South America’s Mega Ports & The Future of Drone Delivery [best-of-2025]

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Blythe Brumleve Milliga (00:37):
Blythe, welcome into another Best of
edition of everything islogistics, a podcast for the
thinkers and freight. I am yourhost, Blythe Milligan, and we
are proudly presented by SPIlogistics. And in this final
part of our best of series, Ihad to actually split it up into

(00:58):
two different episodes, becausethere was just, frankly, too
many favorites to choose from.
And so these episodes are notincluded in our previous
episodes, but they were so good,and I loved them so much, and
you clearly loved them, as I sawit, in the numbers, they were
just too many to not includesomehow in this mix. And so when
these episodes release, we arereleasing Part One and Part Two

(01:21):
all in the same week, and it'smy birthday week. On January 6
is my birthday. And so that partone, which is the episode you
are listening to right now, willreleased, and then in a couple
of days, we will have that parttwo, but for the sake of this
episode, and the reason why youprobably clicked play on it,
here are the four episodes thatwe are going to feature.

(01:44):
Starting off with the title,importing is not for cowards,
with Maersk Janet labuta. AndJanet labuta has worked for
customs and border protectionfor most of her career before
joining Maersk A while ago, longyears ago, and so it is one of
my favorite interviews that Ihave ever had in the history of

(02:05):
my career. And so we're startingoff strong with that great
conversation. Love Janet, andthis is a mental reminder that I
actually have to get her back onthe show because that
conversation was so good. Nextup is the episode that we had
with Kevin Lawton of the newwarehouse podcast, talking about
why 90% of warehouses are stillmanual, which is a shocking

(02:28):
stat. We recorded that episodelive at manifest, the future of
supply chain and logistics. Andso it's a great conversation
that lasts about 2425 minutes, Ibelieve, but it is jam packed
with a lot of great insight fromKevin, also a fellow podcaster.
Next up on the list is grace.
Sharkey returns, and we aretalking about warehouse and

(02:51):
delivery drones. And so we talkabout the current state of the
market. What other countries,like China, are doing in the
delivery drone market, and whatwe kind of foresee that that's
going to happen here in theStates. And so that's a great
clip that we pulled from afreight Friends episode. And
then lastly, for this one, oneof my favorite topics that we

(03:12):
are rounding it out, this isprobably going to be my favorite
episode of the entire year, justbecause of all of the topics
that we cover in it, but SouthAmerican logistics, which is
just such an amazing story towatch unfold, how, you know,
super ports, Peru just has a,you know, just launched, or
opened up a mega port on theircoast, and they're trans,

(03:36):
they're, they're Having all ofthese, I don't say transplant,
but trans shipments, that's theright phrase for it. But they
have these trans shipments thatarrive in Peru, and then the
freight gets put onto barges andit's shipped across the Amazon
River into all different aspectsof the South American continent.
It's just fascinating to watch alot of these stories unfold, to

(03:59):
see the roads getting built, andto see how you know truck
drivers are, you know, usingthese roads or not using and
some of these roads because ofthe danger that they present,
it's just, it's a reallyfascinating glimpse into a
continent that is just boomingwith innovation and
infrastructure. And it's really,really cool to witness in the

(04:23):
modern realm that we sort offind ourselves, where we can see
these things starting to playout on social media, on digital
media, and be able to stayupdated and watch it along the
process. So I hope you enjoythese episodes as much as I did
recording them and then alsokind of revisiting them in our
annual best of series. So enjoy.
Welcome into another episode ofeverything. Is logistics, a

(04:47):
podcast for the thinkers infreight. My name is Blythe
Milligan, and we are proudlypresented by SPI logistics, and
we've got a banger of a show foryou today, because we have Janet
labuta, she is the head ofcustoms and trade issues at
Maersk customs services, andwe're going to be talking about
the complexities around globaltrade and how your company can
help navigate thosecomplexities. So Janet, welcome

(05:08):
to the show.

Unknown (05:11):
Well, thank you very much for having me. It's a
pleasure to be here with you inthe audience. Absolutely.

Blythe Brumleve Milligan (05:16):
And I we were just talking off air
about how I had heard you speakat a CSC cscmp event last year,
and good friend of the show,also on a on regularly Grace
Sharkey said that she was veryjealous that I was interviewing
you today. So she says hello,and she says that she loves you,
and she can't wait to hear thediscussion. So we'll say.

Unknown (05:37):
Thank you, and the feeling is very mutual. So

well, one of the regular topics that
Grace and I actually talk abouton our regular episodes together
is the show to catch a smuggler.
I'm sure you've seen it.

Unknown (05:52):
I've seen it. I've caught them. I've been there.
Awesome.

I was hoping that we would, that we
would bond on that show, becauseit is really, as someone who,
you know, got my logistics startat a trucking company. I didn't
really, and it was all domesticfreight. I didn't really know of
all of the complexities thatsurround, you know, sort of
customs and trade and what youknow the border team does. And

(06:19):
for folks who may not be aware,could you give us sort of that
high level overview, because youspent more than 30 years in
customs, border trade beforejoining mariskin. So give us a
little bit of a, you know, Iguess, a high level overview of
what that role, or that, youknow, institution entails.

Unknown (06:35):
Well, you know, it's the face at the border for
everything, and customs isresponsible for really enforcing
the law for many differentfederal and state, you know,
regulators and so the really,the customs job is
extraordinarily challenging andcomplex. And if you know, if you

(06:58):
look in my day, there's onelevel of trade, and it was just
starting to really take off. Andtoday, you know, the the amount
of imports has grownexponentially over the years. We
now have the dynamic of deminimis and all of this e
commerce dynamic, you know, thetrade community has changed to

(07:21):
meet the requirements of theconsumer, and as a result,
customs is in the samesituation, and they have to meet
the requirements, really, ofother regulations and the law
and what Congress is really kindof expecting customs to do as
far as regulating the trade, andyet they are being bombarded

(07:45):
with all of this, all of thesepackages, and the amount of
trade coming across the border.
There is a lot of fraud. There'sno doubt about it. I think we're
seeing things right now withregard to that fentanyl coming
into the country, we're seeingthings with regard to really,
what I call misdescription,illegal transshipment, the
entire tariff dynamic, withregard to the 301, anti dumping

(08:11):
tariffs. Every time you have anew regulation or law, there are
people out there whose job it isto circumvent that, and that's
the challenge that customsalways has. You know, what's the
balance between legitimate tradeand facilitation? And then how
do we really uncover the fraud,the violations, the smuggling,

(08:36):
etc.

Well, with all of that, you know, just
explosion and growth of what youwere just talking about, how do
you know what to focus on andwhat not to focus on?

Unknown (08:51):
Well, you know, one of the things is you really have to
prioritize what you're doing,and you have to prioritize the
compliance dynamic, and you wantthe biggest bang for your buck,
and that's that's a problem thatcustoms kind of always has to
deal with, because they're beingpushed and pulled in a lot of
different directions. And as aresult, you know, they have to
be very, very upfront withregard to what their priorities

(09:14):
are. And you know, we see thatthere are a lot of conflicting
priorities, and as a result,customs will always tell you
that they can't really resourcetheir way out of situations. And
as a result, they punt to thetrade community and they say,
Okay, you're responsible foryour own compliance. You're

(09:35):
responsible for understandingwho's in your supply chain,
you're responsible forunderstanding not only who's in
the supply chain, but whatthey're doing in that supply
chain. And so the the penalties,the exposure that you know
importers have, is reallygetting very, very challenging

(09:56):
and complex for the importingcommunity.

And so how do you navigate some of
those complexities? Because Iimagine, for a lot of
businesses, maybe they've beenaround for, you know, 2030,
years, and they're having to,you know, not only navigate all
of these additional regulations,but also the technology that
has, you know, come on to thescene in the last five to seven
years. How do you know what todo if you are an importer or a

(10:23):
shipper?

Unknown (10:24):
Well, one of the things I you know, I always say to a
number of our clients that areimporters, you know, you know,
you don't have the level of datathat's out there. You wouldn't
be able to afford. The level ofdata that's out there. Secondly,
really, in your compliancedepartments, you don't have the

(10:44):
analytical skills to take dataand make you know conclusions
with regard to that data. As faras your risk is concerned, you
know many importers, theyunderstand their first level in
the in the supply chain, butthey don't go beyond that. They
may have a buyer, and they say,Okay, here's the product we want

(11:05):
to get on the shelf. Here's whatit looks like. How many pieces
we need. You know when we wantit, here's our price points,
things like that. You go find itand and in many instances, they
don't want to take on any otherresponsibility. But today, the
regulators and the Congress istelling the employers, you have

(11:25):
to understand this. And from myperspective, they cannot do this
alone. You know there's there'stwo things that I see on the
horizon. One is the use ofartificial intelligence, and
there are providers out there,and I you know, MERS, custom
services, partners with Altana.
And Altana is also a productthat's being used, a solution,

(11:46):
product that's being used by us,Customs and Border Protection.
And I always say to our clients,isn't it grand to be able to
have the same thing that Customshas to see, the same thing that
customs is seeing, and customsis using these solutions to
determine risk, and that's whatthe importer should be using.

(12:08):
They need to go outside theirown sphere. Many times,
importers will say, Well, I sendout a questionnaire, and I send
it out to my first tiersupplier, and I tell them to
send it to the second tier,third tier, etc. And then I say
to them, how do you verify andvalidate the information you're

(12:28):
receiving back? This is a verynumber one subjective approach.
You cannot verify and validatethe information. It takes so
long to collect that type ofinformation and make sense out
of it. And if you're using thetechnology that's out there,
such as artificial intelligence,you can synthesize this

(12:51):
information in minutes. Theother thing that's critical is
really to have a partner in thebrokerage area that is ethical,
has integrity and reallyprovides the level of compliance

(14:00):
support that you need. I alwayssay a good broker really is a
force multiplier for theimporting community. There are a
lot of folks out there that arenot that concerned in the broker
area with compliance, and I'veseen it firsthand. And there are
others that really, really takethis issue extremely seriously

(14:23):
and works with their importingcommunity. We are at the point
where, you know, you hate to betrite, but it takes a village.

And what do you mean by by that? It
takes a village because it you Ithink it also maybe would
coincide with a broker who wantsto be better. So how, I guess,
how do you know how to bebetter? Is it just talking to
other three PLS, or otherbrokers?

Unknown (14:49):
Well, I think there's, you know, associations, you
know, you've got the the variousassociations out there for
brokers. I think that if youbuild like MERS custom services
has built an outstandingcompliance department for their
clients, they really keep theirfinger on the pulse with regard
to new regulations, new lawscoming out new requirements. You

(15:12):
know, you talk about the LaceyAct changing just a few days ago
and adding more requirements onimporters. It's really getting
out there and reallyunderstanding what's happening
in the trade community. I don'tthink it's necessary to rely on
other importers, brokers, but Ithink it's very, very important
to rely on the associations thatreally do provide a great deal

(15:35):
of information, the conferences,things of that nature. So I
think that is very, veryimportant to really understand
that that part of it, and youwill know when you are
compliant, when customs is notdoing anything to the entries
coming in.

Yeah, that's as long as you don't get
a knock on your door, I imaginefrom your team then, right?

Unknown (15:58):
And you know, a lot of importers tell me they got now,
well, do you think I'll reallyget caught? And I say, Well, do
you really want to take thatchance?

You shouldn't have said that to
someone like Janet first

Unknown (16:11):
Right, exactly you know and you know what, what's your
appetite for risk? And in thisday and age, as a an ethical you
know broker, an ethicalimporter, being concerned about
your brand, being concernedabout your financial standing,
and. I have seen any number ofimporters really get into

(16:36):
trouble with customs, wheretheir goods have been detained.
They've missed their sellingseason. They've now had to hire
external attorneys, they've beengiven penalties, they've lost
product. Do you want that inyour company? And really you
should be looking at this andsaying, What happens if I miss
my season? What happens if Ihave to pay $2 million in

(16:59):
penalties? What happens to me ifmy brand is damaged? And I think
these are the type of questionsthat importers really need to
ask themselves to be able todetermine and identify, really,
what is your risk appetite? Andit should be a very small
appetite that you have for riskyour appetite for compliance

(17:22):
should be very, very, very, verybig. Your risk appetite should
be very, very small.

So how do you how do you start? How do
you begin a, you know, a propercompliance program.

Unknown (17:34):
Well, I know one of the things that that MERS custom
services does is they do acompliance review for importers,
and they, you know, they look,what are you bringing in? What
are the countries of origin? Arethere any specific regulatory
challenges to your product.
Okay, do we have anti dumping,countervailing duty? Have we had
problems with, you know, forcedlabor in this area? So what is

(17:57):
your exposure in that way, whereyou where you kind of can look
at the the importer, and, ofcourse, I suggest the importer
do that themselves. I think thatreally one of the most important
departments in any importingcompany is the compliance
department. And there should bea process where you're looking

(18:18):
at, where are you sourcing, whatare you what are your sourcing
habits? Again? What Are thereany particular requirements that
are over and above the normal,hey, I valued it correctly, you
know, I, I, you know, classifiedthe product correctly, etc, you

(18:40):
know, am I? Am I leaning towardany type of unnecessary risk for
my company? And I think again,partnering with a good broker
will allow you to get thoseinsights and to microscopically
Look at that. The other thingyou can do is you can use third
party providers with regard toartificial intelligence, because

(19:04):
those algorithms of risk arebuilt into the data set. And you
can see, oh, hey, wait a minute,I've got a red flag potentially
here on this product, withregard to this country, and not
only that, drilling down to, youknow, with regard to a supplier.
So I think that that'simportant. The other thing

(19:26):
that's important is generallylooking at, you know, the
rulings and the legaldeterminations that customs
makes with regard to productcoming into the into the
country, so especially withregard to using, you know, free
trade agreements or tradepreference programs. Am I really
understanding how my product isbeing made? Do I really

(19:49):
understand that it meets therules to get a preference, and
that's going to be, I think, in2025 more and more of a focus
for the government, it's goingto be forced labor. It's going
to be okay if we're going to bedoing more near shoring and
using more free trade agreementslike the usmca or, you know, the

(20:11):
CAFTA agreement. Am I really incompliance? Customs tells me
that not only do they want toknow about who's in the supply
chain and what's being done inthe supply chain, they also want
to know how goods, inherentlyare being made. So what are the
component pieces? Because, forexample, we know with forced

(20:35):
labor, it's not just necessarilythe final product that they're
looking at. It could be anycomponent to that. And I think
that, you know, one of theexamples that I give is I had
one client who was detained, andthey said, you know, it's, it's
wearing apparel, but we got allthe cotton from India, and it's

(20:58):
organic. And I was like, Oh,that's a slam dunk, no problem.
But then they shipped thatcotton, the raw cotton, to be
ginned in China, and customscame back to me and said, prove
that not one thread of theChinese cotton that was in the
shipment before this one thatwas ginned got into this

(21:20):
product. So we're not talkingabout a situation where we're
just looking at the finalproduct. You could have one
thread in. In a shirt, and thatentire thing is tainted. It's
contaminated, and it's subjectto detention, it's subject to
seizure. So the old ways reallyaren't going to work. People

(21:42):
have to really and when I saypeople, I mean people in the
trade community have tostrategically put a plan
together as to how they're goingto address number one, you know,
the products that they'rebringing in, where they're
bringing them in from, and thenwhat do I do if I get a
detention? What do I do if Ihave a problem with regard to

(22:05):
the goods being seized and I nolonger have a season that I can
meet, I can no longer putproduct on the shelf. And I
think that's, you know, whatpeople really, really have to
have to do. How accurate is thedata that I'm getting? How
confident do I feel in what'shappening? And as I said, I

(22:26):
think you know what I say ismore and more companies need to
push the compliance structurefurther away from the port of
entry as possible, to the pointwhere you say, Can I really put
this product on the ship, thetruck, the train, the airplane,

(22:47):
whatever it is to ship it to thecountry of import, or do I have
enough risk that I can prettywell think that customs is going
to detain these goods when theyarrive. And, you know, it's,
it's a many of these things,obviously, are global problems.
They're not just problems withregard to the US, you know,

(23:10):
January 1, we have the EuropeanUnion coming in with their
forced labor requirements. Andagain, it's not country
specific, like the UF LPA is,but it is an across the board.
We've got Canada that'soperating, you know, Mexico is
starting to gin things up. Andmy understanding is the

(23:33):
Department of Homeland Securityis reaching out to our trade
partners to have moreharmonization, to do best
practice sharing, to show how USCustoms has enforced, you know,
the forced labor laws, etc. AndI think, you know, in 2025 there
are going to be a number oftrade what they call remedies.

(23:54):
You may also want to call themweaponizations. Okay, that that
may be used with regard to the,you know, geopolitical leverage,
such as tariffs. And we've seenthis, you know, the rhetoric
with regard recently, in thelast week or so, with regard to
Mexico and Canada, we've seenthis in regard to our

(24:17):
relationships in China. I thinkmore and more the US is going to
look at, you know, what's ourtrade relationship with the
entire African continent? Youknow, we have the African Growth
and Opportunity Act, but will wesee more free trade agreements?
Because here we have a dynamicright now where China is saying

(24:39):
we're not going to exportcritical minerals. We know that
Africa is a critical mineralarea for us. We know how
important critical minerals arefor all our electronics, etc. So
I think there's going to be alot of challenges, a lot of
complexities, and some shiftingas we go forward in 2025 but the

(25:00):
operative word is going tocontinue to be enforcement of
the law.

