first boss and took an internship. And went straight to work outta college and I learned a lot my first couple years actually working. It's one thing to learn in a classroom and it's another to actually work, you know, in the industry. So that's pretty much how I got into into shipping. And did you get into break bulk and chartering right out the gate? Project, not chartering. Project Cargo. Yes, we, Atlantic Railroad used they own multipurpose vessels. And so the, the idea was, is we would take, we had a route, a rotation from the East coast, us and the Gulf Coast to St. Petersburg, Russia. And that's all we did is is, is aligner service. So we'd handle. Containerized cargo and also project cargo, both coming both directions. So we call the same ports. We're on a tight schedule. We had several ships and that's, that's, that was my background before getting into chartering and more of a tramp operational service cuz now we service everything but Russia. Yeah. Orco. How come? Well, yeah, that was a, nobody wants to touch Russian nowadays. That was a rhetorical question, Dave. Yeah. So I'm guessing you liked it. I mean, that's pretty cool business. We just had an, another gentleman on from from a similar line right. That Project Cargo. And, and I told him, You know, that's a, that's a part of, of our business that I really wish I did more of. Mm-hmm. And that's reserved for the cool people, right? Yeah. That's, that's reserved for the football players and, and I'm in the back with the nerds, you know, but it's all good. It's all fun. What is, you know, what is, what is some of the dynamics of. Project cargo and chartering that, that you like the most? I like the flexibility of it. Well, I, I like the flexibility of it. There's, you can offer your customers a lot of options there. It's a lot more expensive sometimes. Sometimes it's not, you know, economical. But we have the ability to call any port at anywhere, anywhere in the world and, and we can turn. Yeah. You know, our vessel, we can take containers if we have to. We we're not, they're not fitted for containers, but we, we can mm-hmm. Take'em as brake bowl. Cause we just have a lot of flexibility as far as the port pairs go. Where we go, where they want us to call. You know, it's just the flexibility of, it's what I like about it. There's a lot more work involved. You have to contact ports, different ports have different restrictions, costs. Mm-hmm. We're, we're able to offer a lot of flexible solutions for our customers here at Torco, and that's one thing that I enjoy being able to be more engaged in the, in the global market. Are you seeing a particular industry with more of the heavy haul, or are you seeing one particular industry kind of take over more of your time right now? I'd say the projects are picking back up the, the demand for multipurpose festivals. I, I believe there's more of a demand than there are ships and there's a lot of ships being built right now. That's a, you know, the, the market doesn't have enough ships for the cargo, but I see the break bulk side is picking up the project car side is picking up the container side. I see. I see that container rates have fallen to very low levels. Recently, so we're not seeing that that containerized cargo that we did move his brake bulk is now back in containers. And as far as I, I know the, the big container carriers are fighting over market share for that particular cargo. All over volume right now. Yeah. They're, they're just in a fight over the volume and they're the contain, the cargo's not there as it used to be, cuz consumer. Demand is, is way down. I mean, the US is a consumer nation and so we import a lot of things. There's not a lot that goes out as far as products. Consumer products go. Yeah. So can you define multipurpose vessel? Multipurpose vessel? In my mind, I, a multipurpose vessel is one that a true multipurpose vessel is a cargo vessel that has anywhere from three to four holds and cranes that are operational to two, three or more cranes that have a lift capacity of maybe a hundred metric tons or more. A lot of them are fitted for the, the carriage of containers. Ours are not, but. Just as accessories for a project, right? They have, yeah, so you can carry containers, you can carry bulk in the holds. You can carry things on the top deck. You can have a welder weld certain, you know, windmill blades. You can, you can carry windmill blades. There's just a lot of different things you can do at the multipurpose vessel, and it's mainly for a mix of project cargo and container as cargo and bulk. You can have bulk in one hold. You can have big. Project cargo in the next, so what, you know, going back to a couple of minutes ago, you're saying that project cargo, i e oversize over dimensional cargo is on the rise. You're seeing more of that than what the availability of multipurpose break bulk vessels. Has Absolutely, absolutely. And