Episode Transcript
[00:00:00] Speaker A: You're listening to the Lodestar, the supply chain and logistics industry's leading source of insight.
[00:00:05] Speaker B: This podcast was created and produced by.
[00:00:07] Speaker A: MK and associates and your host, Mike King.
[00:00:16] Speaker B: This Lodestar podcast comes to you from the Middle east, and fittingly, the theme is transformation. Looking through this regional prism, we're asking what a more fragmented and conflicted world order means. The logistics stakeholders and cargo owners, and what a lineup we have. In no particular order, we've got cargo Gulf's Hans Henrik Nielsen. Susan Sneyer Jacob, head of supply chain development at Kraft, Heinz, JP Morgan's ruler Jayer. And last but not least, it's the deputy director general of the World Trade Organization, Johanna Hill.
[00:00:47] Speaker C: What we did in the simulations is to look since 2018 at voting patterns at the UN Security Council and then measure those as trading blocks and how much they trade amongst themselves versus between themselves. And we saw that trade grew within these two blocks, four to 6% more than between these two blocks. And that's what we are saying, that we are seeing the first signs of fragmentation.
[00:01:16] Speaker B: Hello, everybody, I'm Mike King. Welcome to the Lodestar podcast.
Welcome to the first Lodestar podcast recording in the Middle east, where myself and lodestar Md Nick Marsh have been getting up to speed on one of the biggest and fastest growing logistics markets in the world. Big thanks to all at DP World for showing us around Jebel Ali. Lots of electrification and some very cool box storage options under development. I could hardly believe the speed at which Jebel Ali in Dubai itself has grown. And I was only there five or six years ago. I think I first visited and interviewed the still CEO of DP World, Sultan Ahmad bin Salayam, many, many years ago. I think two decades ago, almost back then, the DP world head office was a modest three story affair. And driving down to Jebel Ali from the creek in Dubai took you through very low density buildings and a bit of scrubland and desert. And then after Jebel Ali, it really was desert. And that was the road through to Abu Dhabi. Now, that road from the center of Dubai down to Jebel Ali now is its dense multi lane traffic, extravagant high rises. You got the palm development, all these impressive new buildings, and the new building, DP Worlds headquartered in it was right next to a metro. Very impressive. I also called into Jeddah in Saudi Arabia, and that obviously is another country undergoing rapid transformation. It's a hard place to set up a business meeting, but there's a lot of progress going on there and we'll be watching it closely, not least of course, because it's massive array of 2030 projects are going to be a huge driver of that Middle east logistics market, which is forecast to expand at a compound annual growth rate of just under 6% between now and 2032. I mention all this development because change and transformation are the overriding themes of this podcast. A little later we'll be hearing from supply chain and procurement thought leaders I met at the excellent economist impact event in Dubai that me and Nick attended. The annual global trade and supply chain Summit is definitely one for the diary. I would say this was the fourth time it has been held and there were some great discussions and debates. But let's get this podcast rolling, and who better do it than a Middle east shipping veteran who's going to explain how businesses have been coping with some of the operational challenges they face this year? Hans Henrik Nielsen, global development director at Cargo Gulf welcome back to the Lodestar podcast.
[00:03:40] Speaker A: Thank you Michael. Thank you for having me again.
[00:03:42] Speaker B: Always welcome for our listeners, Hans Henry and do correct me if I miss anything out. Cargo golf is a pure Enviocc operator. It's part of the GAC Group, and you're offering an array of FCL and consolidation services in and out of the Middle east. Linking to parts of Asia, to Europe, to the US. Is all that roughly right? And maybe you could briefly explain to people what a pure enviocc is.
[00:04:07] Speaker A: Yes, I will. That's correct. For the purpose of defining hardcore or pure, then I will focus on our FCL liner product. Essentially we are a mini container line. We operate exactly the same way as any of the big mlros that your listeners are well known to. We have our own container fleet. We have our own terminal agreements, Stevedore agreements, we do slot charter agreements. We have carrier responsibility on our bill of lading. We have additional ships operator licenses, and of course we also have additional liability insurances. Our core trades are Asia, Arabian Gulf, Red Sea, North Europe and East met. And then we have some niche markets in the Pacific islands and the Indian Ocean.
[00:04:50] Speaker B: And how have your operations, your services, been impacted by this de facto closure for most of container shipping of the Suez Canal on the Red Sea? And a second question related to that how's the general economic disruption to the region a result of conflict? How's that played out for you?
