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Technology, Travel, And The Supply Chain · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day, we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
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  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
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  Speaker 1: at Bloomberg dot com Slash podcast. All right, Hinali Tech
• 0:23
  Speaker 1: Media Telecommunications. That's t MT to the cool kids. Um,
• 0:29
  Speaker 1: I love this part of the market because it's changing. Boy,
• 0:32
  Speaker 1: it seems not just on a daily basis, but maybe
• 0:34
  Speaker 1: an hourly basis. You really got to stay on your toes.
• 0:37
  Speaker 1: Mark Gibson. I know Mark Gibson absolutely is on top
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  Speaker 1: of this space. Mark Gibson's a u S Tech Media
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  Speaker 1: Telecommunications leader for KPMG. Mark, There's a lot to talk
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  Speaker 1: about when we talk about tech and tech trends. I
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  Speaker 1: want to start with cybersecurity because this is something that
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  Speaker 1: we hear companies talk about ramping up their spending to
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  Speaker 1: protect their networks every single year, yet we still see
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  Speaker 1: hacks and ransomware. How do you think about this space?
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  Speaker 1: What are you telling your clients, what are you hearing
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  Speaker 1: from your clients. Yeah, Paul, thanks for the chance to
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  Speaker 1: be with you today. Great to be here. And cybersecurity
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  Speaker 1: is certainly an emerging risk that is accelerated up the
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  Speaker 1: up the risk factors for tech companies, no doubt. Um,
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  Speaker 1: it's interesting we have We've been surveying and talking with
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  Speaker 1: execs that our clients in the tech sector for years
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  Speaker 1: and its cybersecurity has always been in the top list
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  Speaker 1: of risk, but you know, somewhere near somewhere near the bottom,
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  Speaker 1: and it's just sort of sat there and through the pandemic,
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  Speaker 1: and I think through the last eighteen months or so,
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  Speaker 1: we've really seen and accelerate to the top where most
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  Speaker 1: of the exacts we're speaking to in the tech sector
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  Speaker 1: are viewing that as one of the top business risks.
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  Speaker 1: And I think it's unique to tech because like all sectors,
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  Speaker 1: all of the companies in the tech sector have to
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  Speaker 1: worry about attacks within their own walls and within their
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  Speaker 1: own data. But it's also a reputational thing for tech
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  Speaker 1: companies because they're responsible for a lot of the products
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  Speaker 1: and solutions that are out being sold out in the
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  Speaker 1: market that are other companies are relying on to to
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  Speaker 1: protect against these cyber attacks. So it really is both
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  Speaker 1: a business and a reputational risk for a lot of
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  Speaker 1: a lot of the tech companies. Technology is such a
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  Speaker 1: broad term and when you speak to any investment bank
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  Speaker 1: around Wall Street, they say all their clients are transforming
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  Speaker 1: to digital economy. And what does that even mean? I mean,
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  Speaker 1: to be relevant in this new economy? What technologies do
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  Speaker 1: you think are really going to move the needle for
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  Speaker 1: the big corporations? Yeah, Shivani, it's a great question because
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  Speaker 1: you know, the disphrase digital transformation has been out there
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  Speaker 1: everywhere and it means a lot of things to a
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  Speaker 1: lot of people. And we we surveyed some tech exacts globally.
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  Speaker 1: We do that quite often, and we abolutely really interesting
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  Speaker 1: results this year where UM most of the responses of
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  Speaker 1: what are the transformational technologies that are going to drive
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  Speaker 1: the sector going forward? They were new things at the
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  Speaker 1: top of that list. It was things like artificial intelligence
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  Speaker 1: and IoT and robotic process automation. And it was much
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  Speaker 1: different from what we've seen in the past around transformation.
