Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

Hello. Good morning, and good afternoon, everyone. Thank you for attending today. We have a very interesting and obviously a very timely topic that we're going to be covering today. My name is Nick Beehler, and I'll be the host and moderating questions and our speakers today. I'll introduce them shortly. Today is a focus on the U.S. election and the impact on trade policy and what we can expect with the economy globally going forward based on those policies. So we have less than 3 weeks now until the U.S. elections take place, and we'll see a change in the presidential office for sure and potentially, a shift in Congress. So there are different proposals that we're seeing from the candidates, and we'll be focusing on those and the dynamic with both the presidential candidates and Congress in terms of policies and what they need to do to put those forward. So a lot to cover today. We'll get started shortly. A few sort of administrative details we'll cover here real quick. So this is a 60-minute webinar. And you are muted. And if you have questions, which we definitely encourage, or any feedback throughout the webinar, you can use the Q&A box at the bottom of your screen. Lastly, here is we do want to hear from you, this kind of content and our webinars in general. So we send out a survey with each webinar. And so please, if you can share your feedback. That's also a way to get a copy of the content that we're offering today. So both a copy of the slide deck that we'll be showing and a recording of this event. So you can get both of those. If you fill out the survey that will be sent out probably within an hour after the webinar concludes. Just 1 note, too, if you've attended our webinars this year, we are using a different survey platform this month. So don't be alarmed there. It just looks a little bit different this time. Okay. Next month, we have a webinar coming up, and you can see the -- that one there. There's 2 options. Probably for most of you on this option today, the November 21st session is probably the more appropriate timing for you. So we'll be covering the future of e-commerce surge out of Asia. And as you've probably seen, we've seen quite a surge in cargo and notably through airfreight the last few years. And we've seen a dynamic in the destination markets, notably in the U.S., in Europe and some concern there, in particular, around the use of de minimis as measure to bring in goods and sort of what that's doing in those economies. So definitely an interesting topic that we'll be covering from our perspective in Onyx and 2 options there. So you can register for the one that works best for you. All right. For anyone who's new to our webinars and doesn't know who we are, I'd like to just really briefly explain Onyx and kind of what we offer. So we are a division of Expeditors and we were formed in the last couple of years. We help companies manage supply chains and help understand what's going on out there in different geographies and different policy areas. With the goal that help you as a client manager supply chain to withstand risks, build more resilience into your global footprint. So we do this through advisory engagements, and we bring a heavy quantification assessment through our analysis and our final deliverables to our clients. We offer both one-off projects as well as an ongoing retainer relationship if that's of interest. To understand a bit more on the kinds of projects we do. It could help to visualize here, our service lines from different departments, different personas. So we offer services that are tailored to the trade and compliance groups, sourcing and procurement teams, logistics, transportation, distribution and overall for strategy and planning. So different types of projects we offer, whether it's shock monitoring, around a geography or supply chain area. We do deep dive country risk assessments. We do costing analysis and overall risk assessment. So just some examples of the types of work that we offer. And I'll just say if you have anything of interest that you'd like to pursue and speak with us on, feel free to reach out to me or anyone on this call, and we'll be happy to speak with you on that. Okay. One other note is to keep up with what we talk about, whether it's short post. We also offer a blog, long-form content and an analysis and we promote these webinars. So if you want to be alerted for any upcoming webinar, we encourage you to follow us on LinkedIn, and you'll never miss anything and keep up to date with our content. All right. So with that, I'd like to introduce our speakers today. We have 2 speakers, both from Onyx. First of all, we have Melissa Taylor, Director of Geopolitical Research for Onyx. She oversees the delivery of geopolitical and policy analysis and she provides clients with actionable insights to navigate a changing world, and her work in risk advisory and analysis for multinationals is at the intersection of geopolitics, industry and supply chains that work to spend over a decade. Secondly, we have Adam Karson, Chief Economist for Onyx. He has more than 20 years of experience as an economic adviser to global leaders across a range of industries and he has extensive experience in the U.S., Europe and Middle East. Adam most recently worked at Chevron as a senior economist and he's responsible today for Onyx's macroeconomic analysis and forecast. All right. With that, I'd like to turn it over to Melissa, who will start us off today.

