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First Move with Julia Chatterley
Facebook Reportedly Planning a New Name Under Rebrand; Netflix Gets its Tentacles into More Subscribers; Alibaba Shares Jump after the Founder is seen in Spain. Aired 9-10a ET
Aired October 20, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:25]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
Mark's meta move. Facebook reportedly planning a new name under rebrand.
Squid surge. Netflix gets its tentacles into more subscribers.
And Ma or mirage? Alibaba shares jump after the founder is seen in Spain.
It's Wednesday, let's make a move.
Welcome once again to FIRST MOVE this Wednesday where we see something very fishy going on in the global business world, Netflix reporting a whale of a
Q3 with high hopes for Q4 thanks to hit show "Squid Game." It's hooked millions of global viewers, but failed to reel in additional Americans. We
will explain why.
All of this, as Facebook is floating a corporate rebranding and in Washington, D.C. Democrats are attempting to land a deal on fiscal spending
as early as this week. No more floundering.
Meanwhile, Bitcoin trying to scale new heights in crypto land. It is less than one percent away from record highs following the launch of a historic
U.S. Bitcoin futures ETF on Tuesday that went swimmingly. The ProShares ETF rising almost five percent on Tuesday, call it perhaps some crypto shock
and awe, right? Well because it was the second best fund debut ever.
U.S. futures meanwhile resemble still waters trying to catch a bit after five winning days. The profit piranhas though will be out in force again.
Today, we've got Tesla and IBM reporting after the closing bell and across the pond, European stocks are a touch softer, too, but U.K. inflation
taking a surprise dip last month, too. Welcome news on the data front there.
Asia, though taking the bait. Take a look at that -- with Hong Kong closing at near six-week highs. China tech continuing to bounce as low valuations
lure investors. And as I mentioned, Alibaba rising six percent on hopes that a company's new server chip just as founder, Jack Ma reportedly
resurfaces over in Europe, a sign perhaps that Beijing is softening its tech crackdown or merely a red herring.
I'll clam up now. Let's get right to the drivers.
Reports say Facebook is set to give itself a new name. The Verge says we'll hear about the rebrand next week just as the company fends off a hail of
criticism from regulators. But is that pure coincidence? Brian Stelter joins me now.
Someone is putting words into my mouth, but they are the correct words. What do we think of the timing on this? I mean, it was never -- it was
never going to be a good time. Perhaps it makes business sense. What do know here, Brian?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, a month of scandal, weeks of scandal, months of scandal, then a name change? I mean, look, it
literally reminds me of tobacco companies that have rebranded to get away from names like Philip Morris, you know, how they give new corporate
refreshes.
Obviously, a very different situation with Facebook. This is probably more akin to Google creating Alphabet. So Alphabet, of course, the umbrella for
Google and other ventures, and I think that's the vision Mark Zuckerberg has, according to The Verge that the Facebook app, the blue app that
everyone knows the flagship app, with all the troubles that that is just one of many parts of a company umbrella that also includes Instagram, and
WhatsApp and most importantly in this conversation, the Metaverse.
We know that Zuckerberg has been very focused on the Metaverse, on AR and VR, on new products that bring people into a virtual world that is more and
more like real life, and that's the indication that next week, he is going to be announcing this new name at the company's annual Connect Conference
on October 28th.
Maybe it'll leak out sooner, and already, lots of journalists have lots of ideas for the new name. But you know, I think it's a version of Alphabet,
Julia, but at a time that will help distract from Facebook, the flagship app's troubles, both real and future.
CHATTERLEY: Yes, I have to say, and we can come back to this that most of the names that I've seen on social media, they're not very flattering,
quite frankly. And I think, you know, we can talk about this more, and I think confusion for most people, what on earth, the Metaverse is and to
what extent Facebook wants to get away from this sort of social media platform? And we all felt, I think how difficult it was without WhatsApp
when they had that outage a couple of weeks ago. So they are about more than just social media and a social media platform.
But you know, in a challenge company sense, if this weren't Facebook and it weren't -- and Mark Zuckerberg didn't have the power that he had, you'd
probably change the CEO or you'd shakeout management in these kinds of situations with this degree of challenge. Facebook, of course can't do that
because Mark Zuckerberg is so powerful. So what do you do? You shake up the name and you hope for the best.
[09:05:08]
STELTER: Right. You rebrand. You put on a new logo, a new face, some new colors, new color scheme. You renovate the old house because you can't get
a new house.
I think with Zuckerberg certainly, his interest is in -- is not in how to create a better poke button or like button, right? His interest is in what
he believes is the future of the internet, the Metaverse. He wants to create something for the next 20, 30, 40 years, and beyond and not look
backwards. Of course, so much of what is happening here in Washington and elsewhere is about looking both backwards and into the present day and how
this technology is hurting individuals.
We know for instance how again the whistleblower is going to be doing more in public in the coming weeks speaking with regulators in Europe and
beyond. So, you know there are going to continue to be damning stories about Facebook.