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  Speaker 1: And I think what it tells us is UM, before
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  Speaker 1: the pandemic, most companies view digital transformation as a way
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  Speaker 1: to drive costs out of their business you know, sort
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  Speaker 1: of grow the bottom line, update their processes, get their
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  Speaker 1: get their systems into the cloud, things like that, take
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  Speaker 1: back in cost out. But what we're seeing now through
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  Speaker 1: the reasults of these type of technologies are really focused
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  Speaker 1: on growing market share in the top line and enhancing
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  Speaker 1: customer loyalty and things like that that are much more
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  Speaker 1: competitive advantages. And so I think a lot of the
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  Speaker 1: tech companies are viewing these, uh, these newer emerging transformational
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  Speaker 1: technologies as a way to really generate new insights, attack
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  Speaker 1: the data security issue that we talked about previously, and
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  Speaker 1: really drive you know, competitive advantage in the market to
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  Speaker 1: be a winner going forward. So it is really emerging,
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  Speaker 1: but it's a great, uh, it's a great emerging question.
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  Speaker 1: So one of the technologies that seems to have just
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  Speaker 1: exploded this year and maybe even just in the last
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  Speaker 1: six months is crypto, and it just seems like that's
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  Speaker 1: where all the cool kids are going now, to bitcoin,
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  Speaker 1: to crypto. They're not going on to the trading desk
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  Speaker 1: Morgan Stanley to trade the long bond, They're going out
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  Speaker 1: and doing crypto stuff. What do you tell clients about that? Yeah,
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  Speaker 1: I think everybody's looking at that it's certainly become something
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  Speaker 1: that seemed to be UM out of the mainstream for
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  Speaker 1: a number of years, and a lot of clients were
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  Speaker 1: we're we're looking at that, but viewing it as something
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  Speaker 1: they deal with in the future. And I think it
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  Speaker 1: has made its way onto the agenda now for discussion UM.
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  Speaker 1: You know, blockchain is certainly an important topic for the
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  Speaker 1: tech sector UM and that's uh integrated some way with
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  Speaker 1: crypto UM and I think we're seeing more and more
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  Speaker 1: companies investigating how do you lean into that, how do
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  Speaker 1: you accept payment? How do you transact business using those
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  Speaker 1: alternative payment means? And so it's got it's made its
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  Speaker 1: way onto the agenda, I think for the clients that
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  Speaker 1: we talked to you, and I think the we still
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  Speaker 1: maybe we'll wait to see exactly how how it's you
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  Speaker 1: buy a lot going forward? All right, Mark, we'll talk
• 5:21
  Speaker 1: about that one in the future because it's here to stay.
• 5:23
  Speaker 1: It seems like Mark Gibson, u S t MT leader
• 5:25
  Speaker 1: for KPMG giving us the latest on trends in all
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  Speaker 1: things text well, all reports that we're hearing over the
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  Speaker 1: past few days is despite the only cron variant and
• 5:41
  Speaker 1: the challenges there people are traveling. You know, it's Christmas
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  Speaker 1: and people are heading out and getting on planes and
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  Speaker 1: driving and going back and forth for the holidays. Let's
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  Speaker 1: chick in what's really going on with the airlines with
• 5:52
  Speaker 1: that whole industry. Peter McNally, Global lead for Industrials, Materials
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  Speaker 1: and Energy at Third Bridge. Peter, what do you think
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  Speaker 1: holiday travel is gonna look like for these airlines? Uh,
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  Speaker 1: it seems like people are heading to the airports and
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  Speaker 1: flying out. Yeah. Well, good to be with you. The
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  Speaker 1: You know, it's undeniable that people do want to travel,
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  Speaker 1: and we've seen it, you know this year, as people
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  Speaker 1: got vaccinated, they booked flights and they wanted to travel,
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  Speaker 1: the airlines themselves ran into some trouble and dealing with
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  Speaker 1: the demand because it was less predictable than in the past. Um,
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  Speaker 1: people are booking much closer to their travel dates than
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  Speaker 1: in the past. But the difference we've seen Thanksgiving and
• 6:39
  Speaker 1: now coming into Christmas is that the airlines know when
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  Speaker 1: those dates are UM and they can staff and get
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  Speaker 1: the aircraft in the right places at the right time.
