00:00I would say from a containerized trade perspective, what we're seeing in real time in Venezuela at the moment doesn't really move the needle from a global perspective.
00:10I mean, obviously, the Venezuelan economy has been deteriorating over the course of the last decade or more.
00:17And as a result, containerized volumes both into and out of the country have come down very, very substantially over the course of those last few years.
00:24So at the moment, if you were to look at overall volumes, both into and out of Venezuela, they're less than a fraction of one percent.
00:32So what's happening in Venezuela doesn't really affect us hugely or the industry hugely.
00:37However, I would say it does fit into a sort of a broader backdrop of very significant disruption that's been taking place, geopolitically driven disruption that's been taking place over the course of the last 12 plus months.
00:53And there, perversely or counterintuitively, disruption tends to be good for the industry.
01:01And why is that?
01:02If you have disruption and unpredictability, that means that there's a lot of value to optionality.
01:08And we're providers of ships to the shipping lines themselves.
01:12And for them, capacity is optionality.
01:15So they can move the pieces of the chessboard around, you know, as the macro changes.
01:25These guys have been fixing our ships consistently to the extent that we no longer even have any open positions, really, for 2026.
01:34What about just the routes of these ships in general, Tom, even if you're not being directly affected by Venezuela and it's just a small piece of the overall picture, things like Caribbean and Gulf routes or even near Scotland in the UK where the U.S. boarded and seized this Russian tanker?
01:53Sure.
01:54So I would say that, you know, again, putting this in the context of the last 12 months or so, what we've seen is a very dramatic shift in containerized trade flows.
02:04So, you know, up until, I guess, the end of 2024 or so, containers tended to flow in pretty fat pipelines from China into the U.S., China into northern Europe and to some degree across the North Atlantic.
02:20What we're seeing now is that both the U.S. is looking to diversify its sources of cargo.
02:28So trade flows into the U.S., although the volumes are staying up, are becoming more fragmented.
02:35And the Chinese, you know, principally the factory of the world, have been actively looking to diversify their export markets since Trump 1.0, since roughly 2019.
02:45So we're seeing a huge fragmentation of supply chains, containerized supply chains.
02:51That's driving a lot of inefficiency into the system.
02:53And once again, that inefficiency, weirdly, is good news for people like us because to move the same volume of cargo, the shipping lines need more ships, more capacity.
03:03And that's precisely what we're providing.
03:05So a lot is changing at the moment.
03:06You know, I was listening to Rooshir Sharma earlier this morning on Bloomberg Surveillance.
03:12He wrote the book What Went Wrong With Capitalism.
03:14And Paul Sweeney asked him about globalization.
03:18You know, is it is it dying down around the world?
03:21And Sharma said, no, it's just that the U.S. is pulling out of it and global trade for everybody else is picking up.
03:27Do you witness that as well?
03:28That feels about right.
03:31And, you know, just to put things in context, even before all of this disruption began, the U.S. represented roughly 13 percent, 1-3 percent of global containerized trade flows versus roughly 35 percent for China.
03:46So you're right.
03:46The U.S. perhaps is is stepping back a little bit from from globalization, but they're by no means the largest player in the picture, number one.
03:57And I think I'm not sure I would categorize it as a step back completely from globalization.
04:03It's more a rejigging of the picture.
04:05I don't think there's going to be import substitution, at least not in the very short term, implemented by the U.S., but they're going to be sourcing more or less the same goods just from different locations.
04:16So it's the same volumes moving.
04:17And it's worth saying that global trade was up in volume terms, five percent year on year last year, despite the noise.
04:24So it's the cargo is still flowing, but it's just coming out of different different areas and it's looking different.
04:30Maybe there's more regionalization.
04:31Maybe the networks are more complex.
04:33Tom, just before we let you go, what is your outlook for 2026 when it comes to container volumes?
04:40I just wonder how much tariffs are still suppressing or igniting some of the volumes coming in.
04:46Given the big rush to get things in before tariffs took an impact, the confusion of 2025, what does 2026 look like?
04:55Yeah, there is the multibillion dollar question, Danny.
04:58And the truth is we neither we nor I would suggest anyone else really has a clear handle on that.
05:03And in the face of just tremendous uncertainty, the way forward for everyone really is to build as much slack into the system as possible,
05:11because despite all of the complexities and the changing environment, consumers are not getting any less demanding.
05:18Everyone still wants the goods they order online tomorrow or even the same day.
05:22So if people are going to meet that in this ever more complex environment, there needs to be more slack in the system.
05:27And that's essentially exactly what we're seeing in terms of growth.
05:31I would expect it to more or less match GDP growth.
05:35So if global GDP grows at two and a half to three percent or so, I would expect container volumes to grow at more or less that same rate.
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