Blythe Brumleve:
0:05
Welcome into another episode of Everything is Logistics, a podcast for the thinkers in freight. We are proudly presented by SPI Logistics and I'm your host, Blythe Brumleve. We've got an awesome guest for you today. His name is Sal Mercoliano. He is the host of "what's going on with shipping, an infamous channel now over on YouTube where he's bringing the general public into the eyes of shipping and really responsible for, I think, spreading the general awareness of how important shipping and logistics is as an industry as a whole. But you've also your former merchant mariner, your firefighter, your professor at Campbell University. Like you've got all of these different things going on. You know we were talking before in the show. You've got a lot of plates spinning, so I'm glad you took some time out of the day to come join us on the show. So, Sal, welcome in.
Sal Mercogliano:
0:55
Blythe, thanks for having me. I like the phrase infamous. I'm going to go with that. I'm going to stick with that. I like the title.
Blythe Brumleve:
1:01
Well, it's funny. I was just talking to Grace Sharkey of Freight Waves fame, and I told her recently that I'm the president and founder of the Sal fan club, so it feels good to finally get you on an episode of everything is logistics. We've talked previously for spires maritime means podcast. We've talked on, you know, freight Waves cyber league programming, but this is the first time you're on everything is logistics and I really want to focus this conversation on just what the hell's going on in the rest of the world and how it relates and why people should care, because that's a common phrase that I hear is you know well, why should I care? It's going on, you know, across the globe. I don't think people really understand how much it affects global shipping as a whole and affects their day to day life, until the price is reflected at the grocery store. So happy to have you here and kind of break all of these complex topics down for us.
Sal Mercogliano:
1:54
Yeah, I'm happy to talk about it. Like you said, I think you know sometimes I think I need to rename my channel to what the hell's going on with shipping, because it just seems like such a mess at times. I joke all the time that we have these. You know, black swan events are supposed to be these rare things and we just seem to have a flock flying overhead coming down about every month or two.
Blythe Brumleve:
2:12
I know, instead of a black swan it's now just vultures everywhere just waiting to come in and clean up. Now I wanted to just to sort of give the audience a little bit of sort of a roadmap for the show. We're going to talk about sort of global, the global history of shipping as a whole, and then we're going to get into some of the Red Sea stuff and then we're going to get into a little bit about like why that matters. And you know how folks within working within logistics industry can help their own customers get educated on this topic. You can just take some of Sal's videos and just send them to them and that would help them a ton to understand why the rates are increasing. And then we're going to also talk about the growth of his YouTube channel. I believe you were close to 200,000 subscribers, right?
Blythe Brumleve:
2:54
Yeah, just about 180,000 right now Amazing and that's so awesome to watch. You know sort of your, your content flourish, because it's such a good sign to the rest of us that are creating content within the logistics industry to know that like hey, you know, you can, you can, you can make an impact with the content that you're creating. So let's kick things off with, I guess, just sort of like I'm going to ask a lot of dumb questions in this interview.
Sal Mercogliano:
3:20
So there are no dumb questions. Remember I tell my students this all the time there are no dumb quick, there are dumb answers, but there are no dumb questions. So the way you prevent having dumb answers is by asking questions. So you fire away boy.
Blythe Brumleve:
3:31
Okay, perfect. So my first. I think it's dumb, but I'm just going to ask it anyways how did global shipping get started?
Sal Mercogliano:
3:41
So I think you got to look at modern global shipping. I can take you back to the Romans, but that's a bit far back. But you know, post World War Two you have this. You know you vanquished the Germans and the Japanese and all of a sudden you have the great kind of ocean commons open up. It's something that we have taken for granted now and, in matter of what's happening in the Red Sea is a good indication of that. We're seeing it kind of challenged but all of a sudden the world's oceans were wide open and, matter of fact, you can sell ships everywhere. There was very few little kind of confrontations. We had issues, there were small conflicts and wars, but for the overwhelming majority you were able to sail across the oceans and it didn't matter what flag you flew, it didn't matter what country you were, you know kind of associated with. You can undertake trade and what we saw is is, because of that openness, the amount of goods that moved across the ocean increased Once we had a huge technology change.
Sal Mercogliano:
4:37
We had a couple of closures of the Suez Canal, one in 1956 and another one again in 1968. And what you saw was the growth of like super tankers. You went to the ultra large and very large crewed carriers. We've seen the introduction of container ships and the ability to modularize cargo so that it can move almost seamlessly from embarkation to debarkation. And what that has meant is that, you know, in 1950, we were moving half a billion tons of cargo, which is an amazing amount. It was, it was unheard of to be able to move that level. Well, last year we moved 12 billion tons of cargo. So we've increased 20, 22 fold over the span of 74 years and that rate of of of has increased.
Sal Mercogliano:
5:20
And what we're seeing is more and more goods moving around. And so global shipping has connected us in a way that almost transportation costs from country to country almost disappears. You know, on an object like a phone, you know, you put that in a 40 foot container the transportation costs across the ocean is is less than a penny, so there's no visible cost associated with that. And what that has done is, you know, for some industries it's been the death nail. You've, you know, we've, we've seen the demise of certain industries.
Sal Mercogliano:
5:51
At the same time, we've seen the ability to purchase goods go up for not just us in the United States but globally. And we've seen the world, you know kind of standard of living come up to such a level that you've actually seen in some cases poverty eliminated, because now you can freely move food and minerals and ore grain you name it around the planet so that you know it's not unusual to be driving a car that's built overseas. You know, you don't even think about that, you don't think about where your clothes come from. You don't think about any of that stuff because it is virtually seamless. That's what global shipping has given us. It also has has been a bit of a problem when all of a sudden that system doesn't work the way it's supposed to.
Blythe Brumleve:
6:34
And so when you talk about what doesn't work, I think a lot of that discussion kind of centers around like the established trade lanes, and I've always wondered you know, I imagine ocean currents have a lot to do with this, but I is it geopolitical as well as to how these trade lanes are established all across the globe.
Sal Mercogliano:
6:53
It is. In fact, if you look at ancient trade lanes and you superimpose the modern map today, it's kind of the same way. It's kind of the same way if you look at like Roman roads during the Roman Empire, then you put the European highway system on. They're identical, you know, because you know you kind of go the same routes. The big difference is the addition of, like the Suez Canal and the Panama Canal, but basically trade routes follow where people are.
Sal Mercogliano:
7:15
And I saw a map just the other day it was really interesting where it looked at where wealth is concentrated in the world and it's, you know, it's Eastern United States, it's Europe and it's Eastern Asia. And in truth those trade lines kind of marry up almost exactly where you see everything go and it is geopolitical. I mean, when you talk about something like the Red Sea, for example, one of the reasons why the British grab Gibraltar, the Suez, aden, hormuz and Singapore isn't because they're beautiful spots. They are, but they're stride, these key choke points, these key maritime lanes, and so you know controlling them. It's the same reason why you see rest stops where two highways come together. You know it's you getting the business. This is where the trade's coming, this is where everything is. It's why cities develop on key. You know geographic areas. Why Chicago is where it is, at the bottom of Lake Michigan, because it's railways and canals. It's the same way with trade lanes, you know, you see it. There's a global highway commons that ships pass.
Blythe Brumleve:
8:15
And so really like no matter if it's the ocean or if it's land or it. Does this exist in air as well, where certain trade lanes are established?
Sal Mercogliano:
8:24
Oh yeah, it's one of the reasons why you see, ted Stevens Airport in Alaska is one of the busiest airports in the world is because people aren't flying into Alaska to fly to Alaska. They're flying there because, when you look at the world as a globe, this is where you know trade intersix from America, europe and Asia. It's a good spot, and so you have a big airport there to do a lot of trade. So airports work in that same way, shipping works in that same way and you can see that on. You know, if you pull up a marine traffic map and you look at where ships are sailing, you can see those big arcs going across. That's because the world's not flat, it's a big ground thing, and so you know that's the way the trade moves.
Sal Mercogliano:
9:00
And when you have issues at those spots, they can create a lot of problems, and it's one of the reasons why the Red Sea raises issues. It's why when you have low water in the Panama Canal, that raises issue. When you have pirates in the Straits of Malacca, that creates issues. And so you know it's very important to be conscious. And when you hear about disruptions in those areas, understand this is coming your way. It's only a matter of time, but you'll eventually see it manifest itself in either something you're shipping or something you're buying.
Blythe Brumleve:
9:29
So if there's issues in, so say for you know, example, the Suez Canal, where you know, historically there have been issues there. There's been an area of conflict for a very long time how difficult is it to just build like a Panama Canal all over the world, like different Panama Canals? I imagine that's a huge undertaking, but it is. If that's such a security threat, you know why isn't there investment in these other lanes, in these other areas?
Sal Mercogliano:
10:00
Yeah, I mean. You hear that. Now you know the people are talking about what's called the Ben-Gurion Canal, this parallel canal through Israel. You hear about a Nicaragua Canal. You're hearing about the building of the Kraw Peninsula Canal across Thailand, so there's always interest in it. The problem is economics. Are you going to be able to justify the economics for it? Suez was a very tough prospect. It took a lot of money. It took the combined effort of Britain and the United Kingdom to do that. It was a 10-year project. A lot of people died creating the Suez Canal. Same thing with the Panama Canal. The British and French tried to create that. They failed at doing it. It took the Americans to do it. And most recently, probably the best example of this is in 2016, when you opened the new lane of the Panama Canal.
Sal Mercogliano:
10:42
The Panama Canal was constrained for 100 years by the size of the locks. So that was it. You had to fit the locks to go through. And the problem is, by the early 2000s, ships are getting bigger. They're much bigger and there was a big issue and China was talking about building a kind of canal through Nicaragua which would allow larger ships to go through. It's what convinced the Panamanians like we have to update our canal and so they undertook it. It was a big program to do it. There were a lot of problems because they kind of rushed it. So there were some issues with cement and some locks and mechanisms and you can see it kind of manifests itself today with water issues, because the new locks use a lot of water, a lot more than they expected. They're not recycling as much as they hoped to and now we're being kind of. You know, that rush to develop the new lane of the Panama Canal is having the issue that now you're only getting two thirds of the ships through the canal that you normally do in a given year.
Blythe Brumleve:
11:39
And so, I guess, staying on the Panama Canal situation for a minute, is that something that is solvable? Or they're just sort of waiting at the you know, I guess, waiting for Mother Nature to sort of you know, dump a bunch of rain?
Sal Mercogliano:
11:52
Well, every member of the Panama Canal Association is out every day doing a rain dance. I guarantee you that. So they're all. They're all doing whatever they can to get rain into the Panama Canal. Understand, right now you're heading in the dry season and the lake, the Gatun Lake and it's a freshwater canal. Most people are sitting there going. Well, you know. You know, ocean rise like ocean rise has nothing to do with it. It's a freshwater canal. You got to get up over a hill, it's going to get over an 85 foot hill, and so that's that's what you need to keep the lake going.
