Episode Transcript
[00:00:03] Speaker A: New US port fees, tougher IMO rules, a flood of new ships, fragile demand? How much will your freight bill be? What does it all mean for carriers? And what happens if the Suez Canal reopens? That's all coming right up.
[00:00:18] Speaker B: Not necessarily sure the rates that we're heading into now are even all that profitable for them to be quite lucky.
[00:00:24] Speaker A: Is this lower value goods being pushed to markets that can still afford them? Is this dumping?
[00:00:29] Speaker B: And if suddenly the whole geek upon cast into doubt, that would also cast a lot of these investments into doubt.
[00:00:36] Speaker A: We're now hearing about rates into North Europe from Asia edging below US$1,000 per TEU, aren't we?
[00:00:42] Speaker B: In a simple sentence, they're reacting exactly as you might expect.
[00:00:48] Speaker C: You are listening to the Freight Buyers Club. This podcast is brought to you by your host Mike King and produced in partnership with Demerco Express Group, a global 3 PL that specializes in managing logistics to, from and within the Asia Pacific region.
[00:01:03] Speaker A: Hello one and all. I'm Mike King and welcome to the Freight Buyers Club. This episode is produced with the generous support of Demerco Express Group. Bit of housekeeping before we start the Freight Buyers Club is proud to be a media partner for retail, Supply chain and Logistics Expo this year. Events take place 15th to 16th of October the Las Vegas Convention center and 12th to 13th November at ExCel London. If you're attending London and fancy a coffee or a beer, do give me a shout now to my guest. He really does need no introduction. He's director and partner at Liner Game, providing education and training services to the liner industry. And with his consultancy hat on, he's CEO of Espuchi Maritime. Lars Jensen, welcome to the Freight Buyers Club.
[00:01:53] Speaker B: Thanks Mike. Happy to be here again.
[00:01:56] Speaker A: Well, you're always very welcome, Lars. Now, later on we'll be examining what's going on with rates and I'll be trying to persuade you to make some forecasts about what's going to happen in 2026. But first off, the Trans Pacific and the latest White House policy due to shipping on the 14th of October. You know what it is? It's port fees. So As I said 14th of October, Chinese built ships face new fees when calling at US ports. These are US Trade Representative fees on Chinese owned, operated or built vessels. The size of the fee depends on the vessel category. Lars I've simplified that to a degree. But just briefly, how are carriers reacting in terms of vessel deployments and planning?
[00:02:42] Speaker B: In a simple sentence, they are reacting exactly as you might expect.
And that entails a couple of things it entails. If you look at all the major carriers, logically they are phasing out as many Chinese ships from the networks and replacing them with non Chinese ships. So simply a shuffling game. You already had a bunch of the major carriers out. The CMA was the first. But then you had a bunch of the other carriers follow suit. Musk have done. Hmm, have done. At least that's the one top of my mind simply saying they're not going to come when you surcharge it.
So that was fairly expected.
There are a couple of other fallout effects. I think the largest effect we've seen so far is C Span. Keep in mind C Span is not a carrier. I mean that's just. There's no just. Right. But they just own container ships. But being headquartered in Hong Kong, that would suddenly mean if you charter ships from them, they will be seen as Chinese ships. So C SPAN is just doing what everybody would expect. They're moving to simple, they're reflagging likely about 100 chips.
So hey presto, these ships are suddenly not Chinese anymore. That was completely expected. A third thing also expected.
Heaty Shipping. I know everybody talked about Costco and Double ocl. They're the large ones. But there's Heaty Shipping, a small Chinese niche carrier also having Pacific services into the U.S. they just announced one of our services is quite simply gonna shut down. So all of this playing out exactly as expected. The one I would say that is a little bit unknown.
How is Costco and react so far? What they've said is they're going to continue to operate as is and I wouldn't really expect anything less. You have seen them start a service from China to Mexico. Not only in the US could we see a few more minor modifications like that. I would not necessarily put past them.