[00:05:08] Speaker A: Well, I mean, obviously the Babelman Deb situation has impacted both rates and cost more risk insurances, which have gone up tremendously, not just for vessel and crew, but also for containers itself. The value of the container, if you like, so we've had to take on additional insurances and pay additional insurance premiums in order to service the Red Sea. I think that the major changes that we have seen turn has become much smaller. So you don't have the very large container vessels doing way port calls in Jeddah en route to Europe and back. Instead, it is now more a smaller, dedicated turnage that goes in and out of the Red Sea. And that has certainly created opportunities for companies like us. It's more niche. You need to be able to finesse the business more in the business model, where the peak mlos are probably not as flexible as a company like cargo golf. The Baba Almandeb crisis and the Suez crisis has, of course, also meant that less cargo has been moving in on high volume. We have seen a lot of operators change their profile or service profile to a hub and spoke service. We saw that that created congestion in the major ports in the Middle East, Gibrali, obviously for Saudi Arabia, a lot of cargo in the initial Babel Madheis Babel Mandeb crisis was shifted to Dammam, and that created tremendous congestion in the port of Damam. And obviously with congestion, it also means that equipment doesn't move as we plan. So we need more equipment in our fleet. Again, that increases the cost. So it has had a significant impact on how we do business.
[00:06:50] Speaker B: So higher insurance, higher equipment cost, higher rates. Just on your services into Europe then, are some of your services, are they using diverted mainline operator options? And I also noticed you've started a new service in Tuterke. Presumably that's not using services diverted around southern Africa and they go through the Suez Canal, is that right?
[00:07:11] Speaker A: That's correct. We use Jeddah as the transport hub for al Qa. Go into Turkey. The east met was a relatively new addition and part of our long term global expansion plans. We started small, carefully, and to ascertain how the market will embrace a hot, bespoke service into the East Mediterranean. Now, if you look at cargoes, especially the westbound cargoes coming from Asia, indian subcontinent, we are able to cut the transit time of 1520 days compared to moving around the Cape of the good hope. And I know that your listeners will say, well, what about security, and how does that work? And then, of course, there is a risk, and which is why we have been paying the higher risk and more risk premiums. But you will also notice that there has been a clear pattern in how the attacks on commercial merchant shipping in the baby mandib has evolved. And I think that the operators that we charge slots from they have become very astute in dealing with the problems and also being able to navigate the communication and ensuring that their ships are not under attack.
[00:08:24] Speaker B: Just to clarify for any of our listeners, the Bab el Mandeb is the straits that you have to use if you're coming from the Arabian Gulf or from the Indian Ocean into the Red Sea, and then you go from there through the Suez Canal into the Mediterranean. Hans Henrik, you've seen a bunch of carriers based in Asia entering some of your key markets. Are these new entrants? What are they offering? I guess. What do you expect them to stick around?
[00:08:52] Speaker A: Well, I'm not going to sit here talking about other companies and naming names, but yes, you're right, a number of smaller chinese operators and north asian operators, and even some with, shall I say, loose affiliation with Russia, have commenced operations between Asia, Middle east and into the east met, and then initially also going through into the Black Sea. And a lot of them now for east met purposes and the Black Sea, they're now also doing transshipment over eastern, the turkish terminals in Istanbul, Ambali, Komport and so on. It's very opportunistic. Obviously, we saw this during COVID as well. Will they all stick around? Probably not. I think some will. There are some which are building up a nice business. We also see some Middle Eastern, larger operators, very reputable operators with german owners, but Middle east and registered, and they have very aggressively started new services and also using Jeddah as their transfer hub. And for sure they will stick around.
[00:09:56] Speaker B: Jeddah, of course, could do with all the business it can get at the moment, obviously being heavily hit by the closure of the Red Sea to most traffic. Just looking ahead, Hans Henrik, how are you viewing demand as we look through that fourth quarter, the buildup into the chinese new year in January?