Sal Mercogliano:
12:20
When they built the new lane of the canal, they'd actually thought about this. They actually knew that, okay, these locks are going to be huge, we're going to dump a lot of fresh water into the ocean, and so they built these where called reclamation ponds. They were going to recycle water and they envisioned they would recycle about 80% of the water. You can't just dump the water back into the lake because of the salt water and issues. But what happened is the reclamation isn't working as efficiently. They're only getting 50%, but the other half of the water they're losing is from the old locks and they haven't done anything with the old locks, and so now Panama is looking at a couple of things. Number one, improving the reclamation process, maybe reclaiming the water from the old locks and, more importantly, building some more dams and retention to build up the water reservoir on a good tune lake. All of that is great for the future.
Sal Mercogliano:
13:04
It does nothing right now, for the next six months, and so what they have had to do is is, number one, cut back on the number of ships going through, and they've had to lighten the load of the big ships coming through. I understand the new locks were tremendous influence, tremendous change. Prior to 2016, the biggest container ship you could bring through was about 4,500 boxes. Now you can bring through 16,000. So it's it's. It may have been.
Sal Mercogliano:
13:29
One of those things that happened was after the supply chain crisis of the 2020s in LA and Long Beach backed up, a lot of shipping companies sat there and said well, I'll go through the Panama Canal and we'll go directly to the East Coast and the Gulf Coast, right where the population is. Cuts out warehousing in the Inland Empire. Cuts out Drage cuts out class one. It gets out California, which a lot of people like. So you go right into some environments and then, when you had the issue with the Panama Canal, they said well, no worries, we'll just go West, we'll go through the Suez, because the distance is almost the same. And they started doing that until the Red Sea blew up in their face. And now we find ourselves in this kind of global, kind of maritime choke point disaster.
Blythe Brumleve:
14:13
Do any of these maritime choke points exist elsewhere in the world besides these two locations?
Sal Mercogliano:
14:19
Oh yeah, I mean straight sprawlter. You have one. You can see it in the Malacca Straits and down in Singapore, you can see it in the English Channel, coming in the Baltic. The Black Sea is the other big one, obviously, where the Turks have the control over the Dardanelles and the Bosphorus, which has been significant because of Russia, Ukraine going on since 2022. There's the Bering Sea. As the Arctic becomes much more open and used, you get the Bering Sea between Russia and the United States. There's other small ones around the world. You know, on the Great Lakes we saw a strike by the Canadian lock workers so all of a sudden, ships couldn't get off the Great Lakes because the Suez locks were closed, and so you have a lot of little choke points around. But for big ones, I mean it's Panama, it's Suez, it's Gibraltar, it is Malacca Straits. Those tend to be the really big ones and of course, the Taiwan Straits is another one that has a lot of issues between China and Taiwan.
Blythe Brumleve:
15:15
Now, I've heard you mentioned the word locks a few times now. What is that in reference to?
Sal Mercogliano:
15:22
So the two canals are different. So Suez Canal is a straight shot. You sail into Suez and you come out in Port Said in the north. You just sail straight. It's 100 kilometers. It's the ditch, it's what that's referred to. You sail through the ditch In Panama.
Sal Mercogliano:
15:35
You've got to go in locks, and what locks are a series of gates.
Sal Mercogliano:
15:39
So you bring your ship into the first gate and you pump it up with water and you get up to the second gate, you get up to the third one and now you're up on the lake.
Sal Mercogliano:
15:47
And then the same thing you get a stagger down, and so locks change your elevation. They lift you up or lower you down, and you see that in multiple places. So, for example, if you're coming off the Great Lakes into the Atlantic because you can do that you come off the Great Lakes, go through the locks and go all the way out into the Atlantic. You're coming up from a huge distance I forget what it is Several hundred feet up off the Great Lakes, and so you got to stage down that entire path. And so we see these processes to do this, to bring them in, and even some ports around the world have gates and locks to keep the water up because of the tide and you know Liverpool is one of the most famous ones. You come into Liverpool, you come in behind the gates and the locks and the water will just empty out.
Blythe Brumleve:
16:31
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17:22
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Sal Mercogliano:
18:23
So the Red Sea actually isn't very complicated. That's the thing about this. It's very straightforward. So you have this conflict between Israel and Hamas in Gaza. So this is the old Middle East. This is the two-state solution. You had a very ruthless attack by a terrorist group named Hamas out of Gaza. This is an area that's inhabited by Palestinians. Israel has, in turn, basically attacked the Hamas and they've invaded Gaza. The Israeli attack on Gaza has been very polarizing because of the scale, the deaths of innocent people, and is polarized the region in multiple ways.
Sal Mercogliano:
19:03
The Houthi, who are a faction in a civil war that's been going on now for over a decade. So you've got a three-way civil war in Yemen. The Houthi own the western part of Yemen and this is the part right along the Red Sea. The Red Sea is the connector between the Mediterranean through the Suez out into the Indian Ocean. So the Red Sea is this 1,000-mile-long skinny little body of water and at the end you have these two choke points. You have the Suez in the north and then you've got something called the Bob El Mandab, the Gate of Tears, in the southern end. That's right where the Houthi are. So all the ships come down this narrow little gate.
Sal Mercogliano:
19:39
Well, the Houthi, who have done this in the past, started to target ships. Now they've done this periodically. They've targeted ships. They'll throw a missile or a boat or something at it to get attention. What they announced was in solidarity with Hamas, we're going to attack Israeli-owned Israeli flag ships. And what happened was in a very dramatic fashion. They staged a helicopter assault onto a car carrier when it's seen that kind of video on the galaxy leader. They seized the ship and then they started launching missiles and a variety of drones and guided missiles and ballistic missiles. But what has happened is the Houthi have kind of ramped up their attacks. So initially it was against Israeli ships. Then they started hitting other ships and then they said, well, we're going to hit any ship that's connected to Israel, and then they started hitting ships that have nothing to do with Israel. Then they started saying, well, we're going to look at any connection in the past. And basically they're not that very good at shooting at things, and so they're just hitting ships. And what happened was one of the leading container liners in the world, maersk, said OK, this is dangerous, we're going to pull our ships back.
Sal Mercogliano:
20:43
So when you sail through a war zone, you have to have something called war risk insurance. So just like, if you drive your car you're covered for everything you normally do. If you decide to drive your car through a war zone and it gets blown up, the insurance company is not going to cover that. They're going to sit there and say you probably shouldn't have done that. But you can get war risk and war risk insurance is this kind of almost like flood insurance on a house an extra thing.
Sal Mercogliano:
21:05
Initially it was very low. It's like 0.02% of the value of a ship, which was a couple of million dollars. But then as the attacks increased, the rate increased and it got up to about 0.7%. Now we're at 1%, which isn't a lot. If you have a ship like a tanker or a bulk ship carrying oil, you're talking about maybe tens of millions of dollars worth of value. So 1%, you're talking about $100,000. That's still economically feasible to sail through. When you have a container ship carrying 20,000 boxes, you're talking about anywhere from $100 million to a quarter of a billion dollars worth of cargo on board. And now you're talking about a million to $2.5 million in insurance, if you can get the insurance. And so what we saw happen was the big container line started backing off and then there were efforts to restart the trade.
Sal Mercogliano:
22:01
The attacks escalated. The US decided to counter that by striking it at the Houthi. They have since expanded their strikes backwards and now what you have is a situation where about half the normal tonnage that would go through the Suez Canal is not going through. Instead, they're heading around Africa, and what most people don't realize because they look at flat maps is Africa is a big honking continent. It's massive, it's tremendous, it's 3,500 miles around Africa, and Greenland, which looks really big on a map, is actually like a 14th the size of Africa. It's tiny, but Africa. It takes you seven to 10 extra days to go around and that's an extra million dollars at least in fuel, port costs, crew costs, charter rates, you name it.
Sal Mercogliano:
22:49
It's really expensive and what this is doing is displacing trade, and now ships that were supposed to be arriving on schedule in Europe or heading back to Asia aren't because they're still transiting. And what this does is it creates a butterfly effect throughout the supply chain, because now what you're seeing is cargo is delayed getting into Europe. So, for example, a very, very high-vis story was Tesla had to shut down operations in several German plants because the parts they needed are on a ship going around Africa, so that's creating a problem. So that's creating a big problem for them. So what you have to do now is delay, and what we're seeing is escalating freight rates.
Sal Mercogliano:
23:32
So go back to 2020, when we saw what was happening in LA and Long Beach. Well, we just saw in the past week the fastest escalation of freight rates ever. Now we're not up to 2020 levels by any means, but if you look at a chart showing those freight rates, it looks like it's like a rocket going off right now, and what that means is you're going to see higher costs in Europe. We're going to start seeing it in America very soon, because 30% of that cargo that's going from Asia to Europe gets put on different ships and sailed across to us. And then we're going to see it on the backside, because empty containers aren't getting back to Asia on time, which means that those containers aren't being packed. They're not going to get out before the Chinese New Year, so we're going to see delays hitting the West Coast. So all of this and again this all stems from Israel, gaza.
Blythe Brumleve:
24:23
So I have so many questions, ok, but first I want to ask for the Houthis why now this war has been going on for a decade in Yemen, the Civil War, why now are they choosing to start just attacking any I guess any ships that aren't Russian or Chinese.
Sal Mercogliano:
24:44
The Houthi are literally appalled by what's happening in Israel. They see the destruction of Gaza and the deaths of thousands of Palestinians as something they associate with. They're in solidarity. They actually have a fairly I don't want to say noble cause, but they have a justification for wanting to be on the side of the Palestinians. I think their actions are uncalled for, because what they're targeting is innocent ships, innocent ships and maritors, and what they're basically doing is OK. How do we express our solidarity? We can get a GoFundMe page. We can do that. What are we going to do? It's not going to get a lot of attention. What gets a lot of attention is when you start disrupting global trade.
Sal Mercogliano:
25:22
And what's scary about this scenario, and why it should be higher on everyone's radar, is the Houthi are a faction. They're a faction in a three-way civil war. They are not a powerful entity at all. Yet with a handful of drones, guided missiles and ballistic missiles a lot of these are hand-me-downs from Iran they have now interdicted 11 percent of the world trade. They're causing Egypt to go through a financial bankruptcy, potentially because half of the normal toll that the Egyptians will get in a year aren't going through. This represents about five out of $10 billion that the Egyptians get every year through the Suez Canal, that goes into their operating fund for their country, their budget is only $100 billion, so they're talking about losing 5 percent of their budget, not alone the fact that we're seeing freight rates increase, inflation, poor congestion, the Houthi for getting attention or getting a great return on investment for several thousand dollar drone.
Sal Mercogliano:
26:24
I am causing billions of dollars worth of headache for the West which, by the way, openly support Israel in this bombing attack while at the same time decry Russia for doing a similar thing in Ukraine. And so, if you're the Houthi, you're doing this. And what should really be of concern for everybody is, if the Houthi can do this, who else can do this? And what happens when a true nation state who has resources and material and capability decide to interdict trade? And that's one of the reasons why you saw the United States and several other nations decide we got to get in there and try to diffuse this.