That's what it looks like right now. Let me throw in a wild card there. Are we sure USTR would be implemented the way we think it is? The carriers have been bugging USTR for details because the USTR proposal, like to be quite frank, every other thing that came from the US government is strong on headlines, not very strong on the nitty gritty details. There's been a lot of questions posed about some of the details. The latest letter that I've seen that came to some of the carriers and the worshipping council here about a week or so ago basically said from the ustr. We don't quite have all the details in place yet.
And there are two ways to read that. You can read it the way it is, they just don't have the details yet. Despite having months to have it worked out, that is what it is.
I would also not rule out that part of the interpretation to put into that might be that there would be negotiations ongoing in making minor modifications. So let's see how that one played out.
[00:05:25] Speaker A: And anyone who's watching on YouTube or Spotify video, you can see the redeployment of Chinese built tonnage into and out of those US trades courtesy of Sea Intelligence. And the trend is pretty clear carriers are getting these ships off the Trans Pacific. Lars, how does this affect the competitive balance on rates? Especially as relation to you mentioned Cosco on ocl, They're a big disadvantage, right?
[00:05:53] Speaker B: I mean for Cosco and WCL this is a significant disadvantage. There were estimates made by the HSBC bank about a month or so ago that for Costco and Double Seal you're looking at an annual cost of one and a half billion dollars. This is not small potatoes. So they are clearly going to be impacted from a competitive perspective. See from the perspective of all the shippers out there, this basically means they're not going to see any increased costs from usgr. Specifically, could you argue maybe they should see higher costs from Costco and wcl? Well, I'll say good luck with that. There is no way Cosco and Double OCO alone could come out and successfully increase rates if the rest of the carriers don't. I mean the market pricing wise is very competitive.
[00:06:36] Speaker A: We've seen big investments of the container shipping fleet. I mean we've got a record order book at the moment.
A lot of these ships are coming out of China.
What does that do to their values? And what does it do in terms of ordering future vessels?
[00:06:49] Speaker B: Nothing.
No, I mean a couple of things. If you look at all the orders that's been placed just in the last few months after it was known that USTR came out, you can't really see any change. Keep in mind, USTR is not just on containerships, it's also another vessel. Has that changed the percentage of which orders goes to China? Doesn't go to China? Absolutely not.
Don't pin me exactly on it, but as far as I recall, if you look at Shipping Overall, about 80% of all ships in the world never call the US.
So when that is the case, why should we expect the order book to materially change to build more expensive ships?
That again should not really be surprising to anyone. Ustr, if you read into the detailed argumentation for it is very clear it's actually Stated there explicitly also in the executive order covering that one and more initiatives is to bolster more vessel building in the us but it was clear right from the start that USTR would do absolutely no such thing. What it potentially could do is move some ships like in Salkhum Seaspan to be flagged in other countries or moved elsewhere. But that this magicy would move shipbuilding away from China and to the U.S. not gonna happen. It's not. What is happening, Lars?
[00:08:02] Speaker A: Lines. Well, some lines, I should say have said they'll try and absorb the cost, at least for now.
Is that sustainable or do you see that evolving into something where shippers end up footing the bill? Doesn't that always happen in the end?
[00:08:18] Speaker B: At the end it happens. But again, if you look at most of the carriers, many of them have just faced the Chinese ships out. So they offer, let's say for sake of argument, I take a Chinese ship away from the U.S. now I use it to Australia, then I have a Korean ship that went to the us then my cost hasn't really increased. But there is no cost necessarily to pass through.
[00:08:36] Speaker A: Okay, thanks for that, Lars. Let's just, let's dig a little deeper into the Trans Pacific trade and I'll throw some numbers at you. Bimco expects global container demand growth of around 5% this year following slowing to 2.5 to 3.5% next year. But US imports this year are set to contract 2%.
