00:15:26 · S1, Carol Tomé, S0
[00:15:26] S1: But I'm sure it's got to be in your radar. Sean O'Brien has been out talking about it in some cases, very profane ways. Do you have a relationship with him? [00:15:35] S2: So I certainly have met Sean on several occasions and we invited Teamsters into our company over 100 years ago. And our approach has always been to have a constructive relationship with Teamster leadership. [00:15:47] S0: And I can give you an example of that. [00:15:50] S2: This summer we had a driver buyout program that was oversubscribed and Teamster leadership was very vocal about their displeasure with that program. So we met with them And we reached alignment on what was mutually satisfactory for both of us. So that's our approach to work with Teamster leadership. To your point, the contract is out until August 1st of 2028. [00:16:11] S1: Would you start those negotiations any earlier than that, though? [00:16:15] S2: So there's really no mechanism for starting early. I think for us, our focus right now is returning our company to growth. I will say this, Romain, as I reflect back on our company history now over 100 years with Teamsters in our company, I believe other than our founder, I will be the only CEO who's negotiated two union contracts, two Teamster contracts. And I have a lot of lessons learned from the 2023 negotiation. I'm not going to share those lessons learned with you today, but I have a lot of lessons learned. I think that gives me a distinct advantage as we think about the upcoming contract, which again, it's not till 2028.
00:16:15 · Carol Tomé, Romaine Bostick, S1, S0
[00:16:15] S2: So there's really no mechanism for starting early. I think for us, our focus right now is returning our company to growth. I will say this, Romain, as I reflect back on our company history now over 100 years with Teamsters in our company, I believe other than our founder, I will be the only CEO who's negotiated two union contracts, two Teamster contracts. And I have a lot of lessons learned from the 2023 negotiation. I'm not going to share those lessons learned with you today, but I have a lot of lessons learned. I think that gives me a distinct advantage as we think about the upcoming contract, which again, it's not till 2028. [00:16:50] S3: What were those lessons though? [00:16:52] S1: I mean, there were some people that looked at those contract talks in 2023. I know you avoided the catastrophe of an actual strike, but it was still kind of sloppy. [00:17:01] S2: Well, I'll share one lesson with you. We said in 2023 that our desired outcome was. [00:17:08] S0: Win, win, win. It wasn't very clear, was it? [00:17:13] S2: In 2028, we'll be very clear on what our desired outcome is.
00:17:13 · Carol Tomé, S1, S0
[00:17:13] S2: In 2028, we'll be very clear on what our desired outcome is. [00:17:18] S1: I am curious with about where you go next and about this idea of who you look to and who you model yourself after. You worked at Home Depot for years. You worked under Arthur Blank. I know you've talked about him publicly in terms of what he's meant to you as a mentor and as a friend. But I think about CEOs that have either had to go through turnarounds or have had to shrink their company in order to make it bigger or better, as you would say. Is there an example that you look to or is UPS a singular story? [00:17:48] S2: Well, in some ways, I look back at Home Depot because I was the CFO during the financial crisis. [00:17:54] S0: So we shrunk. [00:17:56] S2: We lost 25% of our revenue in one year. [00:17:59] S0: We shrunk. [00:18:00] S2: And it enabled us to really focus on what mattered to the customer. And what better to the customer was moving off of some of the promotional drugs that are very commonplace in retail and go to everyday low value to meet the customers where they want to be and be consistent in the value proposition. And that's similar to here. We're smaller, we're better, and now we're going to meet our customers where they want us to be. Complex logistics, supply chains are complicated. We want to absorb the complexity, present simplicity, and help them run their business.
00:18:00 · Carol Tomé, S1, S0
[00:18:00] S2: And it enabled us to really focus on what mattered to the customer. And what better to the customer was moving off of some of the promotional drugs that are very commonplace in retail and go to everyday low value to meet the customers where they want to be and be consistent in the value proposition. And that's similar to here. We're smaller, we're better, and now we're going to meet our customers where they want us to be. Complex logistics, supply chains are complicated. We want to absorb the complexity, present simplicity, and help them run their business. [00:18:31] S1: Is the tariff issue kind of behind us? I know you've talked about this idea that companies have found a way to manage it. What does that mean? They've managed it and now it's there, but just less surprising? [00:18:41] S0: Well, it's certainly been a lot of change in trade. And, you know, trade doesn't stop. It moves. And we certainly have seen that in our business. [00:18:48] S2: But because of our integrated network, we've been able to turn on a dime to meet our customers where they need us to be and serve them as they were moving their supply chains around the world. What we see in our business is this. We see some trade lanes recovering. In fact, at the end of the quarter, we saw inbound into the U.S. grow, turn positive. That's good news for us because it's very nutritive. We saw Asia to Asia trade lanes. [00:19:14] S0: Grow over 8% in the quarter.
00:19:14 · S0, Carol Tomé
[00:19:14] S0: Grow over 8% in the quarter. [00:19:17] S2: We saw softness coming out of Europe principally because in Europe they eliminated the de minimis exemption in July. So there was a pretty significant drop in trade, but that's starting to recover now. [00:19:28] S0: Candidly, there's a little. [00:19:29] S2: Softness on the Canadian borders, as you might expect. But all of this, I would say, is not structural. It's more cyclical. [00:19:37] S0: It's going to sort out, I think, over time.