Blythe Brumleve:
27:00
I think it's also, from what I understand, it's an economic imbalance as well, because the Houthi drones and the missiles are very cost effective, like sometimes as low as a few hundred dollars, a couple thousand dollars even, whereas, like the US, when they're battling against them, are using like two million dollar missiles. So that doesn't seem like there's see, it seems like there's something is going to going to break and bend.
Sal Mercogliano:
27:26
Yeah, I mean the Houthis have realized that you know what they can use now we haven't had any casualties yet. We've had ships hit, but nothing serious yet. I mean they've been damaged the ships, but nothing serious yet. But again it's they're using weapons that, for you know, for a long time you would heard people say well, you can't use ballistic missiles, these high trajectory missiles, against ships, unless they're very sophisticated.
Sal Mercogliano:
27:47
There's a big debate whether the Chinese had the capability to hit a ship moving at sea with these things, while the Houthi are doing it, and they're doing it in a way that works. They send drones over to a spot, they have people in boats and on small islands, they have the Iranians helping them out in the area, and so they're able to do this. And you're right every time. You know we shoot a standard missile, which is a two to four million dollar missile, to shoot down a $200,000 drone. You know, in terms of investment, it's the Houthi are winning. But the Houthi are winning because they're causing billions of dollars of economic displacement right now, and you know their argument is you want this to end, then tell Israel to back out of Gaza. And you know, if you create enough economic hardship, then maybe that works.
Sal Mercogliano:
28:34
I don't know if people are going to back off on this, but that's what the Houthi logic is, and you know it's very hard now to go to the Houthi and negotiate with them. They're not doing this for monetary reasons. They're doing it for ideological reasons, and ideology is tough. The only way you can push the buttons on the Houthi is their backers, and that's Iran. But the problem is Iran has ramped up attacks too. We've just seen Iran attack targets in Iraq. They just attacked targets in Pakistan, which is unheard of, and so this is really escalating in a way that most people are getting a little concerned about. As a historian, I get a little World War, I vibes, you know, little tiny, little, small, little regional conflicts that morph into a larger, big one.
Blythe Brumleve:
29:17
Now a couple questions here. Why would Iran attack Pakistan? Related to this issue. And then, why isn't? If Egypt stands to lose, you know, 5% of their annual budget? Why aren't they doing more?
Sal Mercogliano:
29:30
So Egypt is the easiest one to answer, because Egypt has got a problem, because if Egypt goes down and it smashes the Houthi, the fear is they're seen then to be pro-Israeli, and you know Egypt has got a lot of problems with the previous political party, the Muslim Brotherhood, within Egypt.
Sal Mercogliano:
29:46
Plus, egypt shares a border with Gaza, and so the fear they have is, if they anger the Hamas, then Hamas turns their missiles from bombing Israel to bombing the Suez Canal, in which case they lose everything from the Suez Canal, and so the Egyptians have got to play a very delicate role. The Pakistanis and Indians in particularly too, have really reacted to several attacks by Iran on shipping in the northern Arabian Sea. There have been two ship attacks perpetrated by Iran, and both the Indian Navy has come out in force. The reason the Indian Navy is out in force is because Indian crew members make up a lot of mariners out there, so they're coming out to protect their crew members and is targeting what they see as insurgents in their country being being funded by Iran. And so you have this. And so what you know, if you got a map of this region and you start making arrows who's involved, it's going to look like you know a five year old, you know doing finger painting, because it's going to involve everybody in some way.
Blythe Brumleve:
30:44
And now another aspect that I heard is you know, and I correct me if I'm wrong, but, like the French, are the only European country that are helping out as far as protecting some of these ships, because there are still ships going through the Suez Canal, they're just doing so with protection.
Sal Mercogliano:
31:00
Yeah. So this is where you get this weird other element here. So the US you know the US does what US does it announces an operation, operation prosperity guardian, which tells me that the Pentagon uses chappy GBT to come up with code names. But you know, they announced this operation. We were going to protect shipping and they say we're going to get all these nations involved. And so they got nations to sign on, but it was very slow in getting up and running and so several countries, france particularly, sat there and said well, we're going to start escorting our ships.
Sal Mercogliano:
31:28
France has a huge container line, cma CGM, which operates at a more say, cma CGM said listen, we're not connected to Israel at all. Some other container liners were connected. So, for example, the Houthi targeted Mediterranean shipping, msc. The wife of the owner of MSC has dual citizenship in Switzerland and Israel, so that was enough for the Houthi. So they targeted them. Msc has an alliance with ZIM, so they targeted MSC. But CMA CGM was wanted to keep their ships going through, and so the French have a frigate down there. They did the escorting going down there.
Sal Mercogliano:
32:03
But it changed when the US initiated the attack. Now the American commander down there, an admiral by the name of Brad Cooper, who's the commander of the Fifth Fleet, said okay, the defensive operation is separate from the offensive operation, but that's kind of a hard line to draw when the same ships are involved in the operation. And so now what you're seeing is you still have the Americans and the British guarding vessels in the Red Sea, but the French, the Italians, the Japanese, they're helping when they can, but their focus is to escort their own ships through, and so they're doing a lot of individual escorts. The strange part about all this is that the largest reinsurer for war risk announced the other day that they may no longer issue war risk insurance for US and British owned ships, which means that you may no longer see US and British owned ships going through the Red Sea, which means that the US Navy and the British Navy are going to be guarding ships that are not their own, and the ships that are going through in large numbers now are Russian and Chinese vessels.
Sal Mercogliano:
33:05
The strangest thing is the Chinese are providing perhaps the best protection for vessels, because all you got to do is on your AIS, is sit there and say I'm a Chinese company, or I'm a Chinese ship, or I have a Chinese crew on board or I don't know, I'm eating Chinese. I don't know enough. If you put something Chinese in there, you can get protection, because the Houthi don't want to anger the Chinese and so they're able to get through. And same thing with the Russians. Now I think behind the scenes the Russians and the Chinese are playing with the Iranians. To you know, give the Houthi information. So not as a tax ship, because initially there were some Chinese and Russian ships hit. They're getting a little better at that now. But I definitely do think that there's a lot behind the scenes that we're not seeing.
Blythe Brumleve:
33:47
Why wouldn't the Houthis want to attack any? Why wouldn't they want to anger the Chinese? Is it strictly because of the, I guess, the Russia Iran alliance?
Sal Mercogliano:
33:55
I think I think it's because of alliances that are going on, the fact that there's a lot of oil trade from Iran to China right now, and China is a big geopolitical player. They like the application of soft power. They're not the Americans who like to shoot a missile here, they like to apply kind of pressure. You know below the scenes. So China has a big influence in the region. Through their Belt and Road initiative. They're doing a lot of infrastructure and building in the area. The only Chinese overseas naval base in the entire planet is in Djibouti, at the very end, right across from the Houthi. So the Chinese have been there for a long time. They've been doing these anti-piracy patrols for a long time. So you know there's a lot of infrastructure and China's got the money to help people. You know they can make things happen and so you know.
Sal Mercogliano:
34:39
I think China has been able to exert a lot of influence in the area behind the scenes. And I think this is the big misconception the US is making. They think there's a military solution to this and I don't think so. I you know the Houthi have been bombed by Saudi Arabia for a decade and they haven't given up, and I think we're very good at blowing things up. We're really great at that when we do do it repeatedly. But you can't blow everything up and I think we lose the image that the persons we have to convince to sail through this area isn't the Houthi, it's the insurance companies. And if I'm an insurance company, I am not taking the chance that one missile or one boat comes loose and sinks a 250 million dollar container ship and I have to pay that out because the liability associated with that is going to be catastrophic and there's no way that the shipping companies are going to be able to do that.
Blythe Brumleve:
35:35
I guess I watch a lot of action packed movies and I'm just thinking to myself if all of this is going on with a small fraction of a terrorist group and I would imagine is the Houthis are a terrorist group, I guess technically classified.
Sal Mercogliano:
35:49
They've just been redesignated as a terrorist group, although they have 30 days until it goes into effect so they can move all their cash and money in the meantime. Interesting Again we're not being very effective in declaring groups terrorists. Go ahead.
Blythe Brumleve:
36:02
I did see that it was a strongly worded letter that was sent to them. So I was like, well, if Maybe the strongly worded letter doesn't work, why wouldn't the Americans just go in and kind of bomb them away Like I don't?
Sal Mercogliano:
36:16
know Well again what's preventing us from sending Vin Diesel and the entire crew in and fixing this up and getting this fixed up is number one.
Sal Mercogliano:
36:28
I mean, if you're the Biden administration number one, you've had a bad track record with land engagements following Afghanistan pulling out. You've got a political. You've got a big thing called an election coming up in November. Do you really want to go back into the Middle East and land there and start committing forces again? It would make the most sense because you know, if you look at the piracy issue back in the 2000s and 2010s, what fixed the piracy issue wasn't naval patrols. It diminished it, it reduced it. But what changed it was the African Union going into Somalia in 2017 and eliminating the nest of pirates. That's what did it.
Sal Mercogliano:
37:04
You know, when you look at the U-boats in World War I, world War II, with defeated U-boats wasn't the Navy. We suppressed them, but they were still sinking ships to the last day of the war. What ended them was the war on land. But again, you don't have a desire for the Americans to put a battalion of Marines ashore in the region for fear that we're going to get sucked into that and not out of it again, especially by November for a presidential election.
Blythe Brumleve:
37:29
So if I'm a merchant mariner on one of these ships that does decide to take all of the risk and go through the Suez Canal, what does that look like? Am I armed, walking up and down the ship? What does that I guess sort of situation look like?
Sal Mercogliano:
37:45
So through my channel I had the opportunity. I had a batch of merchant mariners who sailed through this region contact me and it's been really interesting to hear them. So a batch of them went through on January 9th. This is the big battle that was fought, that kind of triggered the American reaction huge, massive convoy battle.
Sal Mercogliano:
38:02
And three things stood out in all the conversations with all the mariners from the ships. Number one they said it was unbelievable. It was they used this specific word it was a blank show. It was like it was like there was so much going on. It was like insane. It was like it was like being in a movie but you weren't in a movie and it was like three hours of nonstop of missiles and combat going on. They said.
Sal Mercogliano:
38:23
The second thing was it was really disorganized in some ways. A lot of the ships had embarked security detachments, private security detachments. So a very common thing that had happened during the piracy period is you'd bring on these arm guard detachments. Commercial ships can't have weapons. You're not allowed to go into port. We're not gonna allow a ship from a foreign flag with foreign crew coming into New York loaded to the gills with machine guns. So what happens is these ships meet small boats, these offshore supply vessels, and what comes on board is an armed security team. They bring the weapons, they bring the crew, they get on board, they ride the vessel through the contested waters and at the other end they meet another boat. They offload to that boat and then that crew gets on another ship and goes the other way. And they do that. They do like several weeks doing that those crews, and you pay for that. You pay for that. Initially it was very lucrative. Now they've farmed this out to getting kind of foreign workers to do it and they get people from foreign militaries in to do it.