In fact, we know many news outlets are working on and going through some of those leaked documents as we speak and working on stories about further
revelations from "The Wall Street Journal's" Facebook files. So this is going to go on and on for Facebook. Whether we call the company something
else or not, it won't change those real problems, but it might make everybody in the company feel better. It might make Zuckerberg feel better.
CHATTERLEY: Yes. Favorite name so far, Brian? Do you have your own?
STELTER: Somebody mentioned "Horizon" which is a product they've been working on internally. Horizon that has a kind of Alphabet sound to it, you
know, generic. It could mean anything, it could mean nothing at all.
CHATTERLEY: I was going to say, Face Palm. Prints, formerly known as for instance --
STELTER: Formerly known as --
CHATTERLEY: Face palm, the emoji, and also you hold your phone in your palm while your WhatsApp-ing or whatever it is, so actually, it does it
does work.
STELTER: It does work.
CHATTERLEY: I'm not sure they're going to go with that though. Brian, great to have you with us. "Horizon." Brian Stelter there, thank you.
Well, what do you think of Facebook and what could it call itself in the future? We do need some ideas. You can send them to me on Twitter
@jchatterleyCNN and I'll try to read out the few of the best ones at the end of the show. New ones, please.
Okay, let's move on now to a "Squid Game" in for Netflix. The Korean hit show boosting signs up as it grips new viewers in Asia, but closer to home,
the streaming giant grappling with the storm over a comedy special.
Frank Pallotta joins us on the story. Frank, great to have you with us.
Let's talk about the excitement around "Squid Game." The rise that we saw, over four million new subscribers yet, they are really struggling to add
new subscribers in the United States and Canada. Have we hit a ceiling there despite what they do as far as content is concerned?
FRANK PALLOTTA, CNN MEDIA WRITER: So on the surface here, you have 4.4 million more subscribers. That's the good news for Netflix. Netflix is very
happy about that because after the last two quarters of sluggish growth, it seemingly is back on the right track. But let's dig a little bit deeper,
I'll already use the sea puns we've been using -- dive in -- and talk a little bit more about what's going on in the United States and Canada where
a year ago they had pretty much the same, they've only kind of gone up a million subscribers in the last year.
Yes, they got back a lot of the subscribers they lost. They lost about 400,000 subscribers last quarter in the second quarter, but in this quarter
they went up 70. So, it's kind of like a saturated market there and Netflix kind of knows that, which is why they have said that their point of
emphasis is really a global expansion.
If you look at Asia Pacific, that is half of the growth of everything. That's about 2.2 million subscribers there, but the problem for Netflix is
that their rivals are still growing in the United States and it's kind of sluggish a little bit everywhere. So it was 4.4 million subscribers, good.
It's definitely not bad. It's not one of their most phenomenal, you know quarters ever. They've had bigger growth in the past.
But it's definitely not, you know, the worst case scenario either. It's just kind of a very sluggish, boring type of earnings for them, but what
now investors are going to look forward to is that they had a nice Q4 forecast and we'll see where they go from here.
So it was a good -- it was fine. It was a decent earnings report, but not the best in the world, I would say, and "Squid Game" for them, I'll
mention, it also came out in the middle of September. So the quarter ended at the end of September. It had a little bit -- it's kind of riding that
wave rather than having a huge impact on it.
CHATTERLEY: Yes, the bump is to come. It's all about the Q4 forecasts as far as the benefits of that are concerned. Yes, for me, it was also about
everybody else. I mean, 74 million now is the subscriber base in the U.S. and Canada, and it sort of explains why perhaps they're going to try and
push into gaming.
But also, I wonder whether this is a ceiling for the Disney's, for HBO, for some of the other players, Prime for example, just in terms of the
subscriber base. Will they steal from that 74 million, but I want to talk about "The Closer."
Obviously, there was controversy after the airing of "The Closer," the suggestion that Dave Chappelle was sort of -- I have to be careful about
saying this -- offensive, let's call it that -- to the transgender community, an apology from Netflix yesterday.
PALLOTTA: Yes, basically, co-CEO Ted Sarandos said that he was sorry that he made mistakes, that he wish he kind of led a little bit more with
humanity rather than just kind of, you know the response that he had.
But if you really look at this entire controversy, it's somewhat and could be argued -- and I'm arguing it right now is of Netflix's making because
Netflix is this huge apparatus. It is something that is always kind of -- the company line has always been, "We are going to have every kind of
content for every kind of person."
[09:10:23]
PALLOTTA: And we're also going to let artists be artists. That can lead to something like "Squid Game" that basically is a South Korean show that
comes out of nowhere without promotion and is a viral hit, and is the biggest launch they've ever had. But it also means that you're going to
have things like Dave Chappelle, which is offensive to millions of people, but you can't kind of put the genie back in the bottle.
If you're going to let artists be artists and have content for everyone, that also includes potentially content that could offend many of your
subscribers.
