Latest / Bloomberg Intelligence / Nestlé to Slash 16,000 Jobs as New CEO Speeds Up Turnaround

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Nestlé to Slash 16,000 Jobs as New CEO Speeds Up Turnaround · Bloomberg Intelligence

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  Speaker 1: Boom, Bloomberg Audio Studios, podcasts, radio news. You're listening to
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  Speaker 1: or watch us live on YouTube.
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  Speaker 2: You know, let's get our consumer preferences straight here. I'm
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  Speaker 2: a coke person. Do you put pepsi in front of me?
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  Speaker 2: I'm just as happy. Same thing with the chocolate front.
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  Speaker 2: I identify as a kids say, as a Hershey our person,
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  Speaker 2: but you put a Nessi's crunch in front of me boom, Okay,
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  Speaker 2: very happy.
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  Speaker 3: I don't know about either of those. I'm snobby and
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  Speaker 3: I like European chocolate or Japanese chocolate. I don't like
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  Speaker 3: this Nesli stuff.
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  Speaker 4: All right?
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  Speaker 2: Well, I mean now, John is reporting a slashing sixteen
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  Speaker 2: thousand jobs. I went to the dees function. They have
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  Speaker 2: two hundred and seventy seven thousand jobs, so not that big.
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  Speaker 2: But let's check in with Duncan Fox. He covers all
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  Speaker 2: the consumer saple stuff over there in the UK and Europe.
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  Speaker 2: He's a Bloomberg Intelligence. They had pretty good numbers. Duncan,
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  Speaker 2: but there's still this new CEO is taking some head
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  Speaker 2: count out. Talked to us about what you learned at Nesley.
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  Speaker 5: He certainly grabbed the headline with that sort of sixteen
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  Speaker 5: thousand headcount company. As you said, it's six percent of
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  Speaker 5: the overall headcount, so it's not huge in the context
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  Speaker 5: of the group. But I think the main thing today
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  Speaker 5: was that there was not a nasty surprise in that
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  Speaker 5: I've had the second he's the third CEO in the year,
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  Speaker 5: and obviously the chairman left about a month ago as well,
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  Speaker 5: so I think there was fears that maybe there was
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  Speaker 5: something underlying in.
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  Speaker 4: The business that was going wrong. So the one on
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  Speaker 4: halfers and organic.
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  Speaker 5: Growth, albeit not huge, is a relief, and I think
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  Speaker 5: that's why the shares have really bounced today rather than
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  Speaker 5: the wonderful and the headline of the job cuts tell
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  Speaker 5: us a.
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  Speaker 3: Little bit more about this new CEO strategy overall. I'm
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  Speaker 3: curious whether he is rolling out something new completely or
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  Speaker 3: is he just kind of doubling down on the existing
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  Speaker 3: strategy that his predecessor had laid out.
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  Speaker 5: I think he's doubling down. Excuse me. I think there's
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  Speaker 5: no doubt they were trying to become a lot more
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  Speaker 5: focused on their key brands, but he's sort of broadened
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  Speaker 5: that out to the sort of the broader categories, so
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  Speaker 5: rather than just looking at say cold coffee with Nescaffee's
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  Speaker 5: putting it out to the whole of the coffee brands
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  Speaker 5: that they have. So he's definitely being far more aggressive
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  Speaker 5: on trying to make sure that the market share on
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  Speaker 5: their key brands goes up rather than sort of flat
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  Speaker 5: or down. And it looks like he's probably pulled forward
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  Speaker 5: some job cuts as well and pushed them into the
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  Speaker 5: year to twenty twenty seven rather than sort of keeping
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  Speaker 5: them maybe for later into the twenty eight and twenty nine.
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  Speaker 5: So yes, he's definitely i think accelerated the process that
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  Speaker 5: was probably being discussed anyway in the business.
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  Speaker 2: Duncan, I'm just looking at the stock here and over
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  Speaker 2: the last five years, Nesley's compounded and your return has
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  Speaker 2: been about negative two and a half percent per year,
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  Speaker 2: lagging the Swiss index. Here, what's the story? What's the
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  Speaker 2: challenge for a company like Nastlie was such a great brand.
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  Speaker 5: Well, it's such a big, big company in the food industry,
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  Speaker 5: it's got to innovate very very quickly, or it's going
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  Speaker 5: to die. They did quite a bit of vegan innovation
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  Speaker 5: about two three years ago. Unfortunately, pretty much every one
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  Speaker 5: of those products failed because it just didn't taste very good.
