WEBVTT - How the World's Companies Wound Up in a Deepening Supply Chain Nightmare 0:00:10.920 --> 0:00:14.480 Hello, and welcome to another episode of the Odd Thoughts Podcast. 0:00:14.560 --> 0:00:19.840 I'm Tracy Hallaway and I'm Joe. Wasn't Joe remember that 0:00:19.920 --> 0:00:22.840 ever Given? Yeah? That was. That was a great story. 0:00:23.520 --> 0:00:27.800 It's not over yet, is it? So? Possibly my favorite 0:00:27.800 --> 0:00:32.040 sort of finance eco story of all time. It's still going. 0:00:32.520 --> 0:00:35.800 Uh So, there's still this legal thing over what's going 0:00:35.840 --> 0:00:38.360 to happen to all the actual things that were on 0:00:38.479 --> 0:00:40.520 the ever Given after it was stuck in the canal, 0:00:41.360 --> 0:00:44.040 and people are still trying to clear the backlog of 0:00:44.080 --> 0:00:47.840 container ships the sort of logjam that came from the blockage, 0:00:48.400 --> 0:00:51.080 you know, months at this point after the thing was 0:00:51.120 --> 0:00:56.240 actually stuck, right, So it wasn't actually stuck like sort 0:00:56.280 --> 0:00:58.880 of blocking the canal for that long. I think it 0:00:58.960 --> 0:01:02.279 was like about a week maybe or something wrong that, 0:01:02.600 --> 0:01:06.560 but it caused all kinds of issues obviously, and they 0:01:06.560 --> 0:01:08.680 had to have this huge rescue effort and that cost 0:01:08.760 --> 0:01:11.200 all kinds of money. And then the last I heard 0:01:11.200 --> 0:01:12.800 about it, and I probably read an article like a 0:01:12.800 --> 0:01:14.720 week or two ago, there was some sort of like 0:01:15.560 --> 0:01:17.880 some issue with like the boat, the vessel not being 0:01:17.880 --> 0:01:21.320 allowed to actually continue on its journey until the owners 0:01:21.400 --> 0:01:25.160 paid up for the the rescue operation, and then I 0:01:25.160 --> 0:01:28.480 started lost track of it after that. Yeah, that's exactly right. 0:01:28.920 --> 0:01:32.039 And of course the ever Given it's sort of, I 0:01:32.120 --> 0:01:35.840 guess symbolic of all these logistics snarls that we've had 0:01:35.880 --> 0:01:39.880 recently during the coronavirus crisis. And you know, we talked 0:01:39.920 --> 0:01:44.000 about it before in various episodes. We've talked about basically 0:01:44.240 --> 0:01:48.440 the surging traffic and shipping container rates going up, but 0:01:48.520 --> 0:01:51.120 we've also talked about this idea that there's a shortage 0:01:51.160 --> 0:01:55.280 of lots of different things, including lumber, including semi conductors, 0:01:55.320 --> 0:01:58.760 and the logistics snarls really play into that because if 0:01:58.800 --> 0:02:02.640 you already have a short things like semiconductors, plus you 0:02:02.640 --> 0:02:04.520 can't actually move them to where they need to be, 0:02:04.840 --> 0:02:08.200 then everything just gets compounded, right. I was just about 0:02:08.200 --> 0:02:10.680 to use that word compounding, because that's really what it 0:02:10.720 --> 0:02:13.000 feels like that Like the ever Given story was like 0:02:13.080 --> 0:02:15.839 kind of wild. The ship like got turned and went 0:02:15.880 --> 0:02:17.720 into the bank, and it was kind of weird, but 0:02:17.800 --> 0:02:20.959 it really was sort of like the perfect emblem of 0:02:20.960 --> 0:02:24.760 this moment because they are just so many issues recently. 0:02:24.800 --> 0:02:27.639 Did that episode about with the lumber trader, and so 0:02:27.680 --> 0:02:30.640 that after that episode, I was like reading about or 0:02:30.680 --> 0:02:33.280 I was like following like one of the big sawmill companies. 