CHATTERLEY: Yes, content on screen doesn't directly translate to real world harm. That was the e-mail and he qualified that to your point and
said look, that may be lacked humanity.
Yes, content for all, but at times it is going to be personal for some. Frank Pallotta, thank you so much for that.
Okay, Alibaba investors on alert. Founder Jack Ma, reportedly now in Europe. "The South China Morning Post," which Alibaba owns, says he is
traveling outside of China for the first time since his business empire came under Beijing scrutiny. Alibaba shares also jumping after the company
released a new chip.
Paul La Monica joins me with more. Two big stories, but let's hone in on Jack Ma a sighting -- and a sighting most importantly, I think outside of
China.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, obviously there had been, I think some significant concerns on the part of investors Julia, about where
Jack Ma was, and if the Chinese government was really cracking down on him since he is arguably the most well-known and most influential tech CEO in
China.
So this news, you're seeing some reports suggesting that he is in Spain on a tour to try and gain some knowledge about the agricultural business and
more about tech, other reports saying that he is on his yacht vacationing. It might be a combination of the two, a little bit of a business, you know,
mixed with pleasure, if you will.
But clearly investors are happy to see that Jack Ma is a presence again, even though he is not the CEO of Alibaba, he is definitely the most well-
known figure with that company. And there were concerns because Alibaba tried to have a spinoff of an IPO of another Jack Ma controlled company ANT
Financial and the Chinese government, Beijing, you know, cracked down on that and that was perceived as a sign that they were slapping Jack Ma on
the wrist and they've done this with other big Chinese tech companies as well, which has clearly raised concerns about whether or not China really
is serious about becoming more of a free-ish market.
CHATTERLEY: Yes. And I think when you start to see him reappearing again, in investors' minds, at least, it perhaps signals some end or some
completion or the approach of the completion of that tech crackdown and that clean up, so maybe we're making -- adding two and two and making five,
but that's what investors I think are suggesting, at least with the share price overnight.
Quickly on this, Paul, how quickly can you do it? Chips. Another interesting one for Alibaba is all of these tech giants around the world
trying to increase or reduce their vulnerability on the external forces and chip suppliers?
LA MONICA: Yes, definitely. Quickly, Julia. What's important here is that Alibaba is developing a chip for its own servers and Cloud business, which
competes with the likes of Microsoft, Google, and Amazon. So this is not something they're going to be selling to consumers. You're not going to all
of a sudden get a smartphone that has an Alibaba chip in it. It's Alibaba trying to lessen its reliance on outside foreign vendors that eat needs to
power that cloud juggernaut, which is a huge an increasingly important part of the Alibaba growth story.
CHATTERLEY: Yes, the story we shall continue to discuss, I'm sure at many points in the future. Paul La Monica, thank you so much for joining us on
that.
Okay, let me bring you up to speed now with some of the other stories making headlines around the world. Britain's Queen Elizabeth has canceled a
trip to Northern Ireland after doctors advised her to rest for a few days. Buckingham Palace didn't provide further details, but a source tells CNN
the matter was not COVID related. The Palace says she is in good spirits and looking forward to visiting Northern Ireland in the future.
And in the day ahead, the report by Brazilian senators is expected to recommend criminal charges against the President over his response to the
pandemic. The 1,200-page document effectively blames Jair Bolsonaro for hundreds of thousands of COVID deaths. It will accuse him of crimes against
humanity and other offenses.
The senators have decided not to call for charges of mass homicide or genocide. CNN's Shasta Darlington joins us now from Sao Paulo. Shasta,
great to have you with us. They may recommend criminal charges, but how likely is he to face them?
[09:15:06]
SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT Well, that's a very good question, Julia. As you mentioned, we're expecting this final report
to be released by the Senate commission within the next hour. It is expected to recommend that Bolsonaro be charged with crimes against
humanity, alleging he intentionally let coronavirus spread through Brazil, killing hundreds of thousands with the aim of reaching herd immunity and
reopening the economy.
But it may not go very far after that. Though the report is expected to be published very soon, the panel, the 11-person Senate panel won't vote on it
until next week because it is over a thousand pages. They need time to review it.
And while they're expected to approve it, it then gets sent to the Attorney General. The Attorney General is an ally of Bolsonaro, and it really isn't
expected to go much further from there. What's interesting though, is this just -- this comes after months of testimonies and debates. Brazilians were
riveted to this inquiry as though it were some kind of a soap opera tuning in every day.
And so, the Senate Pandemic Parliamentary Inquiry was able to highlight a number of accusations. The text that has been prepared that we're expecting
to come out soon, blames Bolsonaro's policies for the deaths of more than 300,000 Brazilians, half of the nation's COVID-19 death toll. And it also
recommends criminal charges against dozens of other people, including three of Bolsonaro's sons, several government officials and two private
companies.
