transcript

Speaker 1:
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Speaker 2:
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Speaker 3:
[00:59] In no particular order, ticker symbols BA, TSLA, and RIVN. Also, of course, the rest of the day's business news. From American Public Media, this is Marketplace. In Los Angeles, I'm Kai Ryssdal. It is Wednesday today, 22 April. Good as always to have you along, everybody. We begin today deep inside corporate America, a company that spans manufacturing, technology, exports and supply chains, and which has until pretty recently been having a pretty tough go of things. We have talked many a time on this program about Boeing's very long list of problems. There was a strike, fatal crashes, and ensuing groundings, the production backlog. Well, as of today, the company is hoping that's all in the rearview mirror. Boeing reported profits this morning well ahead of expectations, revenue up 14% from last year. And this is the biggie, it's outperforming its biggest competitor, Airbus, for the first time since 2019. Marketplace's Kelly Wells gets us going.

Speaker 4:
[02:09] For years now, Scott Hamilton kept thinking Boeing had finally stopped its downward spiral.

Speaker 5:
[02:15] Then they stepped on their own foot again and did something else.

Speaker 4:
[02:18] He's an Aviation Industry Consultant with Leham Company. He says Boeing's downfall started with a merger in the 90s, and its quality has suffered ever since. Hamilton says it'll take years to fully fix. But now?

Speaker 5:
[02:31] Boeing is finally, finally, finally on an upward trajectory.

Speaker 4:
[02:36] There are two recent developments that have helped shape that trajectory, says Meghna Maharishi, airline reporter at the travel site, Skift. First, she says President Trump has been a big Boeing salesman.

Speaker 6:
[02:48] A lot of the blockbuster orders that we've seen in the news that have come out, those are things that have been maybe like announced at summits and, you know, events where Trump was at.

Speaker 4:
[02:55] And second, it's been two years since that fateful panel broke off a Boeing plane mid-flight.

Speaker 6:
[03:02] They've also been just like able to ramp up production of a 737 MAX after the FAA had put, you know, limits on the production of that aircraft, which is their best-selling aircraft.

Speaker 4:
[03:13] So now 737 MAX production has ramped back up, and the FAA says certifications for two new Boeing models are on track to happen later this year. But just as Boeing overcomes those problems, it's facing a new set of headwinds from the war in the Middle East. Ryan Ewing, founder of the industry site Airline Geeks, says those aren't showing up in the first quarter numbers.

Speaker 7:
[03:35] The airlines usually feel at first and then manufacturers will feel at second.

Speaker 4:
[03:39] The airlines are feeling the spiking fuel prices and canceled flights as ticket prices soar.

Speaker 7:
[03:44] I think you're going to start seeing airlines pull back a little bit on what they're willing to go out and order. I think the other part of that is you might see airlines defer deliveries for airplanes.

Speaker 4:
[03:55] The war started two-thirds of the way through Boeing's first quarter, so its effects likely won't show up until next quarter. I'm Kaylee Wells for Marketplace.

Speaker 3:
[04:06] Market action today, kind of a mixed bag, TBH. Equities hit yet more record highs. Oil traders, though, not at all sanguine about the state of affairs. We will have the details when we do the numbers. Shipping is arguably the global economic story right now, what with the Strait of Hormuz still being closed and all. But set aside the headlines for a second about oil and fertilizer and aluminum and whatnot being trapped in the Persian Gulf, and think bigger about what's happening in the rest of global shipping, critical as it is to global supply chains. Weston Labar is our go-to on matters of maritime supply. He's a chief strategy officer at Waterfront Logistics. That's a short distance transport and yard storage company down at the Port of Los Angeles. Mr. Polybar, welcome back to the program.

Speaker 8:
[05:14] Great to talk to you, Kai.

Speaker 3:
[05:16] So last time we had you on, end-ish of last year, 2025 had proved to be a little bit tricky for you. And I guess I wonder how the first, where are we now? First four months of 2026 are treating you.

Speaker 8:
[05:28] Yeah, full disclosure, 2026 has been a little rough to start for most people in this industry, but I don't think that comes as shocking news to anybody. We talked about how erratic last year was with the high highs, with surges related to tariffs and the low lows, with the volume lulls that follow it. We knew traditionally the first part of the year is slow because of Lunar New Year and the impacts that has this year. Lunar New Year in February, we saw 136 blank sailings for the US. West Coast. And what that really means is they don't have enough containers to fill a ship, so they cancel it. Think of it this way. If you're taking a flight and they've got four flights from Los Angeles to New York, and they only have enough people to fill two flights, they cancel two of those flights and they rejigger the structure of who's sitting where to fit all of those passengers on two flights instead of four. So imagine 136 sailings that were supposed to happen with containers that did not happen.