We're also seeing this play out in spot rate declines which you can see on screen now if you're watching along. Courtesy of freight off. These are in freefall, although they've been in freefall at different times. From Southeast Asia into the US versus from China into the US which is largely the result of different tariff deadlines. And of course, just to throw more jokers into the mix, we're now expecting even more tariffs on October on goods such as furniture, trucks and pharma. So Lars, is this volume and rate decline on the Trans Pacific all down to tariffs and White House trade policy, or is the US consumer finally letting container shipping down?
[00:09:33] Speaker B: No, I'm not sure they're letting container shipping down. If you try to look deeper into the numbers. First of all, the peak season was basically not there. Sure, we had a spike late May, early June, but that was actually not a peak season spike. That was a tariff driven spike. When we had to pause with China, a genuine peak season spike. We should have seen that year late August and coming into September. This is where it gets real interesting because there are multiple different rate indices out there. I mean, one of a couple of ones I find interesting for this particular purpose is if you look at the SCFI first, which is basically just quoted rates, right, they showed a significant spike late August coming into first half of September, which kind of sent the signal that we are getting a last minute peak season on the Pacific.
However, that is a major however. If I look at the index from the NIFI, which measures spot rates not by quotes, but only cargo that's actually physically loaded on board. So we know this cargo is moving, somebody's paying for it, that spike is absent to a large degree. So that tells us coming into early September there was a feeling and a hype that there would be a peak season, that it would be somewhat strong, but that actually didn't materialize. These high quoted rates did not materialize into real rates. So the market has definitely been weak. Does it mean that the consumer has pulled back? Not quite yet. If you're following and of course that data unfortunately is lag. But if you're following data from the US Census Bureau, for example, both sales and inventories, you will see that so far the US consumer sales have been holding up relatively nicely.
The concern is as we're getting into Q4 because the US consumer until now have not really faced the consequences of the terrorists. Not to a large degree, partly because a lot of the trade war has been on pause. I mean it was only really racked up again in August and all other countries. Then it was a little bit on for China than that one of course as well. Then you have the usual lag time in the whole supply chain. It takes time coupled with a lot of the importers not really knowing how to climb or the expectation should be that a lot of these effects will begin to trail through here, June Q4 and then you're going to be really faced with the increase in prices. What will the US consumers then do? Will they give a strong season or not? My guess would be it would be or not.
The negative impact we've seen on US volumes and mind you, both imports and exports are down in the us this is just the beginning. This is kind of deteriorate more in the quarter or two quarters ahead.
[00:12:08] Speaker A: Where do you think inventory levels are then? Based on what you've just said, inventory.
[00:12:12] Speaker B: Levels have actually been holding up relatively okay. The imports of goods. Again if you look at the Census Bureau data, the inventory to sales ratio has basically been staying stable during this whole debacle so far. So the goods imported basically match what is also being Sold inventories are not me declining that much either. So the key here is if US consumers suddenly start to pull back the relative inventory size, the inventory to sales will of course increase rapidly. And that means whatever negative impact we already have on demand would become amplified significantly.
[00:12:49] Speaker A: How do you think that carriers have coped with all of this upheaval? It's not just tariffs. I mean even on that Trans Pacific rate, the closure of the sewers is still a major factor. We also had these major alliances lines changes earlier this year that are still being filtered through to some extent omit all the rest of this turmoil. What do you make of the of liner strategies throughout this?
[00:13:13] Speaker B: I think the liner shipping companies have done their level best under the circumstances. I don't envy neither the carriers nor the shippers. There are two things fundamentally on the Pacific here to be wary of. One thing is the magnitude of a change is another thing you simply for speed and unpredictability on.
When we had the trade war, especially one with China, early on the carriers were fairly rapidly at blanking sailings. That made sense because China US bookings were way down. When you then suddenly had the spike with the cost, the carriers tried to put in capacity as rapidly as possible. But you can't teleport a ship in from one day to the next. So when you look at the hard data from the point where that trade pause was initiated took about three weeks until physically you had a material increase in capacity. The problem then is by the time the carriers filter that capacity in, the shippers change their minds. So from a mindset of let's front load while the pause is there to a mindset, often you have no idea what's going to happen tomorrow. So let's not front load. Let's just play this tactical day by.