0:02:33.680 --> 0:02:37.079 I read their earnings report and they missed a man 0:02:37.160 --> 0:02:40.160 about this. Oh you did, Joe. You've read this from 0:02:40.200 --> 0:02:43.919 my post, Yes, you published it. That was the thing 0:02:44.000 --> 0:02:47.640 about the sawmill company. Yeah, yeah, they couldn't get enough 0:02:47.639 --> 0:02:52.200 truckey right, should have been minting money, but it wasn't. Sorry, 0:02:52.600 --> 0:02:56.040 of course, because they couldn't actually move the wood. Okay, 0:02:56.160 --> 0:02:57.800 so we're all on the same page. So anyway, all 0:02:57.840 --> 0:02:59.799 these things are piling up on top of each other, 0:03:00.080 --> 0:03:04.040 chips and trucks and boats, and it doesn't feel like 0:03:04.040 --> 0:03:06.560 we're getting any closer to some sort of equilibrium. Of course, 0:03:06.560 --> 0:03:08.200 you beat me to that story, Tracy. I don't know 0:03:08.200 --> 0:03:09.960 why I would have ever suggested on the way, but look, 0:03:10.040 --> 0:03:13.200 what's really interesting. Well, I'll tell you one thing. I've 0:03:13.200 --> 0:03:16.079 been trying to ship something on a container from Hong 0:03:16.120 --> 0:03:18.840 Kong to l A for months now, and I cannot 0:03:18.880 --> 0:03:22.280 get room on a ship for lover money. So you know, 0:03:22.360 --> 0:03:24.360 I've been trying to do this for the purposes of 0:03:24.440 --> 0:03:29.320 journalism slash science, so I personally know how bad it is, 0:03:30.000 --> 0:03:32.200 and the guests that we're about to speak to on 0:03:32.240 --> 0:03:34.639 all thoughts. Is someone that I got in touch with 0:03:34.800 --> 0:03:38.200 to try to give me some logistics advice and figure 0:03:38.200 --> 0:03:41.600 out what was going on with my own container shipping woes. 0:03:41.720 --> 0:03:44.520 And he's really the perfect person to talk to about 0:03:44.560 --> 0:03:47.320 this because not only is he the head of a 0:03:47.400 --> 0:03:51.000 tech platform for global logistics, so this is what he 0:03:51.040 --> 0:03:53.960 does day in and day out, but he also has 0:03:54.000 --> 0:03:57.920 about forty containers still stuck on the ever given so 0:03:57.960 --> 0:04:01.119 he can talk about that situation as well. Well. I'm 0:04:01.120 --> 0:04:03.240 really looking forward to this. I'm hoping to learn something 0:04:03.280 --> 0:04:06.440 and hopefully you get some some advice on making your 0:04:06.680 --> 0:04:10.240 making your ship all right. Our guest for today is 0:04:10.360 --> 0:04:14.480 Ryan Peterson. He's the CEO of Flex Support. Ryan, thanks 0:04:14.480 --> 0:04:17.800 so much for coming on. Great to have great to 0:04:17.800 --> 0:04:20.320 be here. Thank you for having me so Ryan. Hopefully, 0:04:20.480 --> 0:04:24.560 Joe and I kind of described the extremity of the 0:04:24.720 --> 0:04:28.960 logistics log jam correctly in the intro. How bad is 0:04:29.000 --> 0:04:31.839 it right now? Um? And it depends where you sit. 0:04:31.920 --> 0:04:34.240 If you if you own a ship or an airplane 0:04:35.080 --> 0:04:36.839 or a fleet of those, you're making a lot of 0:04:36.880 --> 0:04:39.599 money right now. Prices have gone through the roof. The 0:04:39.680 --> 0:04:42.560 reason is because people are shipping more things than ever 0:04:42.640 --> 0:04:46.080 before in human history, and all the ships and planes 0:04:46.080 --> 0:04:49.320 are full. But all the companies in every industry, I 0:04:49.320 --> 0:04:51.919 think lumber, the lumber one you describe super interesting. But 0:04:52.200 --> 0:04:54.640 everybody's having trouble getting anything delivered. And it's not just 0:04:54.680 --> 0:04:56.640 you with your little container. It's some of the best 0:04:56.640 --> 0:04:58.760 companies in the world are struggling right now. So my 0:04:58.880 --> 0:05:01.440 little container is when you feet long for the record, 0:05:01.760 --> 0:05:05.160 but it only has one thing in it. How does 0:05:05.200 --> 0:05:09.360 a flex port sit within the logistics ecosystem? And who 0:05:09.360 --> 0:05:11.920 are your clients and all this? Yeah, so we work 0:05:12.000 --> 0:05:15.680 with about six thousand great companies around the world that 0:05:15.920 --> 0:05:18.400 regularly ship. We actually have more than ten thousand customers, 0:05:18.400 --> 0:05:20.800 but six thousands of them are shipping constantly like