Portland is Shutting down Container port?!

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Transcript

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Hey everybody. This is Jeff with Chain Reactions. Thanks for signing in, checking us out. It is contract season. We're in full fledge. I've actually just had a customer target confirmed. They just signed their deal with the carriers off of their RFQ. Let's go in and see what's going on in the in the marketplace. I came across this article about Portland. They're ending their container business by October. And that's a big deal. they're having some losses. What does that mean? That's one less option. I know that we actually, I have a lot of customers that love the Portland option. An alternative option to Long Beach, and I guess Tacoma would be a second option. But they're losing 14 million in 2024. Following 13 million in 2023. And yeah, so they, they surged in they surged during COVID, which everybody did 43 percent drop in containers handled from 23 to February 24. They do not release actual container volumes. So that it's, that's something so MSC and SM lines agree to pay more. But the state and the feds are not really willing to step up and offer them any financial relief. That is something about Portland. And that just says a lot about that city and state, man. Portland, I don't know where you spend your money, but if you're not investing in the port, you're not investing in the right things. I'll tell you that is a driver for economic activity. And I think Portland, didn't they do the thing? It was like the off city. What was Portland's? Let me look that up. Occupy Portland. If please add it to the comments. Autonomous zone, that's it. Autonomous zone. Thank you. So yeah, and they completely supported it. But your fricking port, you can't come up with the cash. That's amazing. And amazing Portland, you're a special place, man. So here's some big news, man. The fricking. The Hormuz, Strait of Hormuz, so the pirates are taking over major vessels, 14, 000 T. E. U. vessels from M. S. C. So that's Iran. That's the M. S. C. Aries. Again, how these major governments are not stepping in and just blasting them away is beyond me. And this is something I think that the U S needs to step in on and just annihilate somebody because this is international trade. Declare container moves at Mandra on the vessel. We're not immediately known, but the service has substantial space allocation for both ports of call premier routing of the trade link. Yeah. They're Iran is straight looking for a fight. Felix still answer local trade sources have suggested M. S. C. Could deploy an extra loader soon. We just sent out a notification that all of this to mom Jebel Ali this whole major trade lane is more than likely going to be affected and C. M. A. M. S. C. All your major players here, HAPAG they're looking at this very hard. Cargo planning is typically challenging for unscheduled or temporary sailings. MSC has announced that one of its ad hoc ships en route to both Navasheva and Mundra for Europe loads. We'll skip the former call lined up for April. Yeah, they're already skipping Mundra. This was going to discharge 2000 containers and lift 200 export boxes at Navasheva. So now trade is going to be affected in Navasheva. I'm surprised only 200 export boxes, but it's likely 200 export to another country, not the U S. So this war thing is escalating. Outside of war, more business discussion. This is interesting. Hapag Lloyd to target BCO growth. Maersk took this approach. This makes, I don't know what to think of this. This does affect smaller customers. smaller customers do not have the most flexibility with ocean carriers directly. Maersk already did this. And what this does is it puts the customer into a spot market only because now in the case of Maersk, They're not offering contract rates to freight forwarders. So HAPAG is obviously going to take that model and replicate it in some form or fashion. Of course, he's saying not at the expense of its forwarding customers. We'll have to see what that looks like, but it's, it's his six, five to six year plan. So they're they only want to focus on the large BCOs. smaller customers who rely on freight forwarder contracts. This is taking out another large ocean carrier option. Yeah. Which here we go. Increasing direct BCO business is also a strategy being pursued vigorously by Hapag Lloyd's future Gemini cooperation partner Maersk within its integrated logistics service offering. They have turned away, Maersk has turned away from the large forwarder market to target cargo loaners. Yeah. Just like I, I mentioned that has come in for some criticism recently. I'm not criticizing it. I'm merely pointing out that it leaves a gap. It creates a gap to small to medium sized customers who want a specific transit time or a specific customer or business and Maris knows