Is it just that these other people don't want to "rock the boat" at their place of employment?
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.
An outsider taking nothing as granted can often find big inefficiencies.
I would imagine most companies don’t sufficiently reward low level employees pointing out and proactively fixing inefficiencies.
I would argue that is our duty to our fellow humans in society to know about the issues and our proposed solutions.
What about when it’s already almost completely broken and getting worse? That’s precisely when you need creative out of the container thinking.
From what I've seen Petersen has taken a vast reserve of capitalist wealth and leveraged it by investing into his people to progress toward his objective of a more streamlined freight experience.
He seems to be participating seriously in a continuous improvement of his own expertise on this focused objective like no one else with those kind of resources at any recent time.
His proposed temporary container yards have got to be very urgent.
The inherent real estate problem has always loomed large. The "Just-In-Time" supply chain approach has factored out all but the minimal inventory buffers as it proliferated over the decades.
Now JIT can not be executed and there is little alternative remaining.
The storage & warehousing acreage & square footage were agressively downscaled over the long term and the increasing dependence on a fully enabled pipeline moving at maximum flow has been an ever-growing consequence.
Expediting cargo is a task that can not be fully accomplished within a single lifetime, so you really need to start early and never quit if you want to make worthwhile progress.
I think Petersen's gotten better every year and has unique abilities to offer in this crisis.
He would probably make a good supply chain tsar about now.
And he's making himself available, people should jump on it and give him a try.
Each day of delay is another day longer before a stagnant economy can begin to recover.
Coming from a marine cargo entrepreneur after 40 years of much-needed continuous improvement indeed.
Bottom up communication isn't effectively or really in place because command comes from the top down. In many cases their boss and bosses boss never even worked a yard or understand the fundamental realities at the bottom.
Theories about entrepreneurship for example are entirely based on the actions of financially successful entrepreneurs. There’s nothing to prove they are more rational or somehow superior…but that’s who gets to build the narrative.
It's good that the mayor made a temporary adjustment and was allowed to save face. Hopefully it will make a difference.
You have no incentive to make anything efficient.
What's going on in Long Beach?
This is important because the Port is not receiving empty containers, but trucking companies that have empties on truck chassis need somewhere to put that empty before they can get a new container. Allowing additional buffer for empty container storage may allow the current traffic jam to resolve itself.
> "These provisions, which have been in effect for many years, were established to address the visual impact to surrounding areas of sites with excessive storage."
>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 space to put new containers" and the answer is (probably) "well we don't have enough trucks to move the ones we have off the docks". Why don't you have enough trucks? This is where the root cause for the bottleneck probably splits. I'm speculating here, but we either don't have enough physical trucks (I doubt this) or we don't have enough labor to load the containers on the trucks and actually drive them off the dock.
Which is probably the most important question: why don't you have enough labor? I can venture a guess.
>Port truckers are typically independent contractors, without the benefits and protections of unionized transport sectors or even major companies with shipping divisions, like Amazon.com Inc. Their jobs require them to line up for hours to pick up cargo, and they’re paid only when they move it. [Emphasis mine]
>“The port truck driver, for decades now, has basically been the slack adjuster in the whole system,” said Steve Viscelli, an economic sociologist with the University of Pennsylvania who studies labor markets and supply chains. The entire system, he said, is built around free labor from truck drivers as they wait for containers.
Cut checks to these people, and get those containers off the docks. I feel like we're living through some Black Mirror version of The Wire Season 2.
Edit: added the larger context for the Bloomberg article quote
>Danielle Inman, a spokesperson for the National Retail Foundation, which has lobbied for California to overturn AB 5, told PolitiFact that the state’s regulations on trucking impact the availability of drivers and trucks
>(AB 5) makes it nearly impossible for truck drivers to be independent contractors
>At the time AB 5 passed, industry experts said that some owner-operators sought work elsewhere. Some fleets, too, chose to stop doing business with owner-operators in California.
>To meet the current clean air regulations, the state Department of Motor Vehicles blocks new registrations of any oversized vehicles older than 2011 — or those with engines manufactured before 2010.
