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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

#31

Post by jljljl »

qeternity wrote: post #23
remarkEon wrote: post #2

I'm not sure I agree with the conclusions in this thread. >It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam This seems like definitely not the real bottleneck. You have to ask yourself, "why is there no s…

No, this is not the likely root cause for reasons another commenter notes. But I want to point something out: ports and logistics infrastructure are the most unionized, protected industries that exist. The truckers may not be, but the rest of the value chain is, often resulting in huge inefficiencies. You note something like truckers waiting in lines for hours but only getting paid when they move the goods. 1) they a…

I don't think this matches what the thread is saying. Longshoremen are highly unionized, but they are not the bottleneck -- they are blocked because they have nowhere to put the containers they unload.

Fixing the problem requires identifying somewhere to place the empty containers, and arranging transport to move those containers out as quickly as possible

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

#32

Post by jljljl »

remarkEon wrote: post #10
edmundsauto wrote: post #7

Earlier quoted context omitted.

Doesn’t the thread say that there is nowhere to unload containers to, even if there was labor? That seems like what’s causing the truck shortage - it’s not a truck shortage, it’s an empty truck shortage.

I think that point in the thread was really about the lack of chassis on which to move the containers. That part I'm inclined to agree with to a certain extent, but then you're back to asking why there aren't enough chassis, and I'm back to asking why there are still full containers on the docks that can accept stacking empties higher than 2x.

It sounds like the chassis traditionally will arrive with an empty container, and then swap it for a full container. They can't do that now if here isn't a place to drop the container.

Temporarily lifting the zoning restrictions + employing chassis solely to move containers out of the yard (instead of swapping them for empties) seems like the fastest fix

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

#33

Post by qeternity »

jljljl wrote: post #31
qeternity wrote: post #23

Earlier quoted context omitted.

No, this is not the likely root cause for reasons another commenter notes. But I want to point something out: ports and logistics infrastructure are the most unionized, protected industries that exist. The truckers may not be, but the rest of the value chain is, often resulting in huge inefficiencies. You note something like truckers waiting in lines for hours but only getting paid when they move the goods. 1) they a…

I don't think this matches what the thread is saying. Longshoremen are highly unionized, but they are not the bottleneck -- they are blocked because they have nowhere to put the containers they unload. Fixing the problem requires identifying somewhere to place the empty containers, and arranging transport to move those containers out as quickly as possible

I’m not saying it’s the problem now. I’m saying it’s been a problem in the last.

But the current problem is absolutely not due to truckers being non union.

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

#34

Post by throwawaysea »

Does this person actually know what the problem is? For example see https://news.yahoo.com/lazy-crane-operators-making-250-20010.... The symptom might be not enough space for containers, but the root cause could be something a few degrees removed, or a combination of things.

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

#35

Post by bsder »

spiffytech wrote: post #12
remarkEon wrote: post #2

I'm not sure I agree with the conclusions in this thread. >It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam This seems like definitely not the real bottleneck. You have to ask yourself, "why is there no s…

> Why don't you have enough trucks? This is addressed later in the thread. Normally, many trucks haul containers to their destination, unload the container, then return it empty to the port, pull it off the trailer, and haul away another loaded container. But the port is too full to accept empty containers, and zoning laws mean truck companies have already maxed out their own container holding areas. This leaves enor…

Erm, then pay some truckers to haul empty containers to some space in the middle of Arizona, Nevada, Texas, Idaho, Iowa, etc.?

If the problem is empties clogging things up, move the empties. America isn't exactly short of empty space without zoning restrictions. In a week, the yards will be empty.

This seems like a problem that money can solve. The fact that money isn't solving it is extremely suspicious.

Either it means that we don't have enough truckers because they're treated and paid like shit or it means that somebody is making money on things being clogged.

Why are the capitalists all running to the government to break regulations instead of throwing money around? Things that make you go "Hmmmmm."