It has kept the pandemic, the government's handling of the pandemic, the poor performance in the economy in the headlines on a daily basis. And this
has really hit Bolsonaro hard. His approval rating has sunk to record lows and election, he is hoping to run for re-election next year. So even if
this doesn't lead to criminal charges, it has already had a big impact on Bolsonaro and his government -- Julia.
CHATTERLEY: Absolutely. Shasta Darlington in Sao Paulo there. Thank you so much for that.
Okay, still to come here on FIRST MOVE, COVID-19 triggered a booming goods demand and a shipping crisis. Flexport say smart logistics may be the way
out.
But first, investing is the key to net zero, but who will fund it? Luxembourg has a plan. We speak to their Finance Minister next.
(COMMERCIAL BREAK)
[09:20:05]
CHATTERLEY: Welcome back to FIRST MOVE on a woozy Wednesday for U.S. stocks. Sluggish action premarket as investors await a fresh batch of
corporate results, but keenness for carriers. United set for a tantalizing takeoff. It's up some one and a half percent premarket after posting a
smaller than expected Q3 loss. Its CEO saying, quote, "Recent headwinds are turning into tail winds," specifically citing the return of business
travel.
That said, carriers remain concerned about rising fuel costs. Shares of United and Delta have weakened in the past month as Brent crude prices have
soared. Wow, look at that divergence.
Energy angst in China, too. Beijing ordering its coal mines to produce as much as possible to help ease the power crunch that is forcing factories to
slow down. Beijing, if you'll remember ordered mines to reduce production earlier this year to help meet carbon emission targets.
And as the IEA told us last week on this show, carbon dioxide emissions and are now set for their second biggest increase in history this year.
And the timing of that, starting at the end of the month, decision makers gather in Glasgow for COP 26, the U.N. Climate Change Conference and the
stakes could not be higher. Unless we limit global warming to one and a half degrees Celsius, we will see catastrophic flooding, droughts and ocean
die-offs. If we do nothing, we hit that limit by 2030, and that warning from the Inter-Governmental Panel on Climate Change. So we need to get to
net zero, and we need to get there fast.
The question is, how do we pay for it?
A small finance hub at the heart of Europe believes it has the answer to that question. And joining us now is Pierre Gramegna. He is the Luxembourg
Minister of Finance. Sir, fantastic to have you on the show and great to talk to you.
Please help us. We talk about the need to scale up investment and to do it quickly. We don't often talk about the financing required. Your wisdom,
please. What do we need to consider?
PIERRE GRAMEGNA, LUXEMBOURG MINISTER OF FINANCE: Well, Julia, I'm glad you asked that question ahead of COP 26 in Glasgow that is coming soon, and
that I will attend. In fact, what we have concentrated a lot on was how much public finance we can attract to the issue of climate change. In fact,
I should say to the issue of climate crisis, because we are already in the middle of a climate crisis, and not focused enough on how we can crowd in
the private sector, because the billions of the public sector will not be enough, we need surely.
And so how can we get the financial sector play its role? So, what we need to do is have the private sector invest more in green projects on the one
hand, and we need to focus on sustainable finance. That means green, the finance sector itself having the right standards, and helping get to the
goals, that's not an easy one, but that's the only way we can do that.
CHATTERLEY: And we need to get financing out to renewable energy projects at incredibly competitive rates. I mean, many of the governments still
around the world, AAA, like yourself, financing themselves at negative rates. We need to pass on some of those benefits, surely, in terms of
financing to those that are operating in the private sector that are trying to target greener energy investment?
GRAMEGNA: Yes, in fact, the climate goals are very ambitious, and we need to organize the transition. And the transition can only be organized by
financial players, by shortening the use of fossil fuel projects, but not cutting them in a minute.
So how to organize the stretching of the period or the reducing of the period can only be done by finance. Governments can play a role by de-
risking some projects. We do that in Luxembourg, together with the European Investment Bank as the country takes the first loss risk, the EIB the
second one, and then projects become bankable that otherwise wouldn't be. So that's what you call blended finance.
And the other thing that we need is standards. We need to avoid green washing. In fact, we are in a situation where we have three challenges at
the same time. I call it a tricky triangle. We need to avoid greenwashing. We need to avoid stranded assets and we also need to avoid social
stranding.
So, how to bring about the three things together to also have acceptance in the public? That's the very, very difficult question.
CHATTERLEY: I mean, you raise so many important questions there. I mean, if I look at Luxembourg's investment fund industry, I believe it's just
over $5 trillion now. That's a lot of money, even just a tiny little piece of that goes into sort of ESG investments, for example. Is it too little,
actually, that's being funneled in that direction?
And do we need whether it's Luxembourg or broader perhaps, if we're talking pension fund money, for example, specific quotas on how much of that money
has to be invested in these green projects? Particularly, to your point if you could offset some of the risk and ensure return.
[09:25:04]
GRAMEGNA: This is exactly it. Now, there's also some hope. Let's face it, the first green bond was issued by the European Investment Bank in 2007 and
we reached one trillion green bonds by 2020. This year alone, we're going to have one trillion sustainable bonds being issued.
