Latest / Talk Track by Telegraph / How Consumer Brands Move by Rail: Tariffs, Freight Data + the 2027 Cost Outlook

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How Consumer Brands Move by Rail: Tariffs, Freight Data + the 2027 Cost Outlook · Talk Track by Telegraph

• 0:06
  SPEAKER_00: Hello and welcome back to Talk Track, a telegraph podcast where we talk about and respond to the news of the day and we try to think about it to the lens of how it affects the railroading community.
• 0:17
  SPEAKER_00: And by that we really mean everyone shippers, carriers, brokers, leftors, consumers.
• 0:24
  SPEAKER_00: I'm very excited about our guest for this episode.
• 0:27
  SPEAKER_00: It's Mr.
• 0:28
  SPEAKER_00: Tom Madrecki from the from the Customer Brands Association.
• 0:32
  SPEAKER_00: I'll talk to a brief bio, but then Tom, you can target a better one.
• 0:36
  SPEAKER_00: You and I have known each other through a lot of different roles.
• 0:39
  SPEAKER_00: I've always known you to be a really thoughtful and intelligent thinker on supply chain and logistics articles and around how policy interacts with those items.
• 0:49
  SPEAKER_00: So you know, Tom works for the Consumer Brands Association, where he serves as senior VP for public affairs.
• 0:55
  SPEAKER_00: Tom, is there can you kind of help our audience understand the angle you're bringing to a conversation like this one about freight logistics and supply chain?
• 1:03
  SPEAKER_01: Yeah, uh absolutely.
• 1:04
  SPEAKER_01: And David, it's great to see you again.
• 1:06
  SPEAKER_01: And um, I know that we like our history goes back years, so it's uh you know a pleasure to support you in this and like be able to be a part of this conversation, which I think is a really important one and timely, right?
• 1:14
  SPEAKER_01: That you know, you see transportation costs rising, you see um some of the dynamics in the marketplace that are impacting shippers and consumers, and like all this goes together, and you're you're sort of teeing up, I think, what we'll probably discuss a little bit today, which is like the role of policy in that and how that plays a role in shaping that overall environment.
• 1:32
  SPEAKER_01: So, Consumer Brands is a trade association here in Washington, D.C.
• 1:36
  SPEAKER_01: We represent America's largest domestic manufacturing sector by employment, which is frankly a privileged position to be in.
• 1:42
  SPEAKER_01: But think of our membership as food, beverage, household, personal care manufacturers, the types of brands that Americans know and love and use every day, uh found in like every grocery store or big box store uh across the country.
• 1:55
  SPEAKER_01: Um, it's like all of the famous brands that, again, like you know and love.
• 1:59
  SPEAKER_01: That's that's who we are.
• 2:00
  SPEAKER_01: Um, but they at the end of the day use a lot of uh very ubiquitous products, right?
• 2:06
  SPEAKER_01: And there's a lot of transportation involved in getting and making sure that those products are on the shelf, that they're affordable, that they're available and accessible no matter really where you are.
• 2:16
  SPEAKER_01: Um and we're huge users of rail, we're huge users of trucking, and it gives us a unique insight, I think, to some of the dynamics again that you see in the transportation marketplace today.
• 2:26
  SPEAKER_00: Perfect, thank you.
• 2:26
  SPEAKER_00: And and and maybe we start there.
• 2:28
  SPEAKER_00: You know, when I think about consumer brands, consumer packaged goods, there's just you know, brand names all over my household and probably every listener's household.
• 2:36
  SPEAKER_00: Could you could you maybe speak to sort of the role that you have seen rail play in your members' supply chains?
• 2:42
  SPEAKER_00: Because you know, people might be surprised to know that some of the things that are on our shelves at home also touch rail at some point.
• 2:47
  SPEAKER_01: Yeah.
• 2:48
  SPEAKER_01: I mean there's there's uh I I I look at it as a there's a couple of different like prominent use cases for like where folks use rail versus where they use trucking versus where they use like there's a maritime component, certainly as well.