Sal Mercogliano:
39:18
Well, that works great against four Somalis in a speedboat with AK-47s. Doesn't work when you have drones and missiles coming at you. You gotta have the Navy on board to do that and what you're seeing is the Navy is providing protection. The US Navy and the British Navy in particularly have basically stationed their warships between the main shipping channel in Yemen and they're working almost like skeet shooting. The skeets are coming overhead the drones and the missiles and they're knocking them out of the air. And the problem that the insurance companies has is that's great, but you gotta prove me 100% you're gonna knock everything out of the air, and that's difficult to do because things are going to get by and that's the report I got is that every now and then missiles would get by, and fortunately these aren't the most sophisticated missiles. But when you have one blow up a few hundred yards off the bow of a vessel it wakes you up and so it's harrowing.
Sal Mercogliano:
40:09
And then you have shipping companies where the shipping with a cruise on board sit there and say, hey, we're risking our lives. How about a little extra money here? And they ask for war risk pay. Mares canounce. When mares was gonna send their ships through, they were gonna double the wages, which sounds great, but it's a weak worth of double salary. It is a drop in the bucket of what the profits they're making. And yet some shipping companies aren't willing to do it. Matter of fact, the American companies are not willing to pay the double wage for the cruise to go through, which is, I think, is a huge problem for me. It's like these guys are getting and women are getting shot at, and it's by hook or crook that they're not getting hit. So it does create problems because when you sign on a ship again and they sit there and say, well, where am I going? Well, you're going to the Red Sea. It's like, no, I'm not, because I'm not gonna sign on, because I don't have to take this job, I have options.
Blythe Brumleve:
41:02
I'm not gonna do a journey. I was gonna say is that, can they know, I guess, sort of the route ahead of time and be able to give a permission like yes, I'm willing to risk it versus no, or you just find out?
Sal Mercogliano:
41:14
Sometimes they do. There's a company in the United States that actually transports fuel to Israel Under a State Department contract. We provide Israel with high-octane fuel for jets and military, and so State Department charters a tanker and they sell it in, and during the period of the attack there was a big debate. It's like you want us to sell into a port in Israel during rocket fire. It's like okay, and we're gonna be pumping high-octane gasoline? It's like okay, I think I want something in return for that. It's like a little bit something extra for it and there was a lot of debate.
Sal Mercogliano:
41:45
They actually had to have negotiating about it and everything and it's. You know it makes the crews look bad because like well, they're holding out for money and everything, but in truth they want to be paid for their services and you know they're taking a risk and you know they expect just compensation for that.
Blythe Brumleve:
41:59
So you just brought up Israeli ports. Are those still operational during all of this that's going on?
Sal Mercogliano:
42:06
Yep, yep, the main ports are up and running. We've seen some issues. There was a big problem actually at the very beginning, because when Israel everybody in Israel is in the Israeli Defense Force, you don't have a choice Turn 18, you're in the Israeli Defense Force and, matter of fact, you're in the Israeli Defense Force for years in the reserves. They called up reserves, so a lot of people in supply chain got yanked out to go in Cause. If you think about who's in supply chain last time a lot of young people, a lot of dock workers, a lot of people in the offices doing the clerical work, a lot of the you know, the administrators. They got yanked out and so they had a big problem for a while there, where everything slowed down in the ports. They wanted to be efficient. It's like I want to bring a ship in and pull it out real quick. Well, I can't cause. Three of my crane operators are not here because they're they're, they're at the front lines. And so Israel actually had to change some things. They had to release some people, get them back into some critical jobs. It was very similar to what we saw in World Wars, where people got drafted out of out of crucial jobs. So, yeah, the ports are still open now, Not as many ships coming in from outside of Israel, because there's a fear.
Sal Mercogliano:
43:08
There was a ship that was targeted going through by the Houthi, a ship called the Meriskah Hung Jo, and it was it was. It was not Israeli owned, not Israeli linked at all, but the ship had been in Israel back in October and the Houthi says, oh, that's target, and so you know. So there's a lot of people who are saying they don't want to be targeted, even have any connection going into Israel right now.
Blythe Brumleve:
43:31
So how do you see this kind of playing out? Or is it just you have no idea at this point how to how to determine?
Sal Mercogliano:
43:40
CEO of Merisk came out, vincent Kirk Kirk, and he sat there and said this is going to be months, at least months. We're seeing. I understand if tomorrow, the Houthi say you know what? We've realized the error of our ways. The straits open, everything goes back to normal. It's going to take a month or two to reset everything. It's you've already got the disruptions going on and so it's we're definitely seeing several months out.
Sal Mercogliano:
44:01
The problem is most people haven't seen this yet because the delays and the cost haven't really hit the US yet. You're going to see at the end of January, early February at the earliest, where we're going to start seeing this start tick up and and the other problem you have is shipping will adapt to this. We will, you know, we'll go around the Southern end of Africa. We've done it before. You know, sue has closed, sue has. Canal was closed for eight years, from 1967 to 75. So you know we will go around it and and and make it happen. But it's going to cost and and what's really significant right now is the container liners are in a really good position because they have excess ships and their freight rates were so low coming into 2024. If you read all the forecasts for 2024, like in November or October. It's like, oh yeah, bad year for the container companies. It's, it's, it's really bad. Now they're revising forecasts. Their profitability is up because they're using extra ships, they're they're getting higher freight rates and they're getting a percentage share off that, so everything's looking better. So I I don't. There's some interesting forces at play here that don't want to fix this. They don't want to say it out public, but it's really hard because the Houthi, again, are ideological. You can throw every missile the US Navy has at them. You can land the Marines, you can do everything. It's not going to stop them from hurling a missile every now and then you got to convince the insurance companies. That is, that is. That is easier. So if you look at the scenario right now, that's going on in the Black Sea, so just use the Black Sea.
Sal Mercogliano:
45:28
When, when Russia blockaded Ukraine, that cut Ukraine off from exporting grain, you had a deal that was brokered by Turkey to do this, this Black Sea grain initiative. You started seeing the grain come out. Then Russia withdrew from it, and the Russian reasons Russians withdrew is because the Ukrainians were being very effective at sinking their ships, and so the Russian said okay, we're pulling out of this. We don't, we don't like this deal. But the Ukrainian sat there and said, no, we're going to keep running ships in. And they have.
Sal Mercogliano:
45:55
And what you've seen happen is it's gotten safer for them to do it. And what we're seeing is the war risk insurance has come down. It was up at 3%, it's now at 1.25%. And you know they're showing normalization. Hey, the attacks are not happening, they're not as frequent, they're not severe, and that takes time. And that's the problem is, it's going to take time to convince the insurance companies that, listen, you don't have to worry about the catastrophic loss of a vessel, but again, it's all gonna be a matter of of what works best on the balance sheet for the companies.
Blythe Brumleve:
46:31
I'm not sure if you know the answer to this, but what goes on in sort of the insurance, sort of war rooms? How are they analyzing this? Do they have, you know, sort of experts from all over that? Are, you know, providing insight and consulting them on what they should do Like? What does that look like from their end?
Sal Mercogliano:
46:49
They hire the person who has the worst case environment. You know the most dismal person who's got the like dourist personality you can imagine to think. You know the worst pessimist in the world. That's an insurance broker. He's like, okay, how bad can this be? And it's still not the worst. I'll give you the best example I ever heard.
Sal Mercogliano:
47:07
So, ensuring a container ship like ever given. They got stuck in the Suez the worst case scenario. They came up to ensure that vessel was okay. What's the worst thing could ever happen to a ship like the ever given? They said, okay, we got it. Ever given runs into a passenger liner and kills everybody. That's the worst case scenario. The ship sinks, the passenger liner sinks and you killed 5,000 passengers. What's the payout on that? You know what's the economic payout on that? And they said, okay, that's what we gotta ensure against. That's the worst case scenario we gotta ensure against. And what's interesting is I talked to some insurance people afterwards and they said, yeah, we didn't think worse enough, because ever given was worse than that, because we didn't kill anybody. But the worst thing was is we made 450 ships late and now the liability for those 450 ships worth of cargo is more than we ever envisioned. So, yeah, they're doing the worst case scenario because, again, it's not just the loss of the cargo, it's not just the loss of the ship, it's not the loss of the crew, it's the environmental damage.
Sal Mercogliano:
48:07
What happens when, all of a sudden, you have this massive oil spill in the Red Sea, which is basically a huge tidal basin? The water doesn't go in and out of the Red Sea too much. So you've killed fishing, you've killed the coastline, you've killed everything. That's the scenario you start getting into, and it's really hard to get them to start coming down. What you have to do is show that they're gonna make enough revenue coming, because this is the other thing too. If war risk is so high, no one's gonna go through. You're not gonna make any money, so you're kind of killing yourself at the same time. So they wanna make money, but they wanna minimize the downside. What's that sweet spot and everything? Why is it that when you automatically turn 25, you're a better driver than you were when you were 24 and 355 days? I don't know what the difference is. You're kind of the same person, but in terms of insurance, you change dramatically, and that's kind of what they're looking at.
Blythe Brumleve:
48:58
So if we bring it back to the state side people who are working at the ports, people who are working in brokerage offices and they're responsible for communicating some of this information to their customers how do you even advise them, or would you advise them to explain? Maybe this is why you're gonna have a rate hike when your shipments in February?
Sal Mercogliano:
49:23
Yeah, you know, it's so funny as I started talking about this really early. I was talking about this in October and November and and I had some viewers on my channel send me some notes. It's like. It's like Sal, thank you. I was the smartest person in the room the other day because I talked about this and and it has come to fruition. We're seeing the rate heights and we're seeing this.
Sal Mercogliano:
49:40
So you know, we planned ahead, so I told everyone you got to start press pushing forward some cargo. So so you know I'll give you one of the things like it's happening right now is is this so you've got these big, you know again, ships coming from Asia. They're going through the Panama Canal. They're loaded down with cargo. They can't load down all the way. So I got offload some of it in Panama, rail it across, pick it up, go to the east and Gulf Coast offload. But now that ship is largely empty, heading back to Asia. They don't want to send that ship back through the Panama Canal because that takes a transit away from a loaded ship coming the other way. So they're sending that ship now back to Asia around Africa and that's a longer haulback and and this is going to delay goods coming back in. So if you're back hauling something to Asia right now, it's gonna take a lot longer than you planned for. So you got it.
Sal Mercogliano:
50:26
You know, one of the things I think that I hope people got from the supply chain crisis back in the early 2020s is Okay, you got to diversify. You got to be looking at multiple. If you're just coming into one port, if everything you own in the life comes in through Los Angeles and you're still doing that, you should have learned a lesson. You know, because because this is not boating well for you, if you're counting on this, because it only takes one thing to throw a monkey wrench into it If you are now bringing in is like I can come into Los Angeles or I come in the Savannah, I can come into Houston, I could come in Charleston. I come in Norfolk, come in New York. I am in a much better position. I can call an audible and change the play up. You know my playbook isn't carved in stone and I'm gonna you know I'm gonna be Alabama and run up, run up the middle every time and lose against Michigan, which still haunts me Blythe, it haunts me a lot, but anyway, you got to be able to have that, that, that that ability to play, and so that's why I think is is is neat.