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  Speaker 5: And I think, to be honest, that was the industry
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  Speaker 5: I have the same problem, not just NSLE. You've then
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  Speaker 5: got thread of GLP one drugs coming through, so they
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  Speaker 5: pushed out a whole new bunch of products on that
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  Speaker 5: so that you can have them in conjunction with the
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  Speaker 5: drug that you do you're using, so that you don't
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  Speaker 5: lose muscle mass and actually be malnourished. So there's a
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  Speaker 5: lot of things they need to do, but they've probably
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  Speaker 5: not done them quickly enough. That's part of the problem.
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  Speaker 5: When you're such a huge company, you've got to make
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  Speaker 5: sure that innovation comes out straight away, your first to market,
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  Speaker 5: it's at the right price, and then you can win.
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  Speaker 5: And when you've had inflation that's been sort of fifteen
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  Speaker 5: to twenty percent two or three years on the trot,
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  Speaker 5: because of course it's very very difficult to get that
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  Speaker 5: right and get the pricing right so that we the
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  Speaker 5: consumer buys it consistently and say that's not just I
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  Speaker 5: think that's an industry issue which they have to address.
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  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch Us Live
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  Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android
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  Speaker 4: Well.
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  Speaker 2: United Airlines reported better than expected earnings, citing demand for
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  Speaker 2: international travel and premium customers. United CEO Scott Kirby joined
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  Speaker 2: at Bloomberg earlier this morning, breaking down twenty twenty five's
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  Speaker 2: earnings outlook.
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  Speaker 6: First record are really good for United in a lot
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  Speaker 6: of macro volatility that happened for the aviation industry. That
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  Speaker 6: demonstrates the resilience of our revenue, diverse, brand, loyal business model.
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  Speaker 6: But you look to the fourth quarter, it's even more
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  Speaker 6: exciting because as the economy started to get back to
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  Speaker 6: a solid footing at least for aviation, demonstrates a lot
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  Speaker 6: of upside. We think we're going to be able to
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  Speaker 6: grow earnings for the full year even in this environment,
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  Speaker 6: so it really is creating value for all of our customers.
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  Speaker 2: All right, That was United Scott Kirby, a graduate of
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  Speaker 2: the United States Air Force Academy. He joined Bloomberg earlier
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  Speaker 2: today breaking down the results for the company. Let's check
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  Speaker 2: in with George Ferguson, he covers the airlines and aerospace
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  Speaker 2: companies for Bloomberg Intelligence. George, what you make out of
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  Speaker 2: the United numbers here today? Some of the commentary from
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  Speaker 2: mister Kirby.
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  Speaker 7: Market looks pretty saturated, So what's that mean. There's a
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  Speaker 7: lot of capacity in the marketplace and fares are falling.
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  Speaker 7: So if you look at yields at all of the
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  Speaker 7: United markets, they're falling year over year. So the price
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  Speaker 7: paid per mileflow, it's falling anywhere from sort of two
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  Speaker 7: is percent and domestic up to mid single digits. In
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  Speaker 7: international Atlantic was a bright spot in prior quarters. Again
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  Speaker 7: down I think it was roughly around five percent if
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  Speaker 7: I recall correctly. So they put enough capacity in that
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  Speaker 7: marketplace that fairs are starting to fall. United grew at
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  Speaker 7: like seven percent during the quarter. Capacity it's pretty it's
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  Speaker 7: pretty aggressive in an economy that's grown I don't know,
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  Speaker 7: two to three percent, So I think that you know,
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  Speaker 7: to Scott Kirby's benefit there and Delta as well, you know,
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  Speaker 7: the full service carrier is really having a good time
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  Speaker 7: of it lately. Loyalty programs are really you know, putting
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  Speaker 7: some wind in their sales. Premium is still outperforming basic economy,
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  Speaker 7: although it seems like it's sort of we're seeing the
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  Speaker 7: revenue growth from premium about the same as capacity growth,
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  Speaker 7: maybe a little bit less, which tells me there's a
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  Speaker 7: little little bit of price sort of you know weakness
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  Speaker 7: maybe starting to show up in that premium world, and
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  Speaker 7: basic economy still underperforming. That means Scott's competitors are going
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  Speaker 7: to get are going to get banged up in the
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  Speaker 7: in the budget world.
