 Okay, we're back. We're live for the four o'clock clock. I'm J. F. I. Dell. This is sync tech. More specifically, this is the global report and a little young is not available today, but I'm here and her guest, Bill Boreham is here. He joins us from, let's see, where are you? Are you in California? California? Yeah, well, okay, it could be Singapore, it could be California, it could be anywhere. And we will talk about everywhere because our show today deals with maritime choke points. You haven't heard that term very much, but you're going to hear plenty about choke points in global trading. Why should we be concerned? We should all be concerned. And Bill is an international, may I say an international observer. That's correct. What do you familiar with this? He does a diplomat. Okay, citizen diplomat. I want to be that too when I grow up. So Bill, you know, you say choke points, let's define our terms. What is a choke point in international and maritime global trading? Well, in a maritime sense, you know, it's a narrow passageway of water, of which there are a number, depending on how you count them around the world. So it's a place where some other state actor or non-state actor could do something to choke off the passage of ships. That's serious. And I guess my gut isn't serious and I know it's serious, but why don't you tell us why it's serious? Well, I think as we saw most recently with the Suez Canal, there were all these ships backed up sometime, I think maybe as many as 450 to 500 ships waiting to enter the canal. So what, you know, there were goods on those ships. There was petroleum and there's natural gas or a variety of products and we can talk about that. But something had prevented these ships in their normal course, you know, moving to markets to make their deliveries. And there was some, it almost caused some pain. But unfortunately, it really did. It was a lot of concern. But there are, there are concerns about these choke points because we could see even in that case, that despite, if you want to call it pilot error, it was what they say it looks like the ship was grounded by strong winds, very strong winds against its superstructure in all those containers. But to go to go to the point about why we should be concerned just for one other thing. And that is this, you know, people, I think they have the impression that, you know, Suez Canal, this ship, what was the, the ever, ever, ever, ever given, ever given was the name of the ship, Brian, huge ship, a quarter mile long, that ship. They have the feeling that what's happening on the ever given really doesn't affect them. And that it's far away. It's, it's weeks, months away. And it's not carrying anything that affects them. So, you know, it's distant, they don't need to worry about it. But that's not really true, is it? It's not true because actually, most of the cargo through the Suez Canal is food, believe it or not, by percentage of tonnage, as well as percentage of value going through there, destined for Europe and other places. So that's a very, very important food. And if it had gone on longer, there could have been, you know, problems, looking back a number of years ago to a problem with the Bosphorus, you know, that's part of, as they're in Istanbul, they call it the Straits of Turkey. And there was a problem with ships getting through there, and it delayed the wheat coming down from Russia. And that affected Africa and caused riots actually in certain African countries. So that's kind of an example about that. But, you know, I was thinking about this a little bit more analytically, and we'll get into the physical issues and security and all of that. But from a manufacturing standpoint, manufacturing companies long have practiced what's called just-in-time inventory, which means they don't want to have a lot of inventory around. They're delivering to order, you know, almost completely. And you've got like a company I used to work for years ago called SAS, and that company has a supply chain solution, which helps producers and anyone in the supply chain from maximizing profit, reducing costs, and reducing inventory. So we're not long from, you know, running out of whatever it is, whether it's food or energy supplies. So we're worried about disruption is what we're worried about. Yeah. And sooner, probably sooner than later, that disruption will have an effect on all the goods and services we need. Furthermore, the number of ships that are this big, quarter-mile long, carrying 20,000 containers, that has an effect on so many countries, so many industries, so many people. And, you know, take one ship like that offline, and you're affecting effectively millions of people and thousands of industrial enterprises and so forth. So we live on a wire. I agree with you totally about the supply chain, just in time for everything, everybody around the world, avoid the investment in inventory that doesn't move, make it move right away. Right. Well, of course, those ships that couldn't get in got through there pretty quickly in a matter of a few days. So I think something should be said about the administration of the canal. They did a good job. We kind of focused on the mishap, the incident, and that's under investigation. Who knows when they'll figure that out. But I would say something about the Suez Canal and the Panama Canal, each of them have been improved in recent years to accommodate these big ships. You know, they've been widened where they needed to be widened, and also so that you can have ships passing each other. So that's a very positive development. That's an old, you know, that's a part of a solution in effect. But if the canal itself is completely blocked, then it doesn't matter how wide it is. But I think there's some efficiency is built in. So, again, both the Republic of Panama and the Arab Republic of Egypt, you know, wants to accommodate world trade and commerce from a safety and security standpoint. Well, it's also a matter of money. And my understanding is that for every ship that passes through the Suez Canal, the fee to the