The Doorstep: How Shipping Can Help Reenergize Globalization, with BIMCO's Peter Sand

NIKOLAS GVOSDEV: Welcome to this latest edition of The Doorstep podcast. I am your co-host, Carnegie Senior Fellow Nick Gvosdev.

TATIANA SERAFIN: And I am Tatiana Serafin, also a Senior Fellow at the Carnegie Council, and co-host of The Doorstep.

Nick, there is so much going on in the news today, but one of the things that I think is getting lost in all of the Olympics coverage and, in my home state of New York, the coverage of our nefarious Governor Andrew Cuomo is the fact that the Fortune Global 500 List came out, and 143—depending on if you count Hong Kong and China or Taiwan—27 to 28 percent of the Fortune 500 are Chinese companies, government owned and private—very few private, mostly government-owned—which is more than U.S. global companies. I find that is underreported. Are you shocked, surprised, or interested? What do you think?

NIKOLAS GVOSDEV: I would say all of the above. I think that this is an important wake-up call to people in the United States who always assert that the United States has a more dynamic economy, we are the innovators, we are the ones moving forward, and China lags behind. Look, Chinese firms are coming into their own. They have clout. What this again points to is that people around the world, whether they are consumers, producers, looking for investment, or looking for trade have alternatives.

Twenty years ago we and our European partners were essentially the game in town. Everyone wanted to come in to Washington, New York, London, Brussels, and Berlin. This now says you can actually do good business with China. You don't have to go through the U.S. financial system, the corporate system.

It not only gives options to others. It also reduces some of America's traditional leverage, which is our sanctions threats—"You don't want to do things we want, we can cut you off and you will be starved," sometimes quite literally—and this suggests that there is now a robust Chinese sector which can be an alternative to you.

Finally, this means that Chinese firms are richer and that there are more of them. That means clout that they can start to exercise in international business, and that includes talent, recruitment, and influence. All of this I think confirms the trends that we have all talked about for a number of years, which is that power—economic power in this case—is migrating from the Euro-Atlantic to the Indo-Pacific basin.

TATIANA SERAFIN: I am thinking all these business schools are now going to have create case studies of companies like State Grid, Chinese National Petroleum, the Sinopec Group, all top 10 companies. It is not just Apple. Apple actually comes in as number six on the list, believe it or not, names that we consider brands here. So I think this speaks a lot to the fact that we need to open up and that the world is at our doorstep, which is what we talk about all the time here.

This week we have the East Asia summit. Our Secretary of State Antony Blinken is out there, talking to all of the countries. On the last Doorstep we had an India discussion. Well, India is at the table, talking about what is going on in the region and how that region is impacting us. There is a lot of news coming out from that region. We are going to have a guest in a few moments talk with us about the shutdowns in China and Vietnam and how they are impacting our supply chain.

But before that I want to ask you about your recent article—so let's take it back from Asia—about Lithuania, and the importance of Lithuania to U.S. foreign policy. Really? Lithuania?

NIKOLAS GVOSDEV: Lithuania is really a test case for the changes that are occurring in international affairs. In the 1990s and the 2000s Europe was at the center of U.S. foreign policy. This was in the days after the Cold War. We thought of expanding our zone of peace and freedom starting with Europe and then through the Middle East and across the Eurasian space.

What has changed now is two things: As your first news item reported, East Asia is now much more the center of gravity in world affairs. It is not an annex to the West. It is emerging in its own right, and that is reorienting the countries that matter. Vietnam, the Philippines, and Thailand may start to matter much more than in the past, when we thought of Lithuania or Poland or Romania as key players.

The other thing that is changing, of course, and that we will be discussing with our guest as this touches on it as well, is the climate picture. The countries that are going to matter increasingly to the United States are those that are going to be able to help advance the climate environment and energy agenda.