So we do in one year, what we did in 14, so there's a tremendous acceleration and that's a good news. We have the standards becoming
clearer, so that we can all compare the standards. We're not there yet, but I can tell you, I see a lot of initiatives that the European Union has
issued a green bond of 12 billion euros, just yesterday at the Luxembourg green exchange. So you see that things are moving ahead fast.
We also have the initiative, the Bank Alliance for Net Zero, which now gathers together 80 banks representing one-third of all banking assets. So
you see, the private sector has understood that they are key, not only are they key, without them, we cannot reach the Paris goals, which are very
ambitious.
CHATTERLEY: Very quickly, and then I want to move on to other subjects, your point about stranded assets to me, I think is also vital. And you've
also said we have to be very careful not to completely cut investment to fossil fuels, because we need them during the transition period,
particularly given what we're all experiencing, I think around the world with rising commodity costs and energy price costs in particular.
Are we getting that balance right? Because certainly from what I hear from the private sector in certain quarters is that suddenly, any fossil fuel
involvement is a really dirty word, and there is a danger that prices spike in the short term because we're under investing in one and not yet
investing enough in renewables.
GRAMEGNA: Well, the present spike in oil prices and gas prices just shows that we are not in the right spot. As soon as the economy picks up, truly,
we come out of lockdowns, and it's a spectacular V-shaped recovery, the only way we seem to be able to respond to the higher demand of energy is by
reverting to fossil fuels. That must change.
So it means our capacities of renewable energy are too low of cleaner energies. And here again, it is finance that must kick in. We also must
make sure that we price in the CO2 emissions in the cost of energy. That's not being done yet, and we need to do that at world level, and I think
that's one of the key questions that needs to be addressed in Glasgow at COP 26.
CHATTERLEY: Yes, I mean, everyone wants governments to be more ESG friendly, but then if you tell the consumers that prices are going to rise,
or rise further, then suddenly, people aren't so keen on ESG. So, it's finding a balance there, too.
We will come back to this conversation. I want to talk about Luxembourg's decision to sign on to the O.E.C.D. plan for a 15 percent minimum tax.
What's that going to mean for Luxembourg?
GRAMEGNA: Yes. Well, you know, we have been closely involved in the negotiation inside the O.E.C.D., and we are very pleased that we have found
a common agreement because it will create a level playing field in the taxation world. You know, the landscape of taxation had not changed for a
hundred years, and it had led to lots of distortion.
For Luxembourg, it is important that we now have a solution at the global level, so that we can focus on other things. You know, my country is a AAA
country, you mentioned it. We are a very predictable country, investors like that, and we will have no issue with having the minimum effective tax
rate of 15 percent if everybody else applies that and that's how it is looking now. And so we wish that we can have a quick implementation of that
to have a kind of peace in the international tax landscape.
CHATTERLEY: Minister, for all your efforts in sustainable finance and diversification of the economy, we do often refer to you, and it's maybe
lazy journalism, but to some degree it is true of the focus of finance and the importance of finance, particularly after Brexit and the shift that
we've seen from investment industry members towards Luxembourg.
You were mentioned several times in the in the Pandora Papers, and it has raised these questions once again of whether Luxembourg still remains a
conduit for diverting financial flows to offshore tax havens. What's your response to those that still throw those accusations around? Is there any
truth to them?
GRAMEGNA: Well, let alone that we are mentioned very little in those paper --
CHATTERLEY: Relatively, yes.
GRAMEGNA: Relatively little. I think the key here is that transparency is happening. I mean, Luxembourg abandoned bank secrecy back in 2014, and it's
good like that, because we haven't lost in attractiveness because this was not acceptable anymore. We need a fairer landscape and that's what we have,
and in fact such an inquiry would probably be not have been possible five to 10 years ago.
So the transparency is just helping us get to the next step in the world, as everyone likes it with more fairness where everybody pays his fair share
of taxes.
[09:30:24]
CHATTERLEY: Yes, a brighter world, a fairer world. Sir, thank you so much for joining us on FIRST MOVE. I look forward to our next conversation.
GRAMEGNA: It's a pleasure.
CHATTERLEY: Thank you so much.
GRAMEGNA: Bye-bye.
CHATTERLEY: Luxembourg's Minister of Finance there. Thank you, sir.
Okay, the market opens next. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks up and running this Wednesday and a modestly higher open. The Dow is only around half a percent
away from records, helped along by continued strong Q3 earnings results.
Telecom giant, Verizon is the latest firm to top estimates and boost full year guidance. Netflix, meanwhile, lower in early trade, a good Q3, but
concerns about slowing future growth. Deutsche Bank, I think having an impact here, too, downgrading them to a hold saying the share price has got
a little ahead of itself.
Biotech, Novavax, meanwhile, plunging in early trade, off almost 22 percent amid reports of new manufacturing problems for its COVID vaccine.