Sal Mercogliano:
51:20
This is why you can't be doing your own logistics. You've got to have professionals who know this, who saw this happen. And now we're realizing that and they're getting ahead. You know, I just sat in on a freight seminar by one of the freight forwarders really good, really, really top-notch. They're watching the shipping. They they had a good handle on it. They're talking to the operators, they're talking to shipping firms, they're communicating to everybody's like hey, you know this, this is Q1 is gonna be Different than what we thought of. So for Q2, you got to be start planning ahead a little bit more. That Chinese New Year is gonna Cause more of a disruption than we thought, because not everything's gonna be here before that. So make, make preparations for that and you know, I'm not gonna be surprised to see some adjustments Happening here. And it's really trying to watch it and it's hard to do because it's it's. Shipping is such an isolated Field that it's very hard. Like you said in the beginning, it's like I don't know what's going on. How is this gonna impact me directly?
Blythe Brumleve:
52:14
and so for a lot of, it feels like, you know, the situation in the Red Sea and then also the Panama Canal has sort of sucked the oxygen out of the room for a lot of. Maybe other Are, or maybe I'm not sure. Are there other shipping stories that we should be also paying attention to in addition to these two big ones?
Sal Mercogliano:
52:32
Well, I would argue that you're not seeing the impact of them very well. So, for example, we got ships piling in up off Savannah right now and you know we usually see ships off Savannah, but that number is starting to grow quite a bit and you know we're seeing some containers not arriving as as it should be. So you know, for example, a lot of the container ships that go through the Suez into the Mediterranean hit a couple ports and Offload the cargo. Well, that's not happening. So what you got is ships coming around Africa, going in the Tangier or Algesias in Spain, offloading, and so you're seeing the kind of the, the influence of that. You know the ability to get an empty container is going to be tight all of a sudden there's a finite number of containers out there and if you're expecting to have an empty container to load some cargo that you need to haul from the US Outside, that may get tough. You may want to grab a container now because they're going to get tight. You know Most people don't. I don't want to lease a container early. I don't want to pay empty lease to have a box out of my yard. It doesn't do me any good. It's like well, if you can't get it in a week or two or a month or two, you may want to be paying a little bit extra to have it here because all of a sudden there's going to be a shortage. About that, I think what we're seeing right now is the focus is so much on these big things.
Sal Mercogliano:
53:40
I'll give you another one right now. When you have a problem hauling in the short distance, like we're seeing, what do people do? I got high priority cargo. I got a ship it. I'm gonna put it on air. You know how much is air freight right now clogging up? We've got shortages of aviation fuel. How much is that aviation fuel price going up? Because aviation fuel has to be refined. It has to be distributed Well, aviation fuel. I'm not gonna load a load of aviation fuel in the Middle East and sail through rockets to bring it to Europe because I'm on a floating bomb. You know we're gonna sail this around.
Sal Mercogliano:
54:13
And so what happens when we start seeing Aviation fuel going around? I saw a story just today that every Jones Act tanker these are the tankers that move oil and fuel around the United States because of the Jones Act law are Booked for 2024. They're all booked, so you know if you've got a fuel issue, for example, if all of a sudden we have a hurricane because that never happens, you know if we have a storm that shuts down refineries and all of a sudden we don't have Gas in the pipelines, or you know something happens in Florida that you, you know. All of a sudden everything shuts, that's gonna cause a disruption, probably Amplify it more than I previously knew. So you know, if I'm a trucking firm, you know Is it better for me to keep my tanks pressed up at my facilities to fuel my trucks?
Blythe Brumleve:
54:58
It probably is at certain times, because disruptions could be more prevalent now than ever before so it's almost like this this entire conversation is just, I I guess, a kind of an awareness level of if you weren't already paying attention before, you should be paying attention Now, so you can get ahead of some of these things. I think you had just mentioned that you had some commenters that had listed these concerns and made those preparations in advance, so they're kind of avoiding some of these overages, overage fees.
Sal Mercogliano:
55:30
Yeah, you know, we all use just in time logistics, we all do that. I mean, I don't have, you know, a year's worth of food in my house. You know it's weak to weak. You know some commodities. I'm just gonna do it. It's just in time food. You know, I'm just gonna do that and that's the way we operate and you know, which is fine.
Sal Mercogliano:
55:43
But the way the global supply chain, especially on shipping, works is there's not a lot of slack in the system at times and when you cause disruptions, it takes time for the system to catch up and when you disrupt it by a couple of percentage points either way, it has ramifications and it just Resonates down.
Sal Mercogliano:
56:00
You know there was a debate about well, everyone's gonna file in to sit that a West Coast ports right now. Well, no, they're not, because there's a lot of issues about coming in the West Coast ports that still exist, that they want. Even though the rail companies are sitting there saying we want rail freight, we'll take it. You know, tomorrow, bring it in, we'll do it there's still a lot of hesitation about going in because there's a lot of variables going into California ports, you know, with terms of dryage and trucking and labor issues. So you know you have those, those, those kind of hesitations. And again I go back to you know there are people who watch this every day and they're really important for you and the supply chain To know this. You know, if you're if you're, you know, just a regular routine shipper, you don't need to be watching this, but you need someone who does it for you all the time.
Blythe Brumleve:
56:42
So if, if Sal is is president of the world, how are you fixing these two big issues that can hopefully, you know, alleviate some of the other, I guess, ongoing pressures that typically exist in shipping?
Sal Mercogliano:
56:59
Well, you know again. You know it's. It's hard to make it rain. I mean, even as president, you can't make it rain and so you know you do have climate issues. It's. You know, it's really, it's redundancy and in taking lessons that we've learned, my fear coming out of 2020 to 2023 and COVID and the supply chain crisis is okay.
Sal Mercogliano:
57:15
We saw a lot of things go wrong. Have we fixed them? Or have we even acknowledged that there are problem? What are we doing to fix those problems? You know, you know we talk about infrastructure in the United States all the time.
Sal Mercogliano:
57:25
If you look at the three trillion dollar infrastructure bill, how much of that went into ports? Almost none. It was a fraction of a percent. It was very minimal. You know there's got to be better ways to do it. You know you need to have some redundancy in the system to be able to do it. You know there are there choke points. Choke points are always gonna Exist there. There's little areas that you can't get away from. I mean and in truth, bob Elmandab and Suez is a lot better Of a choke point than the Straits of Hormuz, because that's a, that's a cul-de-sac. If you close the Straits of Hormuz, you can't get out of there at all. So you have to have it. You have to react quicker. I think one of the flaws that the US did and the world and it's not just the US, because this is really a world issue is they didn't react quicker enough to the Houthi when the Houthi started grabbing ships and they started shooting, and there should have been a quicker reaction to it. I think if you reacted quicker, that may have convinced the Houthi maybe not to be as bold at times. But when you react slower, they're going to keep ramping up, ramping up, ramping up, and now it's kind of hard to get them to back down at times.
Sal Mercogliano:
58:24
I Think we got to look at how the systems Function around the world. What we're seeing right now, at least on global shipping, is a reordering. We you know we announced the last year that the 2m ocean Alliance, msc and Meris, are splitting in 2025. Meris just came out, announced a new alliance with Hapog Lloyd the Gemini. That that's a reordering. We're seeing shuffling going on and the fear that we have is that we see a big reshuffling and we see a collapse of in the container liner again, kind of like hand gin back in 2017, which caused chaos for a lot of shippers around the world because their cargo got stuck in that system.
Sal Mercogliano:
59:05
You know we have to do some more things for more oversight and more visibility. I don't like regulation, I don't like sitting there saying that the government can fix things, because they can't. But I think Visibility is one of the key things and being able to put light to it. You know why is it that the CEOs of these ocean shipping companies were not, you know, called up sooner to talk about what's the plan here, how do we fix this? Because in many ways, when Merisk announced they're pulling out of out of the Red Sea and then announced they're going back in, then announced we're pulling back out again, okay, that's not an economic decision anymore, merisk, that's a political decision.
Sal Mercogliano:
59:40
You're, you are impacting foreign policy, military policy of countries, and you know that's because you're a big corporation now a big international Corporation. You have a big power. It's very similar to almost like the East India Company of the 1880 1800s. That's the power that these companies have and logistics power. Companies can do that. They can do it. You know, we're used to trucking in the United States, which is very small little firms, but ocean shipping is the exact opposite it's. It's it's behemoths, it's it's these massive Entities that control 10 companies that control 85% of all the ocean shipping. That's what you have to see and and you know there are a lot of elements that need to be looked at, and the fear I have is that we regionalize shipping, that the global shipping common becomes a regional shipping call Area where you're just shipping between small areas, you don't ship outside those areas, and and navies and nations become very protective of their shipping and that means it gets very expensive to ship on the oceans.
Blythe Brumleve:
1:00:41
So it's. It's a lot of like I don't want to say heavy topics, but I mean in some instances, of course, that that's very heavy. It's like, oh my gosh, how do we get out of this? But Is it just a sense from like a historical perspective, that all of these things, conflicts like this, are always going to exist and we just have to, as a human species, just sort of work to problem-solve and work Our way around them?
Sal Mercogliano:
1:01:03
I think it's two things blood. Number one we don't see these. These things happen as much as anymore. Therefore, when they do happen, they seem to get more, just, you know, a disproportionate amount of attention and at the same time, it's the fact that the Houthi, a very small little regional player, is having a global impact because you can, you can reach out and do more, because we're more intertwined, because we're more global, because we have more communication. I mean, the Houthi have Communication. They're gonna be clear. I get trolled by the Houthi all the time. I have, I have. I had a video, I'm not gonna kid you. I had a video that was copyright infringement of the, of the landing of the helicopter on the ship, and I'm convinced it was the Houthi who didn't want me to Use the video and I won. I beat the Houthi. I'm the only one who's beat the Houthi on YouTube, but they have an influence of reach that's kind of disproportionate to themselves. So I do think that we're in a much safer world. You know, and perhaps we hype this up, maybe too much at times, because you know what what we're not talking about is.
Sal Mercogliano:
1:02:02
The global system is working. Trade still working, goods, you know, nothing is stopped flowing. It's going longer. It's being displaced. You're still gonna be able to get your Stanley Cup. You're still gonna be able to get everything you want. It just may take a little bit longer, which isn't the end of all things. Now there are critical things that have to be shipped, and we may pay more through the nose for that. We may have to allocate it to air or Expedited shipments, but in large, we can basically work through these issues, but it does make us more cognizant of the fact that we're much more intertwined than we've ever been in the past.
Sal Mercogliano:
1:02:35
You know there's this argument that we've been globalized since ancient times. You know we found Chinese coins in Pompeii. Okay, well, true, but it's not like there was constant trade between China and Pompeii. You know, now there's concentrated between China and Pompeii. You get it all the time. That is the element. So I do think we we tend to maybe, maybe, magnify the issue quite a bit because we can talk about it more, but at the same time, I think we can also be better prepared to handle it, because we have more, better access to information and alternatives than we ever had in the past and I, too.