every day, 0:05:20.839 --> 0:05:24.680 like medium sized, big, big companies, household names, some of 0:05:25.080 --> 0:05:28.000 the most important brands in the world as well as 0:05:28.040 --> 0:05:30.279 like we have almost all of the directed consumer e 0:05:30.320 --> 0:05:33.800 commerce businesses that are these up and coming companies, So 0:05:33.839 --> 0:05:37.000 we have all of those customers. They contract Flexport to 0:05:37.120 --> 0:05:39.719 manage the full end to end from shipping everything once 0:05:39.760 --> 0:05:42.520 it leaves a factory loading dock all the way into 0:05:42.560 --> 0:05:45.359 their downstream network for distribution into the u S and 0:05:45.400 --> 0:05:50.240 we handle air ocean freight, UH customs and the delivery 0:05:50.360 --> 0:05:53.320 both pickup and delivery for trucking. So talk to us 0:05:53.320 --> 0:05:57.279 a little bit about the containers on the ever given 0:05:57.320 --> 0:06:00.839 then what was your role there in the logistics and 0:06:01.080 --> 0:06:03.880 what's their current status. Yeah, we do have we have 0:06:03.920 --> 0:06:06.640 forty three containers sitting on that ship still, that's our 0:06:06.680 --> 0:06:10.000 European customer base. Obviously they contracted us to ship containers 0:06:10.000 --> 0:06:12.039 out of mostly out of those ones left from China. 0:06:12.839 --> 0:06:15.120 You've seen you've seen the pictures of the ship. They're stuck. 0:06:16.040 --> 0:06:17.960 The name of the game here is second order effects, 0:06:18.520 --> 0:06:20.400 Like you just couldn't predict what was going to happen. 0:06:20.920 --> 0:06:22.599 So you've got the forty three that are stuck on 0:06:22.640 --> 0:06:25.480 that ship, but actually a hundred and twenty other ships 0:06:25.480 --> 0:06:29.720 containing twelve hundred flex sport containers were stuck behind that 0:06:29.760 --> 0:06:33.000 ship or ahead of it which way they're going, and 0:06:33.040 --> 0:06:35.840 also couldn't be delivered. How to get delayed. And that's 0:06:35.880 --> 0:06:38.560 the biggest cost that's going to come about through litigation 0:06:38.600 --> 0:06:41.000 and everything else that flows through here is all of 0:06:41.040 --> 0:06:43.640 these people feel like, hey, you owe me money, you 0:06:43.760 --> 0:06:46.880 blocked my delivery, and all of that that's gonna be 0:06:46.960 --> 0:06:48.880 a lot of lawsuits. It's not just the cost of 0:06:48.880 --> 0:06:52.880 the rescue operation, the dredging of the canal and everything else. 0:06:52.920 --> 0:06:55.480 It's like all these people who had their cargo delayed, 0:06:55.520 --> 0:06:57.720 and what's the how do you quantify that? It's like, 0:06:58.320 --> 0:07:00.240 is it the lost profits that they would have aid 0:07:00.800 --> 0:07:03.599 from delivering those goods. It starts to be a really 0:07:03.680 --> 0:07:05.560 hard exercise that we'll get settled in the court of 0:07:05.640 --> 0:07:09.160 law or or many um and it's gonna take a 0:07:09.200 --> 0:07:11.520 long time to shake out. I don't know if there's 0:07:11.560 --> 0:07:14.520 like client confidentiality, but can you tell us some of 0:07:14.520 --> 0:07:16.640 the items that are stuck on the what types of 0:07:16.680 --> 0:07:19.120 items are stuck on that boat? Yeah, there is a 0:07:19.120 --> 0:07:20.840 lot of confidentiality. But I know that one of our 0:07:20.880 --> 0:07:24.240 customers has is a relatively famous company that make and 0:07:24.280 --> 0:07:27.360 I can't show that, but make keyboards, keyboards and mice, uh, 0:07:27.600 --> 0:07:32.400 the entire like many container loads of that. Um. By 0:07:32.400 --> 0:07:34.360 the way of the forty three containers, we have all 0:07:34.400 --> 0:07:38.920 of the customers except for three, opted into cargo insurance, 0:07:39.560 --> 0:07:43.440 which will cover the damages in the eventual lawsuits that 0:07:43.520 --> 0:07:46.000 come out of this. Those three we're gonna have to 0:07:46.000 --> 0:07:47.840 work through and make sure it doesn't bankrupt them. But 0:07:48.160 --> 0:07:51.800 one of the little known facts about global shipping is, 0:07:51.880 --> 0:07:56.840 under ancient maritime law, the company shipping the cargo, not 0:07:56.920 --> 0:07:59.480 the owner of the ship, but the company that whose 0:07:59.520 --> 0:08:03.280 cargo owns the cargo the products on there is liable 0:08:03.640 --> 0:08:07.200 when something like this happens. Yeah, and and the real 0:08:07.440 --> 0:08:10.920 that's a law called general average. It's a fascinating Wikipedia article. 