Brittain Ladd explains why he thinks Starbucks is in a ‘world of hurt’
On Monday’s The Stockout show, Grace Sharkey and I interviewed Brittain Ladd, an outspoken strategic consultant with a specialty in the retail sector, among others. The discussion touched on geopolitics and how companies can diversify their supply chains to have less reliance on China. That’s not easy, according to Ladd, and often, moving physical production away from China results in production in Mexico or elsewhere by a company that is still owned by a Chinese entity. India is the only country that could possibly displace China as the manufacturer for the world, but India is lacking transportation infrastructure and it would take at least a decade to close the gap on its current disadvantages relative to China.
Ladd also explained why he thinks the Federal Trade Commission is taking the wrong approach in its antitrust complaint against Amazon and outlined why “Starbucks is in a world of hurt.” He considers that customer experience at Starbucks to be generally very poor. That may be true, but he hasn’t been to the Panera across the street from FreightWaves in Chattanooga, which has the worst customer service of any coffee shop I’ve ever been to.
Monday’s show can be seen here, and the full The Stockout playlist is available here.
Loaded and Rolling
On Tuesday, I joined Thomas Wasson’s Loaded & Rolling show for the second time. Loaded & Rolling is generally focused on the highway, so much of the discussion was related to the competitive dynamics between truckload and domestic rail intermodal. Thomas asked questions coming from a lot of different angles, such as on autonomous trucks and the Buffettesque “moat” question. That lent itself to a wide-ranging discussion and ended up getting a little off the initial topic, moving into AI and fast-fashion retailer Shein’s disruption of the airfreight market.
The episode can be seen here, and the full Loaded & Rolling playlist is here.
A win for Norfolk Southern management and longer-term shareholders
FreightWaves’ John Kingston has been covering the Norfolk Southern activist situation closely — his latest article is here. I was surprised that the activist only got three of the board seats it was seeking. Some investors who actively trade the shares were apparently surprised as well. With a big spike in trading volume, shares traded down from $232 to $224 before partially recovering. I imagine that voting broke down along investing horizon lines, with short-term investors supporting Ancora and long-term investors backing management and many of the existing board members. I believe that Ancora made some good points and nominated some very competent board members but was disingenuous in its contention that its plan would make the railroad safer. Shippers should breathe a sigh of relief at the news since it likely means that cuts to railroad staff, equipment and even intermodal lanes will be less severe than if Ancora got most of what it wanted.
To improve margins, Norfolk Southern reduced service in low-volume intermodal lanes, such as those that involve New Orleans and Birmingham, Alabama.
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