And so we've talked a lot about the
companies that that want to becompliant, that want to do the
right thing, but what about theflip side of things you know,
kind of where, you know, the, Iguess, the juicy to catch a
Snuggler, you know, type actionsare taking place. How do you how
do you find the companies thatdon't want to look and make sure

(25:30):
that that, you know, one threadof cotton is not in compliance.
And so how do you, how do youfind those bad guys? Well, I

Unknown (25:38):
think, you know, I laugh, because when I was in
customs, and I, as youmentioned, I was there over 30
years, and I really worked onthe trade enforcement side. And,
you know, one of the things thatI said when I saw the new, you
know, artificial intelligenceapproach. I was like, Wow, if I
had this one when I was incustoms, I would have been
sitting in the catbird seat. AndI think one of the things is

(26:01):
that if you have a good systemand a good solution using AI
that's helping you with youknow, your risk assessments as a
regulator, a lot of these thingsare going to bubble to the
surface very quickly. You'regoing to see problems in the
supply chain. You're going tosee people move in and out of
the supply chain. You're goingto see people change their

(26:21):
business relationships. You'regoing to see people beyond the
scene for three you know,transactions, and then all of a
sudden they disappear, and youwill see them come up. Again as
a new company, and as you lookmore and more at that type of
information, it's going tobecome pretty obvious that you
have a potential risk when I youknow, when I was in customs,

(26:42):
just before I retired, I workedon a product that was probably
the best thing I ever did in myentire career. So I'm glad I
didn't. I didn't retire twoyears earlier. But we called it
operation Mirage, and it was,you know, what you see is not
what's there, okay? And we werelooking at the importation of

(27:06):
textile products and wearingapparel into the US, because
some people in the tradecommunity had gotten in touch
with me and said, you know,there's something wrong. I can't
compete with the prices that I'mseeing. And really, we started
to dig into, you know, who wasbringing the product in, what
did we know about them? And wethen found out, after a series

(27:29):
of attempted visits, that 55% ofthe companies that we were
looking at did not exist at theaddresses in the United States
that they said they wereoperating out of. And as a
result, we found out that we hadplayers overseas that were

(27:49):
orchestrating all of thesetransactions, and they had no
presence in the United States.
So at the time, my boss said,Oh, and penalize them. I said,
How do you penalize Casper theghost? They're not here. Okay,
so there's a lot that goes onthat I think now with the type
of data that we have, the typeof analytical skills, the

(28:10):
machine learning, etc, I think,gives us a great deal more
insight into actually what ishappening in the transaction or
not happening in thattransaction.

How, in your experience? How? How
much, how, how willing, I guess,are other countries and their
customs and border departmentswilling to work with the US?

Unknown (28:37):
Well, I think they will be willing to work with the US.
But I also think that in manyinstances, it's kind of
difficult, okay, the inherentregulatory framework may be
different the level of expertisemay be different. You know, I'm,
at heart a customs person, so Ialways look very, very

(29:01):
positively at the customservices. I have done work in
Vietnam with the custom service.
There, done work in the Republicof Georgia. I've been all over
Africa, the Far East, etc. But Ialso think that there's a lot of
challenges. There's there'schallenges with regard to, you
know, obviously the level ofexpertise, I think that there's

(29:22):
challenges in some areas, withregard to corruption. There's
challenges with, you know,differences in priorities.
There's, you know, obviouslysome countries out there that
don't have any laws with regardto forced labor. In some
instances, the custom serviceservices overseas. It's the only

(29:45):
way that any kind of solid,regular revenue is coming into
the government. So as a result,you know, their priority is
totally revenue driven. So youknow, are the goods declared
correctly? Are they classifiedcorrectly? Are they valued

(30:05):
correctly? And some countries,you know, they they see certain
things that are prohibited, andother countries don't see the
same things that are prohibited.
So, you know, trying to use anorganization like the, you know,
the rural Customs Organization,and we now have, you know,
former US Customs and BorderProtection, Ian sounders as as

(30:29):
the head of the WCO and usingplatforms like that to raise
concerns, to raise issues thatare maybe not as much
transparent in other countries,or that you don't have a
uniformity of approach. I mean,it was through the WCO and the

(30:51):
WTO that you wound up gettingthe Harmonized Tariff Schedule,
because before that, everybodyhad their own way of, you know,
obviously classifying the goodstrade is global, and there has
to be a harmonization. And, youknow, there has to be a
commitment to assist each otherin trying to address the risk,

(31:15):
the inherent risks and trade,we'd like to sit back and think
that everything that's comingacross the border is compliant
and, you know, doesn't have anyviolations, and there's no fraud
being committed, and everybody'sdoing what they're supposed to
do, but that's a wee bit.

Naive?
Are there any? I'm sure thereare. But which commodities are
the most challenging when itcomes to customs?

Unknown (31:41):
Well, I you know, I think in a number of years that
I worked there, I had thetextile portfolio, and it's
probably one of the mostregulated the clothing that's on
your back is one of the mostregulated items, commodities
that come into the UnitedStates. And of course, you know,

(32:06):
one of the things that you haveto look at is, if you're using a
trade preference program, therules can be very arcane. So the
more that you're using tradepreferences, getting duty free
treatment, the rules can reallywrap you around an axle. No pun
intended, really, I think otherthings that that you know. So

(32:30):
the textile industry certainlyreally understanding the
component pieces of electronicsand, you know, critical minerals
and things like that. The otherday, somebody at DHS said to me,
where do we start enforcingcritical minerals, you know, how
do we get back to the mine? Youknow, with textiles, how do we
get back to the cotton field. Soyou know, it depends where in

(32:55):
the supply chain your risk is.
If you're looking at the finalfactory where something's being
made, and somebody's sitting inthat factory, and they are in a
forced labor dynamic, that's onething. But if you're pushing
back through the entire chain toa field, to a mine, that's where
it becomes very, very, verychallenging.

And then how do, I guess, you You
protect against, maybe a mine,or, you know, a textile facility
that was compliant, maybe they,you know, become less compliant
over time. How do you, how doyou find out that there's a
problem there, and then alertthe rest of your customers or
importers that there could be aproblem?

Unknown (33:39):
Well, you know, one of the things is that, you know,
from a customs perspective, I'llspeak now, you know, customs
doesn't very often tell you,hey, the risk is Acme over in
such and such a place, okay?
They'll just tell you, Okay, youknow, we're going to be looking
at this particular commodity.

(33:59):
We're going to be looking thisparticular country of origin.
Understand your chain, okay?
And, you know, one of the thingsthat we see is there's a lot of
illegal transshipment, so thatall of a sudden you start
looking at things. I remember, Iremember working on garlic years
ago, and garlic at the time, hadthe highest anti dumping duty
rate. It was something like 327%and the garlic association in

(34:24):
the US was very, very concernedabout garlic coming in and
whatnot. And, you know, you lookat these things, and all of a
sudden you start seeing shifts.
So you you look, and they say,okay, garlic from from China.
All of a sudden, Chinadisappears. And then you start

(34:45):
seeing Vietnam, Thailand,Indonesia, Bangladesh, and they
weren't in the mix before atall. So now you've diffused the
product and the problem. Okay,as soon as you do that, it's
it's like a tentacle approach.
The web is being spun. Everybodyis moving in different

(35:09):
directions, and that's why I sayartificial intelligence really
shows you that movement before,when I was in customs, we have
all these charts, and we'd beplotting and planning it, you
know, everything, and it feltlike we were detectives in A
murder mystery. And sometimesyou'd hit it and sometimes you

(35:32):
wouldn't. And I would alwayssay, Well, you know, we go after
low hanging fruit, because it'seasy to go after, and you find
things that way. Things havebecome much more complex. And I
think using, you know, thetechnology that's out there now
gives you the insights, andthen, you know, we're then able
to say, hey, we're seeing thisin your chain. And you may want

(35:55):
to look more carefully at this.
You may want to engage yoursuppliers. You may want to
change your suppliers. You mayreally want to change your
country of origin and make surethat one of the things we also
look at is who owns everybody inthe chain? So, you know, that's,

(36:18):
that's the thing. It's somebodynew in the chain. Where did they
come from? Those are the thingsthat you start to ask questions
about. And, you know, we talk toour clients. Can. Continuously
as we see different things, andwe certainly send out, you know,
client advisories and things ofthat nature. And of course, I do

(36:41):
what we call these quarterlybusiness reviews with our key
clients. And I always tell them,Okay, here's the here's the
crystal ball. Look. Just so youknow, my crystal ball is
cracked. But here's what I seein the crystal ball. What's
happening. Here are yourvulnerabilities, your potential
vulnerabilities with the productthat you're bringing in. Here's

(37:04):
what I've heard through thegrapevine. You may want to look
more carefully at this. You maywant us to do an audit and check
out what's happening. You mayalso want to look at a third
party provider that has datathat you don't and then has
analytical skills that you don'tto look at what's happening.

I anecdotally, I from going
through, you know, I guessairport security, which I know
is not probably, you know,customs related, but, you know,
watching, going back to the, youknow, to catch a smuggler show,
and then to listening to, youknow, a lot of the the points
that you're making about, AI,I'm curious. It feels like the
customs border, that team reallyis the one of the first that's

(37:49):
adopting new technology and newtrends. Am I off base in that
thinking? Because it seems likethere's a lot of tech going on,
and y'all are fully embracingit, which is cool to see.

Unknown (37:58):
Yeah, no, I think you're, you're totally right.
And I think the thing thatreally pushed it is the E
commerce dynamic. And, you know,customs was being drowned in
small packages, and then all ofa sudden they have issues with
regard to all you got this, youknow, Uyghur forced labor
Prevention Act that you have toenforce immediately. Then you
have, you know, the 301,tariffs. So I think there was so

(38:22):
much hitting them and again,using the term that they use, we
can't resource our way out ofthis in terms of human
resources, but we have to haveresources that are
technologically advanced to beable to help us resource through
this. And I think that's that'sreally what happened, and they

(38:44):
really went cutting edge on someof these things. And as a matter
of fact, I was exposed to AltanaAI because of the former
commissioner of customs who's ontheir board. And he said, you
know, you work the trade angleof everything. Look at this and
tell me what you think. And Idid work not for the company,

(39:06):
but with the company for about ayear and a half to help perfect
what the solution provides,because I was seeing the
challenges, the problems thatnot only our clients were
having, but also recognizing,when I was a customs official,
the same challenges andcomplexities that a regulator

(39:28):
would have. And so I thinkcustoms was very, very smart to
pick up this information. Andyou know, some of our clients
say, Well, how do we know thisinformation is accurate? I said
by the mere fact that customs isusing it, they have a great deal
of confidence in thatinformation, and I would say

(39:50):
that level of confidence thatCustoms has should spill over to
your company.

And so how do, I guess, you start use,
how do you know what AI to use,what AI to trust? I mean, it
sounds like that, that thecompany that you worked with
for, you know, a year and a halfor worked with, it sound like
they have one of the top tiersolutions when it comes to
analyzing those different Iguess risk assessments is that
what they're I guess the thesoftware is doing is that it

(40:19):
technically plugs in to animporter's database and then
maybe raises red flags.

Unknown (40:25):
Yeah, that's part of it. But, you know, they have
some analysts. For example, whenPVC flooring came up, that one,
one analyst who worked in China,worked in the PVC industry,
understood the industry couldlook at the data and say, Now
this doesn't look right. It'snot a solution that you just

(40:47):
throw at the importer and say,Okay, now figure it out
yourself. Okay, you can't dothat. And the other thing is,
what I always say is you'relooking at the same thing that
customs is looking at, and that,I think, is one way to really
identify who you're going to usein this space. And I think you

(41:10):
ask those questions, are you youknow? Is any government
organization using this? Is anynon government organization
using this? Who are yourclients, you know? And going out
and checking with those clients,getting references and saying,
you know, have they helped you?
Have Have you had issues? Havethey been able to identify risk

(41:30):
that you did not see and thatyou were able to take, you know,
positive steps to amelioratethat risk? So I think that's,
you know, that's one of the keythings, is, you know, to be able
to sit back and say, Hey,customs is using this. It's not
going to hurt you to use thiseither.

How much of a dramatic impact you
mentioned e commerce having thislarge impact on on customs? What
about from the the the temu, theshe in angle? I think I heard
you mentioned at that cscmp talkthat they're responsible for 30%
of all shipments coming in onthe West Coast?

Unknown (42:13):
Yeah, I believe so, yes. And, you know, and I just
saw the other day that there isa US government investigation
with regard to the temu process.
And so I think that there's thepotential, you know, when you're
flooding the market with many,many products. How compliant is
the temu company? I can't say. Idon't know specifically, but I

(42:40):
think it raises questions whenyou have someone that is so
engaged in E commerce, you knowwho's watching the store, so to
speak. So I think there arequestions that need to be asked,
there are processes that need tobe looked at, maybe some

(43:03):
tightening up needs to be done.
I can't say specifically,because I don't know you know
how they operate. There's beenmany allegations, but you know
you have to prove theallegations. And I'm not in a
position to say anything aboutthat, really. I can only say,

(43:25):
You know what I've seen, youknow in the press, and you know
what the government is look, youknow, looking at etc, that they
do have some concerns, andsomebody has to do that, that
look see, to find out exactlywhat's going on.

Does Amazon kind of fit into that
same boat, or do they have awhole do they have to
technically follow all of the USregulations? I mean, obviously
they do. But are they in maybe adifferent category from an E
commerce perspective, because Ithink they're also opening up a
factory to compete with, or ashipping location infrastructure

(44:02):
in Southeast Asia in order tocompete with temu and Shein. Are
they going to face, or are dothey face the same sort of
challenges as a Shein or temu.

Unknown (44:12):
Well, I, you know, I think that we always have to
remember that whoever theimporter of record is is
responsible for the compliance.
So if you know, if you've got athird party in there that nobody
knows about, there's still aresponsibility on the part of
the team, who's the shins, theAmazons, etc, to make sure that
you know products are notprohibited, that you're bringing

(44:37):
in product that is incompliance, that follows the
rules and regulations. And youknow, I think because Amazon is
a US company, they're much moreaware of what their
responsibilities are, and theytake those responsibilities
extremely seriously that I knowpersonally. And so, you know,

(44:58):
you can compete, but thecompetition has to be such that
compliance is the key factor towhat you're doing, you know, and
how, how compliant you know,other countries businesses are,
that remains to be seen.

Where is there? So we've talked to,
you know, about, you know,fentanyl coming over the border,
and how that that's a hugeissue. You know, maybe some,
some other companies are tryingto skirt regulations. But do you
have maybe a favorite case, or,you know, a favorite
investigation that you're youled on your team, and how did

(45:42):
you, I guess, discover it?

Unknown (45:44):
Well, you know, again, I think operation Mirage was my
all time favorite, because whathappened was the trade community
tipped me off to it. Somebody inthe trade community and I
decided that this reallycritically needed to be looked
at. And at the end of the day,what we determined was that even

(46:06):
in this small universe ofcompanies that were shipping to
the US and importing into theUS, we lost over a billion
dollars in revenue from justabout 160 companies. And if you
look at the number of companiesthat are operating in the US,
it's the hundreds of 1000s. Andyou know, you make the leap of
faith that people are trying todo the right thing. So. How do

(46:30):
you carve out those that are nottrying to do the right thing?
And then, what is that impact?
And how do you stop it? Youknow, one of the things I say,
and I say this about AI as well,is you need a, not a reactive
model. You need a predictivemodel. And, and very often, you
know, we look at, oh, thishappened before, and they did

(46:53):
this, they put a false wall in acontainer, or they did it using
this particular methodology, andit's going to happen again, and
then it doesn't, because theyknow, you know, and they've
shifted to something else, okay,so really understanding and
having somebody out there thatreally has access to a lot of
data that can be crunched veryquickly. And like I said,

(47:16):
Operation Mirage was was suchthat one of the questions that I
raised was, here, you here, youhave importers or supposed
importers on paper, and they'renot there. And how does that
really affect the whole securityangle, the anti terrorism angle,

(47:37):
the CT Pat angle of howbusinesses are, you know,
bringing products into theUnited States, if they're lying
about who they are and wherethey are, what's to say, they're
not lying about everything else.
And so, you know, OperationMirage gave us that that look

(47:59):
see into kind of the underworldand the dark side of of
importing in a in a violativeenvironment. So that's what, you
know, that's probably about mybest one. I mean, I found other,
you know, companies thatmisdescribed goods, like, you

(48:20):
know, patio furniture and it'stextiles, or, you know, things
of that nature, because textileshas some of the most, highest
tariff rates on them, because itis such a protected industry,
and so you don't want to, youknow, you don't want to pay, you
know, 30% on a polyester shirtcoming in. So you're going to

(48:42):
call it something that has azero duty rate, you know, you're
going to call it a patio chairor whatever.

Okay, that's interesting, because I
just was thinking of my camerathat I have that that's
recording this right now, and inorder to get it, or in order to
order it, I guess they had toship it as a camera, and not a
video camera, because the taxrates or the import rates were
higher, but there's gonna goAfter you. Am I the importer of

(49:12):
record in that

Unknown (49:13):
probably, oh my gosh, that

is getting cut from the
conversation,

Unknown (49:20):
right? And then you have penalties next, and you,

oh no, well, it's just, it's just a
it's a different camera.

Unknown (49:27):
Yeah, right, right, yeah, I was going to use it as a
different camera, and then foundout I could use it as a video.
Yeah, exactly, you know, really,some of the tariffs with regard
to, for example, the antidumping duty. Sometimes these
tariffs are not on the product,per se, but what the product is
being used for. So, you know,you could have a microphone, and

(49:49):
if you use the microphone in aradio, or whatever, you know, it
then becomes subject to theduty, and if you use it for
something else, it doesn't. Sothat's another complexity for
customs, you know, how is thisproduct? Not only how is it
made, how is it being used? Whomade it? Where did it come from?
So there are a lot of, you know,t's to cross and I's to dot, you

(50:09):
know,

and it sounds like you can't really be
an importer unless you havetechnology in order to help you
point out all these things.

Unknown (50:16):
I agree, and I always say that, you know, importing is
not for cowards, okay? Andreally, you know, one of the
things that I say as well isthat not only is it not for
cowards, but you really have toget your hands dirty. Okay, you

(50:38):
really have to look. You can'tsay, oh, I'm just going to
forget about that. I hadsomebody say to me one time, a
very large company, years ago,just before, really, I'd say,
about two years before, forcedlabor really hit hard, and I
knew it was coming, and I saidto this person, you you better
look at forced labor, and youbetter have a strategy in place.