[00:14:18] Speaker A: Day we just like move beyond the Trans Pacific.
Bimco has found that strong export growth from Asia into Africa, South America and Europe.
I'm talking to some of my sources and they say there's a bit of decline recently, but trades to and from Australasia have been holding up quite well.
Is this all exporters or. I don't know, we use that phrase cargo finds its way. Is that what we're seeing here?
[00:14:44] Speaker B: Right.
[00:14:44] Speaker A: The Trans Pacific is soft and these other trades have taken off. Is this lower value goods being pushed to markets that can still afford them? Is this dumping?
How do you see this? What's going on?
[00:14:55] Speaker B: I wouldn't necessarily call it low value. I'd rather say it in terms of you have a lot of goods that's being produced in China. If suddenly a substantial part of that is no longer being exported to the US Obviously the manufacturers will look for other outlets, and that has been driven some of the growth. There are a couple of ways to then look at it. You could either say, okay, this is a temporary effect, that whenever the US comes to their senses, it will go back to the US I would tend to read it differently to the degree where suddenly, more or less again from one day to the next, you can redirect a lot of these goods to other trades. That shows that there was an underlying unmet demand in South America, in Europe, in Africa, in all these places, that demand clearly must have been there all the time.
So I'm not necessarily sure you're going to see a massive decline subsequently. Why would you.
[00:15:42] Speaker A: So from a line of point of view, then, they've. They've accidentally discovered growth markets because the exporters have found out there is a market beyond the US Is that what you mean?
[00:15:50] Speaker B: That's partly what I mean. And from a lineup perspective, you were mentioning the BIMCO assessment about 5% growth. That would tend to be aligned with that. If you look at some of the latest stats, global demand growth is 5%, but it's bifurcated.
North American volumes are declining.
Sure, you can find a few weeks where they were spiking, but overall during the trade war, they are down where the rest of the world on average has actually grown 6%.
So it's also been very clear over the last four or five months, most of the world shows strong, sustained growth. Basically only the US that shows this weakness and of course, like spreads out completely.
[00:16:30] Speaker A: What trade has surprised you most in terms of that growth this year?
[00:16:34] Speaker B: Probably the ones to Africa, because in some of the stats there, you're looking 50, 20%, 15, 20% growth.
[00:16:40] Speaker A: So from places like Nigeria, isn't it? It's really being taken that West Africa region.
[00:16:45] Speaker B: Exactly. So from a growth perspective, that is clearly large place. Now, mind you, from an absolute volume perspective, of course, Africa is not that large. So it's not a matter that you can suddenly send 100 big ship over there. But definitely surprising on the upside.
[00:17:00] Speaker A: Okay, thanks, Lars. Plenty to chew on there. Let's take a quick break and then we'll turn to the Asia Europe trade.
[00:17:06] Speaker C: This podcast is proudly produced in partnership with DeMurco Express Group, a trusted provider of global shipping and contract logistics services in Asia, Europe and America. DeMurco's particular strength is in Asia, where it gives shippers the freight capacity and local Market expertise to streamline freight movements to and from the region, particularly for Trans Pacific lanes. With 130 forwarding and logistics locations across China, India and Southeast Asia, Demurco connects Asia with the world like no other. Global3PL. You are listening to the Freight Buyers Club.
[00:17:40] Speaker A: Welcome back. If you're on YouTube or Spotify, you can now see the Asia Europe spot market courtesy of freightos.
Again, it looks like free fall. Sorry to use the same word. Again, this is despite a lot of capacity being tied up traveling around Southern Africa instead of via Suez. Demand has been reasonably strong and we've also had a fair amount of congestion which has sucked up capacity. So Lars, with all of those countervailing factors, what do you see going on on that Asia Europe trade? We're now hearing about rates into North Europe from Asia edging below US$1,000 per TEU, aren't we?