• 3:00
  SPEAKER_01: Um but for a healthy portion of our membership, you have companies that these are companies that their history in the US goes back several decades to an era when moving agricultural commodities was critical, um, and it still is today, but it was it was more of like a vertically integrated supply chain almost, like it's like the nascent beginnings of the CPG industry evolving from a point when it was like used to be like a mom and pop operator and then becoming more of like an industrial operation.
• 3:30
  SPEAKER_01: And the ability to move large quantities of agricultural commodities to a manufacturing facility or a processing facility and quickly turn that around.
• 3:38
  SPEAKER_01: Um, and so there's there's a vestige of that from a historical sort of like antecedent perspective that you still have operations across the country where they're bringing in huge amounts of barley or wheat and then turning it into beer, uh, or they're turning and or bringing peanuts across you know a state and they're bringing it to a manufacturing facility and they're making peanut butter, and it's all like the rail line is literally like integrated into the manufacturing footprint.
• 4:03
  SPEAKER_01: Um, and it's like it's a very like every all the peanuts come in or all the grain comes in and it's there, and then it's it's a really seamless transition, right?
• 4:12
  SPEAKER_01: Um, and so rail for those folks is again obviously integral, um, and freight rail performance is then really important because you you're not gonna be able to run the facility for your peanut butter unless you have uh the peanuts on on rail arriving.
• 4:27
  SPEAKER_01: There are other folks that I think use it in a more intermodal capacity, right?
• 4:30
  SPEAKER_01: They're gonna use it to connect hub to hub or are sort of like the spokes in their in their various network because it is an incredibly efficient, sustainable um way of moving goods across the country in a cost-efficient way.
• 4:42
  SPEAKER_01: One of the things that we talk a lot about at consumer brands is that these are typically affordable, low margin, high-volume products, and it may not always make sense to move those uh, especially long distances, uh, in trucking.
• 4:57
  SPEAKER_01: Now, trucking plays a sort of complementary role in many cases for companies because you also, at the same token, if you're delivering to uh a major retailer and a convenience store and everything else in your in your distribution network, you you can't realistically take the train there.
• 5:13
  SPEAKER_01: Uh, you're gonna have to carry it from like the warehouse to that and that and and sort of deliver that last mile on truck.
• 5:19
  SPEAKER_01: So we view them as an industry as complementary uh modes.
• 5:24
  SPEAKER_01: Uh, and we use both, we're huge users of both.
• 5:27
  SPEAKER_01: Um, but it it very much is rail plays this integral role to supply chain operations for our member companies.
• 5:32
  SPEAKER_00: Uh gosh.
• 5:34
  SPEAKER_00: And and kind of thinking about that and thinking about how you work with your member companies and maybe help your member companies to understand and maybe influence policy.
• 5:43
  SPEAKER_00: Uh it seems like one of the big stories, at least on our minds, in supply chain and logistics and policy over the last year has been tariff actions.
• 5:51
  SPEAKER_00: And I I know that's something that you've been thinking a lot about and doing thought leadership work around.
• 5:55
  SPEAKER_00: Uh maybe help our audience to understand our kind of now that we're a year past it, uh what did you see?
• 6:03
  SPEAKER_00: How did member companies adapt?
• 6:05
  SPEAKER_00: What were some of the issues that were on your mind as companies adapted their supply chains to you know more tariff action than than many of us had had ever previously experienced?
• 6:14
  SPEAKER_01: Right.
• 6:15
  SPEAKER_01: I mean one of the unique aspects of uh the CPG industry, not only are America's largest domestic manufacturing sector, um, but actually when you look at the supply chain, the inputs that go into making these everyday products, it's actually vastly domestic of like in their origin.
• 6:32
  SPEAKER_01: So in many cases, up to 90% of the inputs or ingredients in a CPG product are gonna come from U.S.
• 6:38
  SPEAKER_01: farms and suppliers.
• 6:39
  SPEAKER_01: It simply doesn't make sense to like, you know, you don't have to.
• 6:43
  SPEAKER_01: You're gonna try to source as locally as possible, especially for perishable agri agricultural commodities or some of these things.
• 6:49
  SPEAKER_01: It doesn't make sense to you know put something on a boat overseas, send it over, and then it's not cost efficient, nor is it going to be well worth it in the end.