This report in essence is to try to provide a roadmap particularly to Central and East European countries that have gotten used to a relationship with Washington that is essentially based upon looking backwards, dealing with the aftermath of the Cold War, dealing with a resurgent Russia, and essentially saying that in the future you are going to have to be able to be part of this shift that is occurring to the Asia-Pacific and that climate and energy are going to become much more critical topics, and if you want to remain a country of importance to the United States, those are the areas you need to concentrate on.

TATIANA SERAFIN: So interesting. I don't mean to jump this ask to another region of the world, but I do think the recent coup in Tunisia was underreported. The president took control in what seems to be—and as we see in different parts of the world—an authoritarian manner. Believe it or not, I had friends traveling through Tunisia when this happened, so I started to panic because I thought: My god! Coup in Tunisia! And they just enjoyed their 14-day holiday as if nothing happened.

So I am wondering what your thoughts are about political machinations at the top and yet life still happening.

NIKOLAS GVOSDEV: The Tunisia case is quite interesting because Tunisia was considered to be the most promising of the countries of the Arab Spring in being able to make the jump to full Western-style liberal democracy, especially when other countries that had revolutions, starting most notably in Egypt, where the promise of the Arab Spring became the "Arab Winter."

But what has happened in Tunisia points to a larger trend that we have been looking at at The Doorstep, which is that people increasingly are less concerned in some cases with the forms of political democracy, and they are looking for results, or they are looking for guarantees, or they are looking that life will continue to go on reasonably normally. This, of course, is the authoritarian bargain that we see in Russia, in China, and increasingly in other parts of Europe. We see this with Millennials and Gen Z being the two cohorts that have the least faith in the efficacy of democratic systems or do not necessarily see democracy as the best form of government for solving problems like climate change or income inequality. So this very quiet coup that has taken place I think is a warning that, after talking about "waves of democratization" after the Cold War, the world may be moving through an era of re-authoritarianization, that authoritarian states are making comebacks and that authoritarian regimes are showing much greater resilience.

Another story that we have looked at in the past obviously is what is happening in Belarus, where an authoritarian government continues to survive despite the president that the United States and other Western countries recognize visiting, being in Washington and the United States as we speak. In Venezuela the authoritarian government is holding on. In Cuba people thought two weeks ago that we were on the verge of a massive change perhaps occurring, and while the jury is still out on that again there is a resilience to authoritarian regimes. And in the case of Tunisia, perhaps people are even prepared to acquiesce to the loss of democracy if they think it is not going to really make their lives any worse.

TATIANA SERAFIN: So interesting. Or, that we are in a period where we are struggling to find a different modus operandi. There might be something else out there for this new generation because—and we will have our next guest join us, Peter Sand, to talk about how shipping ties us all together and how maybe globalization is going to be the answer.

I am very excited today to welcome Peter Sand, the chief shipping analyst at BIMCO, which is the Baltic and International Maritime Council, where he works with all things shipping.

Why shipping, do you think, our audience of listeners? Why are we looking at shipping today?

Well, does everybody remember what happened in March? A little/big ship called Ever Given, one of the world's largest container ships, caused one of the biggest traffic jams in shipping history. In all those pictures it looked like a little LEGO block, but literally hundreds of ships were blocked. That happened in March, and all of a sudden we are here in August and nobody is talking about it anymore. Except, two days ago, on Tuesday, it finally arrived in the United Kingdom, and there was a big party. People were having cocktails on the dock, welcoming it back.

It was not held up in the Suez Canal that long. It was only six days. It was held up because nobody wanted to pay for the damages. A Japanese company and Egypt, nobody wanted to take responsibility. It took three months in dry dock before it was let go. But that had an impact on all the stuff that was on the ship, and so what we are talking about today is everything that is on your shelf, where does it come from? A lot of it comes via container ship, via dry bulk ships, and we have an expert here to talk to us about what is going on.