Now, to get the overview of the global shipping crisis, you need to take a step back a little. This live map from marinetraffic.com shows the location
of all the cargo vessels in the world.
My next guest likens it to a global traffic jam, when you consider every consignment requires customs clearance and onward documentation, shippers
and suppliers can end up stuck in the slow lane.
Flexport moves much of the process to the Cloud, and we're talking not just ships, but also air and rail freight and trucks, too.
Ryan Peterson is CEO of Flexport and joins us now from San Francisco. Ryan, great to have you on the show. Freight is a what -- trillion dollar
industry -- that I think still operates on 21st -- sorry, 20th Century technology. You aim to change that. Just explain how Flexport works.
RYAN PETERSON, CEO, FLEXPORT: Yes, so well, anytime you want to ship something around the world, there's this complex chain of different
companies that has to come together to move it.
[09:35:06]
PETERSON: You can think about a factory, an importer at the simplest case, but remember, there are trucking companies on both sides of the ocean, a
port. You've got to clear it out of customs in one country and into customs in another, put it on a ship -- that whole end to end process is
traditionally in the normal what's called freight forwarding industry, it's run on paper, it's almost like freight e-mail forwarding relay race of
documents and PDF attachments.
And so what Flexport does is build technology to bring all these parties together, make it seamless for data to flow in parallel so the goods can
move seamlessly and try to get them into the country fast and you know, in time for Christmas is what we're all focused on right now.
CHATTERLEY: So by moving all the data and all the sort of transactions and ticking of boxes, basically to ensure that everything is where you think it
is at any given point in time, you sort of make that far more efficient in terms of the flows of these goods around the world.
I guess, you can also help with costing and find the cheapest routes, and I guess, something else that I know you can track is the carbon footprint,
which given our conversations today in the show, and generally, quite frankly, I think he's something that everybody is very much focused on at
this moment as well.
PETERSON: Yes, all of these things are available, and I think, you know, one of our premises is that your data, your supply chain data is really
valuable just outside of your supply chain team. The finance team cares about it, your ESG team cares about it. Marketing teams want to know,
"Where's my stuff?" Right? Everyone, even customers want to know, where's my stuff? And it's really been trapped in boxes.
For hundreds of years, it is like sort of, the process hasn't changed much. Of course, e-mail helped, but we haven't moved much past that since sort of
1980s technology.
CHATTERLEY: Yes, well, as I was saying, sort of 21st Century technology on an industry that's forever growing and increasingly complex.
We described it in your words, as sort of a global traffic jam what's going on. Just elaborate further, how bad is what you're seeing out there?
PETERSON: Yes, so specifically, you're seeing a big backup at ports, over 77 percent of the world's ports right now have significant delays of ships
and congestion waiting, like I said, a traffic jam of ships just waiting for their turn.
The Port of Long Beach is the worst in the United States right now, where you have -- and that's our largest port, LA Long Beach complex and you have
68 ships at anchor right now, meaning they're not even unloading. There are 30 ships unloading, and there are 68 ships waiting their turn. This is
highly unusual.
Before the pandemic, there would almost never be a reason for a ship to wait. They would be able to pull right up and unload as soon as they got to
port.
So, this is a real problem. American businesses have billions -- billions and billions of dollars' worth of merchandise sitting on those ships in
containers waiting to unload, and it is a big part of why consumers are having trouble finding things that they're looking for in the stores right
now.
CHATTERLEY: Yes, I mean, you're talking about the United States, and it is just one piece of the jigsaw puzzle. I know you have what -- 10,000 clients
in over 200 different countries. I know it's hard to visualize this, but I'm sure this is part of your plan.
If the entire system operated on the Cloud, and I know that's a challenge. So, even if we were just talking about the largest container ships and
those with the associated trade, and obviously the trucks and things, would the situation today look very different? Because there are pieces of the
supply chain here that are broken, whether it's truck drivers, for example, and then that has a backing up effect. Would we be far more efficient today
with your technology in a greater scale?
PETERSON: Yes, there is no doubt that a technology -- moving these processes to the Cloud, allowing for smoother communication for data to
flow between parties is going to -- it's got to be the solution here. I mean, of course, the government needs to invest in infrastructure and
building bigger and deeper ports, and more rail connections and all these things.
But the reality is, that will take a long time, and the technology is here, it's easy to adopt, and we need data to flow because let's say there's a
backup at the port, where right now there's a traffic jam both of ships waiting to get in, but also truck drivers are spending hours -- we estimate
about six hours right now for a truck to get into the port, and that means they can't hit their container appointment number.
And a Cloud-based system would be able to dynamically assign appointments and assign a container to the truck that is available. Right now, they have
to go for a specific container, try to find it somewhere deep in the stack. It takes way too long, and it is leading to these traffic jams.
It is very simple. The technology already exists. We've already built it. And so, I think -- and that's just one example across the chain of where
Cloud-based technology can really help push this supply chain forward.
CHATTERLEY: Yes, that's like a gig economy based approach to something that at the moment is incredibly sticky and laborious.
