00:00Lee Clasco joins us here and Lee you know it's it's fascinating as we do this interview there's a story
00:07read spiking on the Bloomberg Terminal a business week story about diesel prices and the dude the main protagonist in
00:15the lead used to spend sixty eight hundred dollars a month on diesel now he spends eleven thousand and he's
00:21a small businessman FedEx must see the same issues right diesel is probably a pretty important source of fuel in
00:27their supply chain.
00:29Yeah absolutely I mean fuels a major expense for a large parcel carrier like FedEx I mean you know you
00:35have to remember also that they're individual trucks that deliver through their ground network are independent contractors so they're not
00:43really through FedEx Corporation but yeah I mean they have to deal with a higher fuel cost but you know
00:49they do have fuel surcharges in place that helps to recoup any rising prices and minimize the impact to margins.
00:57What about then more generally if there is a hit to the economy Lee that seems to be something that
01:04that FedEx was talking about because surely they're not insulated if just overall demand starts to wane.
01:10Yeah I mean that we've been we've been writing about that a lot on the Bloomberg Terminal you know our
01:15biggest fear within the freight markets is that you know prolonged higher energy prices will impact the consumer.
01:22You know we saw diesel prices recently move above five dollars for the first time since 2022 and you know
01:28that is going to impact not only the transportation providers but also consumers as well because the more they're spending
01:35at the pump they're less their stuff that they're buying and you know here within Bloomberg intelligence covering the freight
01:41markets we care about the movement of stuff.
01:43And so there's going to be less of that to move around you know it really depends on how long
01:48the conflict in Iran last for if this is like you know a couple couple weeks and oil quote unquote
01:56normalizes maybe it doesn't get to where it was before the war but you know somewhere in between you know
02:01I think that consumers probably can handle those extra costs.
02:06Yeah.
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