0:08:11.280 --> 0:08:15.000 And the reason that that's true under ancient sort of 0:08:15.080 --> 0:08:17.040 not I mean ancient, Yeah, it goes back I think 0:08:17.120 --> 0:08:19.760 hundreds of years. And the reason that that was true 0:08:20.040 --> 0:08:24.640 is that in a in a storm or an accident 0:08:24.720 --> 0:08:28.280 at sea, you don't want people to stop and argue 0:08:28.320 --> 0:08:32.440 about whose cargo they're gonna throw overboard, and do you 0:08:32.480 --> 0:08:34.640 want the mariners. You don't want these arguments. You don't 0:08:34.640 --> 0:08:37.200 want the mariners like worrying about that. Just throw the 0:08:37.200 --> 0:08:40.640 cargo over and save the ship, is the principle, and 0:08:40.679 --> 0:08:42.400 you'll sort it out later. And the way you sort 0:08:42.440 --> 0:08:44.800 it out later is everybody agrees that we will share 0:08:44.840 --> 0:08:47.920 equally and whoever's cargo got thrown over the rest of 0:08:47.960 --> 0:08:50.680 the people will make them whole. And that's a principle 0:08:50.760 --> 0:08:56.200 called general average. And the ocean carrier under the law 0:08:56.480 --> 0:08:59.360 has the right to invoke general average and declare it 0:09:00.000 --> 0:09:02.240 and say okay. And so that's what Evergreen has done. 0:09:02.240 --> 0:09:05.760 They have declared general average, which means all of the 0:09:05.800 --> 0:09:08.120 customers who have cargo on that ship are going to 0:09:08.200 --> 0:09:11.280 be liable for the damages that come through um and 0:09:11.360 --> 0:09:14.760 it could be billions of dollars in aggregate and it 0:09:14.800 --> 0:09:17.440 and it gets divided pro rata based on the commercial 0:09:17.480 --> 0:09:20.320 invoice value of your goods. That when you do get 0:09:20.320 --> 0:09:22.120 this your goods put on that ship, you should pay 0:09:22.160 --> 0:09:26.000 for cargo insurance because if that ship gets something terrible 0:09:26.040 --> 0:09:28.480 happens all of a sudden, You're little Bloomberg research project, 0:09:28.480 --> 0:09:31.520 could you know, bring bring you all. You've got to 0:09:31.520 --> 0:09:34.680 make sure that you don't get a bankrupted Oh man, 0:09:35.040 --> 0:09:37.840 that's actually a really good point. And now I'm worried 0:09:37.880 --> 0:09:42.280 about like bringing all of Bloomberg down with this one shipment. 0:09:42.559 --> 0:09:45.080 It's not that expensive. This is actually something that I 0:09:45.120 --> 0:09:47.760 wanted to ask you about. So I'm hoping you can 0:09:47.840 --> 0:09:52.080 expound on that point. Who is actually liable for the 0:09:52.120 --> 0:09:55.840 snarls that we're getting in global shipping traffic, Like when 0:09:55.880 --> 0:10:00.480 stuff goes wrong, Who bears responsibility not just in terms 0:10:00.520 --> 0:10:04.200 of I guess insurance for lost or delayed cargo, but 0:10:04.280 --> 0:10:08.560 also who bears responsibility for solving the problem, Like who 0:10:08.640 --> 0:10:11.360 do your clients go to and say, I can't get 0:10:11.400 --> 0:10:15.000 my stuff shipped on time. Someone needs to fix this. Um, 0:10:15.040 --> 0:10:17.600 that's all on us as as a logistics industry. That 0:10:17.960 --> 0:10:20.200 it's really tough. The analogy I've been using with my 0:10:20.240 --> 0:10:24.440 teams is that we're doing wedding planning outdoors and all 0:10:24.440 --> 0:10:26.560 of a sudden we've been moved to Seattle, you know, 0:10:26.640 --> 0:10:28.880 and it's like, well, every you better be warning your 0:10:28.880 --> 0:10:32.240 customers about what's going on. Tell them that, hey, we're 0:10:32.480 --> 0:10:35.640 not able. The thirty percent of ships are being are 0:10:35.720 --> 0:10:39.720 not making their schedule right now, seven percent of containers 0:10:40.320 --> 0:10:42.880 are getting rolled, which is like what it calls when 0:10:42.880 --> 0:10:45.679 you get bumped in an airline, when you get when 0:10:45.720 --> 0:10:48.120 you get bumped to the next plane that's getting rolled. 