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  Speaker 3: Right, competitors that are not named Delta specifically. Yeah, United
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  Speaker 3: is always mentioned in the same breath as Delta, but
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  Speaker 3: kind of as an also ran in comparison to Delta.
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  Speaker 8: What would United need.
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  Speaker 3: To do to beat Delta at this premium premiumization strategy.
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  Speaker 7: You know, Delta really gets a lot of revenue and
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  Speaker 7: more than United out of this, you know, the co
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  Speaker 7: branded credit card agreement. I think you know what one
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  Speaker 7: Delta sort of in there with American Express. It's got
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  Speaker 7: you know, maybe American Express lives in its own special
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  Speaker 7: world if credit cards I don't know. It feels, you know,
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  Speaker 7: to me, I think most of the maybe younger consumers
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  Speaker 7: carrying around things like visas and master cards. I don't know,
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  Speaker 7: but it seems like that agreement with American Express really
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  Speaker 7: drives a lot of revenue for Delta, and I think
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  Speaker 7: is a big differentiator. And I think Delta has used
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  Speaker 7: that as well as sort of, you know, their premium
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  Speaker 7: seating and lounges to put some distance. But when you
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  Speaker 7: look at the revenue number, it's all about that credit
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  Speaker 7: card agreement with the X.
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  Speaker 3: I'm so glad you bring this up because my current
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  Speaker 3: obsession is to look on Reddit and look at people
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  Speaker 3: who are talking about AMEX Platinum versus the Chase, Sapphire
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  Speaker 3: reserve these partnerships with credit card companies, building loyalty for
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  Speaker 3: these passengers. How costly is it for Delta to maintain
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  Speaker 3: this relationship with AMEX, How costly is it for United
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  Speaker 3: to maintain its relationship with Chase.
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  Speaker 7: I think it's not costly. I think it's lucrative for them,
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  Speaker 7: right because it seems to me that the American consumer.
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  Speaker 7: I don't know that I fully understand this, but feels
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  Speaker 7: like people go out and buy the credit card for
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  Speaker 7: the airline they love. They go put all their groceries,
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  Speaker 7: all their Starbucks, all their did dinners out on that card,
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  Speaker 7: take those points, accrue them for their summer vacation. Pay
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  Speaker 7: five hundred dollars so they get lounge access. They don't.
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  Speaker 7: They're not like Paul Swingey just get lounge access because
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  Speaker 7: who he is. So they got to pay for it.
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  Speaker 7: And so they're willing to spend and hold that card.
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  Speaker 7: And the credit card company's sort of taken down as
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  Speaker 7: what four or five percent per transaction and buying those
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  Speaker 7: miles for the consumer. You know, those miles are some
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  Speaker 7: of them do waste away, people don't use them in time, others. Right,
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  Speaker 7: the airline provides you the opportunity to get a seat.
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  Speaker 7: They don't put all the you know, they don't put
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  Speaker 7: all sort of benefit travel in one airplane, right. They
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  Speaker 7: they give you the opportunity and airplanes that aren't sold
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  Speaker 7: out to get benefit travel. So they kind of, you know,
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  Speaker 7: juices up their load factors. They upgrade you if they
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  Speaker 7: have space. So I think it's I think it's super
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  Speaker 7: lucrative for the airlines. It's really important what credit card
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  Speaker 7: deal you cut right now?
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  Speaker 8: Yeah, for your bottom line?
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  Speaker 3: How much do the airlines talk about this with analysts
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  Speaker 3: on their earnings calls, the injured.
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  Speaker 7: Seats of this, so you're hearing I mean, look, nobody
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  Speaker 7: likes to give away the total intricacy, right because you know,
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  Speaker 7: they make it hard for us to figure out what
• 10:09
  Speaker 7: the wastage numbers are, you know, but you can see
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  Speaker 7: how this flows to the bottom line quite well. But
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  Speaker 7: Delton United talk about it a lot because it really
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  Speaker 7: works for them, or maybe I should say talk about
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  Speaker 7: it the most in the industry because it really works
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  Speaker 7: for them. I think that it's telling that we do
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  Speaker 7: hear the you know, the budget low cost carriers talking
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  Speaker 7: about their loyalty programs too, but they just pale in comparison.