Just in terms of the numbers for Flexport, talk to me about the kind of growth that you've seen even just over the last 18 months since a lot of us
have been buying things online versus going into stores and things. Just what kind of growth in demand and conversations are you having with
customers?
[09:40:05]
PETERSON: Yes, so Flexport has managed to grow our revenue almost 8X in the last quarter -- in the last three years, and a lot of that has been
driven by adoption of e-commerce. We ship for most of the direct to consumer e-commerce businesses in the United States. The big -- the fast
growing up and coming ones, and their growth has really accelerated through the pandemic. And we've been proud to play a part in that helping them run
a modern supply chain, running, sort of giving best in class tools to fast growing smaller businesses.
And yes, so the growth has been crazy and it has been really hard. The last year with all these delays has led to almost three times more exceptions.
An exception is when a human has to intervene in a shipment and that rate has gone up 3X because of all the delays, ships not meeting their sailing
schedule, traffic jams, all kinds of problems on the supply chain have increased our costs quite a bit as well.
CHATTERLEY: Yes, I can only imagine. No time for sleep, quite frankly, the way that you've been working and I love the book behind you, by the way,
"The Big Ship and the Little Digger" with all the other ones. That reminds me of the Suez Canal blockage, something else that everybody has been
dealing with.
Ryan, keep in touch, please. I want to see how you're doing. And thank you so much for your time today.
Ryan Peterson, CEO of Flexport there. Thank you.
Okay, coming up here on FIRST MOVE, a bold, new green investment by one of the global energy giants. We will speak to the CEO of EDP about their
ambitious plans, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. The United Kingdom announcing a major green investment from foreign companies and one of their firms is
Portuguese energy giant, EDP, which plans to invest up to $18 billion by 2030.
EDP with over 70 percent of its power coming from renewable sources currently operates in around 20 different countries, including the United
Kingdom, the United States, Brazil, and Vietnam, among others.
And joining us now is the CEO of EDP, Miguel Stilwell d'Andrade.
Sir, fantastic to have you on the show. This is a huge investment in the U.K., and I know you've been operating there for what -- more than a
decade. Talk to me about your desire, your reasoning for making this investment. What incentives you are perhaps provided, and how quickly you
can be up and running there.
MIGUEL STILWELL D'ANDRADE, CEO, EDP: First of all, thanks for having me. It's a pleasure to be here.
I mean, we are a leading renewable player globally, as you mentioned in 20 countries and we've been investing over the last two decades in renewable
energy. So the U.K. government has come out with an ambitious 10-point plan relating to investments in the U.K. specifically in the green economy, and
we are obviously very excited about that.
[09:45:07]
D'ANDRADE: We've been in the U.K. as you mentioned for 10 years now, investing in offshore wind power, so we have an ambitious plan for over the
next decade to invest around 13 billion pounds, as you mentioned, around $18 billion.
So that's mostly going to be an offshore, mostly up in Scotland, but potentially also down in England, and we are also investing in onshore wind
and solar. So essentially, we are one of the third or fourth largest renewable operators globally. And so obviously, the U.K. is a great market
for us. We're very comfortable with the regulatory framework. We're very comfortable with the macro environment, and so, it's a great place to
invest.
CHATTERLEY: Just in terms of the technology, and we've spent a lot of this show talking about making it manageable in terms of cost of investment
versus balancing the rising cost to consumer perhaps of all the investment that needs to take place. I know you're pioneering a floating wind farm in
Portugal and having conversations about whether or not that is scalable. I mean, the last time I checked, the U.K. has a lot of water.
What are the prospects of using some kind of floating wind farm? Is it cheaper? Why? Talk me through this because this is something I've not
really seen before.
D'ANDRADE: So first, I think the more mature technology is bottom fixed offshore wind power. So that's what's being installed in most of the
countries, not only in Europe, but also on the East Coast of the U.S. There are a lot of projects going on.
Floating is an earlier stage technology, so it is still more expensive, but there is a project up in Scotland for one of the tenders which is going on,
which is looking to explore precisely large scale, floating offshore technology.
So we've been invested in that for a while. We have a pre-commercial project down in Portugal, 25 megawatts, but this is going to be the first
opportunity to really scale that up over the next decade, so having floating wind turbines off the north of Scotland.
So that's something that we're very excited about. As I say, costs will have to come down, but we think it will be a viable technology towards the
end of this decade. And then, it could take off in also many other countries. So it's not just the U.K., but it is for example applicable also
on the West Coast of the U.S., Asia, around Japan, and South Korea. So, there are a lot of countries that could also adopt this type of technology.
CHATTERLEY: Yes, I mean, it's brilliant to see sort of the innovation that's going on in this space, whether we're investing for today or
investing for the future, it is fantastic.
One area that I did notice as well, moving away from the U.K. is Brazil, and we recently spoke to the Economy Minister briefly, I will admit about
their plans for sustainability. But I think Brazil has sort of gotten a bad name in recent years due to the skepticism, let's call it that, from
President Bolsonaro.