(51:01):
And the person looked at me andthey said, I don't have time for
that. I said, You better maketime. I don't. I have too many
other things that I have to dogrant it okay? You have to build
teams. You have to havecompliance structures. I was
speaking at a C suite conferencethe other day, and I said to the

(51:24):
you know, executives, I said,Look, you know, the most
important division. The area inyour company is the Compliance
Division. You know, they protectyour brand. They protect you
from, you know, not being ableto meet the requirement. They
allow you to meet therequirements of getting your

(51:44):
product on the shelf. They keepyou out of a penalty dynamic.
They keep the lawyers at bay. Imean, there's a lot that goes
into they keep customs at bay,because once customs finds an
issue and they think you reallydidn't take the steps you were
supposed to take, and usereasonable care and have a good
compliance structure in place.
Now you're on our radar screen.

(52:08):
There's no doubt about it, sowe're going to look, we're going
to dig, and we're going to findbecause we're going to audit
you. We're going to check allyour, you know, shipments coming
in, so on and so forth. You mayhave your goods detained. You
may have your goods seized. So Ithink that really, those are the

(52:31):
things that you really have tobe aware of.

What does that, I guess, a standard
or a modern compliancedepartment look like? Is it a
team of a few people powered by,you know, AI software, or is it,
you know, a team of 20,realistically, that are all
handling individual roles?

Unknown (52:49):
Well, I think it's probably combination. I think,
you know, some companies, I wasdealing with one unfortunate
client, nice, and the guy saidto me, Well, I'm the only one in
the compliance department, and Idon't really understand all of
this. And I thought to myself,maybe this company didn't make

(53:10):
the right decision to numberone, just have one person number
two, have somebody that reallydidn't understand. I think
compliance departments reallyshould be not necessarily top
heavy, but I think they have tohave the tools and resources
available to make the correctdecisions with regard to the
reasonable care used by thecompany with regard to, you

(53:34):
know, risk assessment and theability to reach out to third
parties to say, hey, we needhelp. Okay, we can't do it all.
There is just too much outthere, and it's not going to
throttle back, okay? It's justgoing to, you know, go full
steam ahead, engines roaringinto 2025, and beyond. There's

(53:58):
no doubt about it.

And so as I guess, as these companies
are starting to, you know, mayberealize it, either, you know, by
nature of them being in anunfortunate situation where they
have to address it, or maybethey're trying to stay up to
date with future regulationsthat may be coming down the
pipeline. You mentioned. Youknow, with the forced labor, is

(54:21):
there anything that's comingdown the pipeline that people
should start preparing for now?

Unknown (54:28):
Well, you know, I do think Blythe that if you have a
good compliance structure, andyou have a strategy as to how
you're going to, number one,identify risk. Two, how are you
going to address the risk?
Number three, how are you goingto protect your supply chain?
Four, how do you reallyunderstand what's happening in
your supply chain? That goes along way. You know, one of the

(54:51):
things that the government does,which always drives me crazy,
and I always said I felt I couldreally affect better compliance
outside of customs than beinginside of customs, is the fact
that they don't give you anywarning. Now, if, if you know
the Entity List with regard tothe uflpa. Well, I was on a call
the other day with DHS, and theysaid, We're going to, you know,

(55:15):
increase the number ofcompanies. They're at 107 now.
We're going to increase thenumber of companies. And you
want to say which ones, andyou're not going to get an
answer, okay, they're just goingto say, surprise. Okay, we're
going to increase the number ofproduct areas, so commodities,
etc. Now they did mention cocoa,they did mention critical

(55:38):
minerals, okay, constructionmaterial, etc. But it's not like
you know, if they pick acommodity out of the air,
they're not going to let youknow until you see a Federal
Register notice that says, youknow, on January 1, 2025 you can
expect to see XYZ happening, andwe're going to add 150 new

(55:58):
companies on the Entity List,and you're scrambling as an
importer, so you have to have aprocess in place that allows you
the flexibility to move as therisk moves. And frankly, the
only thing I see in this day andage that gives companies the

(56:20):
tools to be able to do that isthe technology inherent in
artificial intelligence. I. Thatcan can take inordinate amount
of data. You know, if you lookat the automated commercial
environment and customs, it wasone of the biggest IT projects
in the world, if not thebiggest, okay, and now you've

(56:43):
got AI that takes all of thatinformation and in minutes,
synthesizes it and gives you redflags and tells you what to look
for. And I think that we're in awhole new, different
environment. With regard totrade, I always say, you know,

(57:04):
people who are romantic say, youknow, love makes the world go
round. I like to be verypractical and real. And say,
trade makes the world go round,okay? And the challenges are
very, very intense. And ofcourse, obviously you got a
difference between, you know,large importers that you know
probably can afford to have agood compliance department, and

(57:27):
then medium companies and thensmall companies. How does
everybody operate in this space,you know, and how, how do you as
a smaller company be able to getthe same kind of leverage with
regard to the data as a largercompany may have, they're more
in a situation where they'reprobably insulated from having,

(57:50):
you know, going under, althougha large company did go under
with regard to having a numberof detentions and things like
that, but a smaller company hasa lot more challenges because
they don't have the extraresources. The profit margins
may not be that big. Maybethey're saying we can't really

(58:11):
get an AI solution at the levelthat we would like. So there's
got to be different levels ofapproach that they can take in
order to protect their business.

Is there almost a little bit of
leeway or grace that's given tosome of the smaller companies
that maybe don't have the staffor the budget of the bigger
companies.

Unknown (58:37):
No, you know, the rules and the regulations and the laws
are the same. If you're animporter, whether you're, you
know, bringing in millions ofdollars of goods a year, or
you're bringing in hundreds ofdollars of goods a year, or
1000s of dollars. It doesn'tchange. And you know, that's
that's the issue. And there'sno, I don't want to, I hate to

(59:01):
use the word de minimis, becausewe have another dynamic with de
minimis. But there's no withregard to some of these
violations. There's no deminimis where you could say you
had 150 shirts in the in theshipment, and we think one of
the shirts was a problem, or onea cuff was the problem, or the
collar was the problem. Andwe'll let all these go this

(59:24):
time. It doesn't work that way.
You know, once the theregulators determine that the
good is tainted, contaminated,you know, affected by a
particular problem such asforced labor. You know that that
whole shipment is subject todetention, and obviously, again,
subject to seizure, so it's inyour best interest, yeah, and

(59:47):
so, and some people have said tome, Well, what happens if I get
caught? Is it like, you know, apenalty, a small penalty, no,
no, you lose your product. Andthink about that. I had one
company, small boutique companyout on the West Coast. They lost
their product. They lost theirentire, entire selling season.
And that selling season for themrepresented $10 million and they

(01:00:12):
were a small company that

Blythe Brumleve Milligan (01:00:17):
put them out of business, I would
imagine

Unknown (01:00:19):
they were very concerned that they were really
on the verge of going out ofbusiness.

And so what happens to, I guess, all
that product? Is it, you know,just destroyed? Is it sent back
to the country of origin?

Unknown (01:00:32):
Well, when I worked at the textile program, they used
to auction off the product. AndI said, How do you auction off
violative product? Okay, so wegot to the point where everybody
agreed we could destroy it. Soyou could blame me for that,

yeah, because I feel like that would
be a little unfair if, you know,one entity is able to make money
off of it.

Unknown (01:00:57):
And Right, exactly, somebody, you know, they buy it
in auction, then they go sell itin some in a flea market. You
know, this doesn't make sense.
This is not right.

So say you're, you're one of these
companies. You you have acompliance department. You've
adopted AI into your tech stack,and you're trying to do the
right thing. How do you know,what are the signals that you
are doing the right thing?

Unknown (01:01:21):
Well, I think you know, the biggest signal is you don't
get detentions, you don't havecustoms knocking on your door.
And I think you know, using someof these. Things provide you
with a good track record of,Hey, I am compliant, because
these are the things I'm doing.
You know, the standard isreasonable care. Now it's very
hard to really figure out whatthe definition of reasonable

(01:01:46):
care is. When I was in customs,you know, the trade community
would come in and they'd say, ifI do these 10 things, am I okay?
And then our lawyers would say,Well, yeah, those 10 Things are
great. But then they'll comeback and say, Well, I couldn't
do 10. I did nine. Is that okay?

(01:02:08):
And they said, We're not playingthat, that game. You have to
understand what informedcompliance means to you. Okay?
And I think you have to go theextra step. And Customs has said
this, if you do nothing, that'snot a that's a non starter. But
if you can say, hey, I'm usingAI technology, I understand

(01:02:30):
who's in my my chain, I got ridof three companies in my chain,
and changed. I understood wherethe risk was, and I addressed
that risk. 123, I moved out ofthe country of origin. I changed
people in the chain. I changedthe way my product is being
made. Whatever it is you have toshow that steps are being taken

(01:02:52):
to identify risk and to addressrisk in a very positive way. And
Customs has said over and overagain in various conferences
that I've attended that youreally should be using the type
of technology that's out there.
And you know, in some instances,the other type of technology is,
you know, this isotopic testing.

(01:03:16):
And so, you know, I have AI, Iuse isotopic testing. Here's
what, here's my lab reports,here's what I've done. And so I
think, you know, you can make acogent story that resonates with
the regulators, but if you donothing, take my chances, that's

(01:03:38):
not, that's not going to be whatcustoms is looking for.

What was the phrase you just said,
isotopic testing? What is

Unknown (01:03:45):
isotopic testing?
Isotopic testing is a scientificmethodology that looks at the
isotopes. For example, if you'vegot cotton, it'll look and it'll
determine what, where the soil,where the cotton is grown, and
what soil. So if you're, ifyou're looking at, you know,
hey, the cotton shouldn't bereally coming from China, from
this area. And you do a test,and you see it's almost like the

(01:04:09):
DNA of the product, and itshows, okay, it was grown in
this soil. Here's theparticular, you know,
fingerprint, so to speak, forthat soil. And if you could see,
oh, the fingerprint is India,didn't go anywhere near China,
or the fingerprint is China. Soyou can, you can look at your
product and determine throughthat level of technology what

(01:04:33):
the sources. And that reallystarted a while back. The other
thing is, you know, customs isstarting to upgrade a number of
their labs, lab in Savannah,Georgia and, I believe, in Los
Angeles, where they are alsodoing isotopic testing on
product. So, you know, that'sanother technology that that can

(01:04:57):
be used. But if you say, youknow, hey, I sent out a
questionnaire, and this is whatthey told me, and customs is
going to say, Well, did youvalidate that and verify that.
One thing we had the other daywas an issue with it with a
client who attempted to get somedocuments and they were
counterfeit. So you know, youneed something that's objective,

(01:05:23):
not subjective. Somebody made acomment to me the other day in
the regulatory sphere that thereare document factories being
stood up so that you know, whencustoms ask for documents, boom,
they're right. There you gotthem. But are they legitimate?
Do they really tell the correctstory? Are they accurate? Can

(01:05:43):
you rely on them? That's whatyou have to look at.

Sounds like the criminals are, you
know, there are the bad guys areevolving every step of the

Unknown (01:05:54):
way that and they always have. You know, if I
always say, you know, the one,the one occupation we should
never have, is locksmiths,because you should leave all
you'd be able to leave all yourdoors open, your windows open.
Nobody should bother you. Buthowever, as we know the locks
are getting more and moresophisticated because the

(01:06:16):
perpetrators are getting moreand more sophisticated.

This has been an awesome discussion.
I think I got through all of thequestions that I wanted to ask.
I'm sure I'll think of dozens ofmore after this is done. But
before we conclude. I'm curiousis, is there anything coming,
maybe down the pipeline,anything that you feel is
important, that you know, weshould have talked about, that
we should have mentioned,

Unknown (01:06:39):
that we haven't already Well, I think, you know, as I
said, you know, the crystal ballapproach to things, you know,
what do we think potentiallycould happen in the future, with
regard to trade, once we had thenew administration in place, you
know, I think the ever evolvingissues with regard to forced
labor, I don't think that'sgoing to ease up. That's a non

(01:07:02):
partisan issue. And I thinkthat, for example, if Marco
Rubio gets confirmed asSecretary of State, he was the
sponsor of the Uyghur forcedlabor Prevention Act is nothing
is going away. We've got the useof tariffs potentially in a
geopolitical dynamic. I thinkthe whole sanctions issue and

(01:07:26):
how do you leverage that type ofdynamic when you you know you
have adversaries out there.
Trade is more and more beingused in that way to try to
really address what people wouldthink might be inequities,
unfair trade, not having a levelplaying field. And I think more

(01:07:49):
and more that we're going to seethat type of approach in future.

Yeah, it sounds like these things are
have always evolved, and theywill continue to always evolve,
which is why it's probably greatto have someone like you and the
mayor's, you know, customs teamon your side to help you, you
know, filter through all ofthese different complexities. So
Janet, thank you so much foryour time. Where Can folks
connect with you? You know,follow more of your work and get

(01:08:18):
connected.

Unknown (01:08:20):
Well, basically, I'm on LinkedIn. Number one. Number
two, I am@janet.la Buda, at L,N, s@maersk.mursk.com um, com.
So, you know, they can, they canreach me at Maersk. Everybody
knows me just about so that'seasy to connect there.

Well, awesome. Appreciate your time
that this was an amazingdiscussion, and I'm sure you
know, Grace will be the firstone to get it downloaded, and
we'll both fan girl over it.
Okay?

Unknown (01:08:54):
Well, tell grace. I said hi and send my love. And
thank you very, very much forthe invitation. It was a
pleasure being with you andmeeting you. And sorry we didn't
have a chance to talk last year,but this made up for it, I
think, absolutely.

And real quick, she did want me to
ask about a book. You said thatyou were working on a book, and
she wants to know more about it.

Unknown (01:09:13):
Well, it's interesting.
I'm working on my really, my myfamily dynamic. And I was was
telling her a number of storiesthat I probably shouldn't have
told about the family, and Isaid, I have to get this down in
a book. So I did. I have startedwriting a little bit, but with
all these things going on intrade, I haven't had a chance to
really sit down and do anythingfurther with it.

You're a busy woman. It's one of those
things back burner item. And youknow, when the global trade
stops, you know, maybe, maybecatch a break, but I doubt it's
going to stop anytime soon.

Unknown (01:09:47):
Well, you know, it's interesting, because in two
weeks, I turned 72 at the age of72 I never thought I'd be
talking about artificialintelligence. I never thought
I'd still be working so on andso forth, so and it continues to
challenge. It continues toreally drive a lot of thinking
on my part. So it keeps me alittle bit young.

I love it. I loved that mindset that
you had during that cscmp talk,because people are so hesitant
to grab on to these newtechnologies. And I think from
especially from a small businessperspective, it's one of the AI
has helped change a lot ofthings for me, where I can work
as a team of, you know, five to10 instead of just one person.

(01:10:29):
And so I encourage other, youknow, small business owners to
get out there and use thesetools too. So I appreciate your
willingness to share thatmethodology as

Unknown (01:10:37):
well, definitely. And I think, you know a lot of people,
they, they try to think, Well,maybe it's not good. Maybe AI
is, you know, sending us down aroad that's, you know, The Road
to Perdition, or whatever, theroad to hell. But I think, just
as with anything else, you know,there's so many positive things
about it, and it provides somany insights that you would not

(01:11:00):
have as a company. You don'thave all that data, you don't
have the analytical capability,you don't have the ability to
make a rule, an algorithm to,you know, figure out where the
risk is, and as the machinelearns more and more and more,
by going through all thesetransactions, it's amazing. And

(01:11:21):
I think if you don't takeadvantage of this type of
technology, you're really goingto be behind the eight ball.

That's well said, and I think that
that's a perfect spot to.
Hopefully leave the conversationand encourage folks to go and
begin their own journey into abetter compliance team and a
better compliance departmentusing technology. So Janet,
again, I feel like I keepfinding new questions to ask
you, so I'll say it for thethird time, I appreciate your
time on this show, and we'llhave to have you again in the

(01:11:49):
future to talk more about

Unknown (01:11:52):
great it'd be great.
Thanks very much. I appreciateit. Have a wonderful holiday.
Take care.

You too. Bye. Bye. Welcome into
another episode of everything islogistics, a podcast for the
thinkers and afraid. I'm yourhost, Blythe Milligan, we are
proudly presented by SPIlogistics, and we've got another
interview for you from manifest,the future of supply chain and
logistics right here in LasVegas, and we've got a fellow
podcaster here returning guests,third time on the show.

Unknown (01:12:17):
I think maybe third time you might be the first

three guests. Okay, I'll take that
awesome Kevin Lawton with thenew warehouse podcast. He is
gracious enough to join us andtell us about all things
warehouse, robotics, becausethis is a topic that is so
daunting to me. I don't know ifit's daunting to you.

Unknown (01:12:38):
Yes, it's becoming more and more daunting, because
there's just so many thingsgoing on.

So tell us what is first. Let's
give people like, insight intoyou. Like, how did you how did
you start the podcast? Like,what got you into podcasting?
Specifically, somethingwarehousing.

Unknown (01:12:55):
Yeah, so, so I started in the warehouse, started
working in the warehouse, anddidn't have any formal education
around supply chain orwarehousing. And I honestly
thought in the back of my head,like, Oh, this isn't long term,
right? This isn't long term. Andnow, you know, 13 years later, I
guess it's long term, but Iwanted to learn more about the

(01:13:16):
industry. And at the time, therewas just not much that I found,
like, very engaging orinteresting. This was, you know,
maybe seven, eight years ago.
And, yeah, just there was notlike, you know, content
creators, like, like us. And soI had done some some blogging in
the past, in my past, and it'skind of like, maybe I'll do a

(01:13:39):
blog, but that was very timeconsuming, I thought. And then I
came across, like podcasts, theidea of podcasting, so I'm like,
let me do a podcast. So it'sjust kind of for me to learn.
And then I guess it resonated,started to get a little
traction. And yeah, and now, youknow, we're recording this year,

(01:13:59):
in February, March. Our will besix years since we released the
first episode.

So awesome, yeah. So now is
podcasting your main focus?
Yeah.

Unknown (01:14:10):
So podcasting is definitely the main focus. And
then I also teach as an adjunctprofessor in in supply chain. So
funny enough, I didn't get asupply chain education, but now
I'm giving one. And then I dosome consulting, advisory work
too, as well.