[00:18:18] Speaker B: Yeah, we are. First of all, I'm not sure I would use the word free fall. I would cast in a slightly different light because we tend to compare to what we saw see in 2020, 24 was extreme. If it hadn't been for the pandemic, this would have been the most extreme year ever. The expectation coming into 25 before any of this played out was actually that rate in 25 would be significantly lower than 24, but still much higher than 23 and also higher than the pre pandemic period. That's exactly what happened. And the reason for that was during 24 coming into 25 we had global fleet grow about 10%.
So 24 we had not enough capacity. We could barely make any meat going around Africa. And it was clear coming into 25 that problem would be solved. Which is exactly what happened.
And sure. Have rates gone down in recent weeks? Absolutely, they have on the scfi they've gone below the thousand dollars per day.
You can either say that fine, that's exactly the same level they were at just before the Red Sea crisis broke out. But that would be going to be slightly misleading because in the six to eight weeks prior to the Red Sea crisis, the carriers have actually pulled capacity in order to increase race rates were borrowing out a lot lower than $1,000 prior to the Red Sea crisis. So I would tend to see Asia, Europe not as in free fall but as normalizing.
Normalizing to the degree we have the capacity. It's normal to go around Africa. We don't have the excess capacity anymore. That's how it would tend to see what is going up right now.
[00:19:53] Speaker A: So normal is US$1,000 per TEU. Is that what we're saying? Is that a factor of the global supply and demand?
[00:20:01] Speaker B: Exactly. I mean it's the impact of a supply and demand. How much capacity is soaked up going around Africa that's a little bit measuring elastic band by the meter you can get a lot of different numbers but it's not unrealistic to say 10 to 12%. But since the global freak has then also grown 10 12% since then, we are sort of getting back to not quite the situation prior to the Red Sea crisis, but not far from it, which again was a situation where we had beginning overcapacity.
[00:20:28] Speaker A: Well, we're going to look forward a bit later and I will ask you that question that's staring me in the face about what happens if Suez reopens fully a little bit later, but just on the strategy that we're seeing at the moment.
If this is normal, is this what lions are happy with? Because it seemed to me that they'd found the means to balance supply and demand slightly better since COVID But now there's a lot of reports about this being a rate war on Asia Europe. You're not buying that this is just normal?
[00:20:59] Speaker B: I'm not buying it yet.
Sure, the carriers are quite likely not happy with the current levels also because as they would I we say costs are substantially higher than pre Covid. I'm not necessarily sure the rates that we're heading into now are even all that profitable for them, to be quite blunt. So no, it's not necessarily a good situation for the carriers. But I don't see it necessarily as a disaster.
That challenge comes a little bit later as we're going to talk about. But that's not quite where we are yet.
[00:21:28] Speaker A: Is there anything in the market that indicating to you that there's any efforts with GRI's general rate increases? That is for. For anyone who's not that familiar with the the ocean rate market, do you see any chance they. They might stick or, or maybe look at it a different way? Where's the floor for carriers on rates?
[00:21:46] Speaker B: Yeah, I mean sure there are attempts at GRIs. I'm not necessarily sure they will stick very much. The way I look at it is the Asian Europe market had its peak slightly earlier than usual. It was actually the same thing last year. I think that's owing partly to the longer supply chain. So it's going to be shipped. The timing we are into the slack air related to Chinese Golden Week which also means rates are likely to slide a bit further. That will be Normal seasonality. What we then usually see is a beginning pickup up towards Chinese New Year. Now here's the thing. Chinese New Year next year is quite late. It only comes on, I believe February 17th.
So the beginning pickup towards Chinese New Year might not happen until we are a bit into November. So we could certainly see a sliding of rates or at least a week level of rates from now all the way to November. I would not be surprised.
[00:22:37] Speaker A: So the message is maybe don't look too much at year on years in October.
Is that what we're saying?