All right. Thank you for that introduction. Okay. To start with, I would like to just very quickly give you an idea of what we're going to be covering today. We are going to be diving in a little bit into the policies of the Harris campaign and of the Trump campaign. What we found is that there's a broad agreement on the problem space, but there are very, very different ideas about how to approach the various issues that the United States is facing. And we're going to go through some of the unknowns that we don't quite -- haven't quite gotten enough information about yet from the candidates themselves and give you some hints about what we see lying ahead. From there, we're going to go into the macroeconomic impacts of those policies. Adam is going to take some time to discuss what we do and don't know and the size of the impacts that we're discussing today. Finally, we'll jump into the impacts across the supply chain. We do continue to see rising risks across countries, across industries and across supply chain notes, regardless of who wins today. Because we ultimately see a strong transition in Washington, D.C. in terms of how they're thinking about trade policy and trade policy is so connected with the other aspects of the way the world interacts and the risks that we see. So we'll dive into that just a little bit as well. Okay. First off, let's dive into trade policy. There has been a shift in the way D.C. thinks of policy right now. And we have seen that all parties are agreeing roughly on the problem space and we'll walk through that just a little bit. and some of the key solutions but we're seeing some major disagreement on exactly how to approach it. So what is that problem space? Starting with a shift in the U.S. economy. The U.S. economy was very focused on manufacturing and has increasingly turned towards services. And we've seen a shift, a secular shift away from that manufacturing base. And as a result, we've seen some job losses that really, we've had manufacturing jobs peak in 1979 and we've seen them manufacturing jobs come down since about 2000. We've seen a much more dramatic decline since about 2000. We've seen candidates in this cycle blaming trade, in particular, for that decline. And we know that there are some other causes as well, including automation, but this has been the focus of the Presidential candidates and of Congressional candidates as well. The second major trend is that we've seen a lot of exports coming out of China. And there's been a lot of discussion about oversupply, particularly in the EV sphere. We've seen the U.S., EU and other economies place tariffs on Chinese EVs. And this is really not the first time that we've seen a wave of exports like this coming out of China. But the -- so these economies have decided to react in a defensive, relatively uncoordinated manner to counteract those exports. In addition, we're seeing the rise of tech competition. This is really a race to dominate key technologies that have few incumbents and that are really going to have a profound impact in the way the economy functions. And we are seeing the U.S., EU and China all at once, essentially competing over these industries. We're seeing that through subsidies. We're seeing that through trade protection, and we expect that to continue for some time. Finally, this is all coming through the geopolitical or national security lens. The United States has relatively declined in power internationally. And we've seen countries like China, rise in power relative to the United States. And it's causing some profound shifts in the way the world structure works and the kind of risk that we see on a day-to-day basis. At the end of the day, when you view the first 3 items, such as the shifting economy, that really plays into concerns about loss of the defense industrial base. We see growth in Chinese exports. There are those in the national security community who believe that it's an intentional strategic effort by the Chinese. And then there is the tech competition, which inherently has dual-use properties because some of these goods can be used both for civilian and also for military ends. So we've seen this national security perspective, really reinforce a lot of these trends. And we're seeing all of these as very long trends that are not necessarily going to go away. And many people enter China as the cause of many of these trends. So we've seen this broad centering of China and these issues in trade policy in the United States. But what we've also seen is that despite this consensus, we are entering an era of very, very different proposals to address the same issues. On this chart, you'll see on the y-axis, there's a convergence between parties. On the lower end is low convergence. And on the upper end is high convergence. On the x-axis, there's a likelihood of policy action in the next U.S. presidential term. And you'll see on the right side, policy action is high. In the upper right, you'll see that we expect action on China around trade and investment restrictions in this next Presidential term. I don't think there's much question about that at this point. But what we can't tell you for sure, is exactly who is going to come out on top in the Presidential election and which of the vastly different approaches is going to be taken. What we've seen is that Biden has pursued a very targeted China tech-focused trade policy, while Trump has pursued a broader policy really focused on trade deficit. We've seen a lot of bipartisan support, particularly on the national security side within Congress. But we've also seen fairly limited actions we've seen proposals like the de minimis proposal that had quite a bit of distance between what the 2 parties wanted to do and ultimately couldn't reach agreement in this last session. So ultimately, what we're seeing is quite a bit of divergence and the possibility of 2 very different overall approaches to trade policy. We do see both candidates looking at proposals that would reshore industries and jobs. However, the scale is very different here. For Harris, most of her proposals are very focused on quick wins so far. Now she's had a very short campaign. So we have limited information. But ultimately, what we see as a strong focus on government projects and spending with drug pricing, education, housing, these kinds of initiatives at the forefront. There is some industrial policy that's really focused on modernizing traditional manufacturing and winning the tech races are the 2 key areas that she's kind of identified. She has some industrial policy that's more focused on the national security side as well. But ultimately, she is really focusing on advanced technologies and modernizing traditional technologies. And that would be about $100 billion over the course of 10 years, which on the scale of what we're seeing that of Biden and what Trump is proposing is a relatively small industrial policy. Industrial policy tends to be a