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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

#91
post #14
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…

> Why is this not a major talking point? because we live in a globalised world. your phone would cost 10x what it costs now if you moved production to the US. that would mean lots of people without phones, so a much smaller economy. no one wants that. > Americans have been polled ah, polls :) > across the aisle people prefer made in the USA as a European, i have always associated American made with low quality, cheap…

>at least now even American companies realised this and moved production to far superior Chinese manufacturers.

This sounds like it needs a /s.

For one thing, the transfer of American manufacturing to China happened a long time ago for many common items. The quality of the items that we received here in the US from these Chinese producers has never reached the previous level for some products.

I have bought and used products from all over the world too. Steel and iron tools from China and India frequently are not tempered correctly so they fail, sometimes on the first use. I learned a long time ago that the best tools for serious, everyday usage and longevity - those things you buy once and use forever - are old American-made tools. Once the brands sold out and moved production to China, quality dropped significantly and has not recovered.

What you may be seeing is the case where China ships its highest quality tools, parts, etc to your country, whatever that is, because after doing market research to understand how to accomplish market penetration, they found that people in your country would not compromise on quality/price/whatever and so they know that their cheap-ass junk and production seconds need to go to a less-sensitive market like the US, where items with the same functionality can be found at widely variable prices and no matter the price - there will be a buyer. That condition may not exist in your country.

The operative phrase in any company's financials is "for the (your country name here) market" which indicates that someone at that company had the responsibility of researching buyer habits and expectations in that country so that any product launches would be more likely to succeed.

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

#92
post #52

Earlier quoted context omitted.

There is unlimited ballast all around a ship (water)

I'm no expert, but I believe many of these ships aren't designed to transport liquid cargo. In fact when their solid cargo starts to act too much like a liquid, things go south real fast: https://www.theshipyardblog.com/liquefaction-of-bulk-cargo-e...

Well for sure liquid ballast needs to be in many compartments (not one big one) to mitigate the effects you link to

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

#93
post #35

Earlier quoted context omitted.

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 m…

>Erm, then pay some truckers to haul empty containers to some space in the middle of Arizona, Nevada, Texas, Idaho, Iowa, etc.? Would that just cause a container shortage at the other end of the supply chain?

There needs to be more buffer real estate for containers. One of the thread creator’s reccs was to do this using cargo trains.

But you are right as well. We need to send more containers back to East Asian ports where they are most commonly filled. The problem is that ship owners make more profit by sending back container ships immediately without waiting for them to be restocked with empty containers.

There needs to be a legal or contractual requirement for shippers to lose some economic opportunity cost to help rebalance the supply and demand of containers.

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

#94
post #36

Earlier quoted context omitted.

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 b…

>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... That's what I am looking forward to! What is so special about manufacturing? What would be wrong with assembly-line workers going the way of farm workers? 14 million farm workers in 1910. 3 million today. Tragedy? https://www.nass.usda.gov/Charts_and_Maps/Farm_Labor/fl_frmw..…

And what would you suggest those workers learn to do that could substitute for manufacturing job wages?

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

#95
post #63
post #60

Related: The mayor of Long Beach has increased the stacking limit. https://mobile.twitter.com/RobertGarcia/status/1451679404757...

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 upside and non-negligible chance of punishment. Why bother?

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

#96
post #44

What about a temporary, emergency suspension of the Jones Act for select flagged vessels? https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920

> What about a temporary, emergency suspension of the Jones Act for select flagged vessels?

The Jones Act applies to shipping between US ports, which isn’t the issue, and suspending the Jones Act would allow more ships on internal runs, but the problem is that we have too little port capacity for import runs, so it solves something that is, in a couple different dimensions, completely the wrong problem.

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

#97
post #63
post #60

Related: The mayor of Long Beach has increased the stacking limit. https://mobile.twitter.com/RobertGarcia/status/1451679404757...

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 guess you've never been paid some low multiple of minimum wage.

You have no incentive to make anything efficient.

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

#98

The last year and a half of pandemic aid has been a large scale experiment in universal basic income. The results seem to be somewhat expected: a labor shortage and high inflation.

> The last year and a half of pandemic aid has been a large scale experiment in universal basic income.

No, it hasn’t. All the aid was conditional. Most of it was means tested, and much (both means tested and otherwise) had other tests. One of the largest portions was conditioned on not working.

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

#99
post #20

Earlier quoted context omitted.

i am very careful. i prefer any other nations products. japan, china, almost any country in europe, lots in south america. but the US has constantly disappointed. and not only recently, but throughout the decades.

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?

This. There are different levels of Chinese manufacturing. One made for top Europe and American brands that are good quality while others is the utter junk that floods the Asia Pacific.

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

#100

The last year and a half of pandemic aid has been a large scale experiment in universal basic income. The results seem to be somewhat expected: a labor shortage and high inflation.

A UBI experiment with confounding variables: lockdown, schools closed, travel and tourism restricted, parts of the economy shutting down, job losses, women out of the workforce to take care of children, health care sector under stress, 734 thousand people dead etc. If you can correlate UBI with labor shortage and high inflation from that data - then perhaps you were predisposed to that conclusion.

> A UBI experiment with confounding variables: lockdown, schools closed, travel and tourism restricted, parts of the economy shutting down, job losses, women out of the workforce to take care of children, health care sector under stress, 734 thousand people dead etc.

Also, and more critical to its problems as a UBI experiment, without any UBI, just a bunch of conditional, mostly means-tested or not-working-tested, aid.

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