[00:10:11] Speaker A: Well, I think the demand is actually still very good, at least in our core markets. The main problem going forward will be the supply, and we have been now for two years talking about that, all the extra tonnage that was ordered during the COVID bonanza, that when they come out of the shipyards, then they will create an imbalance between demand and supply. So far, that hasn't happened, but it looks like it is about to happen. So there will be some change for us. As a small or relatively small operator, we really don't see any major problems in finding the cargo that we need to fill our slots, predominantly, probably because we are not the Maersk line or MSC or CMA. So if you are one of those big mlos then clearly the problem and the pressure on their commercial teams will be significantly bigger than it is on us. So we see that the current lead up and drop in rates sort of compares to q four in 2022, where we saw really an FCL rate drop of 80% in a period of three months. And then we stabilized and then rates slowly started to go up again and charter agreements were renegotiated, costs came down. You were able then to operate again at a profitable level. It's pretty much what we've seen here the last couple of months. And in some of our markets, the rates didn't drop with 80%. So that's the problem. We are an NVO that purely sells to freight forwarders. So our freight forwarder active client base grows with about 20% order on quarter. So finding cargo is not the problem. But finding profitable cargo is obviously always a challenge for. For everyone, of course.
[00:11:51] Speaker B: Of course. I think tumultuous is the word I would use describing 2024. Even though a lot of people have been making money, there's still been a hell of a lot of disruption and bottlenecks and things to deal with. What's on your Christmas list for shipping or trade in 2025? Anything you want from your customers, maybe from carriers, or maybe you want the gods to give you a little less disruption, you tell me.
[00:12:16] Speaker A: Well, I think pricing stability would be good.
[00:12:19] Speaker B: I'm sure, I'm sure.
[00:12:21] Speaker A: And obviously price instability at a higher level than where we are right now.
Having said that, the first three quarters of 2024 in general were good for all of us in shipping. And let's also be honest that it was probably more luck than the sign. Of course, you have to operate well and execute well, and I think we've done that. But yes, we were helped a little bit. I think the next wish would probably be less congestion so that our equipment can really move. Congestion is still a real big issue, and so you will have one vessel where the containers don't make it, and then the next vessel, we got too many containers and then we can't load all our mt's back to where we need them, et cetera, et cetera. It's a much bigger problem than people realize, I think also common sense pricing from our big competitors. Maybe not panic when the market goes a little bit soft. Market leaders and their actions do impact the whole market. So if you're a big player like MSc or Maersklein, your actions really have repercussions for everybody in the market. So maybe think before you shoot from the hip and then, you know, let cool hits prevail. It's in a storm that a sailor needs to prove his worth. It's easy when the seats are calm. I think that we have our model is a hybrid model of both direct phone calls and hop and spoke. So for instance, the east Met is a hub and spoke service. And of course a lot of people are talking about what's going to happen, which model is the right between the two big constellations. And I think if there's a strong growth in global GDP, then I think everybody will be happy and then probably the hub and spoke model will be less prevalent. If the economy is not going so well, then I think the Hobbsburg model will be far more prevalent than direct warpairs. So for us, we will continue with our long term plans, which is careful organic growth based on our CRM developments, customer sales, building up relationships with freight forwarders, and simply just doing things right the first time. That has always been our core etho, and we will continue to do so. So despite that, the market seems tough right now, we are very confident for 2025.
[00:14:31] Speaker B: Well, all the best with that. Please everyone, stay with me. In a moment, we're looking at what the world might look like if we don't get karma seas ahead in terms of the geopolitical trading landscape in this more fragmented world that we're looking at today. But for now, Antenrik Nielsen, global development director at Cargo Gulf, thanks for joining me today on the Lodestar podcast.
[00:14:51] Speaker A: Thank you so much Mike. I enjoyed it.
[00:14:56] Speaker B: Okay, some interesting insights there from Hans Henrik. 2024 certainly seen some major changes to the global logistics operating environment, not least because war and protectionism and geopolitical tensions. We could throw in strikes at ports as well, have been leading the news for much of the year. More changes possible after the us presidential elections at the start of next month, not least on tariffs at the economist impacts fourth annual global trade and supply chain summit what this all means in the longer term for supply chain risk and the rules that govern trade were top of the agenda. Ruler Jaya regional trade and working capital head at JP Morgan spoke eloquently about how the logistics and political landscapes were increasingly fraying. This interview took place on the sidelines of the event, and please forgive me for any background noise. I started by asking her if the post World War two pro free trade era was now finished, and if it is finished, what will replace it?
