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Flexport CEO on how to fix the US supply chain crisis

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Re: Flexport CEO on how to fix the US supply chain crisis

#231

Earlier quoted context omitted.

Can you name Chinese products (made in China by and for Chinese companies -- not American or European companies) that you consider to be of high quality? Same for South America. And what American products have "constantly" disappointed you?

Huawei and Xiaomi comes to mind. Build is not Apple quality, but technically superior (I say that as I own pretty much every Apple product)

It's so superior that even their CFO prefers to use Apple instead.

Re: Flexport CEO on how to fix the US supply chain crisis

#232

Which of the two chief executives tagged in this Twitter thread is supposed to have the legal authority to unilaterally overrule Long Beach’s zoning ordinances? Surely it isn’t newsom, but I bet Biden has even less authority. This is not a judgment on the merit of the idea bc the zoning rule seems dumb but what’s the point of proposing a “solution” which it isn’t clear either man can actually implement?

The thread proposed five solutions. Only the first[0] (which is also the one implemented) is changing a local zoning ordinance. The second[1] was to use the national guard (controlled by the governor) and the US military (controlled by the president), and the third[2] was to establish a holding zone further inland on government land.

[0] https://twitter.com/typesfast/status/1451543801194024961

[1] https://twitter.com/typesfast/status/1451543803307905026

[2] https://twitter.com/typesfast/status/1451543804482359297

Re: Flexport CEO on how to fix the US supply chain crisis

#233
post #125

Earlier quoted context omitted.

This was already one Rx from the Twitter thread. Also not all “capitalists” have aligned incentives. Everybody wants shipping to be efficient except those who profit from this inefficiency. Specifically ship companies are making huge profits by racing to the big East Asian ports right now. So much profit that they don’t want their ships to wait in US ports for empty containers to reload. This asymmetry makes it even…

Not at all Tragedy of the Commons. In 40 days (one round trip from US to China), the system clogs and the boats can't go running off because they can't unload at all (happening now). At this point the system stabilizes. Sure, it's not a stable point that the shipping companies want, but it is stable. Capitalism has a way to deal with this. It's called "rising prices". However, business managers have gotten far too us…

Won't there be an equilibrium at some point? Empty ships rush back to Asia but can't load in Asia because all the containers are back in the US. Hence they will sit idle in Asia not earning any money and ships that do carry empty containers back will be rewarded because someone will pay to ensure trade is not blocked in Asia

Re: Flexport CEO on how to fix the US supply chain crisis

#234
post #221

Earlier quoted context omitted.

Does “Very New” match with “10 years old”? 10 years is the average or target lifespan of a tractor-trailer and you can still drive them up to 2023. AB 5 might have a bigger impact though

>Does “Very New” match with “10 years old”? 10 years is the average or target lifespan of a tractor-trailer If 10 years is the average then you are eliminating 50% of trucks on the road. Do you think that could have an impact?

10 years is the average or target lifespan of a truck, not necessarily the average age. I’m not sure what the average age or distribution for trucks serving California ports are

Similarly, human life expectancy is 80 years in the US, but the average age is 38.

The same fact check says that 96% of vehicles are compliant, and order vehicles can be made compliant by replacing the engine.

Either way, a lack of trucks is not the issue, it’s the lack of drivers (because pay and conditions are poor) and the bottleneck at the yards where they can’t exchange empty containers for full containers

Re: Flexport CEO on how to fix the US supply chain crisis

#235
post #13
post #11

Earlier quoted context omitted.

>across the aisle people prefer made in the USA. They may say this, but when push comes to shove, people simply don't buy a lot of consumer goods that are made here.

That’s because right now, it’s significantly more expensive. But given more equal pricing, most people would of course buy USA-made goods. Right now the system is destroyed so of course made in the USA is going to be significantly more expensive until the system can be resurrected. But I assure you a supply chain disruption will be significantly more costly to society and not just financially.

People will act to maximize their short term benefits vs costs. They’ll buy American made, Union made, imported, whatever is cheapest. Of course at the margins some people will choose (place value on) one source or another, but one cannot expect the larger part of the population to act against their immediate incentives to achieve a desirable social outcome.

Re: Flexport CEO on how to fix the US supply chain crisis

#236
post #71
post #64

Earlier quoted context omitted.