we're loading some of this on our bulk carriers, which a bulk carrier is similar to multipurpose, a general cargo ship, but it doesn't have, a lot of'em don't have the, they don't have the tween decks. Sometimes they don't have the high crane capacity, so it adds a little bit more of a dynamic as far as you'd have to call the ports to make sure they have a shore crane that can handle the cargo. So we're, we're using bulk carriers as multipurpose vessels. But but yes, I do see the project side picking back up. A lot of the projects that were put on hold for because of covid are sort of coming back and there's a lot going on in the world now. Lots of, lots of new infrastructure, especially with with renewable wind energy. Okay. And. Yeah. So when you're saying projects, so it sounds like you're not doing some sort of just capital movement of equipment. You're actually moving projects or you're moving equipment that are related to some sort of large CapEx project. Am I? Exactly. Okay. So what are these projects and, and can you kind of elaborate on that? There's some, there's some plants being built here in the us Oh, they're here. So you're importing large equipment. Yeah, lot of lot. We're importing a lot of large equipment and, and pieces that are, that are gonna use, be used to build these particular plants. There's a lot of companies that are pulling out of China. There's a lot of infrastructure. Investment going to Mexico and some in the US as well. This idea of foreign direct investment is, is really taking on a new shift after the supply chain disruption that was partially caused by covid shutdowns. So, man, I wanna get into that. So there's companies that are building plants, are they moving them? Is that why it's so big? Are they moving the actual. Modules from their refineries overseas? Or are they, they need this specific equipment that's going to help build it? I'm curious. It's a, it's a mixture of both. I feel like a lot of it's new, new materials, no shit, but there is some, there is some actual, you know, relocation of existing of, of existing components. But I, it is just, there's a lot of companies that are com have completely re re remapped out their supply chain and the way they manufacture things and the, the countries that they entrust to, to develop whatever industry, industry materials that they, that are, that they're into. Wow. So is it yeah, I gotta think on Dive into that because I, I'm, I, whenever I think of Project Cargo, I always think of equipment moving out. Right. Just going outta Galveston on the big railroads and things like that. I don't really mm-hmm. Think of it coming in. Yeah. The, there's a lot of stuff that comes in, comes into the US and it's project Cargo going out of the us. It's. There's not a lot of, there's a lot more coming in than going out from what I see, and I'm sure other people see more than I do, but there's a lot more that's, that's coming in than going out. The stuff that's going out. A lot of it's manufactured already. Correct. Already. Yeah. You know, ready to go. It's like vehicles. Yeah, exactly. Right. And it's vehicles going for it could be going for mining or military or seismic. A lot of oil and gas. So all of these, it is finished goods, right? Yeah, a lot of finished goods. So what you're bringing in and I guess I've seen some, some big cranes come in. Mm-hmm. Tho those are projects, so wow. And so you're partnering, does SoCo have their own vessels? Yes. Yes, we do. So we have a mixture of our own vessels and then also vessels that we take on d various forms of chart time, charter and voice chargers. So we will take over other vessels like. Right now we, we took over an AAL vessel in, in the Pacific and we're loading a, a wide variety of cargo on that one in Japan. It's in Japan right now, waiting to load some, some F 18 fighter jets. So we'll have several different types of cargo on the same ship, but of course that vessel's not ours, but we we're, we have it on charter right now, so we'll, we'll share vessels amongst each other. Yeah. Yeah. That's and that's industry standard. I get it. Yeah. We collaborate. I mean, not all, not all of us collaborate together, but a lot of us do in, in some way, shape or form. And it helps. And then also, like for instance, right now, the railroad carriers, I understand they, they, we were competitive against them for project cargo for a long time. And I see now that some of them are, they're so full that we'll get some of their overflow. So some of the stuff that historically goes on a railroad carrier, It's now lifted onto our ships and both imported and exported out of the US Both. We, we have both situations going on right now because the railroad carriers are, they have too much and some of the stuff they're not able to handle. We get the overflow. Yeah, exactly. I mean, I know Roro is, is very backed up right now. Mm-hmm. So