Yeah, that's awesome. And so you're
here at manifest, and you have,like, you're one of the few
podcasters, like, with your ownbooth. Like we're, we're very
happy. Manifest, you know, gaveus this booth. But I want to
move up to where you're, whatyou're doing, what, and tell us
what you're doing. You have abooth on the trade show floor.

Unknown (01:14:41):
Yeah, we have a booth, booth 1439 and basically we'll
be set up there. I'm not surewhen this is airing, but we're
we are doing a live stream fromthe booth tomorrow morning
Tuesday. So it'll be streaminglive to LinkedIn, YouTube,
Instagram, and then we'll bedoing some other podcasts at the

(01:15:03):
booth, and also at otherpeople's booths as well, so
trying to capture some of thosesolutions and the demos and
things that are going on. Andthen I think Wednesday
afternoon, we're going to havesome some fun with some little
social media clips, maybe sometrivia, something like that, and
give out some T shirts. Andthen, and we'll be in here too
for a little bit on Wednesdaymorning

as well. So, so podcasting don't
stop for you.

Unknown (01:15:26):
Yes, yeah, when we come to the conference straight show,
it's like back to back to back.
Let's jam as much content as wecan. So we'll do, probably do
about like 20 interviews whilewe're here.

Wow, that's insane. I thought I'm
doing six today, and I thoughtthat that was crazy. Yeah, the
stamina is nuts. Now for thetopic of this episode, because
with manifest, they have such astrong focus on robotics, and
this was one of the first placesthat I was able to see that part
of the logistics process underone roof. But if I remember

(01:16:00):
correctly, you said in aprevious conversation that we
had is something like 90% ofwarehouses don't have any kind
of robotics.

Unknown (01:16:08):
Yeah, yeah. I think, I think it's a very interesting
thing, because you come to tradeshow conference, you look
online, right? LinkedIn, feed,YouTube, like there's all this
video, all this conversationabout robotics and automation.
But the reality is that, youknow, there's still in the
warehouse space. I mean, thepenetration for actual. Robotics

(01:16:31):
and automation is still stillfairly low in in comparison to,
like, how many operations areactually are. So there's still a
huge, huge opportunity in themarket to get into that. But I
think one of the challenges is,certainly there's, like,
barriers to entry, right? Thebarriers to entry are, you know,
cost is one for sure. But Ithink there's also maybe, like,

(01:16:55):
a little bit of a knowledge gaptoo, where people aren't quite
certain whether, you know,they're really ready for robots,
and you know, they may still be,like picking on paper and things
like that. And you know, how doI go from, you know, kind of
these old processes systems,into something that seems super
futuristic, like a robot, right?
So I think there's still a waysto go, but I think that robotics

(01:17:17):
and automation companies arerecognizing that, and you're
seeing like some solutions nowcome to the market that are
trying to tear down some ofthose barriers make it a little
more accessible, a little moreapproachable, too, as well. But
yeah, I mean, I guess, to answeryour question, yeah, there
definitely is still a big gapwhere warehouses that have not
gone into automation androbotics

at all. And it's almost shocking, I
think, with you to your point ofseeing all of these different
companies, robotics, companiesthat have all of these really
cool looking solutions. And ifI'm a warehouse owner, like it
makes me want to go and buy awarehouse just so I can use some
of these different robotics foryour robot friends. Yeah, it
seems like a no brainer, but Iimagine it's very cost

(01:18:06):
restrictive. I imagine there'svery much like it. What are
some, maybe some of the otherchallenges of adopting robotics
inside of your warehouse, isthere like, an entry level robot
that you can get?

Unknown (01:18:16):
Yeah, I mean, I think that, you know, I think one of
the challenges is, certainly,like you said, there's cost
restrictions for some systems,but because of that, I think
people just see robot andthey're like, oh, expensive,
right? Like they see dollarsigns, basically. But there are
solutions that are not asexpensive, I think, as they are
perceived to be. And there'sdifferent pricing models too as

(01:18:39):
well, like you can rent themthrough like a RAS model, which
is robots as a service, right?
So there's options there. But Ithink some of the other
challenges too are that, youknow, a lot of operations are
just, they just haven'toptimized fully, right? And
there's a lot of things to bedone within the operation before
you can say, you know, to get toour next level of efficiency, we

(01:19:03):
need to bring in robots, right?
So if your processes are notdialed in, solidified,
optimized, when you bring thatrobot in, it's not going to fix
that, right? It's just going to.
Had a guest on my podcast onetime. It's always stuck in my
head from a couple years ago,and he said that if you're
automating a bad process, likeyou're just making that bad

(01:19:24):
process happen faster, you'renot making it better, right? So
when you fully optimize, likeyou've looked at WMS, for
example, you've looked at, whatare you using to pick how do you
make your just process flowbetter? Maybe it's positioning
inventory in a certain way toget more efficient and be
faster. When you feel likeyou've kind of exhausted those

(01:19:44):
options, then it's really makessense to start to look at the
robotics and automation and takeit to the next level. So I think
there's that's part of the gapthere is that people have not
gone through and done that workyet to be able to to get to that
that level, and then when theycome to get robotics, I mean,
sometimes people will go afterit, and then they're

(01:20:07):
disappointed in the results, andpart of it is because they
haven't done those steps aheadof time. So there's a lot of
people I know that are focusingon that, from consulting
perspective, servicesperspective, to do that, but I
think that there's a lot ofsteps to take before you can
just buy a robot and just plopit in the warehouse and be like,
Okay, get to work.

Yeah.
So what are some of so say youhave your processes pretty much
mapped out, and then after youhave those processes mapped out,
what does that next step looklike you? I mean, there's a
labor shortage when it comes towarehouse workers, so there's a
unique set of challenges there.
How do you know what directionto go into next?

Unknown (01:20:50):
Yeah, that's, I think that's one of the other
challenges, actually, right? Islike, you walk into a show like
this, or show like, like aPromat or a modax, like,
everywhere you look, there'sgoing to be some kind of
robotics or automation solution,and it's all around you, right?
And, and if you're not prepared,you haven't done any real
research due diligence, like,you're kind of like, Where do I

(01:21:14):
even start, right? So I thinkthere's a lot of education that
needs to be done, also in termsof, like, optimizing those
processes and that education, Ithink can take you much further
right. Because if you look atsomething as simple as, like,
moving a pallet. For example,right? There's tons of solutions

(01:21:34):
that can move a pallet, so it'swhich is the right one for me,
right? Like, how do I figurethis out? What do I go after?
First, you know, it's prettyinteresting. In my career, I had
a role, and, you know, we hadvery little automation. We had a
little bit of conveyor that wasit. And my boss told me, We need

(01:21:55):
to automate unloadingcontainers, right? And kind of
like, and as this was maybethree years ago, four years ago,
and the idea of automation andunloading containers like very
new at that time. And, you know,I tried to explain to him that
we're not there, like we have alot of other things that we need

(01:22:17):
to do, or we need to automateother solutions, and the
technology is just not quitethere yet. But I think, you
know, and you know, to theearlier point from, like, a
marketing perspective, right? HeHe saw a video of something from
Boston Dynamics when they werefirst messing around with that.
And that's when he was like, oh,we need to do this, right? And

(01:22:38):
I'm kind of like, it's, it's notreally realistic, yeah, it's not
really realistic for us. Like,it's kind of out of reach at
this time. So I think there is,like, a little maybe mis
misconception there, and and itis, you know, make your head
spin, like, how many solutions?
And when you go and you walk inand you see all these things
moving around, you're like, oh,that could be great. That could
be great. Wait, what's thedifference between this one and

(01:22:59):
this one? And what's the rightone for me? So there really
needs to be a lot of, like, duediligence, research on on that
end to come to the rightdecision. What does that look
like a lot. It looks likelistening to the new warehouse
podcast. So it looks like Nobut, I mean, you know, resources
like that. I mean, podcasts area great way to learn about some

(01:23:22):
of these things, looking onYouTube, connecting with people
that have done it before. Ithink is another great way to do
that. I mean, like, here, youknow, I manifest, if you come in
and you're, you know, maybe amid market three PL, try to
connect with somebody from,like, a larger three PL that
maybe has done some of thosethings that you want to do and

(01:23:42):
learn from them to find out,like, you know, how did you go
about this? Like before? And I'msure they'll tell you, like, you
know, we did this. Don't do thisright? Like, we took the wrong
step here. Like, go about itthis way. And there's a ton of
consultants out there too thatfocus on this, so working with
them is a good way to go aboutit. And I see a lot of people in
the industry now too, that have,that have been on both sides,

(01:24:05):
right? You have people that werein the warehouse were
practitioners. They didimplement implementations of
robotics or other systemsthemselves, and now they go to
work for the end user orsolution provider. So when
you're engaging with some ofthese companies, and you're
you're starting to do somediscovery, I think it's very
important to understand, are thepeople you're interacting with,

(01:24:28):
do they have that experience,right? Like, do they actually
feel what you've been goingthrough? Or have they gone
through that in the past? Havethey really done a project like
this before? And you know, notto say that people that haven't
are not great, but you know thatthat knowledge, if you're just
starting from kind of thebeginning, is really needed to

(01:24:48):
be able to accomplish that.

Yeah, it sounds like it's one of those
things that it just can becomeoverwhelming so quickly, and if
you don't have somebody that hasbeen through that experience
before, or if you do havesomebody that has been through
that experience, and it's anincredibly valuable resource, so
with maybe some of the thingsthat you're going to see this
upcoming week at manifest, ormaybe some things that you've

(01:25:14):
seen, you know, in the past,what are maybe some of the most
interesting high level roboticsthat you've seen that are also
practical?

Unknown (01:25:22):
Yeah, yeah, that's a good question. I think here just
walking through the floor thismorning and yesterday morning a
little bit and seeing who'shere, there's actually a couple
of different solutions that arefocused on inventory management,
inventory control from arobotics perspective, right? So
you have who's here. You haveVerity gather, AI Corvus

(01:25:46):
robotics doing drones, right?
Drone counting Nokia as well.
Here they do drones as well forinventory County, like the phone
manufacturer, yeah, Nokia, Ames,I think they're calling it now,
yeah. So they have a space here,and they're using drones for
that. And then dextry too aswell, which has, like, maybe

(01:26:09):
arguably the tallest robot outthere, the big LEGO model. Yeah,
I want to, yeah, I love it. Allmy Lego models. My son steals
them, so I can't, like, keepthem on my bookshelf, but I love
them. So, so that's one I thinkthat is somewhat low hanging

(01:26:30):
fruit. Route, in a sense,because they're just capturing
data information, right? Sothere's not, not a huge change
that needs to happen there. Insome cases, maybe you need to
switch around your labelingthings like that. And that's one
thing, I think, from aninventory perspective, that can
make a huge impact on theoperation overall. The other
one, I think that is, you know,kind of low hanging fruit, in a

(01:26:55):
sense. Is it just simply, like,is there a movement that you do
every day on a consistent basis?
Right? Do you pick up pallets inthis area and move them to this
area every single day, right, ina frequent basis? That's an easy
thing where, oh, this ishappening. It's repeatable,
right? We go from this locationto this location, so we can

(01:27:15):
automate that, right? So thatpredictability is a good place
to go after that. But I thinkadditionally, actually a good
solution for that, that's hereas well, is with Big Joe. They
have an automated pallet jackused it before. It's really easy
to use, and engages palette. Youkind of teach it where it needs

(01:27:39):
to go, and then you canreprogram it if you need to
reprogram it. But that movementfrom A to B is an easy way to
start, for sure, yeah,

and that's when it to your earlier
point, when you were talkingabout documenting your
processes. That would be anexample of, you know, what a
typical, you know, worker, a isdoing these things throughout
the day. Is that a safeassumption that that's one of
the processes that you would mapout and then try to figure out
how robotics will fit into thatparticular process?

Unknown (01:28:06):
Yeah, exactly. So you want to map out your your
processes, right? Andunderstand, okay, where do we
have the same thing happeningover and over, right? So, you
know, the pallet movement is anexample, right? Maybe you have,
like, you know, a packing area.
You're loading up pallets withpackages that are going to go
out, and then every day, whenthat pallet is full, that pallet
is going to go to the loadingdock, right? So you can easily,

(01:28:27):
you know, use an automatedpallet jack or something to come
pick up that pallet when it'sready, take it over to the
loading dock, right? Because, ifyou have a human doing that,
right, they're essentially justdoing travel time, right? If you
look at, you know, lean and 5sprinciples, like that's, it's
waste, right? So, so where isthat waste happening from a

(01:28:50):
human perspective, and then howdo we address that? How do we
automate? How do we come up withsolutions to do that movement
that's consistent on a regularbasis? If you're doing something
that's like one off movements orthings like that, it's going to
be really hard to find the ROIof the system.

Last year, when I was at this
conference, there were theseskates that you put on the bar

Unknown (01:29:14):
shift robotics,

I think so. Is that something that
is realistic for a warehouse toimplement? Because it seems like
that would be a really easyentry level, even though I was
not that graceful on them.

Unknown (01:29:26):
No, no. I thought maybe you would do like twirls and
stuff. Yeah. No, the knees,yeah, I feel you there
definitely. I think that Ihaven't heard anything from them
lately. I was wondering

if they were a little bit of a
smaller boot. So I didn't want,I didn't know if maybe they, you
know,

Unknown (01:29:44):
yeah, I think they had an interesting approach, right?
Because there's, I mean, there'sa couple of different ways to
look at automation. It's like,how do something that a human
doesn't necessarily want to do,or is just like repetitive or,
how do we use something likethat solution to to make that
human more productive, but alsomore comfortable, right? So, and

(01:30:05):
that was addressing like,getting them to move faster
through through the warehouse. Ithink that is an interesting
concept, but I do think therewas, there would be a challenge
getting employees like to adaptto them right and use them on a
regular basis. So I thinkthat's, I think that's also one
of the points on automationrobotics, is that there is a

(01:30:28):
huge, huge change managementaspect, right? Because there's
a, there's a bit of, like apsychological shift in the mind,
right? I mean, I remember wewere testing in an operation I
worked there. We we brought in arobot to move these carts around
in our manufacturing area, andit was just, just a test. Didn't

(01:30:50):
really think much of it. Webrought the demo unit, and
within an hour of that Demo,demo unit, somebody, somebody
rolled up to me on the forklift,and they're like, Oh, they're
bringing that in to take ourjobs, right? And, like, no, no.
Like, we're just tryingsomething, you know, it's not to
take jobs like, you know, we'retrying to move people like, you
know, we don't need somebody tojust push carts around all day,

(01:31:11):
right? We're trying to make iteasier and, and that was
something like, I was like, wow,we should have, like, talked
about this, that this is goingto be an operation. It's going
to be around, how do we addressthis with the employees? And I
think that, you know, you needto be clear in the the why,
right? Because I think when youstart to bring that in the mind,
does go to, like. Like, Oh, thisthing is gonna take my job,

(01:31:33):
right? But in reality, in mostcases, I think, you know, and
I've talked to companies thathave brought robots in and stuff
and and, you know, they're veryproud of the fact that, you
know, they they haven't letanybody go. They've been able to
move them into more meaningfulpositions, do higher value type
of work, saves their back too,yeah, and it makes them more

(01:31:54):
comfortable, right? Like a lotof employees, like, when they
start working with them, they'relike, they have great feedback,
because they're like, Oh, I'mnot walking as much, like, I'm
not pushing around a heavy cart,like I'm not lifting as much. So
there's a lot of benefits there,but you need to navigate that
very, very like, cautiously,right? And be, be a little
gentle, I guess, you know, andnot just like, you know, one

(01:32:17):
day, you know, all these robotsare just showing up, and
employees are like, what's goingon? Like, you know, it's a robot
revolution. They're taking overall these things. And, you know,
making sure you have that changemanagement process really
planned out is is so vital tothe success of the solutions as
well.

I love that you brought that up because
I remember talking with sixriver systems, and I was on one
of their webinars, and theymentioned how whenever they
onboard a new customer, theymake sure that that's part, that
that's part of the process. Isa, I guess, addressing the human
psychological component of thisrobot is going to take my job,

(01:32:55):
and how do I work with it,instead of seeing it as an
adversary? Now I got time foryou know, a couple more
questions here. I do want toknow what is the most incredible
warehouse robotic item thatyou've ever seen that you're
like, wow, like the Amazons ofthe world, or the Walmarts of
the world, that they have thatlevel of robotics, interesting.

Unknown (01:33:19):
So an operation itself, or like a solution itself.
What's the difference? Well, theoperation, you know, being like
a warehouse that has robots init and stuff, maybe different
solutions, or just a solutionthat I really like

in particular? Well, it may be the
solution you really like.