Speaker 3:
[06:25] For a layperson, what do we read into that?

Speaker 8:
[06:29] Well, first and foremost, that obviously means there's less cargo coming through our ports, and that means there's less jobs and opportunities for the workers in the surrounding area. And then on top of it, we had other impacts, like the closing of the Strait of Hormuz due to the Iran conflict. So ships that would normally go through the Strait of Hormuz, so maybe the US East Coast or Gulf Coast, were being redirected to transshipment ports in Asia to get that cargo to the US West Coast. And with the blank sailings, there were no ships to bring that cargo to the US West Coast. And so that compounds the issue on top of it.

Speaker 3:
[07:08] With the acknowledgement that you're mostly a short-distance company, obviously, as you were just talking about, long-distance shipping is kind of an issue now. And ships, of course, use fuel, fuel is expensive. Talk to me about that part of your industry right now and the rising costs of petroleum products.

Speaker 8:
[07:25] Yeah. Well, on the shipping side of things, a lot of them have locked in bunker fuel contracts, which are coming up for many of them for renegotiation. So I don't think you've seen 100% of the impact of fuel on the maritime shipping industry, so that the actual container ships. However, we've obviously seen it here on the land side with diesel spiking over $8 a gallon here in Southern California. And really what that means is you have to reevaluate how you're charging your customers, or maybe you need to author a surcharge temporarily until those fuel prices get back to normal, in which case you're putting your book of business with some customers at risk.

Speaker 3:
[08:06] Yeah, nobody's loving those fuel charges. I'll tell you what. Let me ask you to step back for a minute and let's talk, well, not broad sweep, but short-term sweep of history. Since 2020, the logistics industry has had a pandemic, it's had tariffs and now it's had a war that we still haven't figured out exactly what's going to happen. I don't know. How's that been for you, I guess?

Speaker 8:
[08:34] Well, what's sad is that our industry for so long was built on these predictable cycles. Early in the year, slow. Middle of the year through essentially the holidays, super busy. Labor has been created around that. Capacity has been created around that from like a real estate perspective, an equipment perspective, and a labor perspective. And you can't predict that anymore. So you have so many of these uncontrollable events that impact your day to day business that there really isn't a new norm. There's just no normal.

Speaker 3:
[09:09] I was going to ask you to crystal ball the rest of the year, but who knows, right? That's what you just said.

Speaker 8:
[09:14] Well, I do think that most importers are anticipating another tariff shoot a drop sometime this summer after July. So many of them are saying, if it's ready, ship it now. So we should see a very healthy Q2. If consumer spending stays high, we should still see a strong second half of the year from a volume perspective. But if we have a year that was up and down like last year, and we have the lower rates even still from last year, corresponding with it, you're going to see a lot more bankruptcies. You're going to see a lot more companies either downsize or close their door, and that's going to be a sad situation.

Speaker 3:
[09:51] Yeah, that's freight rates, not interest rates, just to be clear. Wes Labar at Waterfront Logistics, he's the chief strategy officer. Mr. Labar, thanks for your time. Sir, I do appreciate it.

Speaker 8:
[10:01] Thanks for having me.

Speaker 3:
[10:24] Reasonable people can disagree about the utility of prediction markets. Kalshi and Polymarket are the two biggies. You can argue about the ethics and the legality of some of the big bets that have been made on those sites of late. What you can't really debate, though, is that they are growing in popularity and that they are looking for ways to get even bigger. The information reported yesterday that Kalshi's prepared to launch something called perpetual futures markets, perps in the vernacular, prediction markets, that basically never end, tied to the price of a particular asset. Not to be outdone, Polymarket is getting into perps as well. As Marketplace's Megan McCarty Carino reports, these kinds of derivatives have been popular in crypto for years. Till now, though, mostly outside US markets.

Speaker 9:
[11:10] Traditional futures contracts have an end date. A buyer and a farmer make a deal today on the price for the next wheat crop, then it gets delivered at harvest. Though modern futures are often tied to an asset that's a bit less tangible, like a stock price, they still have an expiration date. Perpetual futures don't, says Darryl Duffy, a professor of finance at Stanford.