Peter, I am going to start with a tweet that you just sent a couple of hours ago, talking about—and I am so shocked and surprised—how a lot of China is shut down, a lot of factories are shut down, and almost 30 to 35 percent of factories in Vietnam are shut down, causing queues to build up in the South China Sea. This is happening today, right now.

We are also right now talking about the Delta variant and everything shutting down again. Are we in for another global shutdown?

PETER SAND: Fingers crossed, not. But it is an awesome way of starting this podcast. Thanks for having me.

I think you are absolutely right. We should pay more attention to global shipping because it basically makes us live the way that we do in our everyday lives. But many of us do take it for granted, and all of a sudden the Ever Given gets stuck in the Suez Canal. You might even see the memes going around with people trying to put a little bit of lubrication at each side of the Ever Given just to let go of her.

What we are seeing in the Far East right now is surely a warning sign that we need to take very seriously. You mentioned the fact that a significant part of the manufacturing facilities in Vietnam have only recently been closed. Ports and terminals are operating at lower levels than they would otherwise be, and we only earlier this week also saw from China at least similar tendencies. We have not seen real lockdowns again like we saw in January or February of last year—fingers crossed that that will not happen again—but we know that the Chinese authorities will deal with any variant of COVID-19 in a very harsh way in order to make it stop. We saw that in Yantian one-and-a-half months ago when there was a COVID-19 outbreak that impacted container shipping at that point in time. But imagine just for a moment that we see several Yantian incidents all along the Chinese coastline. That means that we are in for a rough ride of a different scale for container shipping going forward if that happens.

TATIANA SERAFIN: Right, because one of the biggest—I was so fascinated by this—shipping lanes is the Far East to North America, and right now it is jam-packed because of the backlog, and prices are increasing. What is going on with that Far East-to-North America shipping lanes? There have been some rumblings here that ports in Portland and Seattle are jam-packed and ships are waiting to dock. How is that affecting the global supply chain?

PETER SAND: It is affecting the global supply chain to a very large extent.

Just to give you a brief overview of the way that global liner shipping works: It basically brings around a lot of semi-finished goods to manufacturing hubs, where finished containerized goods then are shipped all over the world. China is the world champion on this, but the greater area in the Far East is basically the manufacturing hub of the world, and container shipping links the production facilities with the consumers in the West or in the Americas or wherever and also in Africa, all across the globe.

But what we have seen from the United States in their comeback, in order to basically revamp the economy of the United States, is not an unprecedented amount of stimuli, but one which is exceeded only by the stimulus following the two World Wars. So obviously, with a lot of American consumers eager to spend the money they have been given by Capitol Hill, there has been a 40 percent rise in containerized goods traveling across the Pacific, and this is one of the vital transits for container shipping, from the Far East into North America. The other vital artery of goods goes from the Far East to Europe. Those are high-volume and long-distance.

The demand from the United States has built up so fast that container ships have basically been busy transporting boxes, whereas the container ship terminals and ports alongside the whole Pacific coastline of North America have been unable to handle those boxes as the ships have arrived. So we have seen for the past year basically, and particularly around San Pedro Bay, where ships that are heading into the ports of Long Beach and the Port of Los Angeles are anchoring prior to docking and reloading and also getting empty boxes back on that they need to return to the Far East.

That whole clogging up of the supply chain has also resulted in what we are also going to talk about here, record high freight rates. Liner companies across the globe have been capable of negotiating super-high freight rates on the spot market but also, more vitally if we look further ahead, the contract volumes, which is the main bone for the liners, and especially when you look further ahead where those key clients get to, to a certain extent, book in advance their boxes onboard the ships to make sure that they can actually get them in due time for the various seasons when they need them on the shelf for sale.

But right now we are close to a breakdown. It is not a breakdown of global supply chains, but we have really seen an issue with those boxes being turned around, especially in North America, and that will cause a global shortage of containers in the Far East, and that has basically been one of the catalysts behind this inflation of freight rates that has multiplied the cost of logistics for many retailers across the globe by hundreds and thousands of percent.