Blythe Brumleve:
1:03:10
I just wanted to add on to that that, you know, I heard. A great comparison is that, yes, we are dealing with these conflicts right now that are affecting shipping, but we're also not dealing with it the compounding efforts of what happened in 2020, where it was just this massive increase in demand of products, and so we're a little lucky that that's that demand is not there in order to further complicate all of these issues that are going on.
Sal Mercogliano:
1:03:33
Yeah, because that was the issue I always argue in 2020, we didn't have a shipping crisis. We had plenty of ships. There were 109 off LA. I could get you a ship. There was no problem with ships. The problem was is that we just changed our ordering habits, so you had like the kind of quote unquote pre COVID ordering habits and then you had the COVID ordering habits superimposed on top of them and the problem was nobody knew when COVID was gonna stop, so you couldn't stop ordering the pre COVID stuff, and so we wound up ordering was kind of like two parallel sense of goods at the same time.
Sal Mercogliano:
1:04:05
I always make the analogy that the toilet paper shortage wasn't caused by the fact we were using the bathroom more. We were using the same amount before as that. The fact was you were home 24 seven as opposed to being out half the day, where you didn't use as much toilet paper. In your house there was plenty of single ply, industrial sized rolls of toilet paper. But we're human beings and if there's one thing we're gonna pamper, it's our butt, and so we're gonna spend a little bit extra money and get some two ply, three ply, and that's where you started running out. You could've got all the one ply you wanted. So it's just, it created that problem in the supply chain. You're right, we don't have that right now. The problem, but too, is what's that next black swan flying overhead that we don't see yet?
Blythe Brumleve:
1:04:48
So, before we get into the growth of your YouTube channel and sort of the marketing side of things, I am curious to know do you have being a history professor and being able to talk about a lot of these stories with your students? I did want to ask one particular question. It says that this actually comes from my fiance. He's also a big fan of your content as well. He asked how much cross, if any, is there between the topics and the content you cover on your channel and the work you do with Campbell University. Do you use any of it as a basis for lesson plans, and what do your students and faculty think of your internet fame?
Sal Mercogliano:
1:05:27
So it's a great question. I know it came from your fiance. That's great. I'm glad he asked that one. So two parts of that question.
Sal Mercogliano:
1:05:33
So number one yeah, I use stuff like this in my class all the time. Matter of fact, it has helped me develop classes that I do in. So, for example, I'm teaching a brand new course this semester called the history of business and trade, and we literally started that class off talking about the Red Sea. It was the exact thing. We're talking about global trade. We're using that example. We're going through a historical analysis right now of the history of business and trade. Plug a great book here, a splendid exchange how trade shaped the world by Walter William Bernstein, great book using that right now. So it's funny. We're talking about the Red Sea regarding to the ancient Egyptians right now. So it's interesting to see how that plays out. I've also used it in maritime security class. I teach in a maritime history course. So, yeah, it does influence the way I teach here. So that's a big thing In terms of, I get a lot of attention for the YouTube channel.
Sal Mercogliano:
1:06:32
I really do. It's funny. The media people here at my university will always tell me it's like they have a thing that catches every time Campbell University is mentioned. They get a Google order and they say man, it's like we dread when shipping things happen because it's just like nonstop you that come flying through, he goes, he goes, he goes. You get more hits than the sports team sometimes coming through. So it's a lot of fun. I think I get a little jealousy at times because I do get a lot of attention for doing this, but I gotta say my university is extremely supportive. I'm doing this for my office at school, so when you watch a video for me, I got Campbell University in the background. So they're extremely supportive in me doing it. They love the publicity. They really do. They think I get the word of Campbell out quite a bit.
Blythe Brumleve:
1:07:18
Do you see an increase since 2020, where supply chain sort of became like a it gets more well known? Do you see an increase in interest in taking courses like what you offer?
Sal Mercogliano:
1:07:29
It's so funny, as I've had people outside the university say I wanna send my kid to Campbell to take your supply chain program. It's like I don't have a supply chain program, don't come to me, I'll send him some place else. It's like I know where you need to go, but don't come here because I don't have one. But yeah, I have students ask it all the time. We have a program here in Homeland Security and I talk about Homeland Security, maritime Security program all the time and so that's a big one. I push my students to. We do a course on critical infrastructure and so I talk about ports and shipping and everything associated with it. It's always very interesting and I think I've been really pushing my business school side to really push this more. I think supply chain is a great opportunity. We talk about it all the time and the potential and the aspects for it.
Sal Mercogliano:
1:08:13
What's really interesting is, I gotta say, as a historian. My undergrad was a BS in marine transportation, so I did an economic business, very logistics undergrad, but it's the historian in me that's actually works a bit better, I would argue, because it allows me to synthesize a lot of information, to read a lot of things and then to project it and to really focus my attention. I don't know if my business and logistics training really helped me with that as much as my historian training with that. And I joke because I deal with a lot of MBAs too, and I think MBAs are great. They're fantastic, but they also tend to be very narrowed focus sometimes too, and I think historians allow you.
Sal Mercogliano:
1:08:52
One of the things I love about being a historian is I can look at something at the 500 foot level or go all the way up to the 50,000 foot level and I could zoom in and out all the time. I think it's really helpful at times to do that. So it's been a really interesting mix. What's been happening? It's been a crazy three years with this thing. I've got a lot of answers.
Blythe Brumleve:
1:09:09
Do you have a favorite story that you like to tell your students, like a favorite shipping historical story?
Sal Mercogliano:
1:09:15
I don't know if I got a favorite historical shipping story. I mean, I always tell them the story they ever given because it's a great one, because it's just. You know, if I knew, all it took to propel me into fame was that I would have bribed a helmsman on a big ship years ago to hook a hard ride in the Suez and run that ship around Because it was just. It's amazing. You know, what I talk about with the students is this I, you know, because I'm dealing with young students, I'm in a very kind of small the medium size college. I deal with athletes a lot, and so we're talking a lot about right now, about name, image and likeness, which is a big hot topic. And you know I keep telling them it's like, listen you, it doesn't matter where you are, you can make a name for yourself. It doesn't matter. You know, you don't have to be at a big institution or a big university, you can be someplace, like where I am right now, and do it, and I'll show them my video. That's my most popular video I ever did. It's got almost a million views and and I'll show them that and I'll talk about the revenue I got from that and I'll tell them right there.
Sal Mercogliano:
1:10:13
I said that video took me. You know, you look at the timestamp. You know 15 minutes to make. And I said it didn't take me 15 minutes to make that video, it took me 30 years to make that video I had. You know, it took a lot of elements to get to that point where you can sit down and for 15 minutes do this. And I said that's what you need to understand.
Sal Mercogliano:
1:10:31
And so you know, my shipping thing I talk about all the time is when I was driving the ships. I had no idea about any of this stuff I did. All I cared about was, you know, keeping the bow between the anchors. That's what I worried about, and not running a ground and making the news. That's that's what I wanted to do. Now I understand the bigger picture, and and and what I try to do is is make people in the shipping industry understand the bigger picture, because they don't lots of them they just see the balance sheet. And same thing with people who are not involved in the shipping industry make them understand it. So you know, I think everyone really has a favorite story in regards to that.
Blythe Brumleve:
1:11:03
Do you ever get scared of? You know powerful people kind of coming for you?
Sal Mercogliano:
1:11:10
Oh, I got a phone call not too long ago. I was on LinkedIn of all things. I'm on LinkedIn and like I friended somebody. It's like I saw somebody. Actually he connected to me. I looked at it and I was like, oh, wow, that's that's impressive. I don't want to say who it is, but it's like wow, that's, that's impressive. I mean, I mean, they're busy people and they're really up there. And you know, all of a sudden I got that LinkedIn and it's like, yeah, hey, sal. It's like, oh, okay, you know, and so I sent back. He goes hey, if you got a few minutes, I'd really like to talk to you. It's like, oh God, I'm in trouble. It's like there's no way I'm not gonna yell that right now because I've been saying things and it was the most cordial discussion. It was like Sal, appreciate everything you do. It was it was like really impressive and it's amazing.
Sal Mercogliano:
1:11:51
I think I've mentioned this to you before, but I've gotten contacted by people. It's like are you kidding? I'm like assistant secretaries of, of, of, in the cabinet level. It's like. It's like you know, hey, the secretary started your video. I was like, really, it's like, why did you see my video? And it's like, it's like it's really like your opinion and input on this. It's like, okay, I'm like YouTube. I don't like to use influencer, but it's like it's just a YouTube guy. He goes no, no, no, you got a good handle on things. We're really interested on it and I like to think that at times I have contributed a little bit with this and it's amazing the influence you can have.
Sal Mercogliano:
1:12:26
You know you say this all the time, but I'm back basically copy you all the time. If you're not on social media and using it correctly, you're. You just don't understand. I tell every professor I ever do. It's like man, you are an expert in this field that nobody else on the planet does. He's got. There's gonna be a moment when you are sought after more than anybody else and if you're not on social media, no one's gonna find you. They're not gonna know who you are and you're gonna miss out on that opportunity. You can't do it after the fact. You gotta be on there to begin with and you gotta do good stuff, and then they'll come catch you.
Blythe Brumleve:
1:12:59
What kind of opportunities has you know, having a YouTube channel open up the doors for you? I imagine speaking engagements, you know, maybe a full-time income, you know? All of that good stuff.
Sal Mercogliano:
1:13:10
I mean it's generated income, which is great. I got a job offer not too long ago to go be Dean of a school which I had before. I had it turned down, but it was an amazing offer. I was just like. You know, we really love what you do. We want you to keep doing what you're doing and you know, come here and do this Speaking engagements.
Sal Mercogliano:
1:13:27
I think every time I go into speaking engagement that gets me from the channel. I'll always talk about it. I'll do a quick little short Went on there, you know. So I was in Vancouver, washington, you know, vancouver, canada, for a talk because they saw a paper I was doing a brief for the US Transportation Command on Global Logistics in the Pacific, because of a paper I gave on the history of Navy tankers in World War II, because I posted it and it's like it's like hey, come on, we want to hear you talk about this. And so I came on and I did that.
Sal Mercogliano:
1:13:58
I just got invited up to the Naval War College to come participate in an event. So the amount of events I get called to to do and to ask for, my problem Blight is I'm one person I need to clone myself because I just, this is a one person operation. I joke all the time when I do my videos like I'm going to get my. You know there's. If there was a mistake, I said that's a staff fault. The staff is terrible. And the staff is my two dogs you know it's Maui and Peanut, which you'll see in the background on some of my videos every now and then, but that's it.
Sal Mercogliano:
1:14:27
It's really amazing the connections you get and I think you got to appreciate them and grab them when you can. And the biggest, the hardest thing I've had to learn is to say no, because, like, I can't do everything and if I try to do everything I'm going to diminish what I'm doing, and so I've gotten to the point where at times I say I love to help but I just don't have the bandwidth right now to do it.