>Some trucking companies have used the regulations to pressure drivers to buy newer rigs, and some in the industry have claimed that, while not necessarily the cause of the backlog, this kind of policy doesn't help.
AB 5 might have a bigger impact though
If 10 years is the average then you are eliminating 50% of trucks on the road. Do you think that could have an impact?
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
This costs $20-40k  not including the down time and lost revenue from the overhaul. So that’s not a simple cost for owner operators.
Both of these claims have been disputed by fact checking organizations: https://www.politifact.com/factchecks/2021/oct/19/facebook-p...
They have two points:
The contractor ban is currently under injunction in court so why would that affect anyone's behavior. Well, but people do change their behavior when something becomes a legal grey area. And being an owner-operator in CA is not clearly legal anymore, so why risk it? If you're a company that wants to do shipping in CA, does your plan include using owner-operators now? It takes a high level of asinine pollyanna-ism to not be able to think for one second why this might have a substantial effect on shippers.
The second point, that the "truck ban" is not at fault is also total nonsense. First they say "oh the law has been in effect since 2008" well according to their own link, 
it is loaded with ramp-ups in the emmissions requirements. As time passes the requirements increase. As of now nearly all of the most stringent requirements are in place.
So besides citing the law which doesnt make much of a case for their argument, they then quote a partisan who loves the law to say there's no evidence that this law is affecting anything.
And then they take this pile of nonsense to claim it is mostly false, ending with this non-sequitur:
"The COVID-19 pandemic has caused widespread layoffs and factory closures that haven’t yet bounced back to meet the surging consumer demand. "
The ports are full of fucking containers you fucking nitwits! Full of containers filled by workers working at factories! How could this have any bearing on the port issue?
Politifact is a total joke. They're clearly being paid to give cover to whatever their paymasters want.
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 enormous numbers of truck trailers sitting idle, waiting for somewhere to put the empties they're holding before they can pick up more goods to haul.
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."
The empty containers don't need to be trucked to Arizona, they need to be shipped back to China so that they can be filled with more goods and shipped back to LA. There are fewer goods flowing from the US to China though, so they are piling up in LA. Either the price of shipping from US to China has to fall so much that it becomes profitable to ship all these containers back completely empty, or the government has to subsidize the shipping cost - but then which government should even be responsible for paying for this?
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.
> 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).
What's happening is that everybody is playing chicken waiting for somebody else to blink and foot the bill for the fact that everything is out of whack. Why should the government break this logjam instead of the companies that sucked up all the profits over decades from this arrangement?
Since nobody is going to risk spending money, breaking the logjam, and then having their competitor who isn't spending the money benefit, they would rather all hit the wall simultaneously. Fine. But don't come whining to the electorate and elected representatives to fix problems that corporations, themselves created when it bites them in the shorts.
Spend some of those record profits, assholes, and the problems will get fixed.
Socialism for the rich; capitalism for the poor. Same old, same old.
The issue seems to be a combination of factors exacerbated by the state of california.
Existing regs restricting storage space.
Existing regs restricting available trucking stuck holding containers
Existing regs disincentivizing labor or new owner operators.
All this is compounded it seems, by existing contracts limiting pay wait time.
So when wait time increases, due to
1)no space, (2)no trucks, and (3) no labor... mostly due to circumstances directly attributable to the state then nothing moves.
Where are the corporations making money off this ? Can you name them?
Example for why your argument doesn't hold water: one of the issues mentioned in the thread is that trucking companies can only stack containers two high in their yards. Well, what do you think would have happened if that regulation had been changed to six high (one of the suggestions) 20 years ago? Trucking companies would now own or lease smaller yards!
GP is absolutely right that the capitalists need to foot the bill of clearing this mess.
It does seem to me that government should step in to resolve the Gordic knot of coordination problems discussed elsewhere in the thread, but the companies who screwed it up in the first place need to be stuck with the bill. That's part of the deal of capitalism: you get the chance of profits, but also the risk of losses.
Would that just cause a container shortage at the other end of the supply chain?
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.
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 more profitable to rush back to those East Asian ports. Snowball of profits for them at the expense of everyone else.
This is a Tragedy of the Commons situation. It is a great purpose for government intervention.