NIKOLAS GVOSDEV: I think it is extremely critical what you have laid out here, because most people don't think about any of this. They go online, they make an order, they click, they say I'd like two to three-day shipping in terms of domestic shipping, and magically a good appears, and somehow there is not a lot of thinking about how far that good had to travel.

Your point about components, that it is not something is just assembled in one location, you have an integrated chain, and it has to move from place to place, and then, of course, physical limitations. A port can only handle so many ships. Ships are waiting, goods are sitting, prices are going up, and shortages can develop.

I think what all of this also paints—and maybe we can get your reaction to this as well—is: Does this contradict some of the assessments people were making during the height of the pandemic last year? Two things we kept hearing were: "People are really going to cut down on consumption now," and certainly the climate change people were really predicting that people would stop traveling, we would stop shipping goods, and that people would have to learn to be more self-reliant where they were.

The other point that people had was that this was supposed to be the great year of onshoring and reshoring, that finally Europeans and Americans would stop depending on this Far Eastern, South Asian, and East Asian manufacturing hub, and everything was going to be returning because we had learned the folly of dependence.

Yet the picture you have painted for us says that none of those assessments or predictions of 2020 are turning out. We are consuming. We are consuming from the great Indo-Asia-Pacific manufacturing hub. It is traveling across the sea lanes to reach us here, and none of these ideas that the pandemic was going to be this major break in how we consume may be turning out.

What are you seeing from the data? What predictions perhaps are you thinking about what this may mean for supply chains and consumption and purchasing patterns moving forward?

PETER SAND: I think, Nikolas, you bring forward a lot of interesting aspects of the whole lot right now. But I must also say that everything you said and talked about has actually come true but in different parts of the world. It may not be the case that people in North America and in your home country of the United States have been saving a lot, but that is totally opposite to what we have seen in Europe, where people have not "spent money like mad"—sorry for that expression—but the governments of Europe have dealt with, let's say, the aftermath of the pandemic in a different manner.

They have supported businesses indirectly and directly more than the consumers directly, so a different approach. This has also meant that the demand coming from Europe is actually flat from pre-pandemic levels. So we are not seeing a massive demand boost from Europe like we are seeing in North America. But on a global scale obviously when people could not travel, they could not go anywhere, they could not go to restaurants, so they could not spend any money on services. So, yes, a lot of people with extra money in hand spent that money on goods.

But we must also look at where we are now. Fast-forward from that pandemic-struck year. National travel activity has actually picked up fairly well if we look at least at China until recently. We can also see the data coming from North America. You are right now in the middle of driving season. We see finished motor gasoline supply is basically at the five-year average, so that has fairly normalized. We even see that oil product supplied again when compared to the five-year average is exceeding that, and that relates to actually a lot of trucking business getting those containers around that we talked so much about today, and it is to an extent that what is lacking in terms of demand for jet fuel from international flights, which is still significantly down, is basically dwarfed by the demand for the middle distillates for trucking.

So there are a lot of things that have been going on but have happened very fast in some places of the world, so it is a different pattern wherever you look, and wrapping it all up here basically because you are also looking further ahead now: How do we believe the shippers and retailers will react to the crunch that they are facing right now with their goods arriving late, perhaps even too late at some point in time, inventories running down, and at the same time they are unable to stock them fast enough? Will they consider building more resilient supply chains going forward?

If "yes" is the answer to that, they need to know also that there are no cost-free resilient supply chains. If you go from just-in-time to at like just-in-case, what does that then look like? You can have just-in-case in many ways. You have just-in-case, for instance, if you have—well, go back four years. Walmart shipped half of its containers out of Shenzhen in the Pearl River Delta in China. If that port was all of a sudden closed down—that was quite close to Yantian, so it could actually have impacted Walmart to a large extent.