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  Speaker 7: They typically don't give us numbers, but they pay in
• 10:35
  Speaker 7: comparison with what can get done up at Delton United.
• 10:39
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
• 10:46
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 10:50
  Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android
• 10:53
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
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  Speaker 8: Let's switch gears and take a look at tech.
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  Speaker 3: We can't straight too from tech given that it's the
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  Speaker 3: driver of this stock market rally, and today is once
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  Speaker 3: again the best performing sector as well, up nine tens
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  Speaker 3: of one percent. Led buy the chip makers, and in
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  Speaker 3: large part that is because Taiwan Semiconductor Manufacturing TSMC has
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  Speaker 3: raised its outlook once again. And I say once again
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  Speaker 3: because it did it not so long ago. Man Deep
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  Speaker 3: saying is Bloomberg Intelligence is senior tech industry analysts and
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  Speaker 3: joins us now. So it seems like very little is
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  Speaker 3: stopping TSMC's momentum.
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  Speaker 9: Yeah, and look, it's the AI demand that gets reflected
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  Speaker 9: in TSMC's margins, like gross margins nearing sixty percent for
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  Speaker 9: a fab maker. I mean, look at Intel in its
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  Speaker 9: glory days, they were around sixty to sixty five percent
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  Speaker 9: gross margins. So clearly TSMC is kind of hitting it
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  Speaker 9: stride from a gross margin perspective. But I think when
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  Speaker 9: it comes to TSMC, it's obvious to everyone regardless of
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  Speaker 9: whether the accelerator is a GPU or a Broadcom custom chip,
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  Speaker 9: everyone has to go to TSMC to manufacture the chip.
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  Speaker 9: And you want to be in that sort of position
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  Speaker 9: because you don't want to pick. Okay, is Nvidia demand
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  Speaker 9: going to sustain you through twenty thirty and everyone is
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  Speaker 9: kind of trying to reach that point where they have
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  Speaker 9: a substitute for Nvidia, So even if there is a substitute,
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  Speaker 9: you still go to TSMC. And that's where I feel
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  Speaker 9: they are in an NBS position when it comes to
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  Speaker 9: the mode that they have developed.
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  Speaker 2: Is ASML, the direct competitor to t SMC.
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  Speaker 9: No, ASML is one of their suppliers. So TSMC's capex
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  Speaker 9: goes to ASML and TSMC by the way they raise
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  Speaker 9: their revenue outlook, they also raise their capex because they're saying,
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  Speaker 9: we need to expand capacity to fulfill all the demand
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  Speaker 9: that the twenty six gigawatts that open Ai has signed
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  Speaker 9: up for in the last one month. Yep, they need
• 13:06
  Speaker 9: more capacity to TSMC and they need to buy more
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  Speaker 9: SML equipment. So I think it's that chain where TSMC
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  Speaker 9: suppliers also benefit because of that insatiable demand.
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  Speaker 3: Okay, So tsbm C plays this critical role in the
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  Speaker 3: supply chain, and I guess the idea is to get
• 13:24
  Speaker 3: Intel to become kind of like a TSMC.
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  Speaker 8: How long of an effort is that going to be.
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  Speaker 3: I mean, this is not something that can be done
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  Speaker 3: before the end of President Trump's term, is it.
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  Speaker 9: Well, so the way things work in the semiconductor manufacturing
• 13:37
  Speaker 9: world is you go, you know, step by step, and Intel,
• 13:42
  Speaker 9: for the longest time under Pat Gelsinger try to jump,
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  Speaker 9: you know, three steps and directly go from like twelve
• 13:49
  Speaker 9: nanometer to five nanometers.
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  Speaker 2: I see that didn't happen.
• 13:52
  Speaker 9: So you really have to go step by step. And
• 13:55
  Speaker 9: that's where Intel has struggled because there is no shortcut
• 13:59
  Speaker 9: you've become a leading note manufacturer overnight. Even if you
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  Speaker 9: buy the best ASML equipment. It doesn't happen that way,
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  Speaker 9: and you need that expertise, both on the human talent
• 14:09
  Speaker 9: side as well as the latest equipment, which is where
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  Speaker 9: Intel faltered. So I don't see a shortcut. But that
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  Speaker 9: being said, there are parts of that AI chip ecosystem
• 14:21
  Speaker 9: where Intel may get some business if the government pressures
• 14:25
  Speaker 9: you know, all the hyperscalers and these guys to say, okay,
• 14:29
  Speaker 9: you have to use Intel capacity because we want to
• 14:32
  Speaker 9: onshore manufacturing and that should help Intel.