• 6:58
  SPEAKER_01: Um now, at the same token, we don't grow bananas in the US.
• 7:03
  SPEAKER_01: We don't make spices in the US, we don't have cocoa or coffee or some of these other key inputs.
• 7:08
  SPEAKER_01: And so uh the industry's approach on this has really been to draw out that like we have a set of unavailable natural resources that that are critical to domestic manufacturing, that are critical to consumers.
• 7:22
  SPEAKER_01: I have three kids.
• 7:23
  SPEAKER_01: Um trust me, I need my coffee in the morning, um and possibly my chocolate at the end of the day.
• 7:30
  SPEAKER_01: Um and so like there's a real uh need to maintain those supply chains.
• 7:35
  SPEAKER_01: And and honestly, the administration has been incredibly receptive to those arguments.
• 7:40
  SPEAKER_01: And I think that that's one of the reasons that you've seen uh you know, some ability for the CPG industry in particular to manage through that tariff environment.
• 7:50
  SPEAKER_01: Um, to you know, it there's other pressures.
• 7:53
  SPEAKER_01: I think we'll get to that on like a transportation basis, on a labor cost, an inflationary basis.
• 7:59
  SPEAKER_01: Tariffs are not helpful in that regard, like that, like there is there's added cost across the board.
• 8:04
  SPEAKER_01: You think about all the specialty machinery that CPGs may use.
• 8:09
  SPEAKER_01: We don't in the US make a lot of coffee specialty coffee roasting machinery or uh like really complex German-Swiss uh machinery that maybe goes into like the manufacturing line itself.
• 8:21
  SPEAKER_01: And so as companies make investments here in the US, they continue to expand their domestic footprint.
• 8:26
  SPEAKER_01: Well, they're still going to be reliant on those uh overseas providers for those materials, and that just increases the capex and the needed spend to open a new facility or to reinvest in a facility.
• 8:37
  SPEAKER_01: So there's there's certainly an inflationary component, but that recognition of unavailable natural resources has, I think, really allowed uh the CPG industry to sort of weather through things and make sure that we're keeping goods as affordable and accessible as possible in the present environment.
• 8:55
  SPEAKER_00: Gosh, that that's a great point.
• 8:56
  SPEAKER_00: I I really like how you illustrated it on those sort of long lead-time specialty manufacturing components.
• 9:03
  SPEAKER_00: You know, the price of that can make or break the viability of the deal to do some development.
• 9:09
  SPEAKER_00: Do you feel do you and your members feel that things are maybe a little more stable now than they were if we would have had this conversation twelve months ago?
• 9:17
  SPEAKER_01: I think from a trade and tariff standpoint, I think especially one of the dynamics that's really interesting to watch with the administration is frankly, you're going from a mindset almost at the at the White House where they're rolling out the AIPA tariffs and sort of reciprocal tariff day, and like they got the big splashy poster board behind everything.
• 9:35
  SPEAKER_01: Um and because of the legal challenges, because of just the iterative nature of policy development, the the policies that you see in place today, I anticipate being in place for a while.
• 9:48
  SPEAKER_01: Like they're more legally defensible, they have exemptions or sort of recognition of some of these things like unavailable natural resources baked into like the underlying uh policy.
• 9:59
  SPEAKER_01: And I think there's a desire on the part of folks like Ambassador Greer that like they're laying a foundation for, in their eyes, uh domestic manufacturing uh renaissance and the continued investing.
• 10:11
  SPEAKER_01: Like they intend for these policies to be sticky and to be around for a while.
• 10:15
  SPEAKER_01: So they're they're shifting more into almost like legacy mode.
• 10:18
  SPEAKER_01: Um, and I think calibrating or designing their policies to have more of that uh that stability.
• 10:25
  SPEAKER_01: And so I think for businesses, it's a more predictable environment.
• 10:29
  SPEAKER_01: Um, again, bridging to transportation, and we've talked about this before, like transportation is a cyclical uh issue, and so I sense that we're in other spaces going into a less stable environment and one that is uh increasingly shaky and hard to predict.
