Lots More on What America's Busiest Port is Seeing from the Trade Tariffs

SPEAKER_1 (0:02)

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Joe Weisenthal (0:08)

Joe, did you know you can buy a container gantry crane on Alibaba?

Tracy Alloway (0:13)

Oh, I think I saw that. How much is it?

Joe Weisenthal (0:15)

They have different price points, as you might imagine, but I'm looking at one right now that's 37,000 to 28,000. Ooh, and it's customizable. You can change the color.

Tracy Alloway (0:27)

Some of those prices for like industrial equipment on Alibaba are so cheap that like I cannot believe they're real. I think they are real, which is sort of the scary part, or at least in terms of from the perspective of an American industrial perspective. I think in many cases they are actually real, but I still can't believe what's theoretically available. I did a deadlift.

Joe Weisenthal (0:50)

I am both the most popular trader and most successful trader at Citadel.

Tracy Alloway (0:55)

Fed is going viral.

Joe Weisenthal (0:57)

Barges.

Tracy Alloway (0:57)

This is an after school special, except.

Joe Weisenthal (0:59)

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Tracy Alloway (1:05)

Black gold.

Joe Weisenthal (1:06)

These are the important questions. Is it robots taking over the world?

Tracy Alloway (1:09)

No, I think that in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day, that person will have the mandate of heaven.

Joe Weisenthal (1:19)

How do I get more popular and successful?

Tracy Alloway (1:21)

We do have the perfect guest.

Joe Weisenthal (1:24)

You're listening to Lots More, where we catch up with friends about what's going on right now.

Tracy Alloway (1:29)

Because even when the Odd Lots is over, there's always Lots More.

Joe Weisenthal (1:32)

And we really do have the perfect guest. I'm very curious, why would you need a gantry crane in a specific color? Like, is branding very important for these things?

Tracy Alloway (1:45)

I don't know. You know who might know.

Joe Weisenthal (1:46)

Oh, yes. So we have with us, Gene Seroka, the executive director of the Port of LA, which is the busiest port in the US. Welcome back to the show, Gene.

Gene Seroka (1:57)

Tracy, Joe, good to be here.

Joe Weisenthal (1:58)

So one of the reasons we wanted to talk to you is, obviously, there's a lot of confusion about what's going on with trade policy right now. And, you know, we talked on the show about the potential for empty shelves in America if goods aren't coming in any longer. And so I really wanted to go kind of directly to the source and figure out exactly what is going on in terms of imports right now. So we thought you were the perfect person to catch up with.

Gene Seroka (2:23)

Your timing is impeccable because over the last seven days, here at the largest port in the Western Hemisphere, we've averaged five container ships a day. Normally, at this time of year, it would be about 10 to 12 ships in port every single day. Subsequently, job openings for our dock workers are down almost 50% over the last several weeks.

Joe Weisenthal (2:50)

So this is really interesting because on the one hand, we've had the delay in tariffs, the 90-day delay, and who knows what's going to happen after that. So you expected to see a drop in traffic in April and early May, but on the other hand, you could see some front loading of traffic going into the port as people try to get ahead of the new deadline, but that's not what you're seeing right now.

Gene Seroka (3:14)

No, not at all. And the thing of this is, Tracy, that 30% tariffs is simply an average, and that's still really high. A lot of American importers simply slammed on the brakes when they saw the 145%.

And after the Geneva meetings, it was said that they dropped down to 30%. That wasn't met with a lot of enthusiasm in the import community. So you've still got some cargo coming in, and folks went back and scooped up what had been manufactured. Others let orders complete that cycle before shipping out. But what I'm not saying are a lot of new orders because 90 days is a short period of time in our business. That's traditionally how long it takes for an importer to put that paperwork into a factory in Asia, make the product, and simply get it ready to ship to the United States. We're a long way from there.

Tracy Alloway (4:04)

That's really interesting because in a lot of the conversations that we've had, they're long cycle orders. You talk about retailers and they're thinking about October or they're thinking about Halloween or maybe they're thinking about Thanksgiving or maybe they're thinking pretty soon, they're going to be thinking about Christmas. I guess from that perspective, a 90-day window for some retailers, it must be a pretty big risk. If you're a big retailer, maybe you can take the risk that, yeah, they'll probably extend it again, et cetera. But I guess for smaller ones, that's probably not enough certainty that they're not going to end up with a bunch of goods that they have to pay a huge bill on at the end.