Unknown (01:33:36):
Yeah. So I got a lot of friends, but I will say lately,
one that really caught my eye.
Recently, there's a companycalled hummingbird systems, so
they're utilizing drones, butwhat we've seen in the warehouse
is that drones have beenprimarily focused on like

(01:33:57):
inventory counting, datacollection, right? So using
computer vision, they havecameras on them, right? Yeah,
exactly. But humor systems isusing drones for picking
actually, really interesting. Ithink, I think, you know, they
have potential, definitely, veryearly on. I think the market is

(01:34:18):
like, a little, maybe, kind oflike, it's very different, like,
from anything you've seen,right? So, it's a drone. This
drone is tethered so, so there'sa wire, basically that's going
along the top of the pickingshelves, and it's connected to
the drone. So it's consistentpower, right? Which you know

(01:34:38):
some of the autonomous drones,the battery life doesn't last
that long, so you have to swapbatteries, or has to land the
charge. So this has consistentpower for picking, and then it
has a little arm that extendsout. And when your products come
in, you put like, a speciallabel on them, and it's a super
strong kind of magnet. I forgetthe scientific term they use,

(01:34:59):
but and it, it latches on and itand it pulls the arm back, and
then either drops it in a box orsomething underneath, or there's
another robot underneath thatwill drop it into which will
then take it to the shippingarea, wherever it needs to go.
And I think that that is areally interesting approach. And

(01:35:20):
I think that, I think thatpeople are going to be, like,
skeptical about it, right?
Because they seem like maybeit's a little slow, or how is
that really going to work, likein scale? But that is, like a
very unique approach that hascaught my attention, I think,

(01:35:44):
and I think the founders, theyhave a good track record
history, so they're co foundersof locust robotics and quiet
logistics, so, so they kind ofknow what they're doing. Yeah,
right. So that's the otherreason I'm kind of like, yeah,
that's not a bad start, yeah.
So, yeah. So that's one forsure. And then actually, I was
gonna answer the question Icaught my eye up here on the Big

(01:36:05):
Board, robust AI. I think isvery cool too, which I would say
hummingbird is, like, like, veryexperimental. I would say,
right, robust is definitelysomething that's like, I think,
really accessible for peopleright now, they have something
called Carter, which I think isso it's a cart, right? Which is
the perfect name for a cart,right? Carter, so it is

(01:36:26):
autonomous. Business and alsomanually movable, right? So, so
it is basically on a robot. It'sa pick cart, put items to it, or
take items off of it. You cansend it autonomously to go where
it needs to go, or, very simply,it has a handle. And I haven't

(01:36:46):
played with it in person yet.
I'm very excited to play with ithere, because I know it's here,
you just engage with the handle,and it automatically switches to
manual mode, and you just canmove it real quick or move
forward whatever you want to do.
And I think that's a realinteresting solution for people
that are maybe just looking toget started in automation and

(01:37:06):
kind of easy, easy, accessible,gives them more comfortability
working around them, and, youknow, real flexible solution,
yeah,

well, that's, I mean, this is one heck
of an episode, because wecovered a lot of ground in a
very short amount of time, but Ifeel like we accomplished then
you that's why you're apodcaster, because you brought
it back to the entry level ofhow someone can get started.

Unknown (01:37:30):
Yeah, we got to cover the whole audience, right? You
have

to, you have to go over the whole
ecosystem. So Kevin, this wasfantastic. Where can folks
follow you? If they're notalready following you, you
should be following him. Surethe show all that good stuff.

Unknown (01:37:43):
Yeah, so new warehouse, we're on any podcast platform
where you find us. We're doingmore on YouTube too. So you can
follow us on YouTube as well, orjust head to the new warehouse.
New warehouse.com is ourwebsite. Kevin, thank you so
much. Thank you so much. Great.

Blythe Brumleve Milliga (01:37:59):
Repeat.
I got a little intro I did. Ikicked it up a notch. So let me.
Let me read through my littleintro for drone logistics, the
reality versus the hype. And itsays For buzzing through last
mile deliveries to scanningwarehouses. This tech isn't sci
fi anymore. It's real. It'sscaling, and it's getting funded
like crazy. So where drones aremaking the most impact right now

(01:38:19):
is around last mile delivery,warehouse, inventory,
infrastructure, monitoring andthen some niche use cases in
agriculture. We have talked Idon't know if you remember a few
episodes back where there weredrones that were helping
tugboats tie different lines tothe ships that are coming in. So
that was something that Ithought was interesting. So

(01:38:42):
that's happening in the nicheuse case in the maritime sector.
So for last mile delivery, acouple little highlights zipline
you probably have seen. Have youseen them at all on your
Twitter, slash x feed?

Grace Sharkey (01:38:57):
Well, I've been following them for years because
I know that they started off in,I believe, Africa, because of
the regulations, right?

Well, they started off in Ghana, and
they were doing blooddeliveries, and so that was,
it's interesting to see, like,kind of how some of these
companies get started. Theystart off with, like, disaster
logistics, or like medicaldeliveries. These really, like,
time sensitive shipments, butalso high value shipments. And I
think that's probably thebusiness model for some of these

(01:39:26):
companies, is that they startoff in the high impact areas,
you know, kind of tweak somethings, and then from there, it
becomes more investable to theseother VCs. So zipline is one of
them. What have you seen fromthem?

So, yeah, like you said, they did start a more
of the medicine, pharmaceutical,maybe side. I think a lot of
drone companies jumped in rightaround the pandemic with FAA,
like, I guess regulationroundabouts in order to get
enough line in so they could getregulation as well. The one

(01:40:02):
thing I believe, the last time Ihad really looked in the zip
line, they they're doing a lotof work, if I remember
correctly, in Texas withWalmart. I believe Jack Dalio
one of my favorite guys over atflying magazine, who also
writes, of course, forfreightwaves as well. He always
gets to go on those fun toursand see them in action. And I

(01:40:24):
always get really jealous of himas well. But I do know I think
Walmart is has invested, or atleast started using zipline as
well. And they have their dronehas, like, definitely changed
too, if I remember correctly,since when it first came out,
like it was more of like this,almost like a mini plane looking
structure, where now I feel likeit's more of like a bus looking

(01:40:48):
situation, and has, like, it's alittle bit more square, boxy. So
that's been kind of cool,

like a copter, where they can pass off
vertically, yeah. And then I'venoticed too, with with zip
lines, they they use the samekind of methodology that, like
aircraft carriers will usewhenever a plane is coming to
land on an aircraft carrier. Youhave this. It's called the
adjusting cable, I believe, andso it's literally a cable that

(01:41:14):
is obviously very strong, andthat it catches the plane as
it's landing on the carrier. Andso they have something similar
set up in Texas, or maybe it'sArkansas, I believe, with
zipline that they have, but it'sin the air. So they have. These
two kind of sticks that arepointed in the air with a line

(01:41:35):
with a string that's connectingthe two sticks, and it catches
the drone as it's landing. Sozipline definitely is one of
them. They have 600 plus dailymedical flights in Ghana,
serving 12 million people. Ibelieve they're also doing
deliveries in Rwanda. So that'sto your point. That's really
where they kick things off,Alphabet slash Google, which or

(01:41:55):
is the parent company to Googletheir alphabets, wing, it's
300,000 global deliveriesthey've done so far. They're
doing 1000 deliveries a day inAustralia. Walmart, you said
that they invested in zipline.
But I believe they also havetheir own drones as well. It's
been kind of a, I think, forWalmart, it's kind of been a

(01:42:17):
trial period, because I knowthat they were trying to do
deliveries via drone in Florida,but then they just stopped doing
it. And there's lots of factorsat play there. So there's maybe
we should get into a little bitof the, I guess, the challenges
around it. But first, Shenzhenis another one. That is the food
delivery in Shenzhen is inChina, is already normalized

(01:42:40):
there. I don't know if you'veseen any of those videos. It's
kind of incredible. So while I'mtalking about it, they have
almost these, like kiosks, likevending machines all over
Shenzhen. Shenzhen is like theSilicon Valley of China, and so
they have all of the driverlesstaxis in there, by BYD, the
driverless cars, but dronedelivery for food in particular.

(01:43:03):
Like, if you are watching someof these tourists that go over
there, it's like a vendingmachine that has a landing pad
on the top of it, so you canorder food from an app. Like the
demo I saw, they were orderingfrom, like a KFC, so they placed
their order in the next, likeclosest, little vending machine,
kiosk thing you can either orderat the kiosk or use your phone

(01:43:25):
in order to order and pay. Thedrone gets your food gets
delivered in, like, less than 30minutes. They drop it off in
it's almost like their owncontainer system that they
develop. So, you know, thecontainer system that got
developed for the cargo shipsreally streamed line a lot of
deliveries. And that's what thisreminded me of, is this drone

(01:43:46):
that was dropping off a box thatwas meant for food. And it's
specially created, has littlehandles on the top of it that
the drone latches onto. Thedrone lands onto the vending
machine in a specific spot, thefood drops down into the vending
machine. You put in a keypadcode, and you take your you take

(01:44:06):
the box out, and then you takeyour food out of the box. It's
all sealed and properly. So evenif it's a drink, you don't have
to worry about it spilling,because there's like a special
seal on it. You take the boxthat it arrived in, you pull
like one side of the box, and itfolds up instantly, and you just
drop that box right back intothe vending machine. Nearby,
they have a landing in a takeoffarea, so there's a couple like

(01:44:30):
humans in the mix, where thelanding and the drones are kind
of taking off from, and theyhave batteries that are there as
well. So they can kind of switchout the batteries. Because the
biggest hurdle, or the biggestchallenges, which we could
probably talk about right now,is weather related and then
battery related. So these, thesetwo gentlemen were like
monitoring all of the drones,monitoring their power level,

(01:44:52):
and then also switching out thebatteries for the drones that
were looking a little weak inthe charging department. And so
it's just this whole like systemthat they have set up and the
drone deliveries, I mean, youcan order from all different
kinds of restaurants, all withinthe app, and it all gets
delivered, like right next toyou, versus, like a zip line,
where it's more custom, likeit's coming right to your house.

(01:45:14):
And so those were the, I think,some of the more interesting
things that I've seen, like outin the wild when it comes to
deliveries. Have you seenanything sort of interesting
like that?

That is really cool. I haven't have, I to say,
Have I seen any of thesephysically? No, we, I'd say,
here in Michigan, we actuallydo, just in Ann Arbor yesterday,
and they, they have a lot moreof the on the road robots,
because the town physically has,like, set up its infrastructure.

(01:45:50):
It's, it's kind of annoying as,like, as a driver, because
you'll see, like, what lookslike a bike lane, and then
parking for on the street, andthen a regular lane to drive in.
And it's so they've, like,created really great lanes for,
like, robot those type ofdeliveries. But I do think it's

(01:46:10):
fascinating. I know that Ohio, Ithink Kroger is working with a
company DEXA drone Express,which is a female founded drone
company. So go check them out aswell. I think they're a venture
53 portfolio

Blythe Brumleve Millig (01:46:26):
company.
What are they called? DEXAdrexa?

Yep, D, E, X, A.
Blythe, they're, they're bigcustomers Kroger, if I remember
correctly. So the same thing youcan like, because I remember
they had sent me, like, ifyou've ever been to Kroger, I
really any grocery store, right?
Sometimes you get those, like,coupons after your receipt,
right? And there's a receiptfrom Kroger that you get now

(01:46:51):
that's, like, a free DEXAdelivery. So like, you can, you
know, just get a free dronedelivery if you want. Yeah,
there you go. Perfect. So I'veseen theirs, and theirs is,
like, more of, I believe, whatthey're calling, like, as a
service. So like, their thing isthey'll create the drones. It's
almost like it could almostlike, kind of be like a Waymo

(01:47:16):
experience. So like, they build,

like a software or they build hardware.

I believe they have the hardware too. And then
let's say, I say, oh, for aliving, I want to maybe more of
it's an Amazon experience,right? For a living. Maybe I
want to own a fleet of thesedrones, and I'll make
deliveries. Then you can, like,purchase the fleet through them,
just like you would Amazon,right? Like you can purchase,

(01:47:42):
like, a fleet of trucks, andthen your business is
dispatching those trucks andmaking sure they operate. So
they kind of set up the samething there, but yeah, they're
doing the same thing withKroger. And I just think it's
fascinating. I What is alsointeresting, though, is like,
for, like, the zip line thing,like, how they set up those
experiences, like you said inChina, right? They have kind of

(01:48:05):
that, that booth situationthere. What I've noticed, like,
from the Walmarts in particular,is like they they almost set up
like, a whole, like landing padnext to the store that's like
gated off and like, instead, theperson will bring the groceries
or those items into this likegated off, like zone, and then

(01:48:25):
they take off. So it's alsofascinating to kind of think,
like, for instance, I thinkWalmart came out that they're
starting to do dark stores,right, these locations that no
one physically goes into. Youjust go there to pick up your
groceries. So it's like awarehouse. It's like a
warehouse. And I just, I wonderif, like, that's what they're
going to do with these, like,dark stores too, is like, maybe

(01:48:48):
use the roof or, like, somewhereon that property, like to do,
also the drone deliveries.
Because I think, right, when youkind of talk about, like,
regulation, I'm alwaysinterested in, like, how do you
set these up around, you know,busy areas, areas like, with a
lot of trees, a lot of cablelike, what is that experience
like? And so when I did see thatthey're starting to dark stores.

(01:49:10):
I'm like, is that part of thisdrone experience too? So I think
it's cool though it's startingto work. People are using it. I
just I haven't been in an areayet where you can accept

one, Yeah, same. I've been trying,
even when I've gone to Austintwice this year, and I tried so
hard to get a Waymo to pick meup, but I think they're just
limiting it to people who have,like, Austin addresses or Austin
home addresses. So I was very, Iwas very mad that I wasn't able
to get into a way, because Ireally want to experience this

(01:49:44):
kind of technology, and it'sjust not available in my area
yet. And and back to Walmart'slike, drone kind of experiments,
like, there's a lot ofexperimenting going on, because
the there's the challenges thatexist are the battery power, and
then also, from a weatherperspective, if it's raining, if
it's dark, if it's foggy, thatcan all mess with, like the

(01:50:07):
drone sensors and deliverymechanisms. There's also
different ways that, you know,deliveries can be made, like
zipline actually uses, like, atether system to drop your
package. I mean, Walmart andAmazon, when they were first
starting to test these, theywere literally just dropping the
package in someone's backyard.
So, I mean, you know, Godforbid, you know, have something

(01:50:28):
fragile in there. It's notgonna, not going to work in that
system, but there's a lot ofopportunity here, because
Amazon, they, I think, in theirown study, when they were
piloting this program, said that85% of their deliveries are five
pounds or less. So that is amajor drone unlock, because for
one of the challenges thatexists right now for a lot of

(01:50:52):
drone deliveries is that theycan't carry a lot of weight.
That is getting improved. So Ithink there's some drones now
that can hold up to 50 pounds.
So groceries might not be youknow that likely, especially
depending on what you'reordering, it's probably going to
be a certain weight limit. Ifthat you know that, I guess that
software allows you to, kind oflike, when you're in Amazon, and

(01:51:15):
you can kind of pick, oh, can Iget the same day delivery, or
can I match it to, you know, mydelivery of the week day? So I
would imagine that that kind ofcapability would be coming
sooner or later. But as I'mtalking right now, it's pouring.
Training in Florida so well.

And it's funny too to like, kind of think
through that problem, becausegoing back into like, the
technology side of it, right,like, in order to solve that,
you theoretically have to go inand every skew that you are
moving decide whether or notthat item, right, could be

(01:51:55):
technically shipped, right,whether it's based off weight,
how fragile it is, etc, and thenbuilding your system so that I'm
sure you've seen this, right, ifyou like, this happened to me at
Dick's the other day, right? Iwas trying to purchase a number
of things in store, and at theend of it, it was like, we can't
do this in store because thisone item is has to be just

(01:52:20):
shipped directly, right? Andlike, so creating the rules in
your system to, like, be able toknow, so it is, it is
interesting to think, like,Okay, you could even, you could
have the drone ready, you couldyou could pass all the weather
situations you get. But there'sstill, I think, just
connectivity issues of whatexactly can go on there. And I

(01:52:42):
think that's why they've focusedso much on kind of we're just
going to stick to medicines,right, like dropping Tylenol off
on your on your porch, right?
Something that we all know canhappen, can fall from the sky
and probably be fine, comparedto sending, like, of course,
like I've seen, I thinkStarbucks, though, was like,
delivering in drones. Weren'tthey, like, or something? There

(01:53:02):
was like, a coffee company, andI was like, see, that's
something I don't want deliveredby a drone.

And it's interesting you say that
because, in the Chinese way, Imean, obviously they're far
ahead, because DJI is their bigdrone manufacturer. They
manufacture, I want to say overit's not close to 80% but I know
it's over 70% of all the world'sdrones. So they are like the

(01:53:29):
king, as far as likemanufacturing them. But even
with, you know, a lot of theirdeliveries that they're doing
with those sort of, like kiosks,vending machine type places, the
the drinks that they weregetting were sealed, so they
had, like, almost like, like ayogurt in, like, that kind of
seal on top of the yogurt on topof your drink, so it wouldn't

(01:53:51):
spill it all. And so I imaginethat there's going to have to be
some coordination for like aStarbucks or for some of these
other companies, maybe not hotdrinks, but cold drinks, for
sure, because I think thepackaging was also insulated
from like the sun or heatexposure or anything like that,
kind of messing up your food.
But when you think about howmany like DoorDash deliveries,

(01:54:13):
Amazon's 85% of their deliveriesare five pounds or less. Like,
how much are we wasting withjust general traffic on the road
emissions from these last miletrucks like that? There's a lot
of waste going on that thismarket could absolutely
capitalize on, and I think it'sgoing to be, let's see. I think

(01:54:35):
I had in my notes 61 billion. Adrone logistics market could hit
61 billion by 2029 and it saysdrone delivery cuts CO two
emissions by over 90% versusvans, like delivery vans, so
there's definitely someopportunity. But to your earlier

(01:54:56):
point about like regulatoryissues, in order to even pilot a
drone, you have to have what'scalled, like the FAA 107 rules,
which is the US commercial droneuse is regulated by weight,
altitude and line of sightlimits, so the drone can't leave
your eyesight under that rule.

(01:55:17):
Now they're currently trying torework that rule. It's, think
it's loosely being called likerule 108, so then, because
that's where the fleetmanagement software is going to
come into play, which I think issuper interesting if you have an
entire fleet of drones, becausemuch like trucks, like you have
to know where they're at. Youhave to know their maintenance
schedule. You have to know theirpower life in you know where are

(01:55:40):
they making deliveries, who arethey making deliveries to, and
so you have to have all of thatinformation as well for your
drones, just like you do foryour trucks.