0:10:48.160 --> 0:10:53.360 In ocean containership industry standard industry average before the pandemic 0:10:53.440 --> 0:10:55.880 was eight percent. So it's just like a huge spike 0:10:55.960 --> 0:10:59.520 in in failure, service delivery failure, and it's a ton 0:10:59.559 --> 0:11:02.040 of second order effects because right when when that and 0:11:02.080 --> 0:11:04.440 then this was the ever Given is a really good example. 0:11:04.520 --> 0:11:07.640 Like that ship. Okay, it's six days late, the ships 0:11:07.679 --> 0:11:09.600 behind it were six days late. I mean they ever 0:11:09.640 --> 0:11:11.200 given is gonna be months late, but the ones behind 0:11:11.240 --> 0:11:14.000 it were six days late. We're arriving, but now they 0:11:14.000 --> 0:11:15.760 were supposed to go to the next port and the 0:11:15.760 --> 0:11:18.040 next sport, they're gonna be delayed there and there, and 0:11:18.200 --> 0:11:20.680 all those other bookings that were supposed to get put 0:11:20.720 --> 0:11:23.600 on get rolled and have to find a new you 0:11:23.600 --> 0:11:25.200 know what, what ship do they go on? It's a 0:11:25.240 --> 0:11:28.760 mad scramble. That was just like adding you know, insult 0:11:28.800 --> 0:11:32.080 to injury. After a year of this, well at least 0:11:32.120 --> 0:11:35.439 six months of really excess capacity and not enough ships 0:11:35.440 --> 0:11:37.520 to move all the cargo that's trying to move. See, 0:11:37.520 --> 0:11:41.440 I explained that, like ever given a side, what have 0:11:41.600 --> 0:11:47.200 been the main factors that explain why the system is 0:11:47.240 --> 0:11:50.240 basically buckling? Like where where are the big pain points 0:11:50.280 --> 0:11:53.320 coming from? The first thing and the most the easiest 0:11:53.320 --> 0:11:55.680 thing to point to is just like way more demand, 0:11:55.760 --> 0:11:59.880 way more volume is being shipped, and my own working 0:12:00.000 --> 0:12:02.160 I thought this is for this, and I didn't predict 0:12:02.160 --> 0:12:03.960 this in advance, so I'm not claiming to be smart 0:12:04.000 --> 0:12:05.560 and I just sort of looked at the data x 0:12:05.600 --> 0:12:07.600 post and rationalize it, which we're all capable of doing. 0:12:07.600 --> 0:12:09.400 I don't know if it's true or not, but ex 0:12:09.480 --> 0:12:11.920 post we can look backwards and say, well, all of 0:12:11.960 --> 0:12:14.240 these consumers who got locked in their homes and couldn't 0:12:14.280 --> 0:12:16.720 go out, You've got to get your dopamine somewhere. And 0:12:16.760 --> 0:12:19.160 so you just buy stuff on the internet, and and 0:12:19.200 --> 0:12:22.839 people have bought way more things than they were buying before. 0:12:22.880 --> 0:12:25.120 And you've had this like big shift, and the data 0:12:25.160 --> 0:12:26.839 does bear this out. You've had a big shift from 0:12:26.840 --> 0:12:30.080 services which are way down double digit percent down, onto 0:12:30.240 --> 0:12:34.480 durable goods, onto home goods, upgrading your furniture building, um. 0:12:34.559 --> 0:12:36.520 And so that's that's the first thing. It's just like 0:12:36.640 --> 0:12:39.719 way more cargo getting shipped, and you have the same 0:12:39.800 --> 0:12:43.760 number of ships, in some cases less because of actually 0:12:43.800 --> 0:12:46.960 the ocean carriers cut back. We all predicted as an 0:12:47.000 --> 0:12:49.400 industry and as a