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  Speaker 1: Whereas you know, through the summer in the fall, as
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  Speaker 1: like the delta variant emerged and then receded. It was
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  Speaker 1: a lot harder for the airline to do planning. So
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  Speaker 1: over the last few weeks, you know, we've seen better
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  Speaker 1: performance out of the airlines and demand is on the rise,
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  Speaker 1: you know. And first of all, I must say I
• 7:10
  Speaker 1: was also a buck Now graduate too, so you know,
• 7:14
  Speaker 1: you must really know what you're talking about. So you know,
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  Speaker 1: here's the thing. A lot of things are being canceled
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  Speaker 1: that would have spurred a lot of global travel. That is,
• 7:27
  Speaker 1: things like Davos or things. I guess there's a lot
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  Speaker 1: of private planes, but but still it bought a lot
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  Speaker 1: of people flying around the world. The JP Morgan conference
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  Speaker 1: events are being canceled. How does that shape what the
• 7:40
  Speaker 1: beginning of the next year starts to look like. Sure, well,
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  Speaker 1: the way we're looking at it at third bridges to markets,
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  Speaker 1: we've got the domestic market which is basically in a
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  Speaker 1: full recovery, but the international market, even by midsummer next year,
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  Speaker 1: we still expected to be off. It's off levels like
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  Speaker 1: it's not going to be until in all likelihood that
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  Speaker 1: UH international air travel does make that full recovery, whereas
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  Speaker 1: the domestic market a lot more leisure domestic business is
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  Speaker 1: still different. UH, leisure, domestic travel has come back and
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  Speaker 1: has come back strong, and things like delaying returned to
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  Speaker 1: office or conferences being canceled. That's more impacting the business market.
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  Speaker 1: So um, you know, it is really important to segment
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  Speaker 1: um the different types of travelers that that you're seeing
• 8:39
  Speaker 1: when looking at the airlines. All right, A car larry
• 8:41
  Speaker 1: to kind of the airline industry is the oil business. Energy.
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  Speaker 1: It's a big cost for these airlines. We've seen oil here.
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  Speaker 1: We've got w t a Coude oil and fifty cents.
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  Speaker 1: I mean, this seems to be supply seems to be
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  Speaker 1: fixed and oil seems to be moving simply on where
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  Speaker 1: demand or perceived demand is going to be. How are
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  Speaker 1: you thinking about that? And when you look at your companies, Well,
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  Speaker 1: the first thing to think about, you know, oil, is
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  Speaker 1: that inventories are extremely low. We've really flipped the script
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  Speaker 1: from where we were eighteen months ago. And this really
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  Speaker 1: has to do with OPEC, and OPEC has managed supply
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  Speaker 1: lower um and inventories have come down, so that has
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  Speaker 1: led to this recovery in the oil price. That said,
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  Speaker 1: for the first time in a year and a half.
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  Speaker 1: When we look ahead to the first quarter, we actually
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  Speaker 1: see inventories rising for you for crude oil, and to
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  Speaker 1: US that's likely to cap prices. UM. There is a
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  Speaker 1: significant amount of under investment that has gone it, you know,
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  Speaker 1: gone on over the last few years in the sector
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  Speaker 1: that will have long term implications. But over the next
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  Speaker 1: six months for US, it's kind of hard to see
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  Speaker 1: oil prices running away with inventories on on the rise.
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  Speaker 1: And this has to do with OPEC has steadily been
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  Speaker 1: in greasing production UM and the US has also increased.
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  Speaker 1: But we think that in particular is a lot of
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  Speaker 1: low hanging fruit in terms of supply. At the same time,
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  Speaker 1: you know, look, the demand recovery is underway. Jet fuel
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  Speaker 1: is still off, but diesel has been very strong. Gasoline
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  Speaker 1: is picked up. So that's that's the dynamic we've seen
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  Speaker 1: it in oil prices. But regardless, you know, the cost
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  Speaker 1: of oil for airlines is definitely higher than it was
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  Speaker 1: a year ago UM, and this is leading to a
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  Speaker 1: situation while revenues we think in do recover higher fuel costs.