package deal. So we would expect to see something on the trade policy side such as that's more defensive such as tariffs. But so far, she has not been very clear on her stance on tariffs. We'll discuss that a little bit more later as well. Moving on to Trump. We do see that Trump has made his goals very clear, I think even more clear than the first administration. He is really seeking for a large-scale reshoring of U.S. companies as well as FDI investment into the United States. And he's taking what we would call a fence garden approach. And what he's doing is he's essentially building high fences for those companies where he sees unfair -- or countries where he sees unfair trade practices and trying to essentially block those key goods. And at times, taking a broader stance against countries like China and then lower fences for foreign goods in general. Even these lower fences though, are still likely to be in the 10% to 20% tariff range. And then the third aspect of what he's proposing is building a positive business environment within the United States through lower corporate taxes and several other proposals that you can see here. Diving a little bit more into tariffs and some of the unknowns that we have there. I want to quickly touch on one of her key challenges. We do see that a lot of her industrial policy is focused on tax policy. And when she -- depending on how the election goes, she may face split Congress she may have difficulty actually pushing through her tax policy. So that would be a key challenge to her industrial policy, which, again, we would expect to see paired with trade policy. One of her key unknowns is basically her position on trade. So we've gone back through retro speeches, tried to get some key indicators for you about where her thinking is on this. And what we found is that her voting record on USMCA and as well as your statements on TPP, both free trade agreements indicated that she feels that jobs in the United States and the environment are really a key priority above these foreign trade agreements. Now at the end of the day, that doesn't mean she's anti-free trade agreement, but we do see a tendency to prioritize the industry within the United States in a more direct way than we've seen previously or more than the consensus was previously. In her speeches and in her economic plans, there's a direct linkage of industrial policy to trade policy and concerns about unfair trade. And there's a linkage of economic and national security to technological competition. All of these really fit with the problem space that we discussed above and kind of the new consensus around using tariffs and in ways to protect U.S. industry. She has made a critique of the broad tariffs that Trump is proposing, those low fences. And so she seems to be leaning more towards the targeted tariff approach. But I would expect to see a lot of similar motives on the Harris side in terms of reasons to use tariffs, but I do expect to see some pretty different tools being used. We see some interesting proposals coming out of some of her advisers on, for example, a green Marshall Plan, which would provide financing to developing countries to purchase U.S.-made green energy technologies. So we're seeing some different ideas coming out of her camp than we've necessarily seen under Biden. But ultimately, we see the same kind of trade skepticism driving a lot of her discussions. Next up, we have Trump. Trump Is interesting because he also will have the challenge of getting congressional approval for his positions. Again, there's a possibility of a split Congress if Trump wins the election. But ultimately, some of the goals that Trump has may be easier to accomplish with executive powers than we saw with Harris. We do see some preference for the China-specific tariffs to go through Congress. These would be the revocation of preferred normal trade relations, PNTR. This is currently Trump's actual campaign's stance. And so we have reason to believe that he is going to pursue that particular pathway of using Congress to change the legislation and ultimately move China into a different tariff column from Column 1, where those countries with MFN status are currently located to a column 2, where we'll see higher tariffs placed on China or possibly a third column created entirely for China. And we've seen a broad variety of recommendations for how exactly to pursue that. But ultimately, we do see the Congressional pathway is the most likely. However, if the Congressional pathway isn't open or if we're incorrect in that assumption, we may see Trump turn to executive powers. And executive orders do offer Trump the ability to put in place a wide variety of tariffs. There's general agreement about that. There are some requirements for those, including the need for investigations at times or the need to make emergency declarations. But in general, Trump likely has the power to undertake these actions. Some of these can be done within days, particularly EPA. It's become a major talking point as we discuss policy purchase that Trump may take. And at the end of the day, there's some concern around whether the tariffs could be used specifically -- just can be specifically against China and other countries that are identified as potentially having unfair trade or more broadly. And the -- there's belief that the broad tariffs may face more challenges in court but those will take a lot of time to essentially process. And there's some general agreement that we'd likely see that take several years before those were fully challenged. And ultimately, what we see is that it's fairly easy to increase tariff pressure, but industrial policy takes quite a bit of time. On this graphic, you'll see that the U.S. -- you'll see on the left-hand side, the sectors that make up an economy. And on the graphic itself, you'll see that the U.S. and EU have lost a good amount of share in world output. In the right box, you'll see the manufacturing segment. And on the right-hand side, you'll see that China has gained quite a bit of the U.S. global output share. We pair that with knowledge about the shift in the U.S. imports of manufacturing goods from China and overall, you begin to get a picture that this is a very dramatic shift. And what we've seen is that in efforts to derisk the supply chains, there have been limited alternatives. On the right-hand side, you'll see industry reports of fewer alternatives for the goods that they're trying to derisk from and that they've received they've received indications from Biden administration that they would like to derisk from. So ultimately, this is a large-scale industrial-based problem. If this is what you consider the problem space, it will take time and money and it's not going away anytime soon, and we're likely to see several different administrations with several different approaches, continue to try and address this problem over time. And with that, I'll turn it over to Nick.