Blythe Brumleve:
1:14:49
So that's how you answer the question, cause I struggle with it too. I feel the requests coming in, especially with, you know, conferences and coming up, and it just it's very difficult for me to say no. So I imagine it is it just as simple, as you know. Sorry, I don't have the bandwidth because if so I'm just going to copy. That's that line.
Sal Mercogliano:
1:15:06
It is for some, it is for others and there are others like, man, I really want to do this. It's like, oh man, it's like this is what I really want to do, but it's like I can't cut loose and go to DC for three days to be in this event, and afterwards I kick myself because, like, I should have cut loose for three days and been in the event, but you know, you just you can't, cause you know it's either family or work obligations or it's just you got something else going on and so it's really really tough to do. But you know, I think prioritizing is always an issue. We were always, we're always, juggling this.
Sal Mercogliano:
1:15:34
You know, I've got the flexibility to do this YouTube on the road. I've got, you know, it's amazing I've been able to come up with a, you know the portable studio thing where I can, basically with a portable mic, with my phone, you know, and basically a laptop and I'm up and running, I'm good to go. And I can because I've also found out, every time I ever leave like home base to go do something, something hits the fan, every guaranteed something's going to happen, that something hits the fan. It's like here's the story I'm missing right now and I got no way to talk about it. So you know, I get more versatile with it and you know I'm at the point where I'm, you know, almost three years in now.
Sal Mercogliano:
1:16:10
I am thinking about you know. Okay, I need some help, I need to do something here, and I also think it's an opportunity for some students to take advantage. You know I'm in a university. I'd love to get some communication students and maybe working with them and doing that, I think there's some great opportunities to make this a good learning experience for them too.
Blythe Brumleve:
1:16:28
Yeah, heck, yeah, that would. If I was a student at Campbell University, I would be the first one to sign up Because I said, you know, I kick the show off by saying I'm the president and founder of the Sal Fan Club. So you know, I guess you know as sort of we round out this discussion. Are there any creators that you follow within you know the shipping industry or outside of the shipping industry that you draw inspiration from, or are you just sort of head down focused on what you're doing?
Sal Mercogliano:
1:16:53
So I got a trio of buddies who are naval historians and they do very different things. It's very funny. They have a podcast they do together called Bilge Pumps. And so Dr Kenefell, who does this naval history site that's just amazing, I mean he's almost at half a billion, you know half a million, subscribers, it's crazy Just puts out quality work. I mean just really. He has a system and he follows it and he's really good with it. You know, I got another buddy who does this, alex Clark, who's a naval historian. He does these kind of stream of consciousness videos, which I love and he talks about these very ingrained topics and everything. And then another buddy, jamie Slidell, who does kind of a video series it's called Armored Carriers, where he does aircraft carriers in World War II. But it's not him, it's literally images and videos and basically primary sources talking. And I remember when I started all this I talked to all three of them because they all had three different. It was three different models they were using and I talked to all three of them and they were great. They were really supportive and helpful.
Sal Mercogliano:
1:18:09
And one of the things that I've really loved is and you know, there's a community on YouTube where we can kind of help each other. So you know, I'm a firefighter. I got very much involved with the shipboard fires that took place up in Newark, new Jersey. I've been watching the testimony this past week of the Coast Guard hearings and I had a buddy call me who's got a channel, a Stash D training, which is does firefighting training. He said, hey, I've never done a guess before. Why don't you come on and we could talk about this Lithium Ion fire up in Dutch Harbor, alaska? And I did. It was great. I love doing that.
Sal Mercogliano:
1:18:44
Buddy Ward Carroll, who does a Naval YouTube channel. He's an aviator, so he talks about all US Navy stuff. He had me come on. He goes I don't understand this commercial stuff. Come on and talk to my audience and it's great because we feed off each other's audiences. So you know, I love those comments where all of a sudden you get these things like I saw you on Ward's channel. It's great, it's so funny, it's like the guest star you never expect to see on your TV show. So yeah, I get a lot of inspiration from you. I mean Blight, you helped me when I got started with this and I remember sitting there in some interviews with you like, oh, this is good stuff, I'm going to write this down and I need to do this stuff. I mean so there was always. You know, when I started on Freight Waves, it was great because that really hooked me up with a good little group of people at the time who were doing their own shows and starting to really venture off this way.
Sal Mercogliano:
1:19:36
Because this is a complete lark for me Again. I never expected to do this. This is not what I expected to do, and if you would have told me in March of 2021, I go back again. I go back to that day, march 21st I think it is March 23rd of 2021, whenever, given one to shore, I had 136 subscribers and the day before, three people watched my channel. That was it. That's what I had.
Sal Mercogliano:
1:19:58
And I did the first video me and John Conrad from G-Captain, about an hour long talking about every given. I think we got 3,000 views. I was like 3,000 views, it's insane. This is like ecstatic. Now. It's like it's crazy.
Sal Mercogliano:
1:20:12
And then, you know, back in June, I had a viral video that went crazy because we were covering the Titanic and the submersible that went down, and then the amount of calls on a daily basis that I take for granted. Now, I was just talking to Reuters earlier today. I got asked to write an op-ed for the second time by the New York Times. It's crazy. It's just what you can use this for to get your message out. And again it's got to be a quality message.
Sal Mercogliano:
1:20:40
If you watch my videos, it's not high-tech. It is not a video that is a lot of art in it, a lot of graphics and everything like that this mug and maybe some pictures thrown up, maybe some maps of marine traffic and I joke about it because I just got on a canva to change my thumbnails now and I'm very proud of myself because it's like OK, which is very funny, because my 15-year-old son keeps telling me it's like oh, you did that terrible Dad, you've got to change these things. And so I get a lot of inspiration for my 15-year-old son, christopher. He's the one who tells me all the time it's like this, this, no, no, this doesn't work. It's like too wordy. You just make it simpler.
Blythe Brumleve:
1:21:18
I have noticed an update in your thumbnails. What's that? I have noticed an update in your thumbnail design.
Sal Mercogliano:
1:21:23
I know, I know and every time I get like really cocky in my YouTube, he will come in with his phone, pull up a video and say okay, here's a potato chip rotating. It had three million views and I'm like okay, that's it. I think I can't, I can't compete with that and and so it's very humbling. Right off the bat it's like it's not that good.
Blythe Brumleve:
1:21:42
So what do you have planned for the YouTube channel? Is it just sort of just plugging away as you know these topics arise or or do you plan content pretty far out, or what does, I guess, sort of your planning strategy look like?
Sal Mercogliano:
1:21:56
So I try to have in the back of my mind because these new you know, the problem I have is if I chase news stories that go away and then all of a sudden, what do you have behind it? And so like, right now I'm doing a series on the US Merchant Marines. I'm looking at different shipping lines, trying to get a video out a week on that, trying to be very consistent. You know, the consistency is one of the keys and I'm trying to be much more consistent with that. So, you know, putting some background content in there which, which you know for a YouTube channel works, because if you're very news-driven, then you get a peek and trough. You need that kind of steady little base at the bottom that's getting people in all the time. So I'm working on that. That's a really good one for me. I think that's a really solid one to do.
Sal Mercogliano:
1:22:39
I'm looking to really kind of get into a cycle of okay, this is when news stories are gonna come out. My problem is I am driven by the news cycle, so sometimes I will be like, okay, a video a day for a week because there's a lot going on. Other times It'll be like okay, every you know, monday, wednesday, friday or something like that. I'm just gonna try to get on a cycle, do longer content ones on the weekend. I like to, you know, have a you know Kind of a longer one on the weekend that goes a little bit more in depth and I've been pretty good with that.
Sal Mercogliano:
1:23:06
I have a series called what the ship, where I take like five top stories, break them down over 30 minutes and then the last kind of kind of five minutes each one, and the last five minutes. It's okay how these all tie together and you know, those I love to do. They take the longest to do but they they're always the the good ones because they get a lot of feedback on those, because a lot of people will look at them and say, okay, that kind of gets me up to date, they don't have time to watch all these videos, and so you know it's measured and I really want to get to a point where I can Get some help and and develop it and make it. So it's a little less on me and you know I could focus a little bit more, but it's tough. It's just it's hard to juggle, especially when you have no guidepost to go by.
Blythe Brumleve:
1:23:48
How are you balancing it all?
Sal Mercogliano:
1:23:51
I, you know, I just I thrive in this stuff. I really do. I like being busy. Busy to me is the way to go. If Nothing's going on, I turn into inertia rock. I don't move, you know, it's just like I turned to a slug. So this has been great, I love. This keeps me going. It's a very big passion.
Sal Mercogliano:
1:24:07
I have a lot of them, you know, as you mentioned before, you know I'm a volunteer firefighter. I do stuff with the athletics here at university. I'm a chair in my department. I got a 15 year old son, I got a family. It's a lot going on, but I think it's it's. It's really my family's been really supportive. They've been really great at this. They've had a deal with craziness. It's like, okay, something's happened. I got to be on TV at two in the morning for India, you know, and so I'm up, you know in, In, you know in a Shark tie, jacket and pajamas. You know doing, doing the, the standard thing we do. So you know they're really good and I love my wife for for putting up with me with this. Sometimes because it it's crazy, because she, whatever something happens in Chevy, she's like, oh, here we go. You know, here's the phone, here it goes.
Sal Mercogliano:
1:24:50
That is down the hatches Say goodbye to dad for a few days.
Blythe Brumleve:
1:24:55
All right, last couple questions. What advice would you give to a youtuber that's just starting out?
Sal Mercogliano:
1:25:02
Number one don't get discouraged. Don't. Don't look at your numbers, don't. Don't. Don't sit there and say Sal's doing this and I'm doing this, I should Give up. I I remember when I started doing it I was like, oh man, I'm making enough for groceries for this week. You know, it's like I was like so excited, it's like this is great and, and you know, just just focus on what you want to put out there. Don't don't go over the tip of your skis. Don't talk about things you don't know.
Sal Mercogliano:
1:25:28
There are subject matter experts out there and also understand you're gonna be wrong. You know, one of the things with historians I deal with all the time is Historians never write a book because they never want to put their writing down on paper for fear that someone's gonna come back a week Later and say you're wrong on that, because I just found this and you got to get away from that. So whenever given happened, I actually got called by CNN and the Washington Post to write pieces for them, and that was some of the toughest writing I think I've ever done, because it's like it had to be quick and fast because this story is gonna go away. You've got to get it out before the ship is free. So we need this tomorrow to get it done. I'm doing this right now with the New York Times, the op-ed. You got to get it done and so you know, you got to put aside your Preconceived this is the way things worked and try to try new things and don't be afraid. Don't be afraid to be wrong and everything I, you know, I tell people all the time I get notes on my videos that's wrong, it's like great, what's the right answer? And I'll highlight it on my video and I'll highlight up in it to the comments and, if I need to, I'll cut it out of the video. So, you know, don't be afraid of that and, most importantly, find the thing that you like.