• 10:46
  SPEAKER_01: And that's like the nature of the beast when it comes to transportation.
• 10:49
  SPEAKER_01: But I hear more and more from CEOs, from government affairs folks, from folks in the like heads of supply chain.
• 10:56
  SPEAKER_01: They're like, oh, like transportation is getting iffy again.
• 11:00
  SPEAKER_01: And it's you know, I get it.
• 11:03
  SPEAKER_01: They were enjoying their shippers market for a while, and now here we are on the other side, but that's a uh like I don't say the house is on fire, but it's it's like the fire is expanding, right?
• 11:14
  SPEAKER_01: Like it just keeps it's a little bit more, a little bit more, and like I feel like that's gonna really take center stage in 2027.
• 11:20
  SPEAKER_00: Uh that's a great point.
• 11:22
  SPEAKER_00: It it's a fire that moves.
• 11:23
  SPEAKER_00: You know, I think you're right that there was uh a certain set of policy, a sort of uh uncertainty or unease amongst long-term planners that that is.
• 11:32
  SPEAKER_00: Maybe settling on the the trade policy side, but then you're right.
• 11:34
  SPEAKER_00: I mean a lot of uh what's going on with transportation prices right now, you know, is policy driven.
• 11:40
  SPEAKER_00: And so I I a hundred percent agree that there's uh you know volatility coming, and we've seen that with some of the customers that we've been working with.
• 11:47
  SPEAKER_00: I wonder if we could just because I know you know you've been around at the hot button here for a while.
• 11:52
  SPEAKER_00: Uh uh could you talk me through some of the things that you were doing around helping your members during the COVID-19 crisis?
• 11:59
  SPEAKER_00: Because there were all sorts of supply chain implications that I think uh you know lay people, if you will, uh didn't think about, you know, when when manufacturing had to deal with all the stuff that that you know we dealt with you know just in our daily lives.
• 12:12
  SPEAKER_00: How did you all think about that?
• 12:13
  SPEAKER_00: What were some of the things that you were working on?
• 12:15
  SPEAKER_00: And and in particular, I wonder did solutions come out of that that have endured?
• 12:19
  SPEAKER_00: Uh did problems come out of that that have endured that are still broken, you know, you know, from your perspective and your conversations with your members?
• 12:25
  SPEAKER_01: No, I think it's a great question because that past I think informs a lot about what we could still accomplish going into the future.
• 12:32
  SPEAKER_01: And I think that there you exact sort of exactly hit this.
• 12:35
  SPEAKER_01: Like there's maybe solutions that were identified that weren't fully realized or ideas that weren't fully explored.
• 12:41
  SPEAKER_01: Um Frankly, this is a problem also that dates before COVID, right?
• 12:45
  SPEAKER_01: That this is transportation writ large or like lack of capacity, rising rates, or sort of the inflationary dynamics that shippers feel is a problem that was before COVID.
• 12:56
  SPEAKER_01: I came to Consumer Brands in 2019 after close to a decade at UPS, um, which certainly has a lot of experience in the transportation space and is a is a huge user of rail.
• 13:08
  SPEAKER_01: And I started going around town in 2019 talking about the need for a greater emphasis on supply chain resiliency, on really understanding how goods move across the country, because I don't think that even today there's a full appreciation or understanding of like an actual like how does the freight network work?
• 13:26
  SPEAKER_01: Like it's I think that the private sector understands that, particularly for your own business.
• 13:30
  SPEAKER_01: But at a policymaker level, I think that there's sometimes we just take it for granted, right?
• 13:35
  SPEAKER_01: They're like, oh, like I go to the the big box store and I it's like that's just America, like right?
• 13:40
  SPEAKER_01: We we have products everywhere, and I whenever I need it, it's there.
• 13:43
  SPEAKER_01: And you're like, that's not doesn't magically happen.
• 13:46
  SPEAKER_01: Like someone actually did that, which is remarkable.
• 13:50
  SPEAKER_01: Um, and yet the policy doesn't account for that.
• 13:53
  SPEAKER_01: It's all sort of left to the private sector to like clean up the mess every time that a pro like, and that's why supply chain people um are very good at what they do.