Yeah, that's why I when I think, when I met the
the DEXA company like that wasmore of their focus was what
you're talking about, like,almost setting up people.
Because I agree with you. Ithink that market for Drone
Experience is big, just like,again we saw with Amazon and
kind of these, like smalldelivery vans, etc. But how do

(01:56:12):
like we deploy that at scale?
How do we, you know, find thesepeople who can test and qualify
and then run these drone, Iguess drone have to

get a license. They also have, um. I
was listening to a podcastearlier today that they have
these, like, it's like a digitallicense plate for any drone that
is flying in the country, so youcan avoid collisions. You have
to fly at certain like, there'sgoing to very soon be like,
flight paths and flight lanesfor drones. And there's also the

(01:56:50):
the factor around, like, tryingto be less of a nuisance,
because the public, especiallywhen you're talking about in,
like, the public atmosphere,they don't want to hear drones
flying around. They're stillincredibly noisy. There are, you
know, the manufacturers areworking on, you know, reducing
that noise level. But thenthere's also, like, the privacy
level too. Of you know, peoplesee a drone and they

(01:57:11):
automatically think like theirprivacy is being invaded, and so
you have to sort of monitor thatperception as well. But there is
one place where you don't haveto worry about any of this, and
that's inside a warehouse, andthat's probably like the best
use case for drones right now,because there are self flying
drones are reducing manual laborby scanning shelves and barcodes

(01:57:31):
inside these massive warehouses.
IKEA uses 250 autonomous dronesacross 73 warehouses and in nine
countries, even in the dark. Sothey're doing like inventory
counts in the dark. I had gatherAI on the show about a year ago,
and they talk about how theyhave, like, charging pads inside
of their office, and then thedrones will take off from the

(01:57:56):
charging pad, go do theirinventory counts, and then
return back to the the chargingpad. And it's all internal. They
don't have to worry aboutdifferent licenses. They don't
have to worry about, you know,weather patterns and things like
that. It's all kind of, youknow, just built in. So there's,

like, how you can maximize space in a warehouse,
knowing that you can. I mean,clearly there's probably some
fire hazards in this, but youcan build shelves as high as you
physically can, right? Becauseyou don't have to worry too
much. Well, my drones are goingto be counting up there. It's
not humans I'm sending to thetop of these things, right? And

(01:58:38):
and again, you can count at anytime of the day. You have to
worry about having a third shiftto do any of that. I think
that's what's really cool aboutthe drones inside, is it just
like, makes so much sense, it'ssuch a state. It's almost, it
feels a little bit like theopposite of the problem with a
drone outside, where it's like,oh, this is actually helping
with a lot of safety initiativesinside, human safety

(01:58:59):
initiatives, right? And at thesame time, like just being able
to pack and pick and find itemsquickly, I think is, is huge. I
mean, I can't think of, you knowhow often things just get lost
in a warehouse, and to be ableto say, Listen, send the drone
out. He'll sweep this place inminutes, and we'll know exactly
where it is, compared to liketrying to manually find

(01:59:23):
something like that. I'm surethere's, I'm sure there's
warehouses all over the countrywho are losing product or have
sometimes a significant lossjust because things get lost in
their warehouse. So just to havethis, like being that can easily
maneuver through, I think it'sreally cool that, yeah, that
team's awesome. I think the lasttime you talked to him, they

(01:59:43):
just got that warehouse.

I was wondering too, because I used to
work at Costco, and we used tohave inventory counts twice a
year, all hands on deck. It wasnot a you, if you worked at that
company, you had to be there oninventory night. You were
assigned a certain area, and youhad to count everything by hand.
And so it was just all hands ondeck kind of thing, and you have

(02:00:07):
to do it twice a year. So I'msure that's the case for you
know, or was the case for a lotof other companies that aren't
utilizing, you know, technologylike this. So I'm, I'm curious
if the the Costco workers outthere, if anybody's listening,
chime in and let us know howthey're doing inventory counts.
Because I would love to know if,because, I mean, Costco is a,
pretty much a warehouse, and sowhen you're inside there, I

(02:00:30):
wonder if, you know, maybethere's something that they
could do with, like their own,like inventory counts via drone
that are happening at night. Soit doesn't have to be like the
all hands meeting at the end ofthe day. So I did want to
highlight, you know, some ofthese, like GPS tracking
autonomous systems. So there area couple of them, like DJI. We

(02:00:51):
talked about them. They have aflight hub, as far as, like a
fleet management softwareoffering. There's another
company called Air Data, there'sanother company called aloft.
There's other like battery andlike health monitoring. So think
like maintenance for your drone.
It's called Flight base dronedeploy, or air data, UAV, so
there's a few companies therethat are almost like your fleet

(02:01:13):
management software, which Ithink it's just super cool that
we're watching, like some ofthis stuff, like unfold, and
what are they learning from, youknow, experiment logistics,
experiments across the world,and then how it's kind of
different, or the, I guess theapplication is different. For
all different sectors of theworld. But kind of, when I was
watching the video of like theChinese drone delivery, because

(02:01:35):
they're so far ahead when itcomes to drone manufacturing and
just drone deployment, it wasinteresting to see, like, what
is working in their society. AndI kind of think that with those
kiosks, I don't think we're toofar off from, you know,
apartment buildings or even yourown home, like having a little
helipad for drone deliveries,and that is just a marked space

(02:01:57):
for the drones to make thedelivery and they drop those
packages off. And you know thatthat's your little landing pad,
not just for buildings and notjust for kiosks, but for your
house as well.

Yeah, poor gig workers, right? Just No, I think
it would be cool. I just, andit's, I think my well, and this
is more of a societal issue. Myone fear with it is that, and
this, again, is more societalis, I think something like this

(02:02:30):
can be really helpful for areaswho have food deserts, right?
But I also think, at the sametime, those areas also probably
have issues with drone flyingregulation, because they're so
compact. Usually inner cities,right? Are a little bit more
difficult, I think, to withstandthat. So that's, that's my only

(02:02:50):
fear is, like, is this going tobe something that you more of,
like a suburb thing, where youhave that space to kind of take
off and maneuver around,compared to, like an inner city,
who could probably really usethat technology to actually,

like fresh produce or something like
that, like being able to getthat delivered? Yeah, I don't
think we're too far off.
Hopefully. I mean, it just, itdepends on the budget.

It could be a situation too, where it's like,
you're saying you almost maybe,like a block or two, share one,
and that can help, but it willbe fascinating to see how it
starts to explode more. And Ithink once we have more states,
I think accept, accepting of alot of this technology, we'll
see, see more of it too. I thinkthis also the sad side of this,

(02:03:38):
though, is my poor state, wholoves to see snow and rain
throughout the year, is probablygoing to have a little bit more
difficulty deploying thatbecause of weather purposes,
compared to states like yourselfand stay a little bit more dry.

Well, it's literally funding outside
right now we're at the time ofthe year in Florida where it
rains every day. So what arethey going to do about a state
like this where it's rainingfrom like one to 4pm or has a
high chance of rain betweenthose time frames? Yes, maybe
more late night deliveries, ormore early morning deliveries.
That's probably a better, Iguess, method to take, but it

(02:04:15):
is. It is interesting also tosee how they're approaching the
style of drone that they'remanufacturing, because I just
saw, and I'm blanking on thename right now, but I just saw
this drone maker the other daythat is starting to mimic birds.
And so instead of having like, avertical takeoff, they kind of
with birds, they kind of jump totake off, adding almost like

(02:04:38):
little bird type legs to thedrone, so it'll jump, and then
it starts taking off, like, giveit a little extra oomph so it
doesn't need as much battery inorder to Take off. Because once
it takes off, it's, it's much Ihow do I say this? It's not as
impactful on the battery load ofthe machinery if it's already in

(02:05:01):
the air, but it's the initialtake off that is, is challenging
of a situation. And it even,like, this little drone had
wings as well, and so it was,like flapping, like, if it
wanted to, like, hop oversomething, then it was, like a
little, little bird leg jump andthen, but the wings would flap
too as it was jumping. So Idon't know how practical that is

(02:05:23):
for, like, delivery andespecially carrying, you know,
payloads like that, but it issomething, it's something
interesting to

watch totally.
And for all the people out therethink birds aren't real, just
helped you support that theory.

So are there really people who think,
no, I don't. Oh god, you know,I'm about tired of conspiracy
theories and news and everyconspiracy theory I feel like I
talk about it comes true anyway.
So is it even a conspiracytheory? And, you know, I

will say, though the whole drones around New
Jersey thing, it is funny thatyou talk about the type of
takeoff, because the whole,like, weirdness about some of
those, like, lights and stuffwas going back to write the
science of kind of propulsion,and if we have a capability of

(02:06:17):
being able to kind of take offin a different type of
propulsion form, and that's kindof like what you're talking
about, right, is like, but thatkind of technology. G right? Can
be it's, it's interesting tolike theorize if, if we do have
it as a country, right throughthe lens of that conspiracy

(02:06:39):
theory, because that would bevery helpful for this exact
problem solving scenario. Sohope maybe the conspiracy people
are right, and we can get thattype of propulsion off of these
drones and make them a littlebit easier to to get off the
ground and going.

I would love to see some of these
experiments take place in like,the pouring down rain of what
we're experiencing now, likereal magic, or just dive into
the ocean or something like,give us some goods.

You do actually make a good point, though,
because in a day like when it'sraining out, I don't want to go
the store. That's the day I mostlikely want to use a drone.
Like, when it's beautiful out, Iwant to leave my house and,
like, go to that. So really dohave to figure out this weather
situation.

Can you hear the thunder?

Honestly? I thought that was your stomach.

Unknown (02:07:28):
I know she learned. I was like, I did start listening
to and I was like, and I knowthe listeners can hear it,
because I can hear it.

Yeah, it is. I'm not hungry. I ate
right before we startedrecording. So we're good there.
Great Sharky back with us fromfreight waves the Blythe
Milligan here we are proudlypresented by SPI logistics, and
we're going to talk aboutbuilding roads and ports in
South America. So this was sucha fun story for me, personally,

(02:08:03):
to do a lot of research on. Idon't know if you could tell in
my voice, and I will

say, I annoy you what you're talking about, but I
also was like, Oh, this is veryinteresting.

So I just so, I so I've been
endlessly watching YouTubevideos for a while, been keeping
notes on this specific topicbecause, I guess, as a
backstory, my first trip out ofthe country was to Peru. Peru is
a country that's based in SouthAmerica. It has one of the world
wonders with Machu Picchu. Itwas a trip that, honestly, just

(02:08:36):
changed my life. I literallythink about that country at
least five times a week. It'sjust so I got, you know, proof,
no, I don't have the Peru stuff.
We got the we got this gentlemanright here, I'm blanking on the
name, but that got that Peru sogreat country. Love it. But what
I noticed when I was there isthe road construction and the
they have such they have Andy'smountain range that is located

(02:08:58):
there, and also in othercountries as well. But the roads
are so insane. There's actually,you know, YouTube documentaries
that I'll put a link in the shownotes that talks about how
dangerous these roads are.
There's a road in in Bolivia,which I'll talk about here in a
little bit. It's literallycalled the road of death, just

(02:09:19):
because they're so dangerous todrive on. But the reason that
this story came about is that II always kind of have, like, my
eyes open for anything like Perurelated stories, but there is a
new South American port calledin Peru that was just opened,
the shanka Mega port that wasjust opened. And if you don't

(02:09:41):
know the geography of Peru, it'sbasically on the west coast of
South America. And so for a lotof shipments, especially from
China, that is a direct traderoute for China, and so that's
why they have heavily investedin South American
infrastructure, and this is oneof the biggest ports in the
country that just recentlyopened up. So I guess, to give a

(02:10:06):
little bit of background of whythe shanka Mega port matters is
because if you think back to ourArctic shipping episode, we
talked about, sort of the newArctic Silk Road that China and
Russia, you know, some othercountries are trying to explore
to develop that trade lane upinto the North. Well, there's

(02:10:27):
also other trade lanes thatChina is also trying to
establish, to really diversifytheir supply chain routes and
their trade routes, so they'renot going to get stuck on the
West Coast port congestion orthe Panama Canal, if it has, you
know, similar drought levels ofwhat we've seen. You know, it
just happening over the lastyear. So it's, they're part of

(02:10:50):
their Belt and Road Initiative,where the the shanka aligns with
China's push for new tradecorridors. China is South
America's largest tradingpartner, making up 20 to 34% of
trade for individual countries,meaning that something like
Chile is like 30% of their tradeglobally is with China, and so

(02:11:16):
these direct corridors, andsetting up those direct
corridors are vitally importantfor China. For who, you know, I
know a lot of people don't wantto hear it, but they control the
overwhelming majority of theworld's manufacturing. So if
there. Goods, then they need tobe able to protect these trade
routes. And so it's called,essentially, the great

(02:11:36):
Rerouting. And this comes from agentleman that teaches over at
Texas A and M, John PaulRodrigue, and hopefully I'm
pronouncing that name right, buthe just came out with this
phrase called the Greatrerouting, and it's how China is
diversifying all of their traderoutes. And it's not just from

(02:11:59):
the Arctic per or, I guess, theArctic perception, but then also
from other different areas ofhow they can avoid the Strait of
Malacca, which the Strait ofMalacca is in is a little bit
south of India. But the Red Searoute, in order to get through
to the Red Sea, to get to theSuez Canal, China has to go

(02:12:20):
through the Strait of Malacca.
And that is a very you know,historically, that is very
challenging for them, because ofall the drama that China has had
with Japan, they've had with thePhilippines, Vietnam, you know,
other countries in that area,India, of course. And so that is
a major choke point for them.

(02:12:41):
And so he talks about how JohnPaul Rodriguez, he at the Texas
A and M professor. And then heis also, I think he has his,
he's the Department of maritimeBusiness Administration. So stop
me if I'm, you know, getting alittle too far ahead here. But
this particular screen, let'sbring up this image, and it

(02:13:02):
shows how China has beenrerouting its goods based on
everything that's happened overthe last handful of years. And
so basically, what they're doingis they're rerouting a lot of
their shipments to avoid the RedSea crisis, which is what you
see here, the Panama drought,the Suez blockage that happened
back in 2020 famously, but allof these different crises that

(02:13:26):
are happening across the globeand how China is trying to deal
with, you know, shipping theirgoods out, and really the rest
of the world is trying to dealwith shipping their goods out.
And so with this port inShanghai, it offers faster,
cheaper routes for especiallyfor Brazilian goods, because
Brazilian goods can reach Chinanow two weeks faster than using

(02:13:48):
the Panama Canal. So there'salso some strategic benefits as
well for the China Peru sort ofteam up here that it reduces
Peru to China logistics cost by20% and it's also expected to
generate 4.5 billion annuallyand create 8000 jobs in South
America. And that comes from Gcaptain, which Sal marcogliano,

(02:14:10):
number one fan. He has such agreat channel. It's called
what's going on with shipping.
He did a video covering this andcited G captain for a lot of
these stats. I'll put a link inthe show notes in case you want
to watch it, because Sal justgives such a great he's such
content goals, in my opinion, hejust, he gives so much knowledge
and perspective on a lot ofthese different things, but I'll

(02:14:31):
get into some of the keychallenges, but especially when
it comes to geography andinfrastructure gaps. And I got a
lot of B roll that I'm ready totee up. So anything before I
start teeing up this B roll,because I'm that was just sort
of setting the stage, and nowI'm ready to get into the nitty
gritty of it.

I love it. Yes, no, it's, I think let's get into
the the nitty gritty, becauseit's, this is, like, The
fascinating part too, especiallywhen we get to the train route,
to the railway route. I thinkthat's interesting in
particular. I'm glad

you brought that up. Oh, is that
where we're going? That is oneof the first things

corridor, is that where we're headed?

I didn't know. I didn't know that
part, but yeah, when we talkabout, you know, some of the
challenges that are going on inSouth America, it is mainly tied
around infrastructure. The roadsare very challenging to be built
outside of the great Inca Trail,which I'll get into in just a
minute. But there's, there'sroads, there's the Amazon River,

(02:15:36):
then there's also the rainyseasons, then there's, there's
so many it's a continent, sothey have all different kinds of
weather that are going ondifferent elevations of weather.
So the geography of the AndesMountains is just insane to
because I guess I should backup. It's not just the port
that's on the west coast ofSouth America. It's essentially

(02:15:58):
trying to connect Peru toBrazil, because Brazil and China
are major trading partners witheach other. And so what now,
what they have to do is Brazil'son the east coast of South
America. And so they have toeither go around the southern
tip of South America, which isvery dangerous waters, you can't
necessarily, you know, even takea shift through those waters

(02:16:21):
for, you know, six months out ofthe year. So it's not reliable.
And then when you factor in thePanama Canal and a lot of their
drought issues that they'vefaced, you know. In the last
couple years they are, they havealleviated that, I believe
they're putting in, you know,some redundancies in order to
help, you know, fix their theirwater flow issues in that
region. But still, that's enoughto probably shake, you know,

(02:16:44):
somebody else shake anothercountry to say, like, hey, we
need to develop another solutionfor this. And so the idea is
that they're going to have thismega port on the west coast of
South America in Peru, and thenthey can build some train lines,
and then they can also buildsome roads to go through to
connect Peru and Brazil from aninfrastructure perspective. But

(02:17:06):
you have a little problem withthe Andes Mountains in the way
China apparently, has a lot ofexperience in building these
train corridors, especiallythrough mountainous areas. I
think they've done it a lot intheir own country. And so
they're helping Peru, and aspart of their Belt and Road
Initiative is to help not only,you know, South American
countries, but also Africancountries as well. You know,

(02:17:29):
there's, you know, I could alsoget into a little bit of, like,
there's a little, I don't wantto say, shadiness going on, but
essentially, what China does isthey offer the money to start
these projects, and if thecountry can't pay those bills
back, then China is able toseize those infrastructure
assets. And so that's, yeah,it's a win win for them. They

(02:17:51):
can get additional trade routes,or they can just take your take
your stuff,

very capitalistic of that.

So this is a photo of the rail
lines in Argentina. So this isjust a very small sample size.
And so in 1990 you can see allof these rail lines that existed
in the country. And then youfast forward to 2014 which is
obviously 10 years ago, but it'sdrastically decreased. What

(02:18:21):
would you say? Maybe 10% of theexisting rail lines that were
around in 1990 existed in 2014the reason, and from, you know,
kind of reading and trying tounderstand what's going on with,
you know, why would these raillines decrease so much in such a
short amount of time? And thereason for that is for, you

(02:18:44):
know, Argentina, just itself asa country, has had a lot of
issues, changing of governments,changing. Anytime you have a
change of government, you havechange of priorities. So these
industries, especially fortransportation, have gone
through several phases of beingregulated versus being
unregulated or deregulated. Andso when you have that situation
take place, then somethingthat's like the rail lines,

(02:19:07):
which were governmentcontrolled. So they regulate
them, and then they unregulatethem. Well, they fall into ruin,
and the the maintenance of them,you can't keep up with them, and
that there's no money to keep upwith them. Yeah, there's also an
issue of new construction costs.
Mother Nature is a big barrier.
So that in Bolivia, which is thecountry to the east of Peru, has

(02:19:30):
a lot of very similar geographicconcerns. And so let's see the
road of death. I'm going tobring up the road. It's road of
death time. What like a greatalso, road of death time.