Speaker 10:
[11:34] They never mature. There's no final date. You just keep paying based on price movements.

Speaker 9:
[11:40] A few times a day, traders on either side have to settle up based on the current value of the asset. Duffy says they're currently used mainly as a way to bet on the ups and downs of cryptocurrencies.

Speaker 10:
[11:52] The speculators love it because they don't have to mature their contracts. They just keep going.

Speaker 9:
[11:58] But perps raise a lot of regulation questions that haven't been answered yet, says Ben Schifrin at the nonprofit Better Markets.

Speaker 11:
[12:06] They involve a lot of leverage, which means investors can lose even more than they put in.

Speaker 9:
[12:12] On crypto exchanges, traders can leverage a position for up to 50 times what they put in and keep rolling it over and over with just a small amount of collateral.

Speaker 11:
[12:23] And I think it's unlikely that retail investors, to whom these perpetual futures seem to be marketed, are going to understand the risks.

Speaker 9:
[12:31] Last year, the global trading volume of perpetual futures on crypto exchanges was estimated at more than $80 trillion. But these trades haven't really been authorized in US markets. This year, the Federal Commodity Futures Trading Commission signaled it's opening the door to perps.

Speaker 12:
[12:49] The most significant benefit of on-shoring perpetual futures is that it is regulated.

Speaker 9:
[13:00] Gamble Harvey is a professor of finance at Duke.

Speaker 12:
[13:03] This makes trading on these markets much more secure.

Speaker 9:
[13:10] More secure than offshore markets, but there's still not a lot of clarity about how the CFTC will regulate perpetual futures. Just like there's not a lot of clarity about how they regulate prediction markets in general. I'm Megan McCarty-Corino for Marketplace.

Speaker 3:
[13:46] Coming up.

Speaker 13:
[13:47] I've learned that a lot of Americans are addicted to storage.

Speaker 3:
[13:49] You, perhaps? First, though, let's do the numbers. Dow Industrial is up 319 today, two-thirds of 1%, 49,468. The NASDAQ picked up 322 points, that's one-and-a-third percent, 24,582. The S&P 500 found 59 points in the couch cushions, nine-tenths percent, 71.23 there. Boeing, you ask, up 5.5% on the day. The company's main competitor, Europe's Airbus, dipped two-and-a-third percent. The Brazilian company Embraer, or maybe it's Embraer. I don't know. Anyway, known for its smaller regional jets, dropped two-and-two-tenths of 1%. GE Vernova turned in a robust revenue report for the last quarter, up 16% to almost $10 billion. That's better than expectations. What is GE Vernova, you ask? It's a spinoff of the OG GE. It makes gas turbines and other equipment needed for electrical grid modernization much in high demand with the build out of AI, right? GE Vernova, up 13 and 7 tenths percent on the day. Bonds down, yield on the 10-year T-note rose, 4.30%. You're listening to Marketplace.

Speaker 14:
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Speaker 2:
[15:57] This message comes from Capital One Commercial Bank. Your business requires commercial banking solutions that prioritize your long-term success. With Capital One, get a full suite of financial products and services tailored to meet your needs today and goals for tomorrow. Learn more at capitalone.com/commercial. Member FDIC.

Speaker 3:
[16:23] This is Marketplace. I'm Kai Ryssdal. With no offense intended toward car sales professionals used or new, it's not like a trip to the dealership is ever really a good time. And yet, there are states that require new car and trucks to be sold through independent dealers franchises, in so many words, of car makers. Enter, though, Tesla and a 13-year legal fight over its move to sell direct to consumers everywhere. Other auto startups, including Rivian and Lucid, are following suit earlier this year. They won the right to go DTC in Washington state. They're looking for more. Marketplace's Henry Epp has today's, huh, economic history actually is pretty interesting story.

Speaker 15:
[17:08] This all started over a century ago when cars were a new thing and there were hundreds of car manufacturers in the US and many different ways to buy them. Daniel Crane is a law professor at the University of Michigan.

Speaker 16:
[17:21] You could order one from the Sears or Montgomery Ward catalog. You could buy one from a gas station or a traveling salesperson. You could buy them from company-owned stores.

Speaker 15:
[17:30] Or you could buy them from local independent dealerships. But by the 1920s, the US auto industry consolidated into the big three. General Motors, Ford and Chrysler. They were all based in Detroit, but sold to the entire country. The problem with that...