But if you by this example, making a more resilient supply chain could mean that they put factories in Vietnam, for instance, like many international companies have done over the past five years. They could have built new factories in the Philippines, Malaysia, and Indonesia. They could have brought them back to the home nation if—and that is a big if—they could build the factory, source the supplies, and make robots do the job for them, because obviously when we talk about manufacturing goods there are tons of sub-suppliers that feed into the production of this. So bringing back your factory, for instance, from the Far East to Europe, North America, or to Brazil for that matter or South Africa, means you need to rearrange your supply chains just to be able to produce that piece of equipment in a new location.

I am just asking the question then: When at some point in time, say, 12 to 18 months from now, perhaps when we arrive at the next normal of container shipping, when freight rates have come down to a level closer to the ones that we once knew and a much lower level than what we see now, will importers and retailers then be ready to spend that extra money building more resilient supply chains, or will they still go back to where they have basically been for decades now, chasing the cost-cutting initiatives, embracing globalization, and making use of what is still cheap transportation on a global scale, producing where goods are produced most efficiently, cheapest, and still at high quality, and then ship them to the area for consumption and for sales? So, many questions asked here.

If I should give just a little bit of answer also to some of them, I doubt that we will see a huge change to these supply chains. This is without doubt an unprecedented shock with COVID-19 having its label all over the place, but are importers and retailers ready to spend a lot of money changing supply chains that they have basically honed and fine-tuned for decades due to this? I doubt massive changes will be around, but surely some will change.

NIKOLAS GVOSDEV: I think that raises a question too. Everyone talks about this, as you said, but it costs money to reorient supply chains, and the question is: Will taxpayers want to pay for the costs of additional infrastructure or even the incentives to get companies to relocate? I think this kind of suggests what you are saying, that, yes, this is a shock but perhaps not a transformative one.

TATIANA SERAFIN: I don't know. My opinion is that it cannot be that transformative if only $17 billion of our $2 trillion or whatever trillion infrastructure bill that Biden is proposing is allocated to ports and waterways, and a lot of that is inland waterways. I would say maybe not, but that means that it is going to hit our wallets.

Here at The Doorstep we talk a lot about what does the person on Main Street need to think about in terms of the changes ahead. You mention especially the contracts, so those are 12 months out. Are we looking at an increase in prices in our dollar in our pocket or in the euro? By what percent might you predict? If everything goes to plan with managing COVID-19, are we looking at a decrease in 12 months so that this really is just a one-time blip? What do you think?

PETER SAND: I think the longer high freight rates stick around, the risk is that it will feed into inflation and higher consumer prices. But having said that, the share of global transportation, at least on the shipping side of it, for liner shipping, is still almost insignificant to the end consumers. Your sneakers might on a regular ship two years ago have seaborne transportation costs of 10 cents, be that U.S. cents or Euro cents. It doesn't matter. Even one dollar of seaborne transportation costs today, which is, of course, a huge increase in the costs spent on logistics, but still if you pay $100 when you buy them off the shelf and bring them home yourself, will you be able to tell the difference?

But without doubt, there is always an excuse to hike consumer prices, and those masters of logistics that reign not only on the waters but also in hinterland connectivity also know that this is an extraordinary situation, and they are doing whatever they can to bring those goods to our shelves. But right now, everyone is also in a desperate situation, so they pay up to make sure that the goods are there, knowing that, of course, the longer it sticks around the higher the risk is that it will feed into inflation.

But I think above all inflation also comes from the fact that what I talked about earlier here, the monetary stimuli that we have seen, particularly from the United States but also on a global scale, the fact that we have money everywhere, and that we have no interest rates at all means that people are also ready to spend money that they would otherwise spend on interest rates and anything else. So it may be the case that this interim gives us at least an opportunity.

I think Nikolas mentioned that climate activists or those talking about climate impact from COVID-19 thought perhaps this was an opportunity, and now they realize it is a missed opportunity. But from a consumer's perspective we can also see that some of those goods that cannot be fitted into container ships are getting flown around the world right now. So I guess everything has a price.