[00:22:42] Speaker B: Yeah, exactly.
[00:22:44] Speaker A: Okay, that's a state of play on rates now. We'll come to forecast shortly, but let's, let's have a look at. Well, I'll call it the Green Agenda. Specifically, this month In October, the IMO's Marine Environmental Protection Committee is heading for a key vote in London on global carbon charging. This follows April's tentative agreement aiming for net zero by 2050. But opposition has been quite strong from bulker and tanker operators and from the US delegation that actually didn't even attend the April meeting in full.
Lars, how important is this, the MEPC meeting in October for carriers, for sustainable supply chains and for freight buyers?
[00:23:24] Speaker B: I would say it is quite, quite an important meeting because if it becomes a yes, which I actually think we should assume is the baseline, it solidifies the whole trajectory towards 2050.
We necessarily want to meet the targets. I'm less optimistic on that, but that's a different discussion. But it does mean there will be payments coming into place starting in 2028. It's going to be ramped up. What it also does means it will slowly skew the competitiveness of vessels in favor of not necessarily green or at least greener vessels. There's been a whole lot of debate should they go all green, what's the role of LNG and all that. But it's going to push in a more green direction. The interesting part is if against expectation it turns out not to be voted through, that I would see as a significant problem. First of all, if it's a no now, it would be unclear when would we realistically have a similar the next time. What then needs to change in order to do that? That could be years down the line and with a no that would suddenly put serious doubt into I wouldn't even point at the vessels. I would point at the investments in manufacturing units to make the green fuel because the decarbonization is not going to happen unless we have major chemical plants that make the green fuels. These are decades long Projects to do ramp up massive investments. And if suddenly the whole decarbonization is cast into doubt, that would also cast a lot of these investments into doubt. They would be postponed. And we all the time in shipping have this chicken and egg. I'm not going to order a green ship because nobody makes the fuel. Well, I'm not going to make a fuel plant because there's no demand as there are no green ships. So this is the vicious cycle. And if we get a no, we could risk choking it at the outlet in terms of making it very unattractive to invest in these facilities making green fuels. So that's also what's at stake here in the boat that's going to come up here in just a couple of weeks.
[00:25:22] Speaker A: Well, the. I mean, yeah, the first movers lose. Most container shipping has been at the forefront of investing in greener ships. What about those people who've made that jump already? They're going to be pretty unhappy, aren't they? Especially if fuels don't turn up.
[00:25:35] Speaker B: Yeah, exactly. So that is definitely going to be a challenge. And if you look at the debate that's been on here the last few weeks, it's also very clear that the container carriers, World Shipping Council, they are all very much pushing for this to go ahead. There are basically no surprises there with that. We have had some pushback over from the tanker and Volcker section from some of the Greek ship owners. But let's be honest, this is what we see every time there's new environmental legislation up. We saw the same thing. For example, in the lead up to the low sulphur rule, there were no end to also lobbying groups in 2019 suddenly saying no, no, we shouldn't implement low software in 2020, we should postpone. So I see that kind of pushback, as we always see that with any type of new environmental legislation.
[00:26:19] Speaker A: Okay, thanks, Lars. Well, I'll try and get along to the IMO in London and see if I can do a little report and find out what happens at the mepc. Okay, quick fire forecast to finish, if you don't mind. Lars, put you on the spot. Will 2026 be better or worse for shippers than this year?
[00:26:37] Speaker B: That is a good question, because that depends. If you just mean by lower freight rates, the answer is yes. But if the lower freight rates is because of a recession where the shippers also themselves can't sell their goods, I'm not necessarily sure it's good news.
That's basically the long and short of it. If you're in the U.S. i would have a significant worry that you're looking at partly a U.S. recession. So yes, that will cause supply and demand to go down and cause freight rate to go down where you're going to have other problems related with a recession for other trades. I'm not sure if I'll go into that recession. That would just mean we are beginning to build up a bit more of overcapacity. You see some more weakness in the rates coming into 2026, the wildcard then not being so much the US but the red Sea.