Speaker 16:
[17:46] American consumers weren't ready to buy a very expensive product from a distant company they didn't know. They needed a person that they trusted in their local community to sell the car to them.

Speaker 15:
[17:58] So car manufacturers contracted with local dealers to sell their vehicles and car makers focused on making cars. But that gave the big three a lot of power over the dealers, says Catherine Judge, a law professor at Columbia.

Speaker 17:
[18:12] And they could force smaller franchises to buy things they didn't want to buy and to accept terms that were really unfavorable to them.

Speaker 15:
[18:22] The dealers fought back. Starting in the 1930s, they pushed states to pass laws to level the playing field with the car companies. Those included bans on car manufacturers selling direct to customers. The idea was to prevent car companies from undercutting local dealers. So for decades, consumers didn't have any other option, Judge says.

Speaker 17:
[18:43] If you wanted to buy a car, you needed to go to a dealer, and the dealer was your primary source of information about the different options that were available.

Speaker 15:
[18:54] But then came the internet, where customers could get their own information, and then came this startup called Tesla with its CEO, Elon Musk. Again, Daniel Crane at the University of Michigan.

Speaker 16:
[19:05] He makes a business decision that Tesla will have to go direct, open its own stores, sell online, and have its own service centers as well. No independent dealers involved at all.

Speaker 15:
[19:17] Dealerships hated this and fought with Tesla in court and in state legislatures. Tesla and other EV startups came out on top in many cases and won exemptions that allow them to sell direct. Crane calls this period the Tesla Wars. He wrote a book about it. A decade in, he says the legal landscape looks pretty different.

Speaker 16:
[19:36] There are states that are very closed and states that are quite open and a whole variety of possibilities in between those things.

Speaker 15:
[19:44] In some states, Tesla, Rivian, and other startups can sell direct, but traditional car makers still can't. Which brings us to the latest chapter in this battle over a brand called Scout Motors owned by Volkswagen. It plans to sell its SUVs and trucks directly to consumers starting in 2027. Cody Thacker is Scout's vice president of commercial operations.

Speaker 18:
[20:07] We got overwhelming feedback that the consumer was tired of the existing model, felt abused in the existing model, and they were begging us for direct sales.

Speaker 15:
[20:18] Dealership groups have filed multiple lawsuits arguing that Volkswagen dealers may get to sell the Scout brand. The National Automobile Dealers Association did not provide a comment by our deadline, but in the past, it has said it would challenge, quote, all attempts to sell direct. Scout argues that its direct sales model will lower consumer prices. But Ray Shefska at the car buying site Car Edge, who worked in dealerships for four decades, says dealerships can help cut prices too.

Speaker 19:
[20:47] When you have multiple dealers of the same brand in a market area, there will be competition, and the customer can utilize that competition to hopefully get a better price. When you're buying direct from the manufacturer, that doesn't exist.

Speaker 15:
[21:05] And in the best case scenario, he says dealers can add a level of service and connection to your local community that a manufacturer can't. I'm Henry App for Marketplace.

Speaker 3:
[21:35] Not that it's necessarily any of my business, but is anything you own sitting in a self-storage facility right now? I ask because more Americans are using self-storage than ever before. And as a result, in the way that these things go, the industry is building a whole lot more of it. Fred Bernstein wrote about the self-storage boom and his personal experiences with it in the Wall Street Journal the other day. Mr. Bernstein, welcome to the program. It's good to have you on.

Speaker 13:
[22:02] Thank you so much.

Speaker 3:
[22:03] Here's the thing I don't understand about this. American houses are getting bigger, bigger, bigger and bigger. And yet we're renting, as you point out in this piece, far more self-storage space than we ever have?

Speaker 13:
[22:14] That's right. I mean, not only our house is getting bigger, but household size is getting smaller. So actually, we have much more room for a person in our homes. But we buy a lot of stuff. People buy a lot of things they don't really need that they can't bear it apart with.

Speaker 3:
[22:28] You've got a theory on why this happens, right? Explain that to me.

Speaker 13:
[22:31] Why it happens. Well, just people buy more things than they need and they're emotionally attached to them. And once you spent a lot of money storing things, you really hate to admit that you wasted that money, so you keep doing it. And the storage places are designed to make it hard for you to get out. Their business really depends on people bringing stuff in and never taking it out.