that. And they control it. They're running a business. they can be criticized if people feel like it. And now HAPAG is going to also openly do that. So they're going into this co op, those things happen, I guess it'll last five or ten years until they split that co op. I imagine they're going to be doing the same strings. We'll see. We'll see what happens there. But my prediction on April 18th, 2024, is that small to medium size customers are going to experience reduced capacity in the specific segments that they want, because they rely on freight forwarders. For customer service aspect of the business. And if we want to offer HAPAG or MERSC, we will rely on spot market rates. Which is not competitive. I should add that. It's a higher rate level significantly. 30 to 50 percent higher. In real estate, and I'll focus on U. S. real estate just because 80 percent of the listener base that's on Chain Reaction tails from the supply chain front lines. This one's not surprising. Oh, it's all from the U. S., sorry. Look, Laredo up 5 percent. Riders investing in Laredo. After truck border crossings, 5%. New Jersey warehouse demand ebbs. Heh. Consumer spending slow down. Why do you think that is? Nobody wants to be in Jersey. Nobody wants to be in the Northeast. They're taxed. Freedoms are taken away. And then you got Buku. People coming across the border. So politics aside, just it's a simple fact. We had 7 million people across the border. They're going to spend money, whether it's dollars or pesos, they are going to spend money. And that adds trade. There's going to be a demand for housing. So if you're in the real estate business, buy real estate. There's infrastructure needs along the border from California, New Mexico, Arizona to Texas. There's 7 million new residents in the U. S., like it or not. And think about it in terms of of a new market share. And, yeah. Here's a, here's something I've been screaming from the rooftops for two full years to all of my real estate investor friends who, who are starting to look at this. Warehousing boom, right? Oh, invest in these warehouses and blah, blah, blah. And I told him, man, like time out, bro. Why do you think they're building this, these warehouses that they're using data from 2021? And it is not real. That is not real data. That is the Amazon effect amplified. That is. And so the warehousing boom. vacancy rate rose 4. 9%. Why do you think that is? Because they built All of these facilities across the U. S., primarily on spec, because in every little pocket, they started building all these spec facilities, and I can drive in any direction in Houston, Texas, and look at all these spec buildings. There's one on my mind that has been built for three years completed, and it is not occupied yet. Yeah. But it hasn't been full. And you had companies filling up and buying inventory at a premium cost for materials, a premium cost for labor and a premium cost for real estate and shipping. And they have, yeah. And They're trying to reduce that. So after they purchased all that, interest rates started going up and consumer spending has been on the decline for the past 18 months because now everybody has to focus on living. The consumer has to focus on life, right? I know that in the past 18 months, my personal expenses. Have gone up about 40 percent just on food and living costs. And I haven't done anything special, just life. I've just been lifing. So I'm not odd on that. You, nobody is I gotta mute. Inventories are dwindling. Finding a warehouse is really easy. Those warehousing that's gonna go down. Yeah, lack of green compliance can be costly for Southern California warehouses. That's back in January. That's a stupid thing. But yeah, de stocking, freeing up U. S. warehousing, that, that's gonna go on for a while. I am interested in Rider expanding their footprint in Laredo because I see that. Look at that man, 27 percent increase from 2020. That's not going away. With near shoring into Mexico from Asia Pacific, that's very real. Now freight. Asian air cargo block space sold out for 2024 as e commerce fills export capacity. e commerce does not seem to be going away. And the demand and what it forces is air freight. It's very quick. And with all the available warehousing, it's all just in time. Have seen this, the China air freight rates India air freight rates seem to be on the rise. So that is all for today. Hit me up. If there's anything you need me to talk about, I am available. Just comment in the below. Look forward to hearing from everybody. We've got some ISM events coming up and want to hear from all of you. I hope to see you. There's some, there's a dinner, there's a tour in our huge ISM annual. Golf tournament at black horse golf club. I want to see everybody there. Hit me up in the comments. If you have a question about any of it and how to join. So have a great week, everybody. See you on the other side.