6 votes

Can software simplify the supply chain? Ryan Petersen thinks so

1 comment

  1. skybrian
    An interview with the CEO of Flexport, who you might remember from a tweetstorm about supply chain problems in Long Beach. (Previously discussed here.) [...] [...] [...] [...] [...]

    An interview with the CEO of Flexport, who you might remember from a tweetstorm about supply chain problems in Long Beach. (Previously discussed here.)

    I was like, “Oh, that’s really interesting. I wonder why these truckers aren’t showing up?” The reason I rented a boat was not so I could see the port from the water. It doesn’t look that different. I took the CEO of a trucking company and I brought him on the boat. If you ever want to interview somebody and really get the truth out of them, you bring them on a boat. Because right now, I could hang up on you if I don’t like you. But on a boat, you are totally stuck.


    A big part of why there were not enough masks is because all the world’s airplanes were grounded during the pandemic. They were not really flying to China. Fifty percent of the world’s air freight flies in the belly of passenger planes. If those passenger planes are grounded, there is no air freight capacity. We found there were lots of masks available in China. They have ramped up production, but we don’t have air freight to get them in. The rest of the world, as far as I can tell, looked at that problem, put their hands up, and said, “Eh, fuck. I guess our doctors are going to suffer. Let’s watch this on TV and see what the people are saying.”

    If you listen to the problem statement, 50 percent of the world’s plane flies in the belly of passenger planes and those are grounded right now. The solution is so obvious. Look at all the planes that are grounded. I managed through investor networks and connections that I have been fortunate enough to build over the years. I called the airline CEOs and I was like, “Hey, can we use your planes? We are going to go get some masks to save America’s hospitals.” One hundred percent of them said yes. United Airlines gave us free flights. Atlas Airlines gave us a 747 for free. We were getting Dreamliners for a 200K round trip. Ask your super-rich friends if that is a good deal on a private plane, a round trip to China on a Dreamliner. We flew 83 planes, completely full. We filled the overhead bins and the seats. In the end, we shipped 500 million masks to America’s hospitals.

    It was like, “Wait a minute. Why are we the ones doing that? We’re not supposed to be in that industry.” [...]


    Q. [...] One of your recommendations that I have read is that the United States government should treat our ports more like a strategic national asset as opposed to what they do right now, which is that every city gets to run their own port. [...]


    Even if the local governments were equipped in doing a good job, they just do not have the right incentives. Take the city of Oakland here in the Bay Area. Oakland has a really bad murder rate and terrible public school system. I don’t want to speak too much about all their problems, but they have problems to solve. Healthcare, schools, all these things. Yet the Port of Oakland reports in and is part of the city’s mandate. If the Port of Oakland is causing problems in the hinterland, it is causing problems for businesses that are based in Iowa. It is not their problem. You know what I mean?

    [...] I don’t really care who does it or how it’s done, but [ports] need to be invested in. [...]


    Fundamentally, the ports have a very difficult relationship with their labor. The union is very highly paid and very brittle. Getting paid a lot doesn’t bother me, I think that it’s fine. They are very brittle in terms of who will do what and how their org structure works.

    For example, the way that it works today is that a port terminal operator, this private company who leases the land from the government, leases the port terminal and says to the union, “I need 2,000 workers tomorrow.” The union furnishes those 2,000 workers, but they only do it one day at a time. Each day they say how many workers they need for the next day, then the union provides that many workers. Different people every day and no team structure or management process.

    There is no ability to say, “Do you know how to operate this machine? Have you been trained on it? I am your manager every day. Here are the metrics for yesterday. Here is how we are going to get a little bit better today. This is what we are going to work on.” The fundamentals of running an operation is like, “How did we do yesterday? What are we going to do better today?” They don’t do any of that.


    Just to be clear, I am not anti-union. I am anti- “adversarial relationships between management and union.” It’s breakdowns like, “Hey, let’s be a team here. How do we get a process that lets us all get better every single day?” I am not blaming the union. It could be the management’s fault that they don’t have that, but it’s clear that they don’t. They are treating labor as this fungible thing. You say, “Hey, I need this many workers tomorrow,” as if all workers are the same and it doesn’t matter how they’re organized or what team they are on.

    5 votes