TATIANA SERAFIN: I love that you mentioned the green aspect to it because there was once upon a time this idea that shipping is more green and uses less of this terrible fuel. It's still bad, don't get me wrong, but it's not as bad as trucking—which you mentioned has gone up—in terms of emissions and detriment to the environment.

Yet there was also talk last year during COVID-19 that it was so much better for the whales that we did not have as many ships out there. In your real world, what is the real impact of the green movement? Are ships getting greener? Is there pressure to go green?

PETER SAND: Ships are getting greener by the day, in particular container ships. That is basically a reason why Ever Given was also one of the biggest ships in the world. It wasn't the reason why it got stuck, but the development of ultra-large container ships, which is more than a decade-long transition of the industry, has basically meant that more or less for the same amount of fuel you could transport twice the amount of goods.

Seaborne transportation remains by far the greenest way of transporting commodities around the globe. It remains also the most environmentally friendly way of transporting goods up and down the coast of, say, North America or Europe if you get it to the port and get it out there so the carbon footprint is there.

But obviously, when you have a global shipping industry that transports not only containers but also a lot of iron ore, coal, grains, soybeans, oil, and gas, the carbon footprint on a global scale from the international shipping industry is around 3 percent of global emissions. Thirty years from now the emissions from international shipping are likely to be cut in half. That is basically the only industry that has a global target for cutting absolute emissions and not only relative emissions.

So there is certainly development underway, but decarbonizing something like the global shipping industry is also actually much more tricky than decarbonizing your local firm or power plant, where you can basically carbon capture and store what is emitted, even including thermal coal and burning that for power generation. So it is a tall task, but it is something that the shipping industry basically has a clear road ahead in order to deal with.

TATIANA SERAFIN: Are there any leaders in terms of either countries or companies in this effort?

PETER SAND: Yes, very much so. First and foremost, I think we should mention the United Nations body for maritime shipping, the International Maritime Organization, headquartered in London, and basically regulating the global shipping business. Too little too late, some would say. That means the European Commission, for instance, is now in its "Fit for 55" regulation proposing that shipping activity internally in the European Union but also in and out of Europe should be included in the emissions trading scheme that is right now only handling the heavy-polluting land-based industries in Europe, but soon is to include also shipping.

So a lot of initiatives are taken in order to combat the carbon footprints for shipping, but in terms of international shipping the liner companies are absolutely on the forefront of this with ships still getting bigger by the year in terms of container shipping, but we have certainly also seen dry bulk ships that go to a scale like 400,000 metric tons of deadweight, basically carrying twice the volume that you have on the ultra-large container ships and burning less fuel. So in many ways container shipping is advancing, but it is still the part of our industry that can cut emissions to a further extent and especially on an absolute level.

NIKOLAS GVOSDEV: Listening to this, and again why I think it is so critical for our listeners and others to get a better understanding of this is because again most people just think about goods and services magically appearing. Sometimes they think, Well, maybe a storm delay or something else, but in fact there is this very necessary ecosystem of transit that enables this to happen.

But again, one of the things that comes out in listening to your descriptions of how all of this is coming together is that all of the talk last year that COVID-19 represented the death of globalization, that the international trading order was fracturing in the sense that we would stop having these interconnections, and it sounds like COVID-19 has been a shock but the industry is adapting, climate is an issue but the industry is adapting, and instead of the people who said these are the things that are going to stop globalization—pandemics, climate, fuel costs, and changing consumer demand—in fact the picture you are presenting to us is that the system is adapting and that it is showing a degree of resilience with these challenges and that the way moving forward is not that we are not going to stop people buying goods that are made in a global supply chain.

They are not going to give up produce that is not immediately in season in their specific area but will continue to use these supply chains to get fresh produce from one part of the world where it is in season to parts of the world where it isn't, and instead we are going to adapt rather than to change.