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  Speaker 1: Is one of the reasons why profitability won't get back
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  Speaker 1: to twenty nineteen levels just yet for the year. Now,
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  Speaker 1: what does this all mean for the consumer at the end.
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  Speaker 1: If you want a flight apparently to the UK near term,
• 10:50
  Speaker 1: you're paying a thousand bucks. You know, you're it's expensive
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  Speaker 1: to fly right now. So what is the direction of
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  Speaker 1: travel so to speak here for for pricing. Well, there's
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  Speaker 1: there's limited capacity right now going you know, to the
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  Speaker 1: to the international destinations. Right. It was only November eight
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  Speaker 1: when the US opened up to thirty three uh countries
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  Speaker 1: that had been had been closed before, and the airlines
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  Speaker 1: are just moving capacity into you know, serving those markets.
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  Speaker 1: Whereas like if you want to go to Florida, right,
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  Speaker 1: this is where all the airlines have been competing to
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  Speaker 1: get that leisure traveler. Um. So it's a lot more
• 11:31
  Speaker 1: seven thirty seven but three twenties and three that are
• 11:35
  Speaker 1: targeted of that, but there's fewer seven and eight three
• 11:40
  Speaker 1: fifties in position to carry people to these international markets.
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  Speaker 1: And that's why you're seeing this dispersion in what it
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  Speaker 1: costs to travel. Hey, Peter, thanks so much for the update.
• 11:50
  Speaker 1: Really appreciate you taking the time. Peter McNally, he's a
• 11:53
  Speaker 1: global lead for industrials, Materials and Energy and the firm's
• 11:57
  Speaker 1: name is Third Bridge. So getting an update there on
• 12:00
  Speaker 1: some some airlines and some travel and some energy there. Well,
• 12:06
  Speaker 1: I have to admit that when I was getting my
• 12:08
  Speaker 1: MBA at Duke University's Fucal School of Business, where are
• 12:11
  Speaker 1: um our next guest actually had some studies there, I
• 12:14
  Speaker 1: have to admit I didn't pay much attention to the operations,
• 12:18
  Speaker 1: management and logistics classes I know, and that was a mistake,
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  Speaker 1: because those are the folks that are, uh, you know,
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  Speaker 1: really at the center of attention right here. Mike Powa,
• 12:28
  Speaker 1: CEO of DHL Express America's joint US Mike supply Chain,
• 12:33
  Speaker 1: I'd probably say a three or four times a day.
• 12:36
  Speaker 1: It's an excuse for basically everything UH in my world.
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  Speaker 1: Give us a sense of kind of where we are
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  Speaker 1: right now and managing these challenges with the supply chain,
• 12:47
  Speaker 1: and kind of how do you think it's going to
• 12:48
  Speaker 1: play out over the coming six months. Day. Thank you
• 12:51
  Speaker 1: Paul and Chanelli, thanks for having us, and by the way,
• 12:54
  Speaker 1: go Blue Devils as you know UM and hopefully we
• 12:58
  Speaker 1: can do something nice for Coach k on his way out. UH.
• 13:02
  Speaker 1: But back to supply chain first and foremost, I'd have
• 13:06
  Speaker 1: to say that we are really pleased with where we're at.
• 13:10
  Speaker 1: UH as we kind of start to wrap up this
• 13:13
  Speaker 1: peak season. UM. And I don't know what you call
• 13:16
  Speaker 1: peak season these days, because we've been in peak season
• 13:18
  Speaker 1: since last May. But we've had a strong peak season.
• 13:22
  Speaker 1: Our volumes have been up. We started planning for what
• 13:28
  Speaker 1: we call the super Bowl of peak season back in
• 13:30
  Speaker 1: June of this year, going out and hiring two thousand
• 13:34
  Speaker 1: two additional UH individuals just alone here in the US. UM.
• 13:40
  Speaker 1: But so far, knock on wood and we're in the
• 13:42
  Speaker 1: last what we would call the last week, last couple
• 13:44
  Speaker 1: of days of the hurdle. We've performed quite well and
• 13:48
  Speaker 1: I can speak to that as we go through this.
