This article was written by David Gaddes. All views and opinions expressed are strictly his own.
Most of us who have worked in the metals industry on the commercial side for any length of time have been privileged to do so and part of that privilege has been the opportunity to travel and meet an extraordinarily diverse number of people. More than that, it gave us the opportunity to develop relationships with those people thereby obtaining a deeper understanding of their business. As a friend of mine often said to me the metals business is a people’s business. He is right.
We have witnessed some extraordinary changes in the last 20 years. One of them being the rapid advances in new technology when it comes to communication and trading. In addition to this we have been forced to change our day to day working practices by the coronavirus pandemic with the closure of the LME floor being a prime example.
Both these developments have changed the way we trade and operate. Will these changes eventually lead to better quality? I have my doubts. Time will tell but I have concerns about them. Coincidentally the two go hand in hand. I.T. developments have supported the necessity for people to move from a centralized working space with colleagues skilled in various disciplines to an isolated residential existence sitting in front of a screen. Since last March most meetings and conferences involving the physical presence of people have fallen by the wayside to be replaced by any medium you care to mention from a basic conference phone call to the “all singing all dancing” video link. Regardless of the recovery from the virus are we witnessing the death of the City office, internal meetings, conferences and business travel? For me that is a frightening thought and if that is so I believe it would have serious repercussions and not just the obvious economic ones.
I read an article at the weekend which indicated that pre coronavirus business travellers represented 10 to 15 % of global air travel but contributed 40 % of the revenues. I am sure there are global analysts in our businesses adding the fixed cost of prime office space to the travel budget and comparing it to the cost of conference call and video link networks. I suggest the decision makers who are the recipients of these figures think a bit deeper about these changes rather than just focus on the numbers. There is more to it than the numbers and there always has been.
What I am talking about is the quality of relationships developed by physically meeting people and the learning curve that goes with that. I thought of two people recently, triggered by world events and what I see and hear each day.
I sat and watched the tragic TV coverage of the explosion of badly stored ammonium nitrate in Beirut. I knew a man there once. His name was Joseph. In 1975 the Civil War in the Lebanon began between the Muslim west and the Christian east Beirut. Prior to 1975 Beirut was often called the Paris of the Middle East because of the French influence and its vibrant lifestyle. That comparison is hardly applicable today and it has changed forever and not for better. I was in my early days of physical trading then in the lead and zinc department and we dealt with an agent based in Beirut who managed to secure tenders for us with the Metals Board in Cairo, Egypt. Joseph was the man I dealt with there and we managed to succeed against stiff opposition such as Philipp Brothers. He and his colleagues were forced to flee their offices in Beirut when the bullets and shells started flying and they quickly set up shop in Athens.
My abiding memory of Joseph was not the admirable business he provided us with. It was the trip to Athens when he took me to the BasiIica of St Dionysius the Areopagite. This is the main Roman Catholic church of Athens and it is beautiful, especially the stained glass. If you ever get a chance take time out to visit. We had a wonderful lunch and afterwards he explained to me how the Middle East tender business worked and the habits of the various participants. The insight was invaluable. It made sure I did not make a mistake, the cost of which could have made our company travel budget for that year look like chicken feed. I would never have been able to gain such a rich insight into that business by sitting in the office and saving the airfare. Also the very nature of some information is such that a person will only share it one on one and in the right setting.
The second gentleman I thought of was whilst hearing again the Ennio Morricone theme music to Once Upon a Time in America, a Sergio Leone film from 1984. The name of the gentleman was Marcel and he used to buy zinc from me for what was then the galvanising industry in Switzerland. In addition to the theme music of that movie there is some haunting pipe music by Gheorghe Zamfir, a man from humble beginnings in Romania who became famous for playing the extended Nai flutes or pan pipes. In the 1970’s. Marcel was instrumental in discovering Gheorghe and promoting his early career. I used to visit Lausanne in Switzerland to maintain the relationship. On one such trip he invited me to lunch at his home on the slopes beside Lake Geneva. A beautiful place with a small vineyard. Over lunch Marcel told me the story of Gheorghe and how he had assisted his discovery and early development. Before I left he gave me an LP of the music. Gheorghe went on to greater things in the years to come. Marcel helped me understand the Swiss distribution business in detail at that time and how the usage of the strong forward Swiss Franc could double the business we were doing. He never offered such in depth analysis of his business over the phone or in writing. On anything.
Both these men I found extraordinary in their own way and I would never have had a chance to learn those areas of business that well without spending time with them. I venture that a phone call or video link could certainly not supply the tranquil panoramic beauty of the cathedral in Athens or the wonderful food and fine wine I enjoyed looking out over a sunlit Lake Geneva whilst listening to the story from Marcel about Gheorghe. I can think of many other examples.
One of my old bosses would have called those two trips tourism, not business trips. With respect he is wrong. We must spend quality time sitting with people. There is no learning process or trading system in the world that compares with it and which supplies such a rich and detailed understanding of our business. There is no virtual reality fix.
I sincerely hope that future generations can spend time with their counterparties thereby obtaining a richer understanding of the people and their businesses. I also hope that the speed of light digital world combined with strange viruses does not deprive them of this. I cannot applaud a future in a restricted world spent sitting at a desk in front of a screen with a coffee going cold. If that is the case our world, our business and our understanding of it will be so much poorer as a result.
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