[00:15:51] Speaker D: China has gained its place in the manufacturing capabilities across the world and we spoke a bit about concentration risk and that was all post World War two. But I believe now this era has came to an end and defragmentation is actually here to stay. We've already seen new trade blocs forming, new trade agreements, a lot of near shoring, a lot of reshoring, and this is going to be the theme for the next few years. It is still more theoretical, as I mentioned earlier, but clearly a lot has happening and we anticipate to continue to happen. There is a clear requirement for systems and institutional in the same way they supported the globalization, post war two is to support the fragmentation that's happening now. And we need more of World Trade Organization, United nations and World bank to be involved in creating these trade blocs and helping under trade agreements that we already discussed during the session.
[00:16:52] Speaker B: So those post world War two institutions have still got a role in a more fragmented world, but they probably need to adapt to it. Where do you see that world going? Is this like increasingly a zero, a zero sum game rather than the idea that free trade was good for all? Or we move to a place where, you know, there's winners and losers, we.
[00:17:10] Speaker D: Definitely move to a place where there's winners and losers. For some of the losers, they really need to relook into their industrial policies and their global trade relationships. For some of the winners, it's going to be an easier task to get up the curve and start functioning and benefiting from the fragmentation that is taking place.
Totality. I think the global pie is definitely not going to grow.
If you look at China, US back and forth tariffs, it costed the world in 2022, around 700 billion in lost trade. And there's an anticipation that in the next decade trade is going to lose around 2.3 trillion due to this decoupling between US and China, specifically on technology like five g and semiconductors.
[00:18:01] Speaker B: And who are the winners from this? People mention Mexico, they mention Vietnam, they mention Indonesia, they mentioned India. Is the Middle east one of these people?
[00:18:09] Speaker D: America, India, some parts of Africa, North Africa and sub saharan Africa. I think we mentioned Nigeria when I mentioned Morocco. And clearly Middle east is being a neutral party to all what's happening around the world. And with all the growth and potential of this region and the trajectory that the vision is setting it on, Middle east is definitely going to be a key player in that space.
[00:18:36] Speaker B: Are larger companies better able to cope with this more fragmented world than, say, SME's?
[00:18:43] Speaker D: Larger companies would be definitely better equipped to manage this fragmentation. They have easier access to capital. And for SME's, what we've been witnessing and what we continue to witness is a growth in this credit arbitration and risk arbitration, and there's a gap that needs to be filled by financiers.
[00:19:06] Speaker B: JP Morgan's ruler J sees some big changes ahead, and the Middle east clearly has a big role to play. It will be interesting to see which of those August institutions she mentions has had its day, and which of those institutions is able to pivot and modernize and help guide these fragmenting trading trends that threaten, some would say at least, the drivers of global prosperity in the years ahead. Now, it would have been remiss of me not to put some of these questions to Johanna Hill, deputy director general of the World Trade Organization. I started by asking her if Covid was the main driver of efforts to boost supply chain resilience, or if other factors are behind this expansion of trade barriers, of subsidies, of tariffs, all these threats, this post world war trading environment that the WTO has been fundamental in fostering.
[00:19:54] Speaker C: So it's not only Covid right that has been a shock to the world trading system. It has also been geopolitical tensions, armed conflict. We've had also inflation that has affected the world economy. And then we see also natural disasters that are really affecting some trading and shipping lines. And so in this world, where we see constant change and shocks happening, the importance of the world trading system and having a base of rules and understandings is really important so that companies have an idea of where things are going. So right now, of course, as we are seeing the first signs of fragmentation, people are turning to the world trading system and saying, so what happens next? So to us, what happens next is called reglobalization. And it's looking at the changes in supply chains and other configurations and thinking about how to give an opportunity to more countries and to more communities within countries so that they can participate more from the world trading system. So this can mean women leading businesses. How do we integrate them into the world economy? It can be medium, small, medium sized enterprises. We can be talking about developing countries. What can we do so that more developing countries can take part? Global supply chains. And when looking at those issues, we have to think of the world as it is now, but also of what's coming in the future. And what's coming in the future, we see big changes with technology adoption. We see big changes in the area of services, which are becoming the growth export led growth in the developing world, especially in digitally delivered services. The digital economy obviously is bringing many, many opportunities, but also challenges, because some countries are so grappling with the digital divide.
[00:21:41] Speaker B: When you talk about opportunities in this more fragmented world, opportunities for communities, opportunities for countries. Is there also a danger that when there's more trade barriers, that the more disadvantaged countries, the smaller companies or communities, that these could be the ones that.