• 13:51
  Speaker 1: You know, it's interesting. We've been talking to retailer after retailer,
• 13:54
  Speaker 1: and the ones that are winning say they have just
• 13:57
  Speaker 1: gotten their inventory management right. But I want to be
• 14:01
  Speaker 1: also clear because you have someone like Cathy Wood who
• 14:04
  Speaker 1: says the biggest risk to businesses are the fact that
• 14:07
  Speaker 1: people have over ordered and that's going to come to
• 14:10
  Speaker 1: bite them next year. I'm wondering, what is a delicate
• 14:14
  Speaker 1: balance here at this very tricky time when it comes
• 14:18
  Speaker 1: to the world of managing your supply chains. Yeah, well
• 14:23
  Speaker 1: that's that's a good concept. That's UH. I talked about
• 14:25
  Speaker 1: this about nine months ago and I called it four
• 14:28
  Speaker 1: oh fear of running out UM, and a lot of retailers,
• 14:32
  Speaker 1: a lot of our customers went from just in time
• 14:34
  Speaker 1: to just in case. So it speaks exactly to the
• 14:37
  Speaker 1: point you're referencing to. But we've also seen a big
• 14:41
  Speaker 1: shift UH in supply chain. So a lot of what
• 14:45
  Speaker 1: used to go maritime or ocean, or a lot of
• 14:47
  Speaker 1: what used to go freight forwarding has moved over into
• 14:50
  Speaker 1: our space of time definite international. And that's because we
• 14:54
  Speaker 1: have a fixed air network and you know, we're not
• 14:58
  Speaker 1: unique in that sense. Our competitors are there. Some of
• 15:01
  Speaker 1: us planned ahead of others and created that capacity from
• 15:06
  Speaker 1: that perspective, So yes, I would say there is a
• 15:10
  Speaker 1: bit of that that is going on UM, and it
• 15:13
  Speaker 1: may not be too bad, to be honest with you,
• 15:16
  Speaker 1: because I think they will have the inventory that's appropriate
• 15:18
  Speaker 1: and needed as you moved into the next peak season,
• 15:22
  Speaker 1: which will be the run up to Chinese New Year,
• 15:25
  Speaker 1: which is you know, late January of next year. Mike,
• 15:29
  Speaker 1: when you I guess, just based on your internal analysis
• 15:31
  Speaker 1: and your discussion with your customers, what's your best estimate
• 15:35
  Speaker 1: of when the global supply chain will. I'm not sure
• 15:37
  Speaker 1: what the right term is, but but just normalize a
• 15:40
  Speaker 1: little bit more, UM, because it's been you know, a
• 15:42
  Speaker 1: good twelve plus months here. Absolutely, everything that we are seeing,
• 15:48
  Speaker 1: every analysis we've done, every conversation we've had, every session
• 15:52
  Speaker 1: we've attended, indicates late or even early. Absolutely, so we
• 16:00
  Speaker 1: don't see any change in twenty two. Uh. And especially
• 16:05
  Speaker 1: with the variant and the explosiveness that we have seen
• 16:08
  Speaker 1: and you've seen it. I'm living here in South Florida
• 16:11
  Speaker 1: right now. We're up to a hundred and eight thousand
• 16:14
  Speaker 1: new cases just Monday alone of this week in South Florida.
• 16:20
  Speaker 1: All the testing sites are up. We are out of
• 16:24
  Speaker 1: at home testing kits at least here in South Florida.
• 16:27
  Speaker 1: That's what I can speak to, UM. And I don't
• 16:31
  Speaker 1: see this changing in twenty two. So we're headed for
• 16:34
  Speaker 1: another uh, you know, pandemic year in twenty two where
• 16:39
  Speaker 1: we thought it would be an endemic. Hopefully at some
• 16:41
  Speaker 1: point it will change. But again, no change in capacity
• 16:45
  Speaker 1: in twenty two uh. And we think we're well positioned.