what do you foresee happening in the next three to five years? Like where do you see this trend going? You see it kind of capping off and then, Going down or is there just a consistent growth pattern as these US companies begin Nearshoring, it's. It's really hard to say. I, I see it. There's a couple things going on. It's your crystal ball, Dave, right? My crystal ball. You are fresh out of college and we anticipate you making a little predictions, buddy. I don't, I don't think anybody knows for certain, but if I, there's a lot of talk is from a regulatory standpoint, your entire career. Is, is hanging on the line, the line of this prediction? It is, yeah. I, I hope with all, with all seven of my listeners, yes. Oh, I'm sure that will grow if you have other people besides me on here. But I, I see that, I see the trend there. There's ships being built right now. There's more, there's going to be more tonnage than cargo. More, more. Ships and cargo, and I see the, I, I think the party is over for the ocean carriers. We, we struggled for many years and we, we absolutely killed it the last couple years and we're still, we still have the momentum going behind us and we're still doing very well. But I don't think that's going to a, across all types of, whether it be your container carrier or your project cargo carrier, I, I think that there's gonna be new ships enter the market. And freight's gonna be harder to get, and that will drive freight rates down on the, and so it'll be good for, from a shipper standpoint. On the other hand, I see there's a lot of talk about the new regulations for greener energy. Decarbonization. Every luncheon, every conference I go to, crazy, all they talk about, it's crazy. All they talk about is de yeah, de conference every single. Conversation on this podcast. It is leading to this E S G. Yeah. And I'm not even bringing it up. I know, and I, I wasn't gonna bring it up either, but there is something to be said about that. This is what people are talking about. This is a lot of companies, whether they really feel this way or not, or ha have to, to, for their marketing, they have to have this drive behind them to at least appear like they care about esg, e sg. And so what this will result in is a little hard to forecast what the end result will be. I think there the, I, as I understand, the I M O is meeting in, I wanna say July of this year to see what kind of, to, to take an assessment of, of this situation that we are, we are talking about. But there's no telling. I think it'll settle somewhere in the middle. I think that there'll be maybe some regulations on, more regulations on the type of fuel. But no one knows for certain. And what I don't hear a lot of talk about is business must go on. We must make money. There's still, whatever we do with the decarbonization movement must still make business sense. And, and because house, are we going to support a. Is supporting a fleet of ships if the business doesn't make sense. So from, from a profit standpoint, so it's a little hard to say. I think we'll see more regulations the way they're going to, as I understand the way they're going to enforce regulation. One way is through the financial side of things. Banks, big banks are going to require a, some type of record keeping as to how green your supply chain is. So I think we'll see some way, some method of scaling of how responsible you are environmentally and, and there'll be some standard accepted method of keeping your score. Whether it's accurate or not, we don't know, but I think we'll see that. And then that'll be a very it'll be a very looked at. Factor in a, a factor of whether you get financing for a new vessel or not, or financing for anything. Very, A very monitored factor. Yes. Very monitored. K P I. Yes, exactly. So there you go. Yeah. It's, it's moving that way. And the new generation is, this is what they're being taught in school. The, the new, the generation, the educational system. Now there, ev this is also being talked in, talked about even when I was in school, the, the new fuel al alternatives for ships and, and ways that we can make the supply chain a more greener, sustainable supply chain. So, That's, that's definitely I, if, if we had it in our generation, it's going to be even more prevalent in the next, those are the future of all of our companies? So this will be a thing that continues. And to go back to your original question, it'll, there'll be that driving force and there'll be too many ships in the market. I I, I would imagine, and one thing to keep in mind as well. When you build a ship, it's going to be operatable for on an average lifespan of 20 years. So if you're building ships now, you know the, to be completely carbon free or close to it by 2050. I mean, we, we need to have this technology in place and but the next seven years and we're nowhere near we that. Yeah, the technology