Great. Yes. Thanks, Melissa. So we'd like to have a poll issued now. And based on like what you've heard just now and perhaps, what you're seeing about internally at your companies, would like to get a sense of the supply chain impact that you expect to come out of this election. And so we've got 4 scenarios here. Launch this poll here while I'm speaking. So that should be up now. So you have 4 options, but choose one. And do you see a high impact under Harris and high impact under Trump, so it's high impact either way? Or low impact either way or kind of a split, high-impact, Trump; low, Harris or vice versa. So give you guys just a bit of time to answer that? And then once you're done, we'll share the results. [Voting]

And we should have at least 1 more poll later on in the presentation to share your feedback. And just a reminder to any questions. I think we've got a couple already in the Q&A, but if anyone has any questions, feel free to submit those throughout. We'll look for spaces, maybe during speaker handoffs and definitely leave time at the end. Okay. Let's wrap up this poll now. We've got a lot of responses in over 300 people have responded. So let's share this. There we go. We've got our results up on the screen. So I think sort of doing the math here, I mean, high-impact Trump, low Harris is definitely the highest response. Or potentially high impact Trump, high impact Harris. So I think kind of the takeaway for me from these results is that with Trump taking office, people definitely see a significant supply chain impact and maybe a small amount of people see that with Harris. So interesting, fairly matches up, I think, with our first session the other day from what we saw. Okay. I am going to hand it off now to Adam. He's going to take this next section.

Thanks, Nick. Yes. So Melissa just gave you a great walk through of each candidate's policies and some detail on like the context for why they think what they think and what's moving them in particular directions and how they differ on how they approach trade policy. Those trade policies alone would have a pretty significant impact on economic growth. It's also important to consider those policies within the context of their broader economic plans, including a variety of changes to the tax code, spending, industrial policy, immigration policy, among others. So we wanted to estimate the impacts of these economic plans on the U.S. economy. And we did so by conducting a meta-analysis of some existing studies by very reputable groups in addition to our own modeling of each candidates' plans. And I'll walk through these results in greater detail, but I just want to start off with highlighting what are the key levers that kind of move the needle on economic outcomes here. And there are really 4. The first is the level of taxes, both personal and corporate income taxes. Second is the level of the level of tariffs that places on imports. The third thing is the level of retaliation by other countries. So we've heard a lot of discussion around 10% tariffs or revoking PNCR, that could be the equivalent of, say, a 40% or 50% tariff on China. How do other countries respond? Do they respond commensurately or -- and to some lesser degree. And then the fourth thing is are there are some tangential policies that can have a pretty significant impact, especially former President Trump's discussion around immigration policy and potentially, even kind of eliminating or reducing the independence of the Federal Reserve. So those -- keep those things in mind as we walk through these details. Now to orient yourself here on the slide, what we've done is we've highlighted on the left-hand side of this chart, some key economic indicators, including GDP, capital stock, which is a function of a fixed investment, the trade balance and so forth. The impacts on the chart are represented as a percentage point deviation from our baseline view. So we kind of -- you take your baseline view kind of -- you have to be kind of agnostic on what that is and look at the deviation over time. And we've done a 10-year kind of cumulative effect to understand -- better understand what the sort of medium- to long-term dynamic effects are on the economy. So a couple of key takeaways from these results. The first thing you might notice is when looking at the top line GDP number is that both policy packages are a drag on growth over the medium to long term. I should also highlight here, we've -- when we look at like GDP and GDP T and GDP H, it's T for Trump and H for Harris. The reason each plan is negative for growth over the long term is different. And in the case of Trump, really, the tax cuts fade out relatively quickly, largely because those are going to higher income brackets that don't -- won't spend as much of that tax cut and also the corporations, which history has suggested a lot of that money might go to stock buybacks versus more productive activities. In addition, those tax cuts are overshadowed by tariffs. And it obviously depends on the level of tariffs, and we can -- we'll talk about that in the next slide or 2. In the case of Harris, higher taxes, in particular, higher taxes on corporations are a headwind to