Too bad they didn’t switch to collapsible containers: https://www.shiplilly.com/blog/collapsible-shipping-containe... That would handle the trade imbalance by allowing more empties to fit on the way back. Or the USA could actually make something worth shipping. But that’s probably a lot harder than replacing a worldwide fleet of existing non-collapsible containers.

Boeing aircaft and college educations, which are probably the two largest US exports to China, don't fit in shipping containers.

https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...

> The top export categories (2-digit HS) in 2019 were: electrical machinery ($14 billion); machinery ($13 billion); aircraft ($10 billion); optical and medical instruments ($9.7 billion); and vehicles ($9.1 billion).

Re: Flexport CEO on how to fix the US supply chain crisis

#237
post #9

> He’s not allowed by the city of Long Beach zoning code to store empty containers more than 2 high in his truck yard. If he violates this code they’ll shut down his yard altogether. Anyone here surprised? The little things add up, multiply this code by the hundreds of others and you have a supply shortage.

It’s not a million little government regulations that is causing the majority of the supply chain kinks. China was the only country working full speed after the Wuhan lockdown for about a year. The entire world bought masses of PPG and ventilators in addition to our normal plastic consumerism widgets. China sent tons of full containers to the rest of the world but those containers haven’t returned to China. Everythin…

Mayor of Long Beach thinks otherwise.

Re: Flexport CEO on how to fix the US supply chain crisis

#238
post #125

Earlier quoted context omitted.

Not at all Tragedy of the Commons. In 40 days (one round trip from US to China), the system clogs and the boats can't go running off because they can't unload at all (happening now). At this point the system stabilizes. Sure, it's not a stable point that the shipping companies want, but it is stable. Capitalism has a way to deal with this. It's called "rising prices". However, business managers have gotten far too us…

Won't there be an equilibrium at some point? Empty ships rush back to Asia but can't load in Asia because all the containers are back in the US. Hence they will sit idle in Asia not earning any money and ships that do carry empty containers back will be rewarded because someone will pay to ensure trade is not blocked in Asia

in a closed system, at some point the containers stuck in the US would become valuable enough in china that the ships would prioritize shipping them back, yes. but it's not a closed system, the chinese are building new shipping containers as fast as they can, and every new container they build lessens the demand for those containers stuck in the US.

Re: Flexport CEO on how to fix the US supply chain crisis

#239
post #63

Earlier quoted context omitted.

It's weird to me that thousands of people work at the docks or with the trucks, and likely understand these problems quite well, but only after a silicon valley guy rented a boat to take a look and tweeted about it did it come to attention of the larger world. Is it just that these other people don't want to "rock the boat" at their place of employment?

I mean it was a government regulation, there isn't much they could do about it. I assume the 2 stack limit was due to safety reasons, like maybe they are more prone to collapsing like dominoes when stacked too high, and a good wind blows, I don't know. It makes me think of the egg crate challenge a little bit. It's good that the mayor made a temporary adjustment and was allowed to save face. Hopefully it will make a…

I live near a port. Containers are regularly stacked five high.

Re: Flexport CEO on how to fix the US supply chain crisis

#240
post #63

Earlier quoted context omitted.

It's weird to me that thousands of people work at the docks or with the trucks, and likely understand these problems quite well, but only after a silicon valley guy rented a boat to take a look and tweeted about it did it come to attention of the larger world. Is it just that these other people don't want to "rock the boat" at their place of employment?

My guess is they assume, mostly correctly, that their viewpoint will be ignored. Even if their boss takes them seriously, somewhere between them and whoever can make useful decisions will decide that some dock workers opinion can't be worth more than all the reports and data they themselves are working with... or something like that. So making a stink about it is a lot of effort and emotional labor for almost no upsi…

I don't think that the "low-level" workers' viewpoints are accidentally ignored, it's far more likely that the decision-makers at the top actively don't want change.

The upside? Minimal (for them personally.. huge for the country). The downside? Anything "bad" happens, they're fired or worse (e.g. a stack of containers collapses, killing someone). Very asymmetric returns.

On the other hand, Twitter publicity both forces them to do something (bad press if they don't), and also excuses them in case anything goes wrong ("well I thought it was a bad idea but they pressured me to do it"). CYA in action.

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