• 16:48
  Speaker 1: We went ahead in twenty nineteen and purchased fourteen triple
• 16:52
  Speaker 1: seven YE bodies from Boeing. We then put in another
• 16:55
  Speaker 1: order for eight uh and we continue and we added
• 16:58
  Speaker 1: one new aircraft every week from June of this year
• 17:03
  Speaker 1: to the end of the year. I'm curious, and we
• 17:05
  Speaker 1: only really have thirty seconds year. Can you do this
• 17:08
  Speaker 1: in a way that's greener. We are working on that
• 17:12
  Speaker 1: through sustainable aviation fuel, which we started in Europe and
• 17:15
  Speaker 1: in the United States. We kicked it off in San Francisco,
• 17:19
  Speaker 1: uh and now we're looking to kick it off in
• 17:20
  Speaker 1: other markets, but absolutely from that perspective, and we will
• 17:25
  Speaker 1: launch the first twelve fixed wing electric aircraft in the
• 17:30
  Speaker 1: United States through a partnership with Aviation at a Western Washington.
• 17:34
  Speaker 1: So stay tuned for that. All right, Hey, Mike, thanks
• 17:37
  Speaker 1: so much for joining us. Really appreciated getting the update
• 17:39
  Speaker 1: on the supply chain. I didn't necessarily like the timing
• 17:42
  Speaker 1: that Michael suggesting. Late Mike Para, CEO for DHL Express
• 17:46
  Speaker 1: America's um again talking about supply chain challenges remaining uh
• 17:51
  Speaker 1: well into tree. So again we'll have to see how
• 17:55
  Speaker 1: that plays out going forward. Certainly a challenge for the
• 17:58
  Speaker 1: global economy. All right, So infrastructure, we got that infrastructure
• 18:06
  Speaker 1: built through bridges, tunnels, all that kind of stuff. The
• 18:10
  Speaker 1: Gateway project, for example, new train tracks underneath the Hudson River,
• 18:15
  Speaker 1: which we so desperately need, which has been my pet project.
• 18:17
  Speaker 1: Looks like that's even gonna get funded. So this is
• 18:20
  Speaker 1: a great time to talk to our next guest and
• 18:21
  Speaker 1: Fan Dazi, chief executive officer for Richie Brothers. Richie Brothers
• 18:25
  Speaker 1: trades on the n y S E r b A.
• 18:27
  Speaker 1: It's a global asset management company that sells industrial equipment
• 18:32
  Speaker 1: and trucks through live and online auctions and distributes through
• 18:35
  Speaker 1: other channels as well. So a really cool company. I
• 18:37
  Speaker 1: didn't even know this existed until we spoke earlier. Um,
• 18:41
  Speaker 1: and thanks towards for joining us here. It looks like
• 18:44
  Speaker 1: we're gonna get a lot of infrastructure. What's it like
• 18:47
  Speaker 1: out there in the used equipment business? Are people scrambling
• 18:50
  Speaker 1: trying to get stuff to build stuff with? Yeah, Paul,
• 18:55
  Speaker 1: so they're trying, but the supply chain it doesn't seem
• 19:00
  Speaker 1: to be cooperating with us. So the way that used
• 19:04
  Speaker 1: equipment works, uh, is that you know, people replace used
• 19:09
  Speaker 1: equipment typically with new equipment, and if there's a lag
• 19:12
  Speaker 1: and new equipment, they can't dispose of their used equipment.
• 19:16
  Speaker 1: So what's happening is very little supply in the uthed
• 19:20
  Speaker 1: equipment market. It is, however, resulting in an incredible price
• 19:25
  Speaker 1: environment for sellers. Oftentimes these days, because people are scrambling,
• 19:30
  Speaker 1: as you said, for the infrastructure bill, they're busier than
• 19:34
  Speaker 1: they've ever been before. Some used assets are actually selling
• 19:37
  Speaker 1: above their original acquisition costs, unheard of unprecedents that has
• 19:42
  Speaker 1: never happened before. You know, I'm kind of wondering here
• 19:45
  Speaker 1: how long this lasts for and the investments that people
• 19:49
  Speaker 1: are going to need to make to get through all
• 19:51
  Speaker 1: of this uncertainty. Yeah, so that that is the question.