doesn't exist. It's a lot of talk. Agreed. And You know, to, to think a lot of it is, moving big products to go and dig product mining, to get kind of nasty minerals from the ground to ship them to manufacturers to make to go into forced labor camps. To make batteries in pretty bad conditions to ship to Europe and the US mm-hmm. To store clean energy. Mm-hmm. Yeah. And it has a lifespan of. Right now, like 10 years maybe? Yeah. And then what do you, what do you do with that battery? Yeah. So, well, so yeah, we're I, it, it is a it is kind of a exercise in futility. Yes, it is. And, but there's a lot of money in it right now. There's a lot government. It's a ton of money. In that E S G and now pensions are tied to it. Mm-hmm. And like you said, all these co everybody's rfq mm-hmm. Is tied to it. Yours and, and mine. And so we all have to, we all have to bow to E S G. Yes. Yes. And, and we will, it's, a lot of it starts at a, at a government level and Oh, higher than that. Higher than that. Yeah. It's, it's all run by the, by the venture capital firms that are, you know, yeah. It is very, very high. I could go down that rabbit hole. Yeah. But, and then, but at the end of the day, nobody understands really what I mean from a regulatory standpoint. They don't understand it. The technology's not, the technology's not there. Business must go on. And I think we're enjoying the, the, there's a lot of capital that has been invested to. To move green energy products the end of the day, invest in precious metals and cash flow. Mm-hmm. Yeah. The precious metals are gonna spike. Yeah. And somebody might come out with a new way to do things. I mean, invention in innovation is something that must always move forward and it's exciting to, to see new ideas and new. New students graduating and, and thinking outside the box. I mean, it's, that's innovation must always move forward. But it, it must make sense. And if something, if something doesn't work and we hit a dead end, let's go another route. Something I would love personally to hear more about maybe there is things moving forward and I just don't. It's nuclear energy, nuclear power. I think that's something that should be looked at more. Yeah, very clean energy. Yeah, it just needs the, it just needs a green light for the permit. Mm-hmm. Going back a few minutes, you were talking about companies, they're, they're shifting and, and bringing their plants and their manufacturing process over here to the us. You know, you're a global company, right? Mm-hmm. Norco, yes. So. This is gonna be a two-parter. Are you seeing them shift manufacturing to the US or are they bringing it to Mexico? Are, are you seeing plants move from specifically China to other parts of the world, maybe Vietnam or India? So can you kind of give us a few minute overview of what some of that you're seeing, if any? Yes. I think. As far as the origins of some of this stuff, some of it, I'm not sure exactly where it originated from. I do know that the world, a lot of it, the manufacturing is focused primarily on Mexico. There's a lot of investment going on in the US as well, but Mexico is the new China when, when it comes to infrastructure and manufacturing and focus, it's, it's Mexico, it, it used to be China and maybe some other places as well, but it's now Mexico and that's where people are. And companies are, are focused on, from what I'm seeing and from what I'm hearing from my colleagues at other companies as well, it's what the, the US me, well, yeah. The US-Mexico border is going to be, is, is going to, if it's already, I think, surpassed. Long Beach as far as volume? Yeah. Well it already, yeah. It's been the actual, the, the number one port in terms of volume for a long time. Mm-hmm. Not the ocean port, but number one port of entry in terms of volume, so. Right. I think, you know, I had heard at a separate conference, I was at a commercial real estate conference about, Oh, this is in December in Jacksonville and there was a guy, he was very bullish, Uhhuh on Macallan, on investing in buying commercial real estate there, and I was like, Uhhuh. I said, why, like, what's going on? He said, our US Mexico trade is going to skyrocket in the next five to seven years. Yeah. And I thought, I, I don't disagree. and you know, his infrastructure was apartments and so he's, he's buying apartments all along. The border on the US side because he foresees this huge influx of business, therefore people into mm-hmm. The border towns. So he's gonna prepare for that growth. Yeah. It's a smart move. I believe It's a really smart move. One thing that this is, and this is just a little speculation, there's so many factors involved in, in, in rates and some of'em are just unforeseen, but if, if the US and Mexico. Manufacture more, then that means that there, there could be more exports as well. And what that does, at least from our standpoint, I think other