world, as like economists around the world, 0:12:49.400 --> 0:12:52.840 everyone predicted that goods purchases would fall off a cliff, 0:12:53.720 --> 0:12:56.000 and the opposite happened, which I think is a lesson 0:12:56.200 --> 0:12:57.760 that we should all take from this, is like, maybe 0:12:57.840 --> 0:13:00.200 don't be so certain in predictions of the future. But 0:13:00.280 --> 0:13:02.920 we all predicted that, and the ocean carriers actually pulled 0:13:02.920 --> 0:13:08.120 back capacity. Um. A lot of companies pulled back orders 0:13:08.160 --> 0:13:11.360 and their factories made other plans and then all of 0:13:11.400 --> 0:13:13.439 a sudden goot new orders. So you've got a log 0:13:13.520 --> 0:13:16.640 jam at the factory where right now it's taking I 0:13:16.920 --> 0:13:20.719 talked to one bicycle producer, pretty big brand, last two 0:13:20.720 --> 0:13:23.800 weeks ago, and it's taking them three hundred days when 0:13:23.800 --> 0:13:26.720 they place a purchase order with their factory, three days 0:13:26.760 --> 0:13:29.280 before it's ready to get picked up, which normally this 0:13:29.320 --> 0:13:31.760 is like a thirty day process. Um, So you've got 0:13:31.760 --> 0:13:35.000 delays at the factory. Ships there wasn't enough capacity. Well, 0:13:35.160 --> 0:13:37.600 we also ran out of containers, and this is a 0:13:37.600 --> 0:13:41.880 really interesting second order effect. Imports have surged. US exports 0:13:41.880 --> 0:13:46.800 are down of containers. If you don't have containers being exported, 0:13:47.360 --> 0:13:50.400 you don't have empty containers to put those imports in 0:13:50.480 --> 0:13:52.760 coming back, and it needs to run in a loop. 0:13:53.240 --> 0:13:58.560 So normal days pre pandemic of US of containers leaving 0:13:58.559 --> 0:14:01.960 the United States are empty. Uh, it's it's running around 0:14:02.600 --> 0:14:05.720 right now. But for a while they didn't, the ocean 0:14:05.760 --> 0:14:08.440 carriers weren't on top of this and just shipping back 0:14:08.480 --> 0:14:11.599 extra empties to make sure that they have enough capacity. 0:14:11.920 --> 0:14:13.719 So there was a moment a couple of months ago 0:14:13.760 --> 0:14:16.319 where we were as a as an industry, as a society, 0:14:16.679 --> 0:14:20.960 five hundred thousand shipping containers short in China. Sorry sorry, 0:14:21.000 --> 0:14:25.000 could you just explain that. Why is the shipment back 0:14:25.080 --> 0:14:29.800 of empty containers a problem? Because normally you have you 0:14:29.840 --> 0:14:32.840 have full stuff going. Yeah, but US exports fell off 0:14:32.840 --> 0:14:35.640 a cliff, right, and nobody thought, hey, I still need 0:14:35.680 --> 0:14:37.720 the container even if I'm not exporting the goods. So 0:14:38.520 --> 0:14:42.640 the ships were going back to China but leaving empty containers, 0:14:42.640 --> 0:14:44.520 and the empties were staying here because they would get 0:14:44.560 --> 0:14:47.520 imported and usually they get exported automatically. And that's like 0:14:48.040 --> 0:14:50.480 just a really quick reaction. You know, the industry is 0:14:50.520 --> 0:14:53.400 not made to like change this fast, this physical goods 0:14:53.880 --> 0:14:56.080 type of stuff happening in the real world that it's 0:14:56.120 --> 0:14:59.280 not software. Can you go into that in detail, because 0:14:59.480 --> 0:15:01.920 this is something that we spoke about with a previous 0:15:01.960 --> 0:15:06.480 gust on shipping. But how flexible is the industry? I 0:15:06.560 --> 0:15:09.880 get the sense that it isn't very And you're dealing 0:15:09.920 --> 0:15:13.560 with you know, massive ships and huge ports that take 0:15:13.680 --> 0:15:17.200 a lot of coordination and big lead times. But why 0:15:17.320 --> 0:15:21.000 can't it respond to you know, at this point, it's 0:15:21.000 --> 0:15:22.680 a change in the world that's sort of been going 0:15:22.720 --> 0:15:25.320 on for more than a year, So why does it 0:15:25.360 --> 0:15:28.080 take so long to respond to it? Yeah, I mean 0:15:28.120 --> 0:15:30.840 it's it's my personal obsession is to try to make 0:15:30.840 --> 0:15:33.720 this industry more agile and and bring technology to bear. 0:15:33.720 --> 0:15:35.200 And a lot of it is a lack of technology. 