• 19:56
  Speaker 1: That is the question, how long does it last? You know?
• 19:58
  Speaker 1: When this started UH, So I joined Richie Brothers January
• 20:02
  Speaker 1: of UH. Similarly, when I started looking at the company,
• 20:07
  Speaker 1: hadn't heard of it. It's incredible, UH, an incredible marketplace
• 20:11
  Speaker 1: for global use industrial equipment UM around the globe. So
• 20:16
  Speaker 1: I started in UH. And you know, the first inkling
• 20:21
  Speaker 1: we had that there was going to be a supply
• 20:22
  Speaker 1: chain issue kind of came towards the end of the
• 20:24
  Speaker 1: year from the O E. M S. And originally it
• 20:27
  Speaker 1: manifested like a chip shortage. You know, hey, chip shortages
• 20:32
  Speaker 1: UH and then it went to containers and shipping containers
• 20:35
  Speaker 1: and labor and gluts and you know, uh and and
• 20:38
  Speaker 1: the question on everybody's minds is when does it end?
• 20:42
  Speaker 1: And so we know it's not now, if anything, is
• 20:45
  Speaker 1: getting worse now because the supply chain still remains difficult,
• 20:51
  Speaker 1: and the demand because of the infrastructure bill and just
• 20:55
  Speaker 1: making people busier than they've ever been before. We're anticipating
• 21:00
  Speaker 1: on time this year, but looking like towards the back end, uh,
• 21:03
  Speaker 1: not the first half for sure, So give us a sense.
• 21:07
  Speaker 1: And I mean, you know, it's all tied together the
• 21:09
  Speaker 1: new equipment that used equipment market. What are the caterpillars
• 21:12
  Speaker 1: and the deers and all those other manufacturers. What are
• 21:16
  Speaker 1: they saying about their production schedules and how they'll be
• 21:19
  Speaker 1: able to supply the market. Yeah, we're watching those very
• 21:23
  Speaker 1: very closely, and they are experiencing the very the very
• 21:28
  Speaker 1: problems that I alluded to. So we're kind of listening
• 21:30
  Speaker 1: to their public filings, obviously meeting with dealers as well
• 21:34
  Speaker 1: as corporate players in the space to understand what folks
• 21:38
  Speaker 1: are feeling. And the reality is that, uh, you know,
• 21:41
  Speaker 1: the demand from their dealers are higher than anything the
• 21:45
  Speaker 1: companies can supply how they've chosen to kind of balance
• 21:49
  Speaker 1: that is more fulfilled the demand on the retail side,
• 21:53
  Speaker 1: so for retail sales and kind of uh you know,
• 21:56
  Speaker 1: where they're feeling the brunt of the pause is on
• 21:58
  Speaker 1: their rental fleets, which are aging. Uh and uh don't
• 22:04
  Speaker 1: have a replacement cycle that's coming up. The nice thing
• 22:07
  Speaker 1: for Richie Brothers with that is, uh, you know, as
• 22:10
  Speaker 1: equipment continues to age, it for sure he'll need to
• 22:13
  Speaker 1: be disposed of. Uh. And you know that's where we
• 22:16
  Speaker 1: come in. The question is not if, it is when
• 22:19
  Speaker 1: and we are waiting patiently for that day. You know,
• 22:22
  Speaker 1: this idea that equipment demand is really being driven by
• 22:25
  Speaker 1: infrastructure projects, how does that play out on the ground.
• 22:29
  Speaker 1: What does it look like? Oh yeah, exactly. So the
• 22:33
  Speaker 1: interesting thing is was how busy everybody has been the
• 22:37
  Speaker 1: infrastructure money hasn't actually started to blow. So I think
• 22:40
  Speaker 1: we're seeing the tip of the iceberg here. I think
• 22:43
  Speaker 1: do covid um Infrastructure construction has been being an essential service,
• 22:49
  Speaker 1: so we've kind of seen that steadily rise. Obviously people
• 22:52
  Speaker 1: working from home, uh, so kind of construction on the rise,
• 22:56
  Speaker 1: and and you know home improvement, those types of things. Uh.
