"The best century we've ever had"

Let's hope!

“Craig Fuller is CEO and Founder of FreightWaves, the only freight-focused organization that delivers a complete and comprehensive view of the freight and logistics market.”

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Especially since it’s Christmas, and the end of the year, I wanted to highlight some positive news (for once.) I’d love to see more of it.

I found the first part of this interview fascinating, and, if Fuller’s analysis is correct, very bullish for America long-term. I cleaned up the transcript from Youtube. The part of the interview I quote below starts around 19:30 in.

I’d suggest watching, but if you prefer to read, here you go.

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State of Global Freight, China's Impact, & Strategy for Buying Media Companies - Craig Fuller

Chris: I'll just start with what's the latest with China? Their Great Dictator came a couple weeks ago, said he was going to get along with us, we cleaned out San Francisco for him, we rolled out the red carpet, and he gave this great honeydew speech that all was good. What's what what's data show you?

Craig: So Chris, one of the great things about what I get to do, in terms of supply chains, is we often see the geopolitical story play out months or quarters or even years before it sort of comes a public awareness, because supply chains are the goods economy, it's the Main Street economy, and so if we go back to that episode I did, I believe it would have been April of 2022 when we did that episode, only because we talked about the freight recession that was right after that.

So what's interesting was at that moment in time, the concept of friend-shoring, or the concept of North American reshoring was not in the public consciousness at that point. No one was really accepted the fact that we were going to see this manufacturing renaissance. The China story was still playing out at that moment in time where people believed that China was largely eclipsing the United States, and it was inevitable, and that was a conversation that only folks really involved in really deep geopolitical corners, maybe deep finance, and in supply chains were really having, which was the China story, while still existing, is changing, it's pivoting from this aggressively incredible growth story to this country that was starting to really show its age, and I think that's what we're seeing.

We're seeing a a middle age or late stage empire that has largely exhausted all of its ability to compete with the west, and compete specifically with America, and that is exactly what we see right now. China has, through really reckless policies, driven by its own self-protection, combined with sort of really poor economic policies, and lack of freedom, and lack of innovation, has put itself in a really big quandary as it relates to global manufacturing and global supply chains. I mean, what Xi did last - and this took place actually after our our episode - where Xi shut down the entire country, did a secondary lockdown in the second quarter of last year, that, you know, basically locked the entire country down.

He thought - the country was largely in some level of lock down, and rolling lockdowns throughout the Covid - when we were sort of coming back on, our lockdowns were short-lived - for a lot of people that listen to your podcast they may felt like it was too long, but relative to what happened in China, our lockdowns were are relatively short-lived and frankly not that enforced, and we look at what China did was they completely locked down their country, but what they did was they sent a loud clear message to decision makers in America and in the west that they were going to put their own ideology ahead of their economic interest, and that sort of put everybody on notice, because for years supply chain professionals and organizations and decision makers did not accept the fact that China would do something in its own self-interest that was not economically driven.

In other words, they would never do anything to hurt a supply chain and manufacturing sector, because doing so would hurt their economic viability and competitiveness, and for years that's how they operated. They were willing to make concessions in the export market, so products being exported they were willing to make concessions that they wouldn't make for their own people, and even in many ways shaped their own policies to really enable manufacturers to export goods, because they needed American US Dollars and other currencies to flow in so they could buy things like energy and and food. That is no longer the case.

What they have done is they put every supply chain decision maker on notice that their ideology is going to supersede their economic and manufacturing well-being, and so, because of that, we're now looking at practically every supply-chain decision maker around the world thinking about where do I go to manufacture my products, have dependable government policies that are gonna allow me to build these products, and have consistent availability of these products, where can I relocate my factories, where can I relocate my production, and it's obvious that you're going to go to the largest economy in the world world, the United States, and you have to consider how is it serving that economy, and that's where the North American re-shoring story is playing out, and we're seeing that. I mean, what's incredible about this, is this is an opportunity to see the reshaping of an economy, and we're living right in the middle of it. This is a completely generational shift on how the global economy is going to work…

I think it's hard to sort of comprehend that Covid changed everything, and what Covid did is it put everybody on notice. Supply chain decision makers recognized that having single source products in China was a problem, but it was always a problem for another decade. It was a problem that I didn't have to deal with, even when Donald Trump put his tariffs in effect, most people ignored that as a tax. They just looked at it and said this is nothing more than a, you know, a very loud, and some would say obnoxious, president making his point, but at the end of the day it's not going to really matter, it's just noise, and that didn't move the needle in terms of reshoring, but what has moved the needle in terms of reshoring is China's inept ability to manage its own - and maybe maybe it's not their ineptness, maybe it's their actual effectiveness of trying to control their own people - and as a byproduct of that saying parts of our manufacturing economy we just don't care about. Now we're in a whole new generation, and I think it's a pretty profound time to be an American, because we're going to live through another American century that's going to be the best century that we've ever had.

I'm probably called the most bearish guy in the freight market because I'm just talking about the bearish story in freight. But I'm also looking at it in terms of the optimism we have as Americans, just looking at it strictly from a supply chain standpoint. We have everything we need to live. We produce thirty percent more food than we consume. We have so much energy supply, and we're finding new pockets of energy and new ways to exploit energy. We are blessed with such great geography and resources, and we have this vibrant economy built on innovation and entrepreneurship, you can't help but be excited about it. And that's why I am incredibly bullish on what's going to take place in the next decade. The American flag says it all, we should be proud to be Americans simply because we are delivering economic prosperity across the world, but also to our own people. And we are in charge of our own destiny, which I think is what makes it so exciting.

I can be critical of every - there's a lot of things that we do wrong, like there's a lot of problems in America, but you have to be super jazzed and fortunate to live - and this isn't like we are just so fortunate, and I think that's what we have to remember, is for all the problems we've got we have so much right and so many opportunities, and this is all a function of capitalism, and we've built the greatest system to reward the innovators, and that's what China has effectively gotten wrong…

We’ve seen in terms of production of new manufacturing, and here's the thing to keep in mind, is that manufacturing and supply chains is not a short-term issue. It is not a fact that I can move a supply chain, and build a factory, and build manufacturing within a year, and see it in the data. This is a decades long development, but what what we're seeing is the number of new manufacturing and production facilities and investment into our economy is growing by something like 10x over the last two years, or three years, pre-covid to now, and what's happening is we're seeing the early manifestations of new production here in the United States, as companies are now considering, unlike before, the United States as a competitive place to manufacture - but it's not just the US, it's our it's our friends to the south in Mexico and Latin America, the Americas are also gonna win the biggest.

If the biggest winner of the post Cold-War days was China, going from a backwater to an economic superpower, then the biggest winner in this generation will be Mexico. The United States will win, but relative to to sort of who's going to to really exponentially grow, Mexico, particularly the northern part of the country, is going to be a primary beneficiary of economic growth.

As companies move production away from China and Asia they're going to locate a lot of that manufacturing in Northern Mexico, and even Central Mexico, and that's going to create a lot of of really interesting opportunities.

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After listening, my first thought was - who controls the railroads in Mexico?

My next thought was to consider investing in a Mexican ETF (I looked at a few and decided to wait for the next market crash, which of course can never happen, because the Fed will save us.) Also, I should probably at least look into trucking.

Anyway, I hope everyone has a safe and hopeful Christmas.