[00:21:57] Speaker C: Miss out in the configuration we're working under right now, where we see some countries taking more unilateral measures, there are risks of spillover. You know, some of the measures are with very important objectives, such as facilitating the transition to the green economy. But at the same time, we have to keep in mind that there might be unintended consequences to some of these measures, especially from smaller, open economies that might not have the same bandwidth to support their transition to the green economy and might actually have counter effects.
[00:22:30] Speaker B: Do you see a pathway in the future that maybe takes out some of the risk in terms of global trade and how we forecast it? In the sense of maybe we'll see a geopolitical tone down or a lessening of tensions and being optimistic, perhaps.
[00:22:43] Speaker C: I think it's very important to continue building lines of communication, especially on the important challenges like climate change and how to address the digital divide. And as countries grapple with some of the geopolitics at the world trading system, we provide a platform for these conversations to be had. A and if they can be evidence based conversations, we think those can lead to more lasting solutions.
[00:23:07] Speaker B: You mentioned a study that the WTO had done where I guess you gained a dual trading bloc or a future cold war or something. I guess those two trade blocks are challenging.
[00:23:18] Speaker C: We wouldn't call it that way. What we did in the simulations is to look since 2018 at voting patterns at the UN Security Council, and then measure those as trading blocks and how much they trade amongst themselves versus between themselves. And we saw that trade grew within these two blocks, four to 6% more than between these two blocks. And that's what we are saying, that we are seeing the first signs of fragmentation.
[00:23:47] Speaker B: Are you worried that we might see a new cold war?
[00:23:49] Speaker C: Some people have talked about at the World Trade Organization. What we are really interested in is in bringing information and providing a platform for cooperation and for these conversations to be had. Inclusion, for example, is something that we are making a big emphasis this year on. And our World Trade report, that's our flagship annual report, we analyze all these challenges to the World trading system, but also the opportunities that are available.
[00:24:15] Speaker B: Johanna Hill there, and she also made the point that 75% of world trade is still actually conducted under WTO rules. But clearly, there is an internal understanding that the WTO needs to understand and adapt to this new, fragmented world, one with many, many more risks to shippers and their transport partners than we've been accustomed to. But what does all this mean for the world's biggest shippers? Sneha Susan Jacob is head of supply chain development and capex at the Kraft Heinz company, no less. Her job is to develop supply chains for the future across a huge swathe of the company's business, spanning eastern Europe, Russia, the Middle east and Africa. Krafft Heinz reexamines its supply chain strategy on a three year and ten year basis. I started by asking Sneyer to explain the complexity of the company's supply chains, both inbound and outbound.
[00:25:08] Speaker E: It's quite complex, both sides. I think. From one standpoint we're battling with issues of climate change, and then the other standpoint, we're battling with issues on FDA regulations because my upstream would be farmers, and climate change is impacting them much more than it is to a lot of other sectors of society. And for me, that really is an issue. And for us, we're supposed to be ensuring that they're getting their basis fixed, because their basis could be anything from getting their soil nutrition right, getting their fertilizers right, getting their seeds right, getting the planting timelines right, getting the harvesting timelines right. But there's a lot of education which goes into it, which I feel somewhere along the way, we lost it. But I think that, for me, is one issue, because climate change is actually drastically changing the way we're planting and harvesting. And then the second part of it is my outbound, which is also impactful, because we have FDA regulations and Europe has some of the most stringent standards. So how do we meet them from different countries across the world and meeting those regulations, ensuring that we're within all the different frameworks laid out as a regulation, is something that's really crucial for us.
[00:26:24] Speaker B: How many countries are involved on the inbound and then on where you send in all these products to? Can you just explain that?
[00:26:33] Speaker E: Our product is relatively simple because it's ketchup, which technically means you have tomatoes, salt, sugar, water and vinegar. But like us, it's quite simple in terms of our inbound, because we have approximately three to four countries which is involved, but our outbound is where we have majority of the impact, because, like, you're shipping out to several different countries and each of those countries may or may not have the same regulations. But for me, the strategy that we're employing is we attack the biggest and hardest FDA regulation and then we apply those standards across the board. And once you've already applied them across the board, then you're sure that because you're meeting the highest, you're able to meet anyone below that.
[00:27:14] Speaker B: How have you had to rethink or reshape or maybe you haven't at all, but these complex supply chains and all these, these markets that you say, have you had to rethink them in, in light of say, the events of the last few years, particularly on the outbound side? So we've had Covid and the supply chain disruptions that led there. You've just been talking about weather disruptions, which even things like we get bigger waves now, we've got bigger hurricanes now there's a few wars. Let's call that geopolitical risk. We've got trade wars. How do you strategize around those things, those disruptors or changes in landscape?