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 used to never suffering any consequences for their decisions. The moment actual responsibility comes down the pipe they all start whining and running home to Daddy (the government) for help.
Let the ships sit. When the shipping companies lose more money with a sitting ship that can't be unloaded than they gained racing back without empty containers, it will correct.
Do you think people will just tolerate hyperinflation that would cause and sit quietly in line while waiting for overpriced food staples? Riots. Public disorder. Maybe even rebellion against the government.
Governments get involved because the individuals in that government fear what happens when we reach the tipping point where basic society breaks down.
I think we forget that 95% of all goods (or their inputs) are shipped and over 20% of GDP directly relies on shipping. That’s a massive gamble that the same people involved in the supply chain that is suffering from massive entropy can magically reduce that entropy after it snowballs.
Perhaps in normal times they are, but when the flow equilibrium is disrupted suddenly the discretized reality pokes its head through.
The containers are not sufficiently fungible in the fact that they are owned by different entities which may not all want the containers to be shipped to just any place.
Accepting scrap prices for a good container is a losing deal right now when the market obviously has room for them at a much higher price.
How much is a train ride up to the Port of Oakland? Less than $5k per rail car? Probably a lot less. So some enterprising person in Asia could organize that and get them on a ship heading back faster than their competitors, reducing their cost and gaining a competitive advantage at the same time. So why isn’t that happening?
Right now empty containers are 5x-10x their pre-COVID cost in Chinese ports. That’s how prices work in a market system. Perhaps there are non-market forces at work or perhaps the scale of the problem just requires more incentive before it becomes worth while to charter an expensive ship to bring containers back to China.
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 are waiting in line for hours because unions strictly control the amount of labor in ports (these manual labor jobs often pay low-mid six figures) and 2) driver’s simply factor these types of costs and many others into their prices. Owner operators aren’t paid hourly, like millions of other business owners.
This is absolutely not where the current issues lie.
Fixing the problem requires identifying somewhere to place the empty containers, and arranging transport to move those containers out as quickly as possible
But the current problem is absolutely not due to truckers being non union.
Everyone in this country seems to think they know exactly how much everyone else should make and surprisingly they always think others are over paid.
It’s especially comical when it’s coming from tech folks where an L7 sitting at FB can be pulling down seven figures and could sit in their aeron chairs working till they are 80, we should all recognize the privilege we have in that regard
I was responding to a comment that argued they weren’t paid enough, and I was just making the counterpoint.
So no, if anyone has an axe to grind, it would be you.
Ports are natural chokepoints. Just like Apple or Google or Facebook extracts a toll, so too do the ports, longshoremen, port truckers, etc. Their rent seeking is baked into the system.
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
Often chassis dont have cranes to (un)load containers themselves and therefore require cranes (capex heavy assets). Such cranes aren't everywhere/in surplus.
Just saying “give truck drivers more compensation and better working conditions” doesn’t fix the fact that their destinations aren’t open 24/7 so keeping the ports open for an extra shift doesn’t do much right now.
It doesn’t fix the fact that the truck driver depends on someone else to take their container and/or chassis at the end of a delivery and many delivery depots can’t or won’t right now.
And the biggest asymmetry right now has nothing directly to do with truck drivers. There is a shortage of empty containers in East Asia and a glut in the US. Container ships aren’t waiting in the US ports to load up with empty containers, so thyme are exacerbating the issue.
Trucks are plentiful. Trailer empty chassis are not. Your assumption that truck labor is in short supply is a derivative of your misunderstanding of the difference between the trucks and the chassis.
The truck is the thing with the Diesel engine, the cab, and the truck driver. It can detach the trailer and pick up a new trailer.
The thread clearly identifies the “empty chassis” (the trailer with wheels that is capable of mounting a standard container on top) as one of the scarce items.
There was a reddit thread in the truckers group around a year back which literally said this: there are not enough physical trucks since trucks have to been maintained and the spare parts for it are not making their way across border fast enough. This meant that owners have to buy new trucks to compensate for their broken down trucks and leading to escalation of costs which means they expect the same person to work 2x to make up for it.
They're paid by the load, so sitting idle is a non option.
There's an ongoing world wide (minus some regions) container shortage going on at the same time.