• 14:34
  Speaker 2: All right, let me ask my question another way. Who
• 14:37
  Speaker 2: is the competitor to TSMC? Is there a viable competitor
• 14:40
  Speaker 2: TSMC today.
• 14:42
  Speaker 9: Well, so Intel is the closest competitor on the foundry side.
• 14:47
  Speaker 2: You have sound very close, it's not very close.
• 14:49
  Speaker 9: You have some Chinese foundry competitors too, which China wants
• 14:54
  Speaker 9: to be self sufficient in everything they do when it
• 14:56
  Speaker 9: comes to the chip side, from accelevators to manif factoring.
• 15:00
  Speaker 9: They have their own foundry. But it's the same problem.
• 15:03
  Speaker 4: Even if you.
• 15:04
  Speaker 9: Switch to internal foundry, they are way behind in terms
• 15:07
  Speaker 9: of leading node manufacturing.
• 15:08
  Speaker 2: That's how did we get here? How did we get
• 15:10
  Speaker 2: to a place if I'm the global if I'm an
• 15:13
  Speaker 2: Apple or whatever, How did I let my industry get
• 15:15
  Speaker 2: to the point where I have to depend upon one supplier?
• 15:17
  Speaker 9: Well, Apple helped them get there because before this AI
• 15:21
  Speaker 9: mave happened, smartphones is where you needed the latest manufacturing capabilities.
• 15:27
  Speaker 9: And Apple, I mean clearly, they had such a big
• 15:30
  Speaker 9: ramp when it comes to their smartphone install base and
• 15:33
  Speaker 9: they did the entire thing in Asia with the help
• 15:36
  Speaker 9: of PSMC and Fox con. So it's really led by Apple.
• 15:40
  Speaker 9: Why if you're here.
• 15:41
  Speaker 8: They're chasing growth. I mean that's what you do. You
• 15:43
  Speaker 8: go for the most efficient way possible. And that was CSMC.
• 15:46
  Speaker 2: Pretend that I know about technology.
• 15:48
  Speaker 8: I just know these are great questions, These are fantastic.
• 15:51
  Speaker 2: I mean, I'm like John Tucker character level.
• 15:55
  Speaker 8: Fortunately, we have man Deep here with us.
• 15:57
  Speaker 3: Mandy, very quickly, just tell us about what's going on
• 15:59
  Speaker 3: with Apple AI efforts, because every day it seems to
• 16:02
  Speaker 3: be some other executive who was doing something AI at
• 16:05
  Speaker 3: Apple has moved on.
• 16:07
  Speaker 9: Yeah, and so Apple is great at making hardware, but
• 16:10
  Speaker 9: when it comes to AI and llms, they've missed the boat.
• 16:14
  Speaker 9: And right now the researchers are saying Meta or a
• 16:17
  Speaker 9: Google has a lot more compute to offer in terms
• 16:21
  Speaker 9: of you know, being a researcher. And that's where you know,
• 16:24
  Speaker 9: all the deals that Opening Eye is doing, that Meta
• 16:27
  Speaker 9: is doing, it's basically getting the compute for the researchers,
• 16:30
  Speaker 9: not for deploying AI, but for the researchers. So it's
• 16:33
  Speaker 9: a great magnet for all the researchers to come in
• 16:36
  Speaker 9: and you know, use that compute.
• 16:38
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming.
• 16:41
  Speaker 4: Up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Coarplay and Android
• 16:52
  Speaker 1: Auto with the Bloomberg Business App, listen on demand wherever
• 16:55
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 17:00
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  Speaker 10: They're really a diversified transportation provider and they have a
• 17:32
  Speaker 10: lot of different businesses. Trucking is one of their businesses,
• 17:35
  Speaker 10: their truckload business, and they also do its. Their biggest
• 17:39
  Speaker 10: and most profitable is their intermodial business, so that is
• 17:44
  Speaker 10: a container that will start on a truck and then
• 17:47
  Speaker 10: goes on a rail and then is final delivered by
• 17:49
  Speaker 10: a truck. And they also in addition to that, they
• 17:52
  Speaker 10: have a final mile business, so think of getting your
• 17:55
  Speaker 10: exercise equipment or furniture delivered to your home. They have
• 17:58
  Speaker 10: a freight broker in business, which is kind of it
• 18:02
  Speaker 10: brings together capacity providers and shippers. It's a non asset business,
• 18:08
  Speaker 10: and they also have a dedicated business. So a lot
• 18:10
  Speaker 10: of companies will kind of outsource their fleet to companies
• 18:14
  Speaker 10: like JB.