[00:27:48] Speaker E: I think the first thing is you need to visualize yourself supply chain. For me it's really simple. Once I look at the globe and then I figure out where everything is coming from, where we're sending it to and what are the issues. So right now, this year what we started doing was we have the world map and we've started mapping out all the different issues that we're seeing. We've mapped out geopolitical risks across the board, right. And then we've also mapped out the impacts in terms of climate change. Where are they getting impacted the most? And these actually help us work around different solutions. For example, maybe I'm getting tomato paste from a supplier which potentially could be impacted by a geopolitical issue. What is my next source? How am I going to work around getting this supply also up and running? So for me I think it would be, firstly, you need to know your risks, you need to know where they stand and you need to have an exit strategy around it. So for me that would be if.
[00:28:42] Speaker B: I can just take an example like we've had the closure of the Suez Canal, how has that affected you?
[00:28:47] Speaker E: We just had the Houthi attacks. And for us, just having to go around the cape of good hope was quite dramatic because you're like increasing your inventory on hand, which is cost. You're increasing your inbound raw and packed materials, which is also cost. But for us it's actually trying to figure out, okay, how better do we plan now that we have this? Because I'm never going to know what my next risk is going to be, but I'm always going to know that whatever it is, I'm only going to lose one thing, which is capacity in any form, capacity to fail to distribute to a customer, or capacity to even fail to get raw and pack materials. So I think that's critical for us to know, and for us, it was initially trying to figure out how we're going to replan around it as soon as possible. So agility is key, but also, like, even if you say agility, I think it's also the knowledge that you require. Right? Like teams need to be agile enough, and for teams to be agile enough, you need to have the knowledge to action agility.
[00:29:46] Speaker B: How do you go about actioning it? Is that do you use like a range of different suppliers, forwarders, three pls, shipping lines, or is it in house procurement, freight procurement for that type of stuff?
And do you find that your partners are responsive to these things or.
[00:30:02] Speaker E: Yeah, a lot of the times they want to be collaborative enough because it's also impacting them. So I don't think that we've had any major issues on that front. So, yeah, we've been really lucky.
[00:30:12] Speaker B: If you're looking at sort of strategies that involve supplier diversification, what sort of investments do those countries need to make to make sure they're meeting the infrastructure and needs or the standards that you would look for?
[00:30:28] Speaker E: I think each of them are very different. Right. But for example, like, one of the key things is I'm not going to state my company, but for example, Taiwan was a semiconductor hub, but can we build a semiconductor hub overnight anywhere else? Not yet, but for me that's the other point. Whenever somebody comes and says, oh, we need to re shore or we need to do friend shoring or all that. But for me, my first point to them is, are we sure? Because countries may not have the capabilities that we need today, but they could have it tomorrow if we have a directed plan of action. And for me, that's something that we're also building. Again, proof of concepts is what I always advocate on, because a lot of the times we may not know if a country can or can't do it, but it's essential to start small in terms of these proof of concepts and start to grow over it. So for us, we've had several proof of concepts across the board and we've been proving the things that we initially thought were infeasible. Right. So I think it requires a lot of collaboration from our end along with different external suppliers. But if we all collectively have a direction growth, then I think we have no concern.
[00:31:33] Speaker B: Great way to finish up there with Susan Sneyer, Jacob head of supply chain development and capex at the Kraft Heinz company, explaining how giant multinationals are mapping future supply chain risk. Another point that arose from the global trade and supply chain summit in Dubai was the lack of visibility that many shippers have of their own supplier networks, not just periphery partners, but even tier one suppliers. More than one speaker pointed out that building resilience in procurement and across supply chains was next to impossible unless you had clear transparency of all the players that contribute, inbound and outbound. It follows that if you don't have that transparency, you don't know where your risk is. This makes, of course, embarking on China one strategies or building diversification resilience on sourcing, hugely more complicated than it needs to be in the long term, but more short term. Even with disruptions like poor congestion, extreme weather, new regulations or conflict, it means many bcos simply don't know where their risk is. These are themes we'll return to in future on the Lodestar podcast, for sure. But for now, big thanks to my editing team, Karen Ball and Tom Matthews, and most of all, huge gratitude to you all for listening. We'll be back soon.