• 14:02
  SPEAKER_01: Uh, they have a lot a lot of experience in uh putting those fires out, of like rectifying the issue at the last minute.
• 14:09
  SPEAKER_01: And I think it's also probably why everyone in supply chain needs like a therapist or like a sounding board to be like, wow, like I just did that again.
• 14:16
  SPEAKER_01: Um, like, wouldn't it be great if the policy at the outset accounted for it?
• 14:22
  SPEAKER_01: And then we could proactively, whether it's from an infrastructure investment standpoint, whether it's from um a greater connectivity in terms of like data linkages across the supply chain, whether it was rules that took into account in a modern sense how transportation moves across the country, if the regulatory environment was conducive to actually moving things, like what if that whole environment was reshaped to foster a more resilient supply chain?
• 14:46
  SPEAKER_01: And so that's really what we were starting to talk about in even 2019, um, that shouldn't the undergirding policy actually build the system that we want.
• 14:56
  SPEAKER_01: And then COVID happened, and it it I went from being like the redheaded stepchild of the policy world talking about this wonky supply chain thing to sounding very prescient.
• 15:06
  SPEAKER_01: And it, you know, I'm not asking for like a pat on the back in that regard, but I what it did was it it allowed us to then also have more constructive conversations than with the first Trump administration and then later the Biden administration about how do we like what are some creative ideas that we can use to solve that?
• 15:23
  SPEAKER_01: So some things are smaller scale, things like hey, what about this flexibility in a time of crisis?
• 15:29
  SPEAKER_01: What about um adjustments to hours of service or truck weights or like other mechanisms that just materially make it easier or more efficient to move goods across the country, especially considering the newer, more modern technology that we have, or you know, adding additional brake axles, or like what like there's some accommodation that can now be made by the private sector to allow for those that more efficient movement of goods.
• 15:53
  SPEAKER_01: Like very brass tacks sort of way.
• 15:55
  SPEAKER_01: And the uh the the bigger, I think, thematic aspect that came out of that though is that it deserves supply chains and freight in particular needs to go from like the underbelly basement of DOT to actually having a prominent role at certainly at DOT, but also at the White House, at the National Economic Council, in other circles to like recognize the nothing happens without a supply chain.
• 16:21
  SPEAKER_01: So we need to have a really uh good understanding of the health of our supply chains.
• 16:26
  SPEAKER_01: Are they working?
• 16:27
  SPEAKER_01: Are they not?
• 16:27
  SPEAKER_01: Where are the sort of pinch points or nodes that are under duress?
• 16:31
  SPEAKER_01: Um, where can we best uh sort of appropriately target resources to shore those up in a time of crisis?
• 16:38
  SPEAKER_01: And can we have data and insight that then drives policymaking into the future?
• 16:43
  SPEAKER_01: And so we had called for the creation of an office of supply chain.
• 16:46
  SPEAKER_01: Um, I am not in the interest, I'm I don't think anyone is in uh a big fan of like creating additional bureaucratic layers in government, but I think that there's some value in understanding, like there's a need for expertise, insight at a federal level to really understand again where things are what are what's happening in the supply chain, where can resources be directed, how do we do it better?
• 17:08
  SPEAKER_01: Um the Biden administration, I think, really queued up, like picked up on that, and there was some effort between the White House, never in such a formal capacity as a quote, office, but that ultimately then funneled also into the creation of a program at uh DOT called Flow.
• 17:24
  SPEAKER_01: Um and that bridges to another concept that we talked a lot about, which is the national freight data portal, this ability to share information across the shipper community to the truckering community, to maritime, to others.
• 17:39
  SPEAKER_01: At the time, I know it was just a maritime pilot, but I think that the runway for that program, um, certainly something that Secretary Duffy is continuing to explore in the Trump administration, with like the sovereignty initiative that they have, there's a huge runway for the federal government to almost serve a facilitating role.
• 17:57
  SPEAKER_01: Um, the same way that we've done like air traffic control, like big, almost like public work type project.