How easy is it to invest in Brazil? And how encouraging -- can I ask -- has the government been of your investment plans there?
D'ANDRADE: So I have to say that Brazil from a regulatory point of view in the electricity sector is actually quite stable and predictable. And we've
been invested in Brazil for 25 years now. Obviously, Brazil has macro issues, exchange rate issues, but from a fundamental basis on sort of the
actual sector, it is actually very good.
So we've been investing mostly over the last couple of years in wind and solar in Brazil. We have around 1,500 megawatts either built or being built
as we speak, and so, it's a great country. It's got a lot of resources, a lot of sun, a lot of wind, and that's actually been one of the big that --
CHATTERLEY: I think we've lost him there. What a shame. We'll get him back because I had -- as you can well imagine, plenty more questions there. The
CEO of EDP. I apologize for that.
Yes, challenges of live TV.
Okay, we're going to take a break. Coming up on FIRST MOVE, turkeys. The gift that keeps on giving. How my conversation with Anna Stewart yesterday
was gobbled up by FIRST MOVE fans. Yes, that was a moment. We are back after this.
(COMMERCIAL BREAK)
[09:51:13]
CHATTERLEY: Africa's transformation into a hub of technological innovation is well underway. IT giant, IBM, has been working on the continent for
nearly a century. And in today's "Connecting Africa," CNN's Eleni Giokos sits down with IBM's regional head, the first ever woman and the first
African to hold the post.
(BEGIN VIDEOTAPE)
ANGELA KYEREMATEN-JIMOH, REGIONAL GENERAL MANAGER FOR IBM AFRICA: In the next 10 years, every organization is going to be a technology company
because technology is at the forefront, it is the bedrock of innovation right now.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: So what is IBM working on? What projects are you involved in on the continent?
KYEREMATEN-JIMOH: We are at the forefront of driving digital transformation for banks, for governments, for all institutions. Even
during the COVID, we worked with the governments in South Africa to devise a solution that helped to identify where the hotspots are.
We are working on sustainable farming, help farmers plant sensors in their farms that collects data and helps them to make informed decisions.
We're talking about intelligence. We're talking about interconnectedness. We're talking about instrumentation -- all of that, it is technology that
is driving that.
GIOKOS: The reality is, internet penetration is still sitting only at 40 percent. Can we talk comfortably about digital transformation when access
to internet is still not where it should be?
KYEREMATEN-JIMOH: So, I totally agree with you. But you know, whenever I get asked this question, I also pose the question that I think we are
overlooking what we are currently doing on the continent. We have 816 million connected SIMs on the continent, and this is going to increase to
one billion in the next four years.
GIOKOS: So telco linked, that you're focusing on.
KYEREMATEN-JIMOH: Yes. But that is connectivity. If you have your SIM card connected, you are connected, right? So we have to look at the penetration
of smartphones onto the continent as well and that is also on the rise.
GIOKOS: So I want to take you to a scenario in a village in the middle of, you know, the hills in Rwanda, outside Kigali is a mother who only has a
cell phone that she shares with a group of other mothers and it is an analogue phone. How do we connect her? How do we bridge the digital divide
on the continent?
KYEREMATEN-JIMOH: So, that's a great question. So, we actually are developing apps that even with analogue phones, you can still tap into this
technology. They are short codes for analogue phones.
So Africa development is not focused on just the cities, we are looking at the people that are in the remote areas. We are looking at how we bank
them. We are looking at how we include them in the financial sector. We are looking at how they become part of this digital transformation.
That lady, that woman with that analogue phone, trust me, she is not left behind.
(END VIDEOTAPE)
CHATTERLEY: And finally on FIRST MOVE, viewers of yesterday's show were treated to a live report from this British farm about supply shortages. The
video of our Anna Stewart with these talkative turkeys was picked up online. Here is a bit of it.
(BEGIN VIDEO CLIP)
ANNA STEWART, CNN REPORTER: These turkeys are great fun. They are very vocal, if you clap -- I mean, this is my audience --
(END VIDEO CLIP)
CHATTERLEY: After that went out, Twitter did not let us down. Look at what this viewer made out from it.
[VIDEO CLIP PLAYS]
CHATTERLEY: Repurposing the clapping in the "Friends" theme. I call that genius and I could not stop laughing at this and I know the same goes for
Anna, too, so we do thank you for one, watching; and two, your creativity.
And before we go, I asked you for your ideas for a new name for Facebook. And once again, you did not disappoint.
[09:55:09]
CHATTERLEY: Here are some of the potential names that you twitted to me. Fact checkbook, Spybook, Facewash, Face first, Narcissism Network --
someone is going to tell me I am skating on thin ice there, and my self- declared winner, Face Palm.
Yes, face palm, palm, and yes. Okay. Stay safe. "Connect the World" with Becky Anderson is next, and I will see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
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