Speaker 3:
[22:53] This will surely earn me some hate mail from the self-storage industry, but they are not the most attractive buildings, and towns and cities have kind of decided they don't want them around, or at least in residential areas, yeah?

Speaker 13:
[23:07] That's right, and they don't want them on commercial strips either. They'd like to have street life. And these places are devoid of life for the most part, and more and more of them are controlled remotely by large corporations. They often don't even have people on duty. So they're not good for eating commercial areas active, and they're not beautiful at all in residential areas. They really need to be in industrial parks, but the developers don't want to put them there. They want to put them in central locations.

Speaker 3:
[23:36] Yeah, and of course, people who have self-stored spaces don't want to have to drive out to some industrial space, right?

Speaker 13:
[23:42] I suppose. It never bothered me. I have space for 30 years. But I guess people want them in central locations just like everything else.

Speaker 3:
[23:52] Well, we've come now to that point in this interview where I ask you to relate your personal experience with this, because you know where of you speak.

Speaker 13:
[23:59] Yeah. I bought a house more than 30 years ago. The house didn't really work out. It was a weekend house and there were some problems with it. And after a year or so, I put it on the market. And when I sold it, I wanted to put everything in storage because I thought I might get another weekend house. And I never bought another weekend house, but I kept the stuff. And I never really had a good way of getting it out. It was an entire house full of furniture and appliances. And there was no dumpster on premises. And I think one of the things the owners of these facilities do is not provide any way of disposing of things. It just seemed like an impossible problem having all this stuff there, not knowing what to do with it.

Speaker 3:
[24:38] You put this in print, so I'm not outing you at all. But over 30 years, you write that you spent $100,000 on this place.

Speaker 13:
[24:45] Something like that. I never ended up exactly, but I don't feel too bad. I used to joke that some people's vices, alcohol, some gambling, this was my vice or really my addiction in a way, which is storage. I've learned that a lot of Americans are addicted to storage. I've gotten read or mail from people who have six or eight or 10 storage spaces sometimes in different states, frequently hiding them from their spouses. They're embarrassed, but they can't stop.

Speaker 3:
[25:15] How did it come to pass that you wound up getting rid of this thing?

Speaker 13:
[25:18] My husband insisted that we not take a vacation until we got rid of the stuff. This was costing a lot of money. And he put his foot down and we spent three days there with our sons and we went through it all. It was very eye opening to be reminded of chapters from my earlier life that I had forgotten about completely. But all of that was in the storage space, not just furniture, but really evidence of so many things I had forgotten about in my personal life and in my professional life. It was absolutely fascinating going through the boxes.

Speaker 3:
[25:51] Not to add insult to injury, but you did have to pay a guy to help you cart it all away.

Speaker 13:
[25:54] Oh yeah, I had to pay a guy $1,000 to cart away the things we didn't need, because there was no other way to get it out of there. There were many items that were worthless, so I went and have them and months later I saw him selling them on eBay for quite a lot of money. That really added insult to injury.

Speaker 3:
[26:10] It really did. Fred Bernstein wrote in the journal the other day about self storage spaces. Mr. Bernstein, thanks for your time sir, I appreciate it.

Speaker 13:
[26:17] Thank you so much, Kai.

Speaker 3:
[26:39] This final note, a follow up of sorts, to Megan's story yesterday about agentic artificial intelligence, AI that can mostly autonomously do things. I missed this in the news firehose that we are living in, but apparently Google's CEO Sundar Pichai said yesterday, fully 75% of the company's new computer code is being written by agentic AI. A year and a half ago, it was 25%. Telling you what, the future is coming at us faster than we are ready for. Our media production team includes Brian Allison, John Fokey, Montana Johnson, Drew Jostad, Gary O'Keefe and Charlton Thorpe. Alex Simpson is the manager of media production. I'm Kai Ryssdal. We will see you tomorrow, everybody. This is 8 p.m. We'll be right back.

Speaker 20:
[27:42] Headlines shift overnight, and then again in the afternoon, and again in the evening. You see where I'm going with this. Hello, I'm David Brancaccio, special correspondent from Marketplace, where we deliver economic news designed to keep you both sane and informed. One of my favorite ways to make sense of it all is with the Marketplace newsletter. Every weekday, our team curates must read stories from the week and delivers explainers. Write to your inbox. So if you want the latest from me and our team of award-winning journalists, head over to marketplace.org/newsletters and sign up today.