• 18:02
  SPEAKER_01: Like the the US aviation space would not be as functional and safe and uh efficient as it is, absent government's role in like standing up air traffic control and having that be universal and having that be something that everyone along in different parts of the country can connect to.
• 18:19
  SPEAKER_01: Um, that same opportunity I think exists long term in the freight space to allow for private sector innovation, to allow for private sector community to better connect to each other, to identify where is their mission, where is their open capacity, where is their demand, how do you bridge those things together?
• 18:36
  SPEAKER_01: Um, because that's ultimately, I think, and I know that your research in the past talks a lot about this, but like you're matching demand and capacity.
• 18:43
  SPEAKER_01: Supply chain does not need to be particularly challenging, and yet it is.
• 18:47
  SPEAKER_01: And like, how do we just make it more efficient and really to every supply chain professional's goal, like squeeze incremental sense out of a rock?
• 18:56
  SPEAKER_01: Um, like like how do we make it just a little bit easier?
• 19:00
  SPEAKER_01: And I think there's a real role for some of the policy to do that.
• 19:03
  SPEAKER_00: Uh gosh, that's such a good angle on it.
• 19:05
  SPEAKER_00: And and it it it's especially interesting as I think about so you know, and in you and I have kind of talked on some of those projects before over the years.
• 19:12
  SPEAKER_00: Uh and and what came to my mind just as you were describing it is uh a long time ago I had a research project where I looked at the algorithms that um design landing planes at airports and I thought, well, why don't we just do that for truck to warehouses like why don't we just optimize that?
• 19:29
  SPEAKER_00: And so kind of we could do it, but we really uh pretty quickly ran up into and this would have been uh gosh pre-COVID, you know, so uh 2017, 2018, maybe four.
• 19:42
  SPEAKER_00: Uh and we ran up against computing power.
• 19:45
  SPEAKER_00: Because basically the argument was all right, well Dave, there's a lot more warehouses than airports.
• 19:50
  SPEAKER_00: Like, you know, you're gonna have you're gonna need better technology than you have, and and we kind of left it there, but you know, that space and the AI space has been growing so much at the same time that maybe those there's a confluence there.
• 20:02
  SPEAKER_01: I don't want to like jump in ahead of you, but I think that that's like the promise, right?
• 20:05
  SPEAKER_01: Like that we are now at a stage where data, AI, like all of these uh you know, factors and tools that are available, like that is clearly like the next evolution of this.
• 20:17
  SPEAKER_01: Um, that there's a real opportunity to make things more efficient.
• 20:20
  SPEAKER_01: Um but I think it does ultimately take also like some level of of policy involvement to sort of clear the runway, to empower uh those folks to sort of create the linkages that wouldn't otherwise exist.
• 20:33
  SPEAKER_01: Um, and that's I think definitely something that's imagined in this, like what is now like the the supply, like the supply chain sovereignty initiative at DOT, um and picking up on the legacy of flow and continuing to build that program out, I think is a real promise um going forward.
• 20:48
  SPEAKER_01: And then on the freight rail side, because I know that like things like flow and or more tur still today, more maritime and maybe more trucking longer term, but on the freight rail side, there's you know, coming off of East Palestine, obviously there's a real desire to improve safety.
• 21:06
  SPEAKER_01: Um, that and I don't think anybody discounts that.
• 21:09
  SPEAKER_01: I think what we also have to look at is what is the long-standing performance issues that have plagued freight rail?
• 21:15
  SPEAKER_01: I think that over the last several years, to the rail community's credit, there have been tremendous performance improvements that has been absolutely noticed by the shippers' community.
• 21:24
  SPEAKER_01: Um, we have a very good relationship with AAR.
• 21:27
  SPEAKER_01: Um, and I think it's just that like, how do we get that mechanism working again better?
• 21:31
  SPEAKER_01: Where shippers and the rail uh are working more hand in hand, that they're continuing to see those performance improvements over time.
• 21:39
  SPEAKER_01: Um, there's certainly uh opportunities for new technology integration to make things safer and to make things more efficient.
• 21:46
  SPEAKER_01: Uh, and then there's the competitive issue, which um obviously there's a a major merger uh that is sort of like afoot.