growth. And we see that on the next line for capital stock. So there's a headwind to investment activity, which then feeds through to economic growth. The second thing I'll point out here is that there's much greater uncertainty around the Trump plan, as shown in particular by those pink bars. So we've separated out a couple of Trump's policies to focus in on what we think are the sort of core economic policies. And then that the pink bar includes a range of possibilities for immigration policies. So he's talked a lot about deporting undocumented workers. But there's a tremendous amount of uncertainty about how that could be implemented and to what scale. And there's also been a lot of discussion about the executive branch having a say in monetary policy. Now when we think about immigration policy, the economic impact that affects the economy really through the channel of reducing labor supply, which would reduce production and create some wage inflation as the labor market supply/demand balance kind of gets out of whack. On the Federal Reserve side and executive interference in monetary policy, that's a little bit tougher to model, maybe a little bit -- a little more art than science. But because we don't we don't know what decisions would be made or not made if the sort of institutional paradigm were to change. But what we do know is that looking at countries with independent central banks tend to have structurally higher growth and lower inflation and more stable prices over time. Some studies suggest that political interference in monetary policy decisions over time, it can increase inflation by upwards of 2 percentage points. So there's -- there are really -- I think there's very strong evidence that independent Federal Reserve, independent central bank is much better for economic outcomes and more stable prices. Now those policies are a little more controversial, some could argue they're a little bit practical to implement. So that's why we've highlighted those in pink, so you can kind of separate those out as a different scenario, if you so choose. The third thing on this chart to highlight is that inflation could reemerge. But generally, only in the cases of sort of a tariff escalation. In Harris administration, we don't anticipate enough federal spending to really move the needle significantly on inflation. Maybe we're talking 0.1%. But in a Trump scenario, again, depending on the scale of tariffs, that could definitely feed through to consumer prices. And then again, depending on what happens with immigration policy and Fed policy, you could see an additional boost to inflationary pressures. The other thing I'll highlight here is on the trade balance. And you can see that the Harris plan has a fairly negligible impact on the trade balance. She's -- that her campaign has been a little fuzzy on trade policy. And nothing that they've been discussing has a material and direct impact on the trade balance. In the case of Trump administration under sort of fairly normal parameters. Again, there will be -- we expect pretty limited impact on the trade balance. So the goal of shrinking the trade deficit doesn't really occur here. You could see some shrinking of the trade deficit in the most extreme cases but really for the wrong reasons, if you will. So the trade balance would only shrink if really we saw such a negative impact on economic growth that imports were shrinking at a faster rate than exports were declining, which is not an outcome that I don't think any -- either party really is searching for. So if we go to the next slide, we can look at sort of the flip side of the coin. So those are the economic outcomes. The other side of the coin is what happens to the federal deficit and the national debt. When we're talking about pretty big tax cuts for the Trump administration or tax increases and spending increases, it's bound to move the needle on federal spending. And what we see here is on this chart is, first of all, the baseline isn't very good. The U.S. is going to be running structural deficits of $1 trillion to $2 trillion for the foreseeable future. So we're -- the starting point is not a great place. What we found in our modeling is that the Harris administration adds about $2 trillion cumulatively over a 10-year period, as shown in the top set of charts. So the deficit over a 10-year period increases from roughly $27 billion, $28 trillion to about $30 trillion. That's largely because of some new spending, so a couple of trillion dollars in new spending. Her plan would raise some new revenues through higher corporate income taxes. But then you have the dynamic effect of slower growth, which reduces tax receipts at the same time. For Trump, really, his plan is estimated to add about $4 trillion to the federal deficit over a 10-year period. And this is almost entirely attributable to lower tax revenue by -- because of the significant tax cuts to corporations and then making permanent the tax cuts that he passed in his first administration. So neither plan is good for the deficit, both plans are actually negative. When we think about how that affects debt to GDP ratio, you have the dynamics of the numerator and denominator there. And