0:15:35.240 --> 0:15:38.280 A lot of these companies are running old systems. I've 0:15:38.280 --> 0:15:40.320 heard the word as four hundred more times than I 0:15:40.320 --> 0:15:41.720 ever want to hear again in my life. That's like 0:15:41.720 --> 0:15:45.840 an an operating system built by IBM as a predecessor 0:15:45.880 --> 0:15:48.960 to OS two. Like we're talking about early early eighties 0:15:49.000 --> 0:15:51.720 technology that's still running and and it's hard to switch 0:15:51.720 --> 0:15:54.680 out a system that runs such vital systems and your 0:15:54.720 --> 0:15:57.080 you know, running your company. And so some of it 0:15:57.160 --> 0:15:59.760 is technology and lack of tech to be agile. Some 0:16:00.160 --> 0:16:02.840 process I don't know, like I send some bureaucracy. So 0:16:02.880 --> 0:16:05.440 for example, with these empty containers, we saw this problem 0:16:05.480 --> 0:16:08.720 coming like six months ago. We're like, hey, the exports 0:16:08.720 --> 0:16:12.440 aren't happening, there's gonna be a lack of empty containers 0:16:12.440 --> 0:16:15.520 in China. We went to a couple of ocean carrier 0:16:15.560 --> 0:16:18.080 partners of ours and said, we want to ship empty containers, 0:16:18.120 --> 0:16:20.880 will pay you to ship them. We want to make 0:16:20.920 --> 0:16:24.040 sure we have empties available, and they told us sure, 0:16:24.480 --> 0:16:26.280 but once it arrives there, we're taking it back in. 0:16:26.320 --> 0:16:28.360 It's our container and we're like, okay, well I'm not 0:16:28.360 --> 0:16:30.840 gonna pay you to ship an empty like so we 0:16:30.880 --> 0:16:33.480 didn't do it, and then fast forward a couple of 0:16:33.480 --> 0:16:35.160 months and they didn't have the empties. Were like, ah, 0:16:35.200 --> 0:16:37.920 we were offering to pay you to do this, and 0:16:37.960 --> 0:16:39.840 you'd be making more money right now. So some of 0:16:39.880 --> 0:16:42.479 it is just like, hey, how do you get older 0:16:42.520 --> 0:16:45.800 companies to be less bureaucratic and be agile and respond 0:16:45.840 --> 0:16:49.080 to change, which is not something they've really had to learn. 0:16:49.160 --> 0:16:50.680 I think we've seen this with a lot of institutions. 0:16:50.680 --> 0:16:53.120 I don't need to just pick on any particular industry. 0:16:53.120 --> 0:16:56.200 We've seen this with healthcare distribution, We've seen it across 0:16:56.240 --> 0:16:57.920 the board of the Pandemics really exposed a lot of 0:16:57.920 --> 0:17:00.400 our institutions, and I think it's a wake up callegs. 0:17:00.440 --> 0:17:02.480 You're not stupid people. They're like, oh wow, okay, we 0:17:02.520 --> 0:17:05.159 really have to invest in upgrade our technology systems. So 0:17:05.200 --> 0:17:08.680 we're seeing um, good partnership there, but in the midst 0:17:08.680 --> 0:17:11.040 of a pandemic, it's hard and mistakes are made, for 0:17:11.080 --> 0:17:29.840 sure from the companies that you work with. Obviously I 0:17:29.920 --> 0:17:33.480 assume in normal times has already complicated stuff, but you know, 0:17:33.520 --> 0:17:35.800 like what's sort of going on inside at the corporate 0:17:35.880 --> 0:17:39.160 level as they sort of have to like pivot too, 0:17:39.800 --> 0:17:41.919 this kind of thing that I don't know, maybe I 0:17:41.920 --> 0:17:44.040 don't know if it normally runs an autopilot, but it's 0:17:44.040 --> 0:17:48.760 sort of smooth to this becoming a major strategic focus 0:17:48.800 --> 0:17:51.600 for their ability to conduct business. We're talking about brands 0:17:51.600 --> 0:17:53.760 like companies that need to get their products in stock, 0:17:53.800 --> 0:17:57.080 and yeah, it is