• 18:14
  Speaker 4: Hunt.
• 18:15
  Speaker 10: So there their hands are in a lot of different
• 18:18
  Speaker 10: parts of the freight UH freight markets. And to your point,
• 18:22
  Speaker 10: they are a bellweather because they do touch on so
• 18:25
  Speaker 10: many different modes and industries.
• 18:30
  Speaker 3: Who's their competitor, who's their biggest competitor in doing all
• 18:32
  Speaker 3: this or is the market kind of split up based
• 18:35
  Speaker 3: on geographic location.
• 18:38
  Speaker 10: Sure, well, there are companies that are similarly set up
• 18:41
  Speaker 10: to Jbhunt, like a Schneider those are those orange trucks
• 18:44
  Speaker 10: that you see on the road, but like a Werner,
• 18:47
  Speaker 10: trucking company has a big dedicated business. C. H. Robinson
• 18:52
  Speaker 10: has is a huge brokerage business. Hub Group is another
• 18:56
  Speaker 10: intermodial marketing company who does the intermodial UH stuff.
• 18:59
  Speaker 4: So they have a lot.
• 19:01
  Speaker 10: Of different competitors within within the market. But some of
• 19:05
  Speaker 10: the largest publicly traded trucking companies besides JB. Hunt, Werner,
• 19:09
  Speaker 10: and Schneider are Heartland and Knights Swift or some of
• 19:13
  Speaker 10: the large truckload carriers, and there's a whole sub segment
• 19:16
  Speaker 10: of less than truckload which JB. Hunt plays very little,
• 19:19
  Speaker 10: and it's only their playing in their brokerage business.
• 19:22
  Speaker 2: So leave based on your history covering the trucks, how
• 19:25
  Speaker 2: do you look at them and their business models as
• 19:28
  Speaker 2: kind of reflective of maybe how the US economy is going.
• 19:32
  Speaker 4: Well.
• 19:33
  Speaker 10: You know what I would say is, you know, their
• 19:34
  Speaker 10: stock is on fire right now, and that's really driven
• 19:37
  Speaker 10: the fact that they outperformed in the third quarter. A
• 19:41
  Speaker 10: lot of that has to do with them doing company specific,
• 19:44
  Speaker 10: company driven cost cutting measures.
• 19:47
  Speaker 4: So it's not so much about the macro. It's kind
• 19:50
  Speaker 4: of more about you know, what is JB. Hunt doing?
• 19:52
  Speaker 10: And they've increased their productivity or reduced costs around twenty
• 19:56
  Speaker 10: million dollars, which added sixteen cents to the bottom line
• 19:59
  Speaker 10: and helped fuel that beat. You know what I would
• 20:02
  Speaker 10: say though to the macro is we were pretty interested
• 20:05
  Speaker 10: in management's comments on the peak season. So you know,
• 20:09
  Speaker 10: they are expecting a peak season this year, maybe not
• 20:12
  Speaker 10: a very strong one, but you know, we're going into
• 20:15
  Speaker 10: the peak season. I think it's going to be pretty muted.
• 20:17
  Speaker 10: We still kind of think that, but you know, we'll
• 20:20
  Speaker 10: see how it ends up playing. You know, our thoughts
• 20:23
  Speaker 10: are the consumers weakening. Consumer confidence is going down, and
• 20:27
  Speaker 10: you had a lot of pull forward demand and you
• 20:29
  Speaker 10: know what Jabi Hunt would say is some of that
• 20:31
  Speaker 10: freight just got to the ports and now it needs
• 20:33
  Speaker 10: to move inland. So we'll see what transpires. But you know,
• 20:36
  Speaker 10: we're not expecting a very robust peak season this year.
• 20:40
  Speaker 8: Paul, what were you saying earlier about turnover for jab
• 20:42
  Speaker 8: Hunt drivers?
• 20:43
  Speaker 2: Yeah, the turnover is super super high in the trucking industry.