Suez Canal authority is something around $700,000 for every single ship. This is a big industry as far as the government of Egypt is concerned. Yes, I think it may only represent a couple of percent of the GDP of Egypt. But it is expensive. And that's a critical issue here when you talk about the transportation. And that's starting to push people to find shorter ways. Of course, the can the can the canals were a shorter way to get from one marketplace to another. But there is an expense associated with it. And we can get into that. I mean, if the canal is going to be blocked longer, some ships are going to have to go down around Africa. That would be a lot longer trip. Yeah. Well, can you can you go through some of these? I mean, you mentioned before the show that there were seven of interest. I know, but I don't think I know seven. There's a locker straight near Singapore, the Panama Canal Suez Canal. You mentioned to me above El Mondab, which is south of Suez. I had no idea about that. And now, as you mentioned also to me, the Arctic passages, which are free of ice because of climate change. They're, you know, they're new shipping routes. So, although it's a sad origin, the fact is, the shipping routes and they're not necessarily controlled by the United States, possibly Russia, possibly China. Right. Well, we'll go on to that briefly, because that illustrates a couple of the points here. You know, with the Arctic ice melting, it used to be that you'd be lucky if you could transit the northern Russian coast for maybe two months a year. But now it looks like it could be almost any time. Russia has also invested in a new and a number of nuclear powered ice breakers, though they could break up the ice or when emergencies occur, they can be there. So that's a passageway, which is much, much shorter than going from China, you know, through the Indian Ocean, the Arabian Sea and up through the canal, and through the Mediterranean up to say, Rotterdam. So, so the northern sea route is what it is called. And that does promise a far shorter route, and whether they can able to be able to charge any tariffs, going through their fees. I'm going to be talking to an expert at a Russian University next week to probe into that more deeply. But there's no question that one of the first places that came to mind with the Suez problem was looking closely at the northern sea route. Now it's interesting, you know, we had a, we had to come down to the coast guard on the show a year ago, maybe less. And he spoke of an incident in the northern sea route where the Russian Navy had issued a directive to the American Navy that if they wanted to use the northern they wanted to use the passage that had opened up. And the Russians were claiming they're claiming it. They should ask permission. And they wanted to, you know, advance notice and permission from the American Navy, you can imagine what kind of response they got from the American Navy. But the point is, Well, yeah, but it probably did does transit their territorial waters. And whether this is 30 miles out or 200 miles. So that's going to have to be adjudicated somewhere by somebody or mutual consent. But it's certainly, you know, Russia's in a position to control that. No doubt about it. Yeah. And, you know, so that I think we're behind the eight ball and that's simply because they were there when it opened up. And they're making their claims even before we make any claims and, and they have of course a nuclear icebreaker that that has an advantage over a non nuclear icebreaker. So, we may find that it's sort of like the Suez Canal right where you have one entity who controls the passage. Exactly. Well, you know it's interesting we're having this conversation today because over the weekend the Financial Times of London devoted almost a full page to reviewing three new books about the influence of rivers, oceans and terrain on the history and strategy of countries seems kind of obvious when you stop and think about it, but there was a great big full page book review in the weekend edition of the Times. So it is quite relevant to a lot of people. You know I think we might spend a little bit more time at the Bob L. I wrote an article about that four years ago, which I published on LinkedIn, as I had just by accident discovered what was going on there. What was going on was China was beginning to build its very first base outside of China. And the US already was there. In fact, the only base that the US has there at that straight and it's actually in the Republic of Djibouti only 900,000 people in that country. East side of Africa Djibouti. It is it's in the Horn of Africa. And of course the country to the north is Iteria, and to the west is Ethiopia, then Somalia farther south. But this is a straight, which is very narrow and separates the Red Sea from the from the Arabian sea in effect. And you've got Djibouti on one side, and you've got Yemen on the other, which we know is an area of conflict. But anyway, so China was building a quickly built not only military base where they were having maneuvers, including live fire maneuvers. It also became a naval base for them. So here we are four years after four or five years after they started it. So that's a very unique situation. So why is the US there. Why is China there. And the Chinese certainly want to, from a security standpoint, make sure that oil that comes through there, or food stuffs or manufactured goods that they said can pass through that straight. So Suez is not the only choke point in the neighborhood. Let me get my geography straight on this. This is be between Africa, the Horn of Africa and Yemen. And is it, is it a choke point to get to the Suez canal. And it is, can I get to the Suez canal without passing through Bob Elmond up. We have to go through that straight. And that's, you know, a natural straight we talk about canals, but of course there are natural straights. And so that's a natural straight, and very, very, very narrow there. I think it's, oh, I think 18 miles wide at one point. So who would you say is in