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

#36

Post by rsj_hn »

nradov wrote: post #30
coolso wrote: post #4

It feels like everyone is trying real hard to come up with solutions that just continue the status quo of having all of our goods produced in China. Just 20-25 years ago we were still making a lot of things in the US. But the American worker, and economy, was sold out to cheap, high-polluting, IP-stealing, yes-lets-ship-it-2000-miles-instead-of-making-it-in-the-US Chinese labor and manufacturing at the benefit of the…

We still make things in the US. Manufacturing revenue has been consistently increasing. However manufacturing as a share of GDP has fallen as other sectors grew faster. And employment has fallen due to automation and process improvements. https://www.macrotrends.net/countries/USA/united-states/manu...

You have to be really careful when citing numbers like these.

A typical American "manufacturing" firm primarily does design and supply chain management, with the actual physical task of production and assembly outsourced. So if they can get the foreign production for $100 and they sell the product for $300, then their design and supply chain management is worth $200 and we say that the US has a strong manufacturing base because of that $200 contribution to GDP.

Thus Boeing and Maytag are considered US manufacturers, because they are American companies that produce physical products. But both of these companies outsource most production. But as long as they earn a big spread between their costs of outsourcing and what they sell the finished products for, it will appear as though US manufacturing is strong.

Therefore the US is at incredible risk in its manufacturing base, with the contributions to GDP held together primarily by preventing IP theft. The moment the suppliers can set up their own shop or sell enough IP to local rivals, they will be able to sell the identical good for $150, undercutting the US manufacturer and then they have to either exit the market to some other product line where IP protections are stronger or just go out of business.

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

#37

Post by missinfo »

mikewarot wrote: post #3

>Leadership is the missing ingredient at this point. Political will has evaporated in the age of polling driven decisions. The Donor class sees actual leadership as dangerous to them, they still remember the betrayal of FDR and guard against it. I suspect some huge profits are being made by some while the supply chain remains effectively strangled, so why would they want it fixed? Things have been going down hill sin…

Even worse, they are increasingly deferring to Twitter.

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

#38

Post by more_corn »

nradov wrote: post #29
spiffytech wrote: post #12

Earlier quoted context omitted.

> Why don't you have enough trucks? This is addressed later in the thread. Normally, many trucks haul containers to their destination, unload the container, then return it empty to the port, pull it off the trailer, and haul away another loaded container. But the port is too full to accept empty containers, and zoning laws mean truck companies have already maxed out their own container holding areas. This leaves enor…

Would it make sense to clear the jam by scrapping some of empty containers for steel recycling?

No. Those containers are needed. Scrapping them would cause a shortage of containers bottleneck two weeks after clearing this bottleneck. We simply need to take the containers off the trucks, but are not allowed due to zoning.

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

#39

Post by more_corn »

remarkEon wrote: post #15
spiffytech wrote: post #12

Earlier quoted context omitted.

> Why don't you have enough trucks? This is addressed later in the thread. Normally, many trucks haul containers to their destination, unload the container, then return it empty to the port, pull it off the trailer, and haul away another loaded container. But the port is too full to accept empty containers, and zoning laws mean truck companies have already maxed out their own container holding areas. This leaves enor…

I agree with you, some emergency zoning changes need to happen, but my inclination is still to think that'll end up being a short term bottleneck and it'll move further down the supply chain when/if that happens. Needs to be an all hands on deck (no pun intended) approach.

Absolutely, clearing a bottleneck shifts the bottleneck. Our options are 1) Do nothing and let the current situation continue to deteriorate 2) Clear the existing bottleneck and then clear the next one.

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

#40

Post by more_corn »

missinfo wrote: post #37
mikewarot wrote: post #3

>Leadership is the missing ingredient at this point. Political will has evaporated in the age of polling driven decisions. The Donor class sees actual leadership as dangerous to them, they still remember the betrayal of FDR and guard against it. I suspect some huge profits are being made by some while the supply chain remains effectively strangled, so why would they want it fixed? Things have been going down hill sin…

Even worse, they are increasingly deferring to Twitter.

To be fair, some really good ideas came out of this particular Twitter thread.
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