what we see is in sort of the medium term after 2034, some marginal impacts on debt to GDP, a slight increase under Harris, but nothing really to get too worried about. When we think about the longer term and making the Trump tax cuts permanent, that's where we start to see debt to GDP ratios start to increase more significantly out to 2065. So that has a bigger impact on things like ability to pay entitlements and kind of those long -- very long-term obligations that the U.S. has. Moving on to the next slide, we wanted to highlight -- so this uncertainty around tariffs. And are they going to be 10% or 60%? Or where are they going to fall? And we wanted to better understand whether or not there are any particular thresholds above which tariffs become significantly negative or significant drag on growth. If you tuned into a webinar we did a few months ago, we went through an extensive kind of modeling scenario where we looked at the proposed plan of 60% tariffs on China and 10% on the rest of the world. And we looked at that at 60% tariffs in 10% increments, so to try to identify some key thresholds. The punchline there was really, the impacts of tariffs become material at or above 20%. And so this is not us advocating for 20% tariffs. But what -- it's a signpost to all of you to say like, if tariffs remain under 20%. Yes, it will be a drag on growth, but kind of marginal. But if we -- if the debate is like centered on something at 20% or above, that's when the impact to economic growth will be quite material and the impacts to inflation would be much higher and more persistent over time. And then on the next slide, what I'd like to kind of leave you with is a summary of how we see each candidate's plans in terms of their ability to achieve their goals. And so on the left-hand side, just a list of some of the stated objectives that each candidate has come out with and then our assessment of how likely they'll be able to achieve those goals or how positive or negative their plans are towards achieving those goals. What we'd say about the Harris administration is if -- to the extent the administration is focused on achieving more equitable growth, that mission can be accomplished. So when we look at the effect of her proposals on different income brackets, we do see strong -- relatively strong income growth for lower and middle income tax brackets at the expense of higher income tax brackets and at the expense of slower overall growth and higher debt. That might be a price people are willing to pay because it's a -- to achieve a particular outcome. But that's the reality of that trade-off. On the other hand, you have the Trump administration that would -- is more focused on short-term growth by cutting personnel and corporate income taxes. And if he sorts of stops there, if he focuses just on tax policy in order to kind of reduce growth in the short term, that mission could be accomplished as well. Again, at the expense of higher deficits and higher debt, but cutting taxes aggressively would boost animal spirits and boost spending and investment and at least in the short term, growth would be higher. The question is around the uncertainty of trade policy, immigration, Fed policy, et cetera. And so that gives us some concern and some pause button, and there are a lot of unknowns of how effective his plans would be towards achieving even the economic growth objectives. The other thing I'd highlight here is neither plan is going to be very effective on moving the trade balance, as I mentioned a few slides ago. The introduction of higher tariffs is really more likely to change the texture of trade and could potentially reduce the trade deficit specifically with China but is likely to kind of just move that trade deficit to other countries, other regions. The fundamental driver, economists generally think of the fundamental drivers of a trade deficit is more related to a savings and investment imbalance. So savings, basically spending more than we save by definition, implies that we need to be importing more than we export. And that's sort of the fundamental driver of trade deficits, not level of tariffs and not even necessarily trade policy more broadly. So that's kind of the question for the Trump administration, and they kind of stick to taxes and kind of pro-growth policies or are they going to venture into aggressive trade policy that we think would have negative impacts over the medium to long term. So with that, I'll hand back to Nick, and we can talk about -- I think maybe another poll and then some impacts on the supply chain.

Yes. Thank you, Adam. I'm going to launch this poll here. So yes, I'd love to hear your response on this. Given your responsibility, what you're in charge of day-to-day in your job, what causes you the most concern and it will be interesting to see, again, how you respond versus our audience the other day, to give you a bit here. And then after this, Melissa will be coming back and for our last section, and then I would like to ask Melissa a quick question, too, before she gets going. And then anyone else, again, feel free to use the Q&A and get your questions in. We'll leave a few minutes at the very end today. [Voting]