• 22:59
  Speaker 1: And now how right on the heels of that is
• 23:02
  Speaker 1: going to be this infrastructure of money that's going to
• 23:04
  Speaker 1: be desperately needed flooding in um and the supply chain
• 23:09
  Speaker 1: will for sure catch up. The question is when what
• 23:12
  Speaker 1: piece of equipment or or type of equipment is most
• 23:15
  Speaker 1: in demand or which one is experiencing that, you know,
• 23:18
  Speaker 1: supply demand mismatcher, you're really having some problems, picket. And
• 23:22
  Speaker 1: it's there anything transportation to construction, to crane to mining, right,
• 23:28
  Speaker 1: It's it's actually interesting. So I'm you know, I I've
• 23:31
  Speaker 1: seen from the car space over a decade between Ford
• 23:35
  Speaker 1: Motor Company and Chrysler uh and so kind of Uh.
• 23:39
  Speaker 1: You know, in this industry about two years, we've never
• 23:42
  Speaker 1: seen anything like this before. That across the board. The manufacturers,
• 23:46
  Speaker 1: we see it with the car manufacturers as well, are
• 23:50
  Speaker 1: just experiencing, you know, never before seeing disruptions and their
• 23:55
  Speaker 1: supply chain. You know, we're hearing from some manufacturers that
• 23:59
  Speaker 1: at this point there only taking orders for they will
• 24:03
  Speaker 1: not be able to fulfill anything else. In Again, what
• 24:06
  Speaker 1: that means for sellers is incredible time for to sell.
• 24:09
  Speaker 1: The prices are sky highs. So you know, our last
• 24:12
  Speaker 1: guest was a duke grad. But Anne is uh War
• 24:15
  Speaker 1: an m b A and systems engineering, and I'm wondering
• 24:19
  Speaker 1: and how important is this for the future, for more
• 24:23
  Speaker 1: people to be building in operations and engineering skills into
• 24:28
  Speaker 1: their own work. Yeah, you know, thank you for that question.
• 24:33
  Speaker 1: I am a huge STEM fan, so uh as you
• 24:37
  Speaker 1: As you noted, I have a Masters and engineer, bachelor's
• 24:39
  Speaker 1: and engineering and Masters and engineering before my m b A.
• 24:43
  Speaker 1: Uh you know, I firmly believe that every company today
• 24:46
  Speaker 1: is in fact the technology company, and for the leaders
• 24:50
  Speaker 1: of tomorrow to be fluent in the language of technology
• 24:54
  Speaker 1: is just invaluable, even if you're not coding. Uh you know, uh,
• 24:59
  Speaker 1: heaven forbid eye code off my coding skills from two
• 25:03
  Speaker 1: decades back. But the fact that I can speak that
• 25:06
  Speaker 1: language just is such an incredible skill set and a
• 25:10
  Speaker 1: shortcut actually for the organization so that you know, they
• 25:13
  Speaker 1: don't constantly have to wait for me to catch up.
• 25:15
  Speaker 1: So for anybody listening, I believe STEM is the future.
• 25:19
  Speaker 1: I have um two children, a boy and a girl.
• 25:23
  Speaker 1: He is actually majoring in engineering right now, which she's
• 25:26
  Speaker 1: thinking something in STEM, either science or engineering, and I
• 25:29
  Speaker 1: couldn't be happier yep. Likewise, all right, and thank you
• 25:32
  Speaker 1: so much for joining us. Always love chatting with you
• 25:35
  Speaker 1: and getting your perspective really interesting and Fan Dazzi, chief
• 25:38
  Speaker 1: executive officer of Richie Brothers. Thanks for listening to the
• 25:43
  Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews
• 25:47
  Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm
• 25:51
  Speaker 1: Matt Miller. I'm on Twitter at Matt Miller three. On
• 25:56
  Speaker 1: Fall Sweeney, I'm on Twitter at pt Sweeney Before the podcast,
• 25:59
  Speaker 1: you can always hatches worldwide at Bloomberg Gradient