control now. Well, the, you know, anyone can go through there's nothing charged to go through. It's a natural waterway. But, you know, I think the US, you know, wants to exert some control and protective approaches for the Suez canal probably. And the Chinese there have have goods going each way. And the Chinese want to have a presence there because this is, I'm guessing here, please confirm, because they have a large presence a growing presence in Africa. It is part of their one Belt One Road initiative. They need to get to Africa and I'm thinking that maybe the straight of Bob Elmond Dobb has has something to do with their access to Africa. And I'm sure that it does. It was saying for the US gives you a base to operate from and the as I think as I said, the US has 5000 troops there at least what they'll admit to. But as to, you know, who controls things. A friend of mine, who is Andre Portanov is the director general of something called the Russian International Affairs Council. He wrote an article about a month ago that appeared in a something called global brief, which is kind of like foreign affairs in a way, if you, although that's basically US orientation is a lot of different writers. Andre called for a new global government governance of these canals, and of these waterways that something needs to be done under the ages of the UN. And even cited remarks by a US admiral to that same effect that something needed to be done. We just can't leave the defense and the protection to add hawk, and to, you know, the countries that happen to be there. There should be global governance. It sounds like a good idea. It also sounds like you agree with it. But my question is, just how, how do you effectuate that because the people who control these canals for a number of reasons geopolitical and for that matter financial are not about to give them up. Well, that that is absolutely correct. There's no doubt about that. So you've got to get it, get a dialogue going. And again, an incident and unfortunate incident has happened in Suez, but prompt that but probably the only institution that you can move that through would be the United Nations. I think you're, you're correct on that. Now you have another area that we want to talk about for sure, because it's do do Southwest of Hawaii, and that's the straight of Malacca, which is 580 miles long. And basically you've got the island of Sumatra, which is Indonesia on one side, and you've got the melee peninsula on the other side. And there's several points where it's not too deep. You still get some of these ships through. In fact, there's actually a convention that's named after the straight that determines what size ships can go through. That's just from a navigation point of view. So again, melee peninsula and Indonesia on the other side. There's no intention around that straight, not by those two countries, but by India and China. Again, it's crucial for India to move manufactured goods through that straight. I mean, the only way to go from the South China Sea and related bodies of water to the east of that area is through the Strait of Malacca. And that brings them out into the Indian Ocean. Well, guess who's waiting for them, and has been waiting for them is the Indian Navy, right at the mouth of the straight. And they did some nice intimidation here a few months ago because there's a conflict, a land conflict in the Himalayas between China and India. And they were just signaling to the Chinese, you'll give us a hard time in the mountains, and we're going to stop the ships coming through. So, very interesting. It's thousands of miles away. And yet, from a geopolitical point of view, it could be across the street. Right. And of course, the other thing is to get to the Malacca straight, you've got to go through the Singapore Strait, which is only about 58 miles or so. But going from the South China Sea of the Singapore Strait, which Singapore would have some something to say about that, then up through the Malacca straight. So that's another one of that's a choke point. Yeah, right. So Asian, Asian maritime traffic is going to go through there to get to Europe, I suppose, carrying all manner of things. One issue that comes to mind, you said it was shallow in some places of what was 500 miles long. And I wonder if there's a concern in this straight and other straights that are bottlenecks for ships that that go go ground for ships that get in the way and stand in the way of other traffic later. And that is the reason to have an agreement among nations to control the way ships move and whether it's a risk to international traffic. Well, without being complacent, you know, the fact is that the maritime industry, you know, has been managing things pretty well. And that was one of the very rare instances. I mean, when you think of the thousands of ships that go through these straights or these canals, this is a very low incidence, you know, when you when you really get down to it. And actually, the more concerning issue is state actors and non state actors or terrorists who could do something and maybe not just hit one passageway with two or three at the same time and convulse, you know, and truly convulse the world economy. So these ships ships were blown up or destroyed or wrecked. I mean, this ship just had to be moved off the bank. They had to refloat it there. So I do think some more proactive governance is needed. And then of course that quickly leads to how do you enforce monitor or supervise what you're trying to govern and who gets to do that. And that's where you even more so intrude on sovereignty. Well, you mentioned non state actors and, you know, terrorists are non state actors, but so are pirates. And I wonder if that's a concern in these choke points. That has been a concern in all of the choke points that we have talked about definitely has been piracy has been an issue. But with the collective action, it's been reduced tremendously. So I mean the piracy occurred, and it was pretty much put down I mean the Somali pirates, which are not not far from the straight in