• 21:54
  SPEAKER_01: Um, I would anticipate that the administration approves that just given their uh sort of.
• 22:00
  SPEAKER_01: Directional notion of things.
• 22:02
  SPEAKER_01: But at the same time, I think that historically, when you see consolidation in the space, the shippers community is always like a little nervous, like will performance decline?
• 22:12
  SPEAKER_01: How will rates be impacted?
• 22:14
  SPEAKER_01: And so just having that balance of like what are what are shipper priorities?
• 22:18
  SPEAKER_01: How does consolidation and um you know mergers impact that?
• 22:23
  SPEAKER_01: Just something to watch.
• 22:24
  SPEAKER_01: Not saying that one is going to lead to the other, but I think it's an important area that the the government plays a role in in sort of understanding those dynamics.
• 22:32
  SPEAKER_00: Gosh, no, absolutely.
• 22:33
  SPEAKER_00: And and it kind of leads into the the questions I want to close out with, but it did make me think of something that I wasn't really thinking of until you brought it up, is that like you know, for people who follow the merger and probably listeners of this podcast, you know, that's kind of the highest drama story for us for real order people.
• 22:49
  SPEAKER_00: But you know, I think this is already the largest evidentiary record uh of any proposed real merger, and it's the first one to use real real data.
• 22:57
  SPEAKER_00: And I don't think you can separate that from the fact that the STB and their staff all now have prodigious AI tooling.
• 23:05
  SPEAKER_00: And the public has it too.
• 23:06
  SPEAKER_00: So like the scrutiny that this thing will get will be unlike anything previously seen.
• 23:12
  SPEAKER_00: Uh whichever you know, to kind of build on your point, I think can be for the better.
• 23:16
  SPEAKER_00: You know, I think that's why the the board is compelling all of this data and and you know, sharing what can be shared.
• 23:23
  SPEAKER_00: Because it's a all of those are big questions, the one that you mentioned, but gosh, if I were them, I would think I am going to be scrutinized like no one has ever been scrutinized in today's day and age.
• 23:33
  SPEAKER_01: And I think it actually goes to this issue of like we it's not like a again, it's not like a shipper community versus rail or like a shipper community versus trucker thing.
• 23:43
  SPEAKER_01: Like, in order for the shipper community and the manufacturing community to thrive, you need rail.
• 23:48
  SPEAKER_01: You need trucking.
• 23:49
  SPEAKER_01: And so like we all have to work together in that.
• 23:52
  SPEAKER_01: And it and the whole system has to work because again, like the supply chain is so critical to ensuring the availability and the affordability and the accessibility of these products.
• 24:01
  SPEAKER_01: So I think it is absolutely in the interest of everyone to have as successful and um sort of like robust of a freight rail network as possible, that it's like super functional and efficient.
• 24:13
  SPEAKER_01: Um we continue to invest in that space because I think over time, one of the things that I that keeps me up at night is the degree to which the US sort of seeds uh leadership in terms of infrastructure investment, in terms of uh acceptance of new technology or the like the pace of technological adoption that you know we've also weighted in the past on some of the labor issues and other things that have plagued or impacted both freight rail and maritime.
• 24:40
  SPEAKER_01: Uh and there has to, I think, be a healthy appreciation both of like workers, of manufacturers, of the impact on consumers, but also like, hey, like at some point we have to modernize, we have to be able to continue to invest, we have to be able to grow and keep pace because otherwise someone else is gonna eat our lunch.
• 24:57
  SPEAKER_00: As we come sort of to the to the end of this conversation, I'm already looking forward to rescheduling the next one.
• 25:02
  SPEAKER_00: One of the things that we think about here on you know Talk Track, we're sort of a news-themed um uh podcast.
• 25:09
  SPEAKER_00: And I wonder what you would call your above-the-fold headline uh closing out 2026 is is there a story in business logistics and supply chain that you think deserves the biggest font, if you will, takes up the most headspace, or may have the most influence uh on listeners of a show like this, you know, between now and the end of the year?
• 25:28
  SPEAKER_01: I think it and I see the you see this in some of the remarks that I mentioned I've heard from CEOs that hey, transportation costs are rising, or hey, I'm I'm a little bit nervous about that.