Sal Mercogliano:
1:26:32
You know, I thought about a YouTube channel before this. I actually, during COVID, I was working with a history organization and we were doing interviews. I was like, oh, hit, naval history. I could do a naval history channel. But then it's like there's a lot of them out there, there's a lot of people doing this and and I think it could be competing against them, you know. And then I thought, well, I'll do naval stuff. It's like, ah, there's naval stuff too.
Sal Mercogliano:
1:26:51
And then I found my niche and that was commercial shipping. It's like nobody's talking about this stuff. This is great. It's like it's like I found my one little lane and it's like, okay, this is my lane, I'm good to take it and and off I go running and what I find, too, is I find people who are doing things kind of similar.
Sal Mercogliano:
1:27:07
So there's a lot of guys out there and women out there who are recording themselves Selling. It's like, okay, I'm not gonna do that, but I'm gonna bring them on to my channel and they can talk about it. I'm gonna promote their channel and they'll promote mine and this will be great. We'll feed off each other and and you know, that's that's a thing Don't be afraid to ask, that's. The other thing is like you know, they're everyone I've ever encountered never had someone. I'll see someone who used something on their videos Like hey, what'd you use for that? That's great. It's like, oh, here you go. No one's keeping anything proprietary. It's like this is, this is what we want you to do and and I'm really amazed about it I did.
Sal Mercogliano:
1:27:38
I did a tube. I did a tube video section on a 60 minute segment on the US Navy, where I took the entire 60 minute segment, cut it In half and I just kind of overlaid me on it. It's like there's no way this is flying. There's, there's no way I'm not getting copyrighted hit by 60 minutes. I did it's like 60 minutes flagged it and I put in a you know, an appeal saying, okay, this is fair use doctrine and and I've changed it substantially and son of a gun if they didn't approve it. And I said okay, well, that's amazing to me.
Sal Mercogliano:
1:28:07
And then last week I got called by 60 minutes because of the Red Sea and they said, sal, we wanted to talk to you. It's like, it's like okay, great, 60 minutes. Like oh, it's like I was wondering about it. And the first words out of their mouth was hey, we enjoyed your videos a lot. I was like really, it's like seriously, do you did it? No, no, we really did. We thought they're really constructive. It's like okay, great, he goes. Matter of fact, that's why we're calling you. We figured you know this.
Sal Mercogliano:
1:28:28
So you know, don't be afraid to reach out and and and and go that way, because I, because I think what keeps everyone back is is being discouraged and those low numbers, nobody's watching. I'm not getting anything. It's a lot of work, I'm not getting anything out in return. Man, that that changed for me. And it changed for me in September of 2021, when I shifted from talking about a ship stuck in the Suez to talking about the global supply chain issue and the the arrival of ships off of LA and Long Beach, and that is solely because I had a. I had a viewer sit there and say, sal, you should Branch out a little bit and talk a little bit more than just this ship stuck in Suez. And I was like, it's a good idea, I should do that. And then I had a lot of people subscribers and patreon Members who gave me a lot of great advice and it's like, okay, you guys do know what you're talking about.
Blythe Brumleve:
1:29:20
What kind of advice was that? It you know just different topics to cover and things like that.
Sal Mercogliano:
1:29:24
Yeah there's a whole variety of different things. You know how to change your patreon page. What's it do with that? You know how to how to change. You know. You know, okay, you're doing this in your video. It's really annoying, don't do that anymore. It's like.
Sal Mercogliano:
1:29:35
It's like I had this really like a long introduction to myself. It's like, oh god, I don't need that, you need. Even my son said kind of get into dad, kind of you know 15 seconds. You got to be the quick preview, you know, because that's what people are doing scrolling on their phone. You're gonna have action in your first 15 seconds of your video and, and so you know a lot of things. You know I changed, changed that, change the format a little bit.
Sal Mercogliano:
1:29:55
It's so funny because sometimes I do like these really long videos. I like I know it's gonna like this and I'll get that. It's like it's like, oh, dude, you drone on for too long. It's like it's like okay, this is not tick tock. If you want a 30 second tick tock, go to tick tock. This is gonna be a little bit different. And I've had people say, no, no, we like the long format, go that way.
Sal Mercogliano:
1:30:11
And and you know, I listen to the people who watch me, because I think they do, and there's some, you know, there's some who've been there for a long time. I've known them for a long time. I don't know who they are, but I just, I just know their handle and so when they, they drop you a comment every now and then I was like, oh, that's good one, I'm gonna listen to that one, I, I, I appreciate that, and then you know, it's, it's. You know, I got this stick with the Hawaiian shirts, which I wear Hawaiian shirts anyway. So it's like it's great. And, and you know, every now and then when I put it, when I wear a new Hawaiian shirt, I get more comments about that. It's like, oh, I hadn't seen that one yet, where'd you get that? So it's a lot of fun.
Blythe Brumleve:
1:30:46
Yeah, I think you are the perfect example of a creator that had a wealth of knowledge about something and then just decided to just start creating. And then you just Evolve as you go and you pick up things along the way and a lot of people want that instant success right away, but they don't realize you know how many reps and how much you know self-awareness it takes to continuously. You know watch yourself and get better and listen to some comments and know which ones to avoid and which stories to cover, which ones to avoid it. Just it comes with time that it's not really something that that can be taught.
Sal Mercogliano:
1:31:21
Yeah, you know, youtube is a great medium too, because you know, if you read that hurtful comment comes up, it's like, oh, that's hurtful Billy you know and you can just move on.
Sal Mercogliano:
1:31:27
It's great, it's a great feature. It's just, you know you can't do that in real life. You know sometimes you just can't do that and but you know, here you can't. It's a little even, it's just like it's fine. You know, I don't like to delete comments at all, I really don't. It's just if it's really spiteful, mean and and in derogatory and it's hurtful or do that.
Sal Mercogliano:
1:31:44
But yeah, but it's a comment all they want, they're fine, I love, I love that comment, but it's just, you know how you develop and and again, be willing to listen and change because you haven't figured it out. If you're like me life and you go back and look at a video you did two years ago, you're like, oh, it's like, it's the same thing about writing. I do the same thing when I read something I wrote like years ago I would have done that so differently now I just I just kind of cringe at that at times, and and and. So you know, I just keep developing and keep moving and keep changing and and you try new things at different times too. You know, see if this works, and then like, ooh, no, that's not work at all.
Blythe Brumleve:
1:32:19
Well, it's definitely been a joy to watch over the last few years. You're definitely that example that I look to. As far as you know, hey, youtube is probably the home for a lot of our content that we create, and you know we should invest more time and energy into it. So so, thank you for being that that you know that, that beacon of reason, I guess you know in this crazy world of content creation, where can folks follow you, follow more of your work? What are your social platforms of choice? I don't think it's tick-tock, but I'm pretty sure it's Twitter, slash X and YouTube, yeah.
Sal Mercogliano:
1:32:53
I, I do. Well, you know, it's so funny because because I am thinking tick-tock and I've done a few of them and I really need to get better at that. That's really one of the things that I want to bring somebody on that can take a video and put it into a tick-tock, because I think I think that eats up a lot of my time and it's like, okay, maybe if I get somebody to do that, that'd be more efficient. But no, I'm on Twitter a lot X whatever you want to call it at my cock lano s, obviously YouTube. What's going on with shipping, which has all my links there? I've got a you know, facebook on my Instagram. I'm on LinkedIn, you name it. I joke with my students all the time. They can't find me. They're just not trying hard enough Because, because I'm pretty much out there everywhere and I don't think you blithe, I'm seriously I.
Sal Mercogliano:
1:33:30
You know, when we started talking very early on, I, I appreciate it. I remember how many of the talks we had like, oh man, life has got all these great ideas. I need to be listening to them. I tell people all the time it's like. It's like social media is your friend. If you think it's a problem. You just you're not using it correctly. And for businesses, I just don't understand how they don't under. I really don't. I I went to a conference not long ago when these shipping companies were complaining I can't get young people interested in it, and it's like you don't not out anywhere where young people would know about this. Do a video showing these kids in in sailing around the world. I guarantee you get interested in it. It's like you're crazy there. There are some guys that do that, women that do that, and I love talking about them because they can do things that I can't do. They're gonna be shipped for a backdrop and so it's great you know to do that.
Blythe Brumleve:
1:34:18
Yes, I 100%. And first of all, thank you for the the nice comments. And then, but the second of all, I would echo that statement because we had a Woman on the show. She's a merchant mariner and she's the captain of a ship. Get a Gabby Salazar. So she's still, to this day, one of my best performing videos, because people love to learn about these different career opportunities.
Sal Mercogliano:
1:34:39
And Gabby's great. I mean she's on Instagram, you can follow her. She's a beautiful girl but more importantly, she does this. You know she goes. She's so funny because she goes from this really kind of Picture-resk beautiful woman and the next thing she's in coveralls and she's working on the ship and she's just like boom, it's like go, and she travels the world and people love that. She let you know what.
Sal Mercogliano:
1:34:58
One of the things that she had emphasized is the fact that I could work for two months out of the year. Then I got two months off and it's great. I'm gonna go everywhere because I make good money and I'm gonna go travel and I can do it, and Gabby is just fantastic about that. And you know, I've been highlighting a lot of those guys and women who do that, because I think it's really important to show them and let they let people know what it's like, because, again, it's too easy to think that my goods just show up at the, you know, on a shelf and there's nothing behind it. Whether it's a truck driver, it's got in the railway, it's, it's it's it's a female captain driving the ship. There's a lot involved involved with this.
Blythe Brumleve:
1:35:31
Well, I think that that is the perfect place to end this discussion. We went. I thought we would go about this length, about an hour and a half, two hours. I was hoping that you would be okay with it, because I had a slew of questions. You answered all of them flawlessly so so, sal, thank you so much for for joining the show and your time. It's very appreciated.
Sal Mercogliano:
1:35:51
Blithe, when I talk about telling people, you know I don't have the bandwidth. You will always have my bandwidth life. There's never a problem with that. I will make bandwidth time for you. I appreciate what you've done, how you've helped me and especially your audience. So thank you so much for having me.
Blythe Brumleve:
1:36:05
Absolutely that the feeling is mutual. So thank you, sal. I Hope you enjoyed this episode of everything is logistics, a podcast for the thinkers in it freight, telling the stories behind how your Favorite stuff and people get from point A to B. Subscribe to the show, sign up for our newsletter and follow our socials over at everything is logistics, comm. And in addition to the podcast, I also wanted to let y'all know about another company I operate, and that's digital dispatch, where we help you build a better website.
Blythe Brumleve:
1:36:38
Now, a lot of the times, we hand this task of Building a new website or refreshing a current one off to a co-worker's child, a neighbor down the street or Stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website.
Blythe Brumleve:
1:36:54
Well, that doesn't happen at digital dispatch. We've been building online since 2009, but we're also early adopters of AI, automation and other website tactics that help your company to be a central place to pull in All of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as $1,500, along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus freight, marketing and sales content similar to what you hear on the podcast. You can watch a quick explainer video over on digital dispatchio. Just check out the pricing page once you arrive and you can see how we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go Jags.