the canal. They were put down and then the same, there were pirates in Malacca as well. So but someone had to take the initiative and there was, you know, some disruption. You know, speaking of choke points bill, you were talking about the South China Sea. And those, I want to say artificial islands those constructed islands constructed islands and constructed into military operational units by China in the South China Sea. And I wonder, and of course they're there for strategic reasons they're there. I think you could say they're there to create choke points. Would you agree with me about that are they effectively choke points that are created by China. There's no question about it. I mean, well, there may be a lot of water between some of them, but they give them a strategic presence. But it's also projecting power. That's really what it's a projecting power to Vietnam, the Philippines, and even Australia. So they're asserting a presence there, and saying who can go through it and who can't. And they don't like the fact that the Indians have very much so intruded into that though into those waters, but India of course has business with Japan and Korea. So they don't want to be intimidated by the Chinese. And the Chinese have been very demanding, but very possessive, if you will, I know that's right term about their ability to build these islands and in fact that they were in a court case with the Philippines and others on whether they had a right to do that. And they lost, they lost in the International Court in the hay, but they don't care. I don't hate no attention. Yeah, and all of this is based on some legendary almost mythic fleet that left from China in the 1500s and touch certain waters. So they're making the claims based on that. But can we talk a little about the Panama Canal that's closer to home. And I've always wondered, I'm interested in your thought about it, whether we really should have given it up. Well, that's forget what I remember when that happened. And it was quite controversial at the time. And people probably don't even know or recall that there was a band of land, five miles on each side of the canal was called the canal zone, and it even issued stamps. And John McCain was born there. There was a question when he was running for president. And in 2008, whether he was a natural born citizen of the United States, Congress did pass a resolution to clear up that issue. Well, I mean, from a geopolitical standpoint, you know, Teddy Roosevelt may have been right. But for what was gained, certainly not gained by the United States. I think that it's been well administered. Again, they did expand the canal. And so that's something that haven't been any issues there really, but it's really very, very small. It's not wide enough, very, very narrow. More recently, there has been a proposal, I think by Nicaragua to build a canal, which would be longer through the land, then crossing a lake. And of course, when you go back to the history of the Panama Canal itself. While the French were working that way, there was a much stronger case made in Congress to go through Nicaragua, which was a meanable to the transit and to the canal versus Panama. But, you know, Panama appeared as the narrowest place to do it. And you're speaking of geography. A lot of people don't realize that the, let's call it the Atlantic, or the Caribbean end of the canal is actually farther to the west and the Pacific exit of the canal. You can visualize that. You really look at a north-south map. It has that difference to it. And I did drive across the isthmus a few years ago, which was quite a weird thing to do because they had no signs to get over to the other side. People go through on ships on a nice trip. I tried to drive over there to see the locks. I did get over there, but I got lost about three times trying to find my way. You talk about locks in the Panama Canal, which makes it a vulnerability there to the extent that Suez- That's a very good point. Whereas actually the Suez is a straight cut through, which they couldn't deal with Panama. But it seems to have been well-administered and they did do themselves a favor by making it bigger. Well, I think for me, a takeaway here is that article you mentioned about creating a United Nations body that would oversee all of these showpoints. Because as time goes by, even though we have better technology at sea and these ships are more able to deal with casualties or possible casualties. The fact is that we're going to have more situations where quarter mile ships are stuck and it affects our global supply chain and thus hundreds of countries and millions of people. And I guess the takeaway point for me is we really need to do that before it becomes an international crisis. Whether by natural unintentional causes or by intentional causes, one of these days that could be something that burns the whole world. Right, no question. Especially as I say in my research on this, I was a little surprised to find out the amount of food that's going through. And that is a greater tonnage in value than what we assume is the crude oil and LNG. So, well, I guess we have to write our congressman. Yeah, we do. You know, it's interesting that as the world gets flatter like Tom Friedman says, you know, these issues are revealed, and they become more critical for us. And we have to pay attention. However, you know, it's a matter of priorities. So this particular issue is not a high priority in the United States or anywhere else and have to make it a high priority. Well, the terrorism is a high priority. And I think that's where various disparate nations, you know, can work together. So let's hope that they will do that. But thank you, Jay, very much for bringing out this issue and give me the opportunity to talk about it. I appreciate it. Thank you, Bill. It's been it's been really elucidating and valuable to have this conversation with you. Your knowledge and your experience in the area is impressive. And this discussion really takes me to a new place and I appreciate it. Thank you very much. Aloha.