Phrase Happy Thanksgiving. It's the road of
death time. Oh, or shook themout.

I just hold on, the video is not
available anymore. No, no sugar.
You talk. I'm gonna find it,because this is not gonna get
around me. So what

are the you're not getting through in this one
China, we're finding the video.

Yeah, we're gonna find the road of
death. Free documentary, road ofdeath, and I'm sure it was, ah,
here we have found it.

Nice try. Nice try, trying. Nice try. You tried
again. You tried again. Butwe're going to figure it out.

Alright, let's they thought they could
hold us back.

Yeah, no, this is a land of the free content over
here China.

It's kind of ironic talking about
YouTube, and I think they justtook down a bunch of other posts
recently, but that's that's astory for another time. All
right, let me bring up thisvideo. And this comes from free
documentary. And they basically,they have a bunch of people that
they're following in Bolivia.
One of them is a truck driver,and so to sort of set the scene

(02:20:58):
like truck driving, obviously,is a very dangerous job here in
the United States, significantlymore dangerous in South America
because of all the issues thatthey're dealing with. So all
that to say. I've talked enoughabout this. I'm going to hit
play on this video, and it'sgoing to play for a couple
minutes because it's reallyinteresting stuff.

Unknown (02:21:21):
There's no there is hardly a single road in Bolivia
that he hasn't traveled. Oh,yikes. The road to La Paz is his
home route. He trans. Partstimber from the jungle. His load
weighs 25 tons, without anyincidents. The journey takes him
three days.

(02:21:44):
It still is dry season at theend of October, so the road is
quite dusty.
You in a few weeks, it'll startraining, the road will be
drowned in mud and morass, andthere is hardly any kind of
movement possible. But for now,the drivers are fighting the

(02:22:06):
stifling heat and the dusty airyou Omar is driving quite fast.
He's using the opportunity tomake kilometers. His co driver
hardly knows the road. He wantsto learn about its pitfalls from
Umar.
It's like death gripping theside.

(02:22:29):
There are dangers everywhere.
You must not make mistakes. Thetruck could break down. There's
a lot to be sorryabout when you're on the road,
anything can happen.
The truck is stuck. The wheelsare spinning.

(02:22:56):
It's deep, really deep. Put itin there, in there.

So I'm gonna, I'm gonna pause the video
just for a second here, becausethese are the kind of things
that they have to deal with on aregular basis, they can only do
these routes

drivers so spoiled American driver, I never

let me tell you. In another video I was
watching this morning aboutPeru's dangerous roads, there's
literally an impasse of, youknow, when you're going, when
you're going around a mountain,especially a curb, you can't see
what's coming, you know, aroundthe corner. And so for a lot of
the trucks when they'reascending up the mountain, they
don't stop. The people that arecoming down the mountain are
supposed to be the ones that arestopping. And so this one truck

(02:23:43):
that was trying to get aroundone of these circles, it's not,
it's not wide enough for thetruck to get across. And so with
the it's almost like a U shape.
They literally took logs andthey they cornered the the
circle to kind of like addanother, like, part of the road
that was just connected so thetruck could just get around it.

(02:24:05):
And they said, Oh, this happensall the time. In the video that
we're watching right now,they're going through a giant
mud pit, yeah, and they have toput rocks underneath the wheels
and then shove a bunch of debrisin order to get just around this
one piece. There's other driverstoo, that when they're driving
on these mountains, they're notthese mountain roads are not
paved, and so that, becausethey're not paved, they kick the

(02:24:28):
tires, kick up a lot of dust,and so then they can't see the
damn road. And so it's just allof these different things that
they're, that they're beingfaced with. And it's just, and
we're just talking about theregular roads in the mountains,
for God's sake, let alone,

like, bringing the tools to build onto them,
right like, and

then there's this, this other really
fun part where I think, oh yes.
And there's another fun part,because the Amazon River
obviously has all thesedifferent, you know, sort of
this, the main river, and thenthey have all these sort of
offshoots, the inland waterways,which I'll get into in just a
second, for South America, isincredible. And, you know, we
all know, I think about NorthAmerican waterways, but with the

(02:25:12):
Amazon in particular, thesetrucks also, obviously, there's
very few bridges in the country,because if they don't
necessarily have a lot of roadsthat are under construction or
have been constructed, then theydon't necessarily have a lot of
the bridge infrastructureeither. And so for a lot of
these drivers here, I will bringup stop that bridge this point

(02:25:33):
where they have to get onpontoon boats in order to take
their truck from one side of theAmazon river to the other
pontoon boats. And a lot ofthese pontoon boats can fit a
max of two trucks at a time. Solet me play it from here,

Unknown (02:26:01):
we're nabaki lies on the banks of the Rio Beni, on
the inflows of the Amazon River.
Trucks are waiting to cross theriver here,
the ferry consists of a simplewooden pontoon. The pontinero

(02:26:23):
instructs the truck drivers. TheCrossing takes half an hour, and
only two trucks can go on at atime. The.

Oh, that one's barely on there, too.

Can we just stop and appreciate that
half of this truck, half ofOmar's truck, is hanging off of
the back of this pontoon.

Unknown (02:26:43):
Talking about insurance on loads. I hope the guy's
insured. He ain't.
Ferryman guanyras is responsiblefor bringing trucks and people
to the other side safely. He'sbeen shipping the Rio Beni for
many years now. He also knowswhen operations should come to a

(02:27:03):
halt. This river needs a certainlevel. You can't always cross.
Okay, at a high tide, thecurrent will carry floods, wood
and junk and everything thatdestroys the engines of the
boats.

(02:27:25):
As soon as the ferry lands onthe bank, juanera RIAs must
anchor it tightly. Iron chainswill make sure the pontoon
doesn't break loose when thetrucks Embark. The ramp consists
of only two logs. They have tocarry the weight of 90 tons. It
takes expertise and goodjudgment to position them

(02:27:47):
properly.

I'm going to stop the clip right
here, because I love this guybecause he goes on it to further
explain in the video of anytimesomething goes wrong, he blames
the driver, which I think islike universal across all
countries. He's like the driversthat you know, that they let the
wheels spin, or they, you know,they don't, you know, get onto

(02:28:09):
the the boards properly. And ifyou're just listening, basically
what we're seeing is a giantpontoon boat that has a bunch
of, like, two by is two by foursor two by eight,

even though term pontoon is like stretching it,
or we're talking about a slabon, like, floating

devices, yes, yes. And so then they
arrive, up to they cross theriver, they get onto like
there's no this is this area isnot paved. And then there's two
giant pieces of wood that thetruck driver is then supposed to
drive off of the pontoon boatonto these two giant pieces of
wood in order to continue theirroute. And that's just part of

(02:28:49):
the route. And so, you know,going back a little bit to with
Omar, the truck driver that wejust saw, I said, not only in
this video, do they show all ofthe different types of geography
that that he's having to dealwith, but they show along the
route he stops over to have abreak to eat some Lunch, there's

(02:29:10):
somebody in the in therestaurant that says, Oh, I have
to get this monkey up to thistown. Can you take it with you?
So he literally has a monkey tobring it off and drop it off
while he's on the lunch break.
That's just one. He also doespreventative maintenance.

Picked up an LTL on the way. And

it's like, I hope this is because it
was a cute monkey. And I waslike, I'm not gonna ask

about, you know, how I feel about monkeys and

humans, illegal trade, you know,
wildlife trade, no, no shade toOmar. But maybe, maybe be a
little curious about where thesemonkeys are going to before you
agree. Yeah, the next one is, hedoes preventative maintenance on
a tire that takes about 30minutes, but it ends up saving
him hours in the future, in casea tire mishap happens when he's

(02:30:01):
like, hundreds of miles awayfrom a town that can actually
help him. So he doespreventative maintenance while
on the route. He also choosecoca leaves to de stress and to
stay awake. I don't know ifyou've ever heard of coca
leaves. Yep, yeah. So Ieverybody. I'm a huge coffee
drinker. Yes, when I went toPeru, I didn't drink any coffee

(02:30:25):
coca leaves all day, every day.
Yeah, it was they served them inwhich for folks who don't know,
coca leaves are a derivative, orare one of the base ingredients
of cocaine. Obviously, there's abunch of other shit, including
like gasoline and stuff that'salso added to the production
process, but the coca leaf ingeneral is very medicinal, like

(02:30:46):
it's everywhere in the country.
I really wanted to bring someback. I couldn't. Obviously,
it's illegal. There's onlyactually one company in the
world that can export cocaleaves from Peru, and that's
Coca Cola. Fun fact, there'sstill a derivative of cocaine

in Coca Cola.
Love that. I love it so much.

But coca leaves, like when you walk
into hotels, the dried cocaleaves are literally sitting in
a bowl next to hot water andlemon and you just and very
similar to, like making a glassof water making a cup of coffee
in a hotel lobby, they have cocaleaves right there next to it.
They also help with, like,elevation sickness. They help.
To keep you awake. Omar talksabout how he uses it to de

(02:31:35):
stress. So very I love that thecoca leaves like, why can't we
export these to other countries?
I would be a number one buyer ofit because

it was I know a lot of guys who would you know,
brokers all over the country.
Just like booking the most ratethey've ever seen,

you're trying to get more revenue, to
get more loads, open up anoffshoring office in Peru and
allow them to forget Colombia,just go straight to Peru. Oh, my
God, I love it. Next one thatOmar does is he even he passes a
wreck that happened on the sideof the mountain, and the driver

(02:32:19):
survived, but the truck fallsdown because he's literally,
he's driving on the road ofdeath, and he comes across like
a bunch of belongings that areon the side of the road. So he
knows something has happened,and because safety is obviously
hugely important, and you canonly can't drive very fast with
a lot of the stuff that you'retransporting because of all of
the geographical situations thatyou're dealing with. And so they

(02:32:42):
come up on this guy that histruck has just fallen off of the
road. He survived. Thankfully,got all of the stuff out of the
road. And it's just a bunch ofdrivers, just like, looking
around and trying to gage, like,what happened and how they can
prevent it in the future.
Because even though these roadsexist, there's still a lot of,
like, crumb, literally crumblingof the side of the road where

(02:33:03):
it's not all the way solidified,and as far as, like, the, I
guess, the construction of theroad itself. So there's pieces
of the road that are fallingdown like a landslide because of
it. Then another, you know, Iguess really cool thing that
happened after he discoveredthat wreckage, which, as a
driver, like when you come up onsomething like that, I imagine

(02:33:25):
it has to be insanely stressful,a very strong reminder of, you
know, keep being safe, of whileyou're on the road. But then
another part that really stoodout to me is, right after this
in the documentary, they stoppedover at like, this gorgeous
waterfall on the side of theroad, and they're like, oh,

(02:33:45):
great, it's time to take ashower. And so they literally,
like, stop over and hang out inthis waterfall and de stress,
and the Omar talks about howthis is the first shower that
they've kind of had in like aday and a half. And it's also a
great reminder to him that afterthey just saw this wreckage of a
truck driver who thank God hesurvived, yeah, but it could

(02:34:08):
have been very, very differentstory. So that kind of scares
him as that part of the job. Butthen, on the flip side, being
able to stop off at thisgorgeous waterfall and be able
to take a shower in a gorgeouswaterfall is another like, you
know, just a reminder of why heloves his job so much. There was
also, you know, really, I guessan interesting parallel for

(02:34:31):
truck drivers in these, youknow, Bolivia Peru, Brazil, is
that they're seen ascelebrities. And Omar in
particular, has two wives. Andso he, when he travels to other
cities, he goes and visits hiswife. And, you know, children
with this with this one has hisother, you know, wife and
children with this one. And thewoman who kind of knows that the

(02:34:53):
second wife kind of knows abouther situation, but she says
whenever Omar comes to visither, that all of the women come
up and talk to him, and thathe's like a mini celebrity
because he's a truck driver andhe makes good money relative to,
you know, the areas that they'reliving in. So these other women
are all trying to, like, vie, tobe that next wife. And the woman

(02:35:14):
was like, I see it all the time,and it makes me very jealous. It
makes me very angry. And sheknows she's the second one. So
Omar is over here just livinglife. And so really, really
interesting documentary. It'sthe channel is called free
documentary, and so if you justlook it up on YouTube, you can
find it very easily. I'll alsolink to it in the show notes.

(02:35:36):
But any I feel like I've beentalking for a while and I can
continue talking. But anythoughts so far,

I mean, it's I think this is actually, like my
favorite part of logisticstopics. It's like, you know, I
think we're so, I don't want tosay sheltered here in the United
States, but like our issues withinfrastructure here are nothing
compared to something like this.
And I even think about like,often just areas, whether it's

(02:36:08):
South America or even Africa,right, that are developing like,
truly developing like, from theAmazon to like, having a cement
road there, right? Like, notonly the it's like, it's, it
almost feels like what camefirst, chicken or the egg. Like.

(02:36:28):
In order to even build theinfrastructure out there, you
have to be able to drive outthere and, and how do you drive
somewhere that has, like, nopast, like GPS, Google Maps,
like car that's like, drivenaround and figured out that
location. So it's like, I just,I do find it fascinating these
areas where, when we talk about,like, visibility products. Like,

(02:36:51):
imagine visibility into, like,where that truck is, or where
the other trucks are, and beingable to actually know that there
is a truck on the other side ofthat, that curve, you know,
like, that's where those toolscould really make, like, a
worldwide difference. When Italk to a lot of, maybe the
founders of those companies, youknow, sometimes that's like,
where their brain goes bigpicture wise, where, like, we're

(02:37:12):
sitting here in the UnitedStates, like, I don't care,
like, where, where's thepalette, you know? But like,
just the fact that that techcould just, like, save, quite
literally, save drivers livesright on. Like, those mountains,
I think is really cool. So Ithink sometimes when we maybe
have these, like, big pictureideas for technology United

(02:37:33):
States, and we can't figure outa way to, like, apply it, I
think it's fascinating to kindof, like, put your mindset in a
different country where it'slike, oh, this could be really
advantageous for them. Andthat's how I think sometimes we
see founding groups come out ofthese countries, right? I think
of like people like the foundersbehind load smart, right?

(02:37:55):
They're from, I believe, LatinAmerica, salvento and their
founders, right? I come from

rapido too. Rapido solutions,

yeah, well, I will say Roberto has been in
United States for some time assomeone who went to Michigan
down the road. But, yes, butstill, like, it's, it's, I think
it's maybe these problems thatwe have across the globe, right?
How do those influence thetechnology that also, like,
comes out here in the UnitedStates? And I think, like, I

(02:38:31):
again, like a United Statesdriver couldn't even, like,
we're over here discussingwhether or not parking should
have a price on it, where, like,these guys are like, Oh, you
want showers. Like, here's ahere's a fucking shower, you
know, like,

I would much rather take a
waterfall

here, right? But it just like, it's fascinating
to me that, like, those twocultures, like, exist at the
same time, and I need drivers tosay, I'm not saying that your
problems aren't valid, yesplease. So like, Calm the fuck
down. But like, it's it is justinteresting to me to be like,
you know, there's always someoneworse off, right?

Well, watch. So I missed the intro of
this video, and I want to playit now because it shows the
actual like road of death, soyou can kind of see what these
drivers are dealing with. So letme play the intro form this same
video.

Unknown (02:39:33):
You it's regarded as one of the most dangerous roads
of the world, la cara Terra dela muerte, the road of death.
Year after year, many people diehere.

(02:39:57):
Some go looking for adventure.
Others depend on this road forfor all of them, it's a risky
ride.

The Road The video is called Hot
roads, the road to death in theAndes, which is it is. So I
guess, to your point, US drivershave to deal with their own set
of problems. These arecompletely different set of
problems with these roads. Andif you notice, and if you are

(02:40:46):
watching the video version ofthis, what I think is is so
interesting is that a lot ofthese roads that exist in South
America were created by theIncas, which the Incas are
ancient human civilizationcomparable to like the Mayans or
the Egyptians. And theydeveloped the Incas developed a

(02:41:08):
road system 24,000 miles long,all within South America. So for
a lot of these roads, notnecessarily the road that we
just saw in that video, but fora lot of the roads in South
America, especially on the west,west coast side of the
continent, they were all created1000s of years in the 15th

(02:41:28):
century. So I have. Some littlelike shorts video that I wanted
to play, because I just thinkit's so it really is like just
speaks to exactly what they'retrying to deal with.
Infrastructure wise. How do youeven widen roads that were made
in the 15th century? They weremade for people walking, not for

(02:41:49):
trucks. And so I think that'salso something that we got to
keep in mind as well. So let meplay this really quick, I guess,
a historical perspective on whatthese roads in South America
are, what I guess, what thebaseline level is, in order to
enhance what is going on from aconstruction infrastructure
investment today

Unknown (02:42:12):
Inca road system, stretching over 24,000 miles
connected the vast Inca Empire,which spanned present day Peru
Ecuador, Bolivia and Chile,built without the wheel or
horses, it allowed for efficientmovement of armies, goods and
messages across mountainousterrain. Bridges and staircases

(02:42:36):
were constructed using advancedengineering techniques. The road
network was crucial for theEmpire's cohesion and trade.
Parts of it are still usedtoday, a testament to the Incas
remarkable engineering skills

the ink. Did you know that most of
the Canada, no, I'm not gonnaplay that video. I was gonna
play that next video becausethey were really good at
suggesting, like all the Incaroad shorts yesterday, when I
was finding out exactly whatvideo to use. But I thought that
that was just such a good Iguess giving a background of
because I think sometimes,especially as Americans, we can

(02:43:14):
see the current infrastructurethat exists in another country
and think that they are, youknow, third world or like, you
know, the proper phrase to callthem now is the, you know,
emerging countries, instead of,you know, third world countries.
And so we kind of, I think, tryto compare our country to
theirs, and just see it as likea lesser but the Incas were one

(02:43:37):
of the most fascinatingcivilizations that have ever
graced this planet, and theirinnovations and their
construction techniques, andeven like their stonework is
some of the best we have everseen in the history of human
civilization. A lot of theirconstruction methods we can't
replicate to this day, verysimilar to, like the the Roman

(02:43:58):
cement that we can't replicateto this day. And so when you
have infrastructure that hasstood the test of time for a lot
of like Roman roads versus Inkaroads, I think the Inka road
should be right up there withit, because, with these road
systems, they used it as seen,Lord of the Rings. You know, the
the beacons of of minister. Youknow that messaging system of,

(02:44:22):
you know, you light one beaconand the next game gets gone,
door calls for aid. You know,

all of those things. What a job. How do I
sign up for that?