• 25:37
  SPEAKER_01: What I don't see yet, and I think will happen if I'm like crystal balling this, is that in March, April, June, you're gonna start getting the actually panicked phone calls of like this number came back, and it is way higher than my team predicted.
• 25:54
  SPEAKER_01: Um, and I think that that's in part because some of the costs lag in the space, even with a rising energy cost, even with overall inflationary environment, like you see this lag historically in supply chain costs, and you see the cyclical uh part of this market.
• 26:10
  SPEAKER_01: And I think that when the that cycle comes like roaring back against the shipping community, all of a sudden it'll like dawn on the C-suite, and people will like cry that the sky is falling.
• 26:21
  SPEAKER_01: And there will be folks like you or me and others that'll be like, I thought we told you.
• 26:26
  SPEAKER_01: Um and I just anticipate that.
• 26:29
  SPEAKER_01: Um, we've talked about this in the past, too, like in a in a you know, weird way I almost wish that people would start uh looking at ways of just sort of stabilizing rates and not having us go through this like crazy bell curve every time.
• 26:41
  SPEAKER_01: But everyone's always trying to get the best deal.
• 26:43
  SPEAKER_01: Everyone's always trying to like stay or stay out ahead of the market to their own extent or sort of gamify it.
• 26:51
  SPEAKER_01: Um I just I really do anticipate that that costs, those costs are going to come home to roost a little bit, and that it will be still surprising, even when it shouldn't be.
• 27:00
  SPEAKER_00: I think that is a a very solid case for the above the fold story.
• 27:05
  SPEAKER_00: Now, now to continue the analogy, we're called Talk Track, there's a bit of a music theme.
• 27:09
  SPEAKER_00: You know, every single had a b-side track, something that went along with the story but wasn't the main story.
• 27:15
  SPEAKER_00: Do you have a notion of a b-side track or sort of an undersung story that is maybe on your radar or you're keeping an eye on on behalf of your, you know, maybe your members, or maybe it's personal curiosity, just something going on right now in the world of business logistics that's you know not above the fold, but still interesting and may turn out to be important.
• 27:34
  SPEAKER_01: Yeah, I mean, this sounds very self-serving for me to talk about.
• 27:37
  SPEAKER_01: Again, uh you know who you represent.
• 27:39
  SPEAKER_01: It's food, beverage, household, personal caremakers.
• 27:41
  SPEAKER_01: We have our own vested interest in saying, like, hey, the industry is doing everything possible to keep things affordable.
• 27:46
  SPEAKER_01: And at the same token, I actually think that that is a remarkable story.
• 27:49
  SPEAKER_01: Like you've seen through COVID, you've seen through uh war in multiple different countries, um, that you've seen through like this entire period of inflation, um, really going back even to 2020 and like the surging demand for CPG products, that like it's actually not the the cost increases are not what they could be, right?
• 28:10
  SPEAKER_01: Or that the the the products are still affordable, that the products are still available.
• 28:14
  SPEAKER_01: And that is just like an undertold story.
• 28:17
  SPEAKER_01: And that's like testament to supply chain professionals again, like putting their collective heads together and trying to figure out impossible scenarios.
• 28:25
  SPEAKER_01: Um, but there's like a real um, you know, it's an un unsung profession.
• 28:30
  SPEAKER_01: Nobody ever gets like the pat on the bat that they need.
• 28:32
  SPEAKER_01: Uh and like I I think very highly of like what the industry has done in that regard to just come out better for it and be able to continue to put important products on the shelf for every day.
• 28:45
  SPEAKER_00: That's a great call out, Tom.
• 28:47
  SPEAKER_00: Thank you so much for your time and thank you for everything you do to to help people to address their problem that you identified, that not everyone understands what's going on in business logistics and supply chain, and it's already complicated and it's already changing, and just thank you for being on top of it and helping us to understand it and and sharing your time with us.
• 29:04
  SPEAKER_01: Absolutely.
• 29:05
  SPEAKER_01: So I was gonna see if we're gonna do it again soon.