• 20:46
  Speaker 2: Really talk to us about the state of the of
• 20:49
  Speaker 2: that part of the business just I guess attracting and
• 20:52
  Speaker 2: retaining drivers.
• 20:54
  Speaker 4: Yeah, so it's really interesting.
• 20:56
  Speaker 10: I'm going to pivot a little bit because you know,
• 20:58
  Speaker 10: with the new with THEE well they're so new anymore.
• 21:00
  Speaker 10: With the Trump administration, they're really focused on enforcing rules
• 21:05
  Speaker 10: that are already on the books and so you know,
• 21:07
  Speaker 10: there are certain standards that drivers have to have to understand,
• 21:11
  Speaker 10: understand and read the English language, and they are really
• 21:15
  Speaker 10: going out there and kind of enforcing those rules. You know,
• 21:19
  Speaker 10: we had Werner's CEO, Derek Leathers on our podcast to
• 21:23
  Speaker 10: do a podcast by the way called Talking Transports. There
• 21:25
  Speaker 10: you got available wherever you get podcasts, good anyway, and
• 21:30
  Speaker 10: he said that you know, that could impact five to
• 21:32
  Speaker 10: fifteen percent of supply, and truckload rates have been really
• 21:35
  Speaker 10: depressed over the last three years.
• 21:36
  Speaker 4: We've been in a freight recession.
• 21:37
  Speaker 10: A lot of that has to do with the fact
• 21:39
  Speaker 10: that there's so much capacity out there, and this could
• 21:41
  Speaker 10: take some of that capacity out. Also, there's something the
• 21:46
  Speaker 10: DOT issues non domicile CDLs. They are stopping doing that,
• 21:50
  Speaker 10: and any non domicile CDLs that get try to get
• 21:53
  Speaker 10: renewed are probably not going to get renewed.
• 21:55
  Speaker 4: Act.
• 21:55
  Speaker 2: That's actually the driver's license right.
• 21:58
  Speaker 4: Yeah, for on US citizens.
• 22:01
  Speaker 10: So you're going to see that kind of leave the
• 22:05
  Speaker 10: market as well, and that could be the catalyst to
• 22:08
  Speaker 10: tighten the market. And we don't think it's going to
• 22:10
  Speaker 10: like flip on a dime. It's going to be gradual
• 22:13
  Speaker 10: and that is a good thing because the capacity that's
• 22:17
  Speaker 10: been out there, the slack capacity has been really stubborn
• 22:19
  Speaker 10: to get out of the market.
• 22:21
  Speaker 3: What are the prices or what are the wages for
• 22:24
  Speaker 3: a truck driver? I'm just curious given all the challenges
• 22:26
  Speaker 3: that you just explained.
• 22:28
  Speaker 10: Yeah, well, most truck drivers get paid by the mile.
• 22:32
  Speaker 10: I don't really know what the latest rates. I think
• 22:34
  Speaker 10: it's like fifty cents a mile or something like that.
• 22:37
  Speaker 10: And so you know, that's how they tend to get
• 22:39
  Speaker 10: paid by the mile. And you know, being a truck driver,
• 22:44
  Speaker 10: as Paul, as you mentioned, there is a lot of turnover.
• 22:46
  Speaker 10: A lot of that has to do with people get
• 22:47
  Speaker 10: into the industry not really knowing what to expect.
• 22:51
  Speaker 4: It is not an easy job. It's a tough job.
• 22:55
  Speaker 10: It's an important job because obviously most of the things
• 22:57
  Speaker 10: that you and I buy at the stores come via
• 22:59
  Speaker 10: truck and kind of moves the economy. It's very important
• 23:03
  Speaker 10: to the economy. But it is a tough job because
• 23:05
  Speaker 10: some of these jobs, these these folks are away from
• 23:08
  Speaker 10: their friends and families for weeks at a time, and so,
• 23:12
  Speaker 10: you know, the industry is trying to do what it can,
• 23:15
  Speaker 10: you know, at least, if you're a company driver, you know,
• 23:17
  Speaker 10: trying to get them home as much as possible and
• 23:21
  Speaker 10: at least having a schedule which they can rely on
• 23:23
  Speaker 10: so if they need to be somewhere, they know, you know,
• 23:25
  Speaker 10: they'll be home in time to go to their daughter's
• 23:28
  Speaker 10: wedding or their son's birthday party or something.
• 23:31
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