carriers would agree, is that if you have, there's such an imbalance right now with imports versus exports and the, and so you, you have, you know, you have to pay for your ship to come over here full, which is no problem. But then when it leaves empty, you also have to keep that cost in mind as well if it's gonna ballast to the next port. To load more cargo. So freight rates tend to be higher for even imports to the US because we know that there's, it's finding exports is going to be difficult. Ships come in full and they leave empty. Yeah. All right, man. I'm gonna wrap this up. Okay. Got got a surprise question for you. Oh, cool. Yeah. What is on your bucket list? My bucket list. Yeah, give me, give me one, two, or three things on your bucket list, but at least one, oh get married. I guess. What else am I gonna do at this age? I am gonna say, that doesn't count. I need something good. That doesn't count. No, that's not, what else am I gonna do? I'm gonna Bucket list. Bucket list. Bucket list. The buck. What is a bucket list again, I forget. Something you have to do before you die that's getting married. I mean, what I, I've done a lot of things. I don't know what else there is. Really, you've done a lot of things. What's the most, what's your favorite memory then? Oh, probably my, my daughter, she's only five and a half, so we have a lot of fun adventures, so, okay. I will, I will count that. You can't, you can't not count the daughter. So the birth of your daughter? Yeah, the birth of my daughter. We have a lot of fun together, so anything that five and a half we do whatever she wants to do now. I mean, I've, I've had my Avengers in life and, and they've been great and. And lots of stories there, but I think the, she kind of makes, we do whatever she wants to do now. So, yeah, all the adventures, she determines what they're, that's what I love to do for fun. And so have you taken her to Disney? No. No. We have never gone there before. So as the father of two daughters I will tell you now is probably the time. Is she a princessy kind of girl? She, yes, very much so. She's in a dragon, I'll tell you. And I am, I am not like, you know, pro Disney or whatever, but I will tell you, I've taken the kids to Disney a few different times, and then the last time my, my daughters were outgrown from. That princess phase. Yeah. And it was like a different experience. So, huh. I will tell you, like doing it while they're in that princess phase, it is a, It is something you'll remember, like it's really fun to see them light up and like they're seeing those characters. So something to think about non-business related, but I'll tell you. Yeah, no, it's, that's why we, we don't, you know, we work for. Everyone works for a person. Well, it's like you said, right? You do everything she wants to do. Uhhuh. I like it's why I'm, it's why I still have to work until I'm like 95. Oh, yeah. No, I have, I actually have more than one. I have a, I have five, so well, good grief. Yeah. I only have, yeah. You'll, you'll never not be working. Correct. Correct. So if you ever want to talk kids, you know, see what it's gonna be like. But I would tell you that man with the daughters when they're five, dude, if you could do it next year when they're six mm-hmm. It's easy cuz they can walk and, yeah. It, it is a different experience. So that is not a plug for Disney, by the way. I don't wanna promoting it. It is more of a father-daughter thing. Yeah, no, I'll take all that advice. I can get, I'll probably be calling you for, for additional advice, try and help you avoid some pitfalls, bro. Yeah, I'm not working then We're doing whatever Jamie said what Jamie wants to do. That's her name, Jamie, she instructed me the other day to call her the Queen Dog International. Are you kidding me? Yeah. That's her. That's, that's what I am to call her. That is, it's no longer, I can't call her Jamie anymore. And she's five. Yeah, she's five. That is brilliant. I love that. She's the queen dog international. That's fantastic. well, Dave, how can everybody get in touch with you? How can these mega factories get in touch with you for your insight and shipping support? I can send me an email d w h@thorcoprojects.com or call me on my cell. It's always, Twenty four seven. You can call me anytime.(979) 255-7599. Anybody can call me. Awesome. We're not hard to find. No man. That's d w h@thorcoprojects.com. We will have it in the show notes. And man, I really enjoyed it, like your insight Thank you everybody for tuning in. Please like, share and subscribe. As always, we're brought to you by Bridgestone Capital, passive Income for Supply Chain Professionals, looking at commercial real estate all around the us. Chain investor.pro. If you want some more information, just download that ebook@chaininvestor.pro. All right, Dave, thanks so much, and thank you, Jeff. Thanks for having me. Been a pleasure.