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 CCP but everyone else’s expense.
This is just the tip of the iceberg. This wasn’t even a direct supply chain disruption and it’s hitting us hard. Imagine if we ever had one, and there’s no evidence to suggest we won’t again. We’re dependent on… China of all places for everything?
Why can’t we focus our brainstorming sessions on bringing manufacturing back to the USA? Why is this not a major talking point? Americans have been polled and across the aisle people prefer made in the USA.
Let the CCP take care of its own people. It certainly thinks it’s system is the right way.
It’s madness and it’s sad. Every corporation and politician that had a hand in this ought to be ashamed. Every media outlet that ignores it ought to be ashamed too.
They may say this, but when push comes to shove, people simply don't buy a lot of consumer goods that are made here.
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.
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, cheaply made, bad taste and expensive. American products are to be avoided at all times. this has been the case for decades and decades, before the move to China. 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.
What informs that viewpoint? It’s really foreign to any perception I’ve ever heard from anyone or experienced myself.
where i come from if someone wants great quality we buy european, japanese or chinese products.
whenever i travel to different continents for work, no one i talk to wants or buys american made anything. it’s again, european, japanese or chinese.
of course software is different, due to its globalised nature.
and of course sometimes you buy american branded products. if you can’t find anything else, you kind of have to settle with the american product.
It would be helpful if you were more specific. Where do you come from? What types of products are you talking about?
Your experience with industrial equipment is irrelevant here since it's still being done in US.
Chinese is cheap but their machinery is generally not very good. They screw up all sorts of stuff: wrong bearings, designs are copied but not always thoroughly thought out, weld issues, poorly programmed PLCs, incorrect wiring, poor metals quality control, dangerous safety implementations, the list goes on and on. Some bigger manufacturers are getting better there.
But places like Turkey and Korea have a nice balance of technically "good enough" and cheaper than the Euro/American products, though Korean machines have gotten more expensive and are technically very sophisticated.
The idea that anyone building a factory would turn to China for technically sophisticated machinery is interesting and would be a quick way to get fired in industry. China has gotten a lot better over the years, but I think a lot of people forget that a lot of what happens in China is assembly, not necessarily manufacturing of the subcomponents, which is where much of the actual value add is. If you do get machinery made in China, you look for those who use as much European, Japanese, Korean, or American parts as possible.
Sure, not American, all the American software companies. They are global, unlike every other giant enterprise.
Yeah perhaps true. But then I’d say that it’s essentially a meaningless conclusion to hold as some universal truth.
And what American products have "constantly" disappointed you?
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.
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?
That's a good question. The answer is that it drives productivity growth. Most of the economy does not increase in productivity at all. Your haircutter or waiter is not more productive than a haircutter or waiter in the 1800s. But they make much more per hour because of cost-disease as they attach themselves to industries where one hour of labor can produce exponentially more output. So you have 20% of the economy driving basically all of the economic growth and productivity gains, and the wage growth of everyone else is dependent on this 20% doing really well. Therefore some nations, like China, are willing to fight for those manufacturing industries, even as other nations, like the US, think they can maintain advanced status if their workforce consists of marketing executives and baristas. They think IP protections will keep those marketing executives earning huge bonuses and then that will support spending more on each espresso. Long term, this is not a viable plan, even if it works well in the short term.
> 14 million farm workers in 1910. 3 million today. Tragedy?
No, that's productivity gains. But we are still farming and producing that food. The equivalent would be if the US got out of the farming business and turned to designing genetically engineered seeds. Let all those other nations grow food, we will do the high value stuff and outsource the actual growing-of-things. Well, OK, until other nations decide to stop paying licensing fees or switch to their own designs. Then not being able to grow things would really hurt us. Same for not being able to make things and turning to just designing stuff.
When a nation loses their increasing returns to scale industries is when economic growth stops.
Surely you see that having fewer workers because the work is being done someplace far away is not equivalent having fewer workers because we can do more work with fewer.
If there ever was a direct supply chain disruption (intentional or not), the US would be in a much worse spot than we are right now. Everything from semiconductors to nuts and bolts would be a problem (some more than others). There isn't a single issue more important to national security right now.