Yes, exactly. You just, you know, you
got to play a hobbit, and thenyou have to, you know, go
against the rules, and thenlight the beacon on fire. And
then, you know, eternity, yeah,if I could light a beacon to
summon Aragorn, I Well, I can'tsay that now. I'm a married
woman, but I would have done itin the past, which I think any

(02:44:52):
woman now is like growing up, isrealizing that Aragorn was the
hot one, not Legolas.

Yeah, I don't want to admit that I was a big
Orlando Bloom fan, dude. No, Ilove I go back to my, like,
childhood home, and my wholecloset I has, like, just photos
of him, like lying. Oh, my God.
What inseparable in my mind.

Well, yeah, now we have to admit it
right. You're as adults, youknow you're right. Sam wise was
the real hero. Oh, should bringup the photo. I just met him
recently. I know, I know that'sfine. You would touch you. I'm
not going to, don't make me cry.
I'm not going to cry back toSouth America. Okay, so I hinted
earlier about the, you know, thethe rail line ecosystem. Then

(02:45:46):
we've also talked about, youknow, some of the pontoon boats,
and for a lot of thegeographical challenges we just
saw with the road of death,there is another way that we
could be or that South Americanscan, you know, I guess, enhance
their logistics profile in orderto help the flow of goods, not
just between Peru and Brazil,but throughout The entire

(02:46:09):
country. Most of us have seenthat US inland waterways map,
but have you ever seen a SouthAmerican inland waterways map?
And so right now, on the screen,we're showing the vast network
of navigable rivers and alsorail lines that exist within the
country right now. And so thisactually. Actually comes from

(02:46:30):
Science Direct. And so thisimage on the screen is
showcasing, showcasing, which isside note or sidebar. I can't
believe that, like, this levelof research actually exists, and
I'm thankful for it, because youjust, you're looking at this
graphic. They're talking aboutall of the different commodities
that are being moved throughoutthe country. You know, iron ore,
which South America is rich in,just natural resources, even

(02:46:55):
like magnesium, petroleum,obviously petroleum, especially
for Venezuela and Guyana,cement, wheat, sugar. There's
all of these differentcommodities that are just
flooded into the country.
Problem is that they can'ttransport the damn goods. And so
this research, you know, wentthrough a lot of the planning of

(02:47:17):
what take, or what it would takein order to develop these
different infrastructureprojects all across the
continent. And if you're, ifyou're just, I guess listening,
I'm sorry, but there's really noway to kind of explain this. Go
to the YouTube version of theshow and be sure to watch that
version, because a lot of theseimages are just really
incredible. And so just, youknow, to talk about how, I

(02:47:39):
guess, you plan a waterwaysystem. Distribution within
another continent is so likesort of step one is the waterway
path proposal. Then they try tofind all of the basins. Then
they identify the major citiesand choke points. Then they talk
about the technical challenges.
Then they talk about land cover,road versus waterway management,
the road versus waterway impact,you know, all of these different

(02:48:03):
variables. I'm not going to gothrough all of them, because
that would be super boring. But,you know, topographical data, so
it's all of these differentthings. Of there are people in
this world who are trying toplan, you know, just these
massive infrastructure projects.
And I think that that is anotherreally interesting point about
just South American logistics,is that there are people

(02:48:25):
actively trying to plan thesethings out. And so in the next
image, they also talk about someof the other rivers, not just
the Amazon River, but otherrivers that could be navigable
as well, where they're planningand proposing to put different
stop points. There was onegentleman in that video that was
talking about how his familygrew coca leaves. They grew

(02:48:49):
pineapples and also Yuccas, oryucca plants, and they would use
a mule to take the mule intotown in order to sell the yuca.
But Yucca costs, like 50 centsper product. But it was costing
them 50 cents just the take thedamn things there, and so they
just stopped taking them there.
But then there was atransportation road that was put

(02:49:12):
in place between that town andtheir town. And so you see all
these little dots on the map.
And so once his dot gotconnected to another.it reduced
the transportation costsignificantly for them. And so
this family is now able to sellthe goods that they have on
their own property, and be ableto go into town, and it's worth

(02:49:35):
it for them, and they get alittle bit of extra money in
order to do that, and we'retalking like, you know, an extra
couple 100 bucks a month, butthat couple 100 bucks relative
to where they're living, goes somuch further than say it would,
you know, in in The US, and sothere's a lot of just this
really cool research that'sbeing done. You know, I'm just

(02:49:56):
kind of scrolling through allthe slides here, and I'll link
it in the show notes, in caseyou want to check it out more.
But there's just so much stuffthat goes into, you know, not
just recognizing, hey, we have aroad of death. How can we take
it less death and more life andmore, you know, supplying those,
I guess, roads of like lifesavers, not theoretically, but,

(02:50:20):
you know, for a lot of these,like farmers who, you know, have
now a pathway to make money, andit's just, it's part of a,
probably a, you know, a project,or projects that are going to
take dozens, maybe hundreds ofyears to fully flesh out all of
these infrastructure issues. Butthere is. There's a lot of stuff

(02:50:40):
going on in South America andbut a lot of it is starting at
very much the ground level andconnecting these small towns
that you know are small villagesthat you know, you don't even
have an address. And I rememberasking, you know, one of the
people that we were on tourwith, because we were drive
through these towns, and I'mlike, you know, is delivery even

(02:51:02):
possible out here? Like, do youhave addresses? Like, you know,
just simple things like thatthat we take for granted. And he
said, No, we don't haveaddresses, but we do have GPS
locations, and so they justenter in the GPS coordinates of
where they want the packages tobe delivered. And it's just such
a different perspective. And Ithink a lot of things we take

(02:51:24):
for granted, but then also a lotof things, it's like, dang, I
kind of wish it was, kind ofwish I could stop off on the
side of the road and have awater. Fall shower and, yeah, be
able to pay from civilizationthat you need GPS coordinates to
find me 100%

and it's, I'm at, like, I can't even imagine
memorizing my GPS coordinates,you know, like, but it is, I
think what's interesting aboutit is, I don't know if you're
going to get into it at all. Butdid you? Did you read anything
about the the central by oceanicrailway that they're building at

(02:51:59):
all? No, tell us about it. Solet me see if I can find a
picture I can send to you. So Iwill say this has been in talk
since about 2013 so there's kindof like this back and forth. If
this would like ever happen,I'll, I'll throw it in the chat
for you,

because that's, I think while, while
you're bringing that up, there'swe kind of hinted at it earlier,
talking about the Argentinarailways that have been
essentially just left, yeah, andso that exists, not just in
Argentina, but for a lot ofcountries throughout the
continent, is that they've hadthese rail lines. They had
massive investments, you know,in the really when rail was at

(02:52:40):
its peak, especially in theUnited States, that you know
that this, these problems havebeen recognized for a while, but
for a lot of these rail lines,they've just fallen into
disarray because no one hasmaintained them, and because no
one has maintained them or not,no one, but very few of them
have been maintained. And so itmakes projects, I'm assuming,
about what you're about to talkabout, you know, challenging to

(02:53:03):
take on, unless you just, unlessyou're just not worried about
revamping the currentinfrastructure and just you want
to start new.

Yeah, and as as you'll see here, this so this is
something, if I remembercorrectly, I'm trying to see if
I still have it up. This issomething that has been just on
and off talks for a while now,but I think, again, it's one of
those things where, if theycould make a reality, China
could have a whole differentkind of play here on this side

(02:53:34):
of the world in particular. Butbasically they've been talking
for years about doing and Chinawould essentially pay for it,
going back to kind of thestatement you would say of
building this railroad across sothat when they come in through
that port, they can easilytransport it across. Again, this
is, like, all part of a plan toavoid the Pana canal in

(02:53:58):
particular. And I think it'sinteresting again, it's like it
sounds like, really, what theissue is is, who's paying for
it, who owns it, and they'verecently just started doing,
like, the environmental studieson it too. Because, I mean,
you're talking about earlier bigpart of this is probably
throwing some pretty bigdynamite into some pretty big
mountains. I mean, look at justhow small the Panama Canal is,

(02:54:22):
and the work that went intothat, honestly, the lives that
went into that as well. I knowthings have updated, so I don't
think we're talking about humanlives like we're talking that
big of an issue. But again, itis a Chinese project, so who
knows, but you know, it's, it isinteresting to just like, see
how something like this, right?
And again, like everything islogistics. Like to point back to

(02:54:45):
your brand, Blythe, like thetalks that we're having
terrifies right now, like howthings would change if there was
a different way for China toreroute itself and to avoid some
of the areas that the UnitedStates has a huge grasp on,
right and to be able to shiparound, not to have to use the

(02:55:06):
Panama Canal, and to be able tonot only what would be
interesting About this too, islike you were talking about
earlier, is China would ownthis, so if we wanted to use it
as well, or certain countries,right? Like, what? How? How does
that reflect onto China'soverall power and strength when
it comes to global trade? And Ithink again, like, if this will

(02:55:28):
be built is, is still up inquestion, up until today. I
think, clearly, my thing is, is,I think it would do wonders,
probably for the economies alongthe line, right, like, depending
on how much China fucks them,right? I guess on the deal,
that's a big part of this. But Iit it goes back to, like the

(02:55:50):
Arctic discussion, where, youknow, today we can discuss
Chinese politics and just globaltrade in one nature, but
something like this being built,or, you know, the Arctic being
used at the to to the extentthat People have discussed it.
Like, how does that changepolitics globally? How does that

(02:56:13):
change what the United States isproducing? How does that change
what we even can get our handson as consumers? And I just find
it fascinating. Like, I wasdiving into this project for a
while too. And like, what's thebiggest thing it sounds like, of
course, is just. Um, right nowit sounds like they're doing a
lot of environmental studiesstill on it, trying to make sure

(02:56:34):
that's fine, because there is, Imean, it would do some damage.
Look how big this thing is. Butagain, it kind of just, I think
United States, in thesediscussions, lives in a world of
like this stuff not everhappening. And what happens in a
world where this stuff doesstart to really grow and
actually come to fruition. Soyeah, like you said when you

(02:56:58):
discussed or you put in an emailfor something to talk about
today. So I was like, divinginto just this aspect alone, and
it's, I mean, it's, it'sfascinating to think, just like,
how this, I mean, we're not doneevolving in terms of, like
global trade, and I think peopleare going to find different ways
around it. I mean, another bigthing too. It's like, you know,

(02:57:18):
sustainability initiatives,like, how, how do we view those
in regards to things like this,right? And if we do start to
throw aside sustainabilityissues, or, like, our just the
ethics behind it, right? And,like, what does that leave open
to in other countries? Like, ifwe're not going to, if we're not

(02:57:40):
going to hold ourselves to acertain standard sustainability
wise? Like, why even does dothese countries have to do
environmental studies, right?
Like, and so it's, and if theydon't have to, I can guarantee
this thing will be built muchfaster than it is being looked
at now. And so, yeah, I will

say when we were, because we did so
much driving around in Peru. Andso when you're what's what, I
guess, spawned the the questionof like, well, how do these
people even get like stuffdelivered? Is that even
possible? Is that something thatthey even want? And so these
towns are so small, theseindigenous communities, and a

(02:58:22):
lot of them are not beingconsulted when these big
projects are, you know, takingplace, or they're being bribed
with a bunch of money in orderto give up their land, not
realizing they're giving it upfor pennies on the dollar, when
they could be earningsignificantly more, and they're
just being short changed andbeing sort of like robbed of

(02:58:45):
their natural resources. And sothere was another on that same
road trip, because I will saythat we drove by another town,
and I'm so mad at myself to thisday that I did not get a photo
of it, because it was the cutestthing I've ever seen. But it was
a class of kids, and it was avery small town. I'm talking
like 10 buildings in this smalltown. And it could be homes, it

(02:59:06):
could be schools, but it wasvery clearly like these school
children were on the side of theroad holding up posters that
we're talking about, like, savethe planet and Save Our Towns
and things like. So it's theycare. And it was really
inspiring to see that on on thedrive. Because for a country
like this, tourism is especiallyfor Peru, as is becoming a very

(02:59:30):
serious industry for them, avery good money maker. Think
they were also just voted likethe top culinary spot in the
entire world. Like some of thefood that they grow is because
they have such high elevationsthat it's such a unique growing
climate like it the best fruit,the best juice I've ever had in

(02:59:50):
my life, the best ceviche I'veever had in my life. A lot of
the best meals I've ever had inmy life came from this country.
And so as you as like these big,mega projects are being
considered, yes, it's definitelygood from a trade relationship,
you know, geopoliticalstandpoint, typically, when you
have trade with a country, youdon't go to war with them. And

(03:00:13):
so that is all good and well,but I hope that these indigenous
communities are and theyprobably aren't, but I would
hope that there's somebodyfighting for them to have a
voice and a say in all of this,and so that they you know, if
they are interested in making alittle bit of extra money, that
they're not short changed, orthat their land isn't seized,

(03:00:34):
and, you know, they have anopportunity to cash in on this,
as I'm sure that the Chinese aregoing to be able to cash in on
this, and they don't even livein the damn country. And so, you
know, it's very interesting tosee a map like this of a giant
rail line, and then see an imagelike this of where all of the

(03:00:54):
other existing rail lines andwaterways that really
revolutionized trade throughoutthis entire country, but yet
they are still dealing withroads like this. Yeah, exactly.
And so it's just it's anincredible set of circumstances
that I think is unique to thecountry of what they're what

(03:01:14):
they're dealing with. Youmentioned earlier about how you
know what the US is doing. And Ihad asked, you know is doing a
lot of research. I took all mynotes and I loaded it into chat
GBT, and I said, What am Imissing from this? Is there any
gaps of my notes that you thinkwould. Would be interesting to
add. And one of the things thatchat GPT recommended to add was

(03:01:35):
what the US, how the US isreacting. And so a couple
different points is that they'rereacting to this because they
kind of feel like asleep at thewheel, almost like I don't but
outside of Guyana, who just hada major oil discovery, whose
neighbors to Venezuela, which isobviously an enemy of the US,
our current enemy, and feelslike it changes every 10 years,

(03:01:58):
but that is a country that theyare helping to invest in. But
outside of that, I don't know ofanything else that's going on,
but chatgpt said that number onetrade policies. That's how
they're reacting to a lot ofthis investment that China has
made with their Belt and RoadInitiative, where they're
putting tariffs on Chinesegoods. I think they mentioned
Peru specifically when it comesto those shipments, because the

(03:02:20):
way that Sal explained it in hisyou know what's going on with
shipping channel is that Chinacan take these massive boats
that can't fit through thePanama Canal. They can take
these massive ships, send itover to the Megaport in Peru,
and then transload it toeverywhere else throughout the
country, and then also transloadthose shipments directly into
Central America. And then that'sobviously a pathway right into

(03:02:43):
the United States. So I believethat they have been threatened
with tariffs as well. And thenthere's also competing
investments. So there's theprogram like the America's
partnership for economicprosperity, and that aims to
counter China, but it's lackingin comparable funding. So
China's throwing a bunch ofmoney at this us is trying to,

(03:03:06):
you know, form more trade deals,trade policies through those
deals or through tariffs oneway. They're one way or another.
They're, you know, they're,they're going to try to address
this, but I feel like they'rekind of addressing this way too
late, and it creates a set ofchallenging problems that these
countries know that they'redealing with. But now, who do

(03:03:28):
they trust to help them throughit? It's not the US. They're
just in China. And so I thinkit's just a very, very
fascinating of how all of thisis taking shape and how it's all
unfolding. And I from the verytops of like the geopolitical
strategy of developing new tradelanes and trade routes, it still

(03:03:50):
comes down to the nitty grittyof, can you get a chip on a
pontoon boat to go across theAmazon River? Can you survive
the road of death? Yeah, like,it still boils down to, like,
these very simple things. And ifyou can't get over there, can
you get a mule to take you andyour family to go sell some
goods? And so it's just all ofthese different things that that
folks are dealing with in SouthAmerica and

trying to, like, build, again, like chicken egg
situation, like building thatrailroad with that
infrastructure supporting it,right? It's like, God, how long
would this take to even finish,right? So it's, it's
interesting. And again, though,like one to consider when you,
when you look at tariffs todayand and just the political power

(03:04:33):
across the world, right?

Yeah, it feels like the United States
is doing more like short termthings, and China is thinking
long term. Oh yeah, real long.
And that side, I think that'sprobably a good place to
anything else you want tomention. You know, the think we
covered a lot,

yeah? No, no, I think it's interesting. Yeah,

thanks for tuning in to another episode
of everything is logistics,where we talk all things supply
chain for the thinkers infreight, if you like this
episode, there's plenty morewhere that came from. Be sure to
follow or subscribe on yourfavorite podcast app so you
never miss a conversation. Theshow is also available in video
format over on YouTube, just bysearching everything as
logistics. And if you're workingin freight logistics or supply

(03:05:18):
chain marketing, check out mycompany, digital dispatch. We
help you build smarter websitesand marketing systems that
actually drive results, not justvanity metrics. Additionally, if
you're trying to find the rightfreight tech tools are partners
without getting buried inbuzzwords. Head on over to
cargorex.io where we're buildingthe largest database of logistic

(03:05:38):
services and solutions. All thelinks you need are in the show
notes. I'll catch you in thenext Episode, in go jags. You

(03:06:13):
you you.

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