[00:27:19] Speaker A: I'll come back to that in a second. But just on your point there, if we keep seeing rates decline, presumably we'll see more blind sailings. Will this affect reliability of line of services? Because we've seen some improvements this year, haven't we?
[00:27:33] Speaker B: Yeah, well look, well first of all, blank sailings don't affect reliability at all. That's more technicality. The way reliability are typically measured is did the ship arrive on time? Now if the ship didn't sail in the first place, there's nothing to measure. So this is not to, you can say try to nitpick on word but I actually think it's important because very often different stakeholders use the same word reliability, but they mean something very different. Reliability in the strict sense of how it's been measured is basically did the ship arrive on time especially that would be the carrier's viewpoint. From a shipper perspective you'd also say well if the sailing is canceled, that cost me a different time boulevard or if a cargo was rolled, which are perfectly valid point by the shippers. But we should just realize it's different things we're talking about now that one being set aside.
Yes, we have seen an improvement in reliability, but it's wet now, almost months. I mean we're seeing reliability now stall at around 65% which is not good. It's still clearly below where the pre pandemic normality was.
So whilst we did see an improvement, we haven't seen any more improvement the last three or four months.
[00:28:43] Speaker A: Okay, you mentioned it earlier. If the Suez Canal fully reopened, what happens to rates once we get past the initial ship bunching and congestion and network stabilize?
[00:28:54] Speaker B: Yeah, I mean once we get past that initial part. The thing is we are heading into what I would call a normal cyclical downturn. I'm sure somebody would be hyperbolic and say oh my God, we're heading into a crash. But that's not the word I would choose. I actually ran a model here over the weekend trying to look at what is the order book ranging all the way out to 2029.
What will demand likely do, what want to do when we reopen the sewer grounding? How do we take into account the vessels are going slower?
How do we take reliability into account, taking all these elements into account that if. And that's an if. That's a pure guess. Let's say the Red Sea reopens and everything is fine from mid-2026 leads to a cycle downturn and the bottom of the market would be 2027.
And by the way, this is also taking into account fairly aggressive scrapping. When I say bottom, it matches the problem that we saw around 2015, 2016, if people remember that one. But it is nowhere near as bad as what we saw in the financial crisis way back in 2009.
[00:29:56] Speaker A: And a final one, how would you suggest shippers, but also carriers should factor in risk in 2026? Specifically geopolitical shocks like tariffs. But we've also seen a number of outbreaks of violence and war and conflict. How do you plan around that? Or just can't you.
[00:30:16] Speaker B: You can't.
It's as simple as that. I mean if you see some of these geopolitical turmoils and I would throw the US Trade war on top of that, they change so rapidly that there is no good way necessarily to plan that for the long term. That's also why I said earlier, I see a lot of US shippers that have given up on doing medium and long term supply chain planning because conditions now change so rapidly that it's a waste of time and effort. It's a matter of tactically looking at, okay, this is our baseline. How do we adapt this week or next week? And we might simply see a lot more of that also coming in to 2026.
[00:30:51] Speaker A: So from a carrier point of view, they've got to be as flexible as their customers.
[00:30:54] Speaker B: They've got to be as flexible. The challenge again is, as we saw here, very good on the on the Pacific, late May, early June. It takes time when conditions change from one week to the next. I can't magically teleport ship. This takes weeks is signature change.
[00:31:09] Speaker A: Lar Jensen, CEO of Vespucci Maritime thanks for cutting through the noise today. The takeaway this time, growth is still there, but uncertainty rules. With new fees, new ships and new rules, the winners will be those who stay flexible. Big thanks to Demeco Express Group for sorting this show. If this conversation helped you sanity check your 2026 planning, please do share it with a colleague and don't forget, get to subscribe. Thanks also to Karen Ball and Tom Matthews for their production skills. We'll be back soon. I'm Mike King and this is the freight buyers.