As you look forward, is this the trend that you are observing of this adaptation and resilience, but really with the end that globalization continues forward rather than stopping in its tracks?

PETER SAND: Very much so. I think that shipping is basically the facilitator also in terms of climate impact. You mentioned the fact that if we should only eat, say, vegetables or fruits which are in season in our local country, what would happen? Consumers would have an outcry if they could not get them throughout the year. If the alternative to shipping those perishable goods on container ships to, say, the Walmarts or Tescos around the world, would be to heat up a local greening facility or greenhouse, that would really mean greenhouse gases in the most literal way.

So I think we should basically re-embrace globalization, and I can only say that there is also a need for that because any crisis—this includes COVID-19, of course—really makes politicians look much more inward. They have been more nationalistic across the globe, and they, of course, have looked at their own voters and shied away from being, say, the statesmen of the world, trying to do big trading agreements with global trading partners.

But we really need to do that, and I think geopolitics is at the center of attention, at least for the analysis that I do on a daily basis, trying to focus and imagine: How will global economic development impact shipping and trade going forward? How will geopolitics either facilitate or put up obstacles to trade going forward due to the fact that politicians on a global scale perhaps start to dislike one another for any good or bad reason?

But it remains a fact that the more reliant we are on one another, the less likely is a real war—not only talking about trade wars, but if we recall why the European Union was set up in the first place, it was set up out of coal and steel because those were the ingredients behind any warmongering nation. They needed the fuel, they needed the steel, and then they could build an army. So the European Union is basically a project of peace built on the idea that the closer we tie each other's economies, the less likely it is that we will go to war. And many, many years down the road now, what a success.

So I can only encourage world leaders to make sure that they remain tied closely to one another economically, politically, mentally, and in any way in order to make sure that we reap the benefits of globalization and that we make sure that some of those great thoughts of economists and thinkers of past centuries where the division of labor and the distribution of capital is well thought of: You should produce goods where it makes sense and then trade; you should not try as an individual country to set up everything in your own backyard. If you try to do that, you will only get more costly goods of a lower quality and with less selection. Would you like that? No.

NIKOLAS GVOSDEV: I think that is a great message because when it is put that way that is something that voters would not endorse. When they hear someone saying, "Globalization failed us, it turned against us," and then you say, "Well, the alternative is," as you said, "we can leave the global system, you will have fewer goods at higher cost, lower quality, and you are increasing the possibility of conflict, which could very negatively impact you," I think you would find that you would have very different public attitudes. But as you said, it also requires that political leaders embrace that message that you just so succinctly laid out, and hopefully perhaps from one of our viewers passing it on, that would be a great message to start hearing more leaders actually vocalize in the way that you have just presented it to us.

PETER SAND: I think it is an important message to keep on saying that.

Nikolas, you put it quite rightly. Politicians basically tell people how it is. At least, that is how I see it. There would not be much of an outcry when it would be up for debate, because nobody wants more expensive goods, less choice, and lower quality obviously. It's a no-brainer.

TATIANA SERAFIN: I think that is a great place to end our discussion. It all depends on shipping.

Thank you so much for explaining our global interconnection, a very tangible one. I talk a lot about the intangible, cultural, TikTok connections that obsess me, but this is a very tangible connection with goods going from one place to another. Thank you for explaining and sharing your thoughts and ideas with us.

Listeners, comment. Find us on Twitter @DoorstepPodcast. Get in touch. We would love to hear from you.

Hopefully, Peter, we can have you on again in a few months to see if your predictions are going the way you want them to go.

PETER SAND: Thank you so much for having me, and thank you all, kind listeners, for your attention. It has been such great company today and a great discussion. I would love to be back to see if those predictions turn out to be the way that I laid them down or in a different way. Thanks again.

NIKOLAS GVOSDEV: Thank you.