logistics team has been I sometimes 0:17:57.080 --> 0:18:00.119 call it like the offensive lineman of business, Like you 0:18:00.160 --> 0:18:03.119 don't really get noticed until you commit a penalty. Every 0:18:03.280 --> 0:18:04.879 everybody's piste off with you, and the rest of the 0:18:04.920 --> 0:18:07.200 time you just say, yeah, he blocked somebody. That's his job. 0:18:08.040 --> 0:18:10.719 And I think we're finally seeing the opportunity for for 0:18:10.760 --> 0:18:13.679 these people, these teams to become much more strategic and 0:18:13.680 --> 0:18:15.800 get a seat at the table and talk with the CFO, 0:18:16.320 --> 0:18:18.520 talk with the head of marketing and sales, and the 0:18:18.560 --> 0:18:21.520 e commerce team about hey, where's the stuff? I mean, 0:18:21.520 --> 0:18:23.520 the dirty little secret is that the best brands in 0:18:23.560 --> 0:18:25.720 the world have no idea where their products are. And 0:18:25.760 --> 0:18:29.840 that's in normal times and now really they have no 0:18:29.880 --> 0:18:31.520 idea where it is or when it's going to get there. 0:18:31.520 --> 0:18:35.000 And it's all the previous models have stopped working. Um. 0:18:35.040 --> 0:18:37.000 And they need they need technology, they need answers. They 0:18:37.040 --> 0:18:39.480 can show them, Hey, show me on a satellite where 0:18:39.480 --> 0:18:41.800 this ship is, and show me used machine learning to 0:18:41.800 --> 0:18:44.159 predict when is it actually going to clear customs and 0:18:44.160 --> 0:18:48.280 get delivered to me? So I can communicate that downstream 0:18:48.400 --> 0:18:51.800 to the end consumer, all the way to the end consumer, 0:18:52.040 --> 0:18:55.120 who cares when's there? When's their couch going to arrive? Um? 0:18:55.160 --> 0:18:56.840 And that's an age old problem. No one can tell 0:18:56.840 --> 0:18:58.480 you when your couch is gonna arrive. But it's been 0:18:58.880 --> 0:19:01.000 compounded in a lot a couple of months, and we're 0:19:01.000 --> 0:19:03.480 trying to at least be able to give people visibility 0:19:03.480 --> 0:19:05.879 even if you can't run it faster. And I can't 0:19:06.160 --> 0:19:08.119 make the ships not be stuck at the port waiting, 0:19:08.359 --> 0:19:11.080 but I can tell you what the estimated weight time is, 0:19:11.119 --> 0:19:13.040 and I can tell you what current throughput levels at 0:19:13.040 --> 0:19:15.640 that port terminal are etcetera. Uh, and that's what that's 0:19:15.640 --> 0:19:17.600 what the Flex Moore technology platform is built for. So 0:19:17.880 --> 0:19:19.520 we've we've found this whole thing. You know. The silver 0:19:19.560 --> 0:19:21.000 lining in US is like we're all of a sudden. 0:19:21.240 --> 0:19:24.280 Normally we just ship cardboard boxes through our platform and 0:19:24.280 --> 0:19:25.800 no one thinks it's that interesting. All of a sudden, 0:19:25.840 --> 0:19:27.280 here I am talking to you all and trying to 0:19:27.440 --> 0:19:29.720 talking to board levels and really getting in there and 0:19:29.720 --> 0:19:33.080 trying to solve real problems for people. So this actually 0:19:33.160 --> 0:19:34.840 leads to a question that I wanted to ask you 0:19:34.880 --> 0:19:37.119 as well. Can you talk to us a little bit 0:19:37.160 --> 0:19:41.120 about how the economics or the process of actually loading 0:19:41.240 --> 0:19:45.199 container ships work. So you just mentioned that, you know, 0:19:45.240 --> 0:19:48.720 you have technology and machine learning that help you estimate 0:19:48.760 --> 0:19:53.120 that process. It seems to be really complicated. And again 0:19:53.960 --> 0:19:56.800 I'm speaking a little bit from personal experience here, but 0:19:57.000 --> 0:19:59.600 I keep getting rolled from ship to ship to ship, 0:20:00.000 --> 0:20:02.720 which means there's someone else who is taking my space 0:20:04.040 --> 0:20:05.879 on the ship that I was supposed to get and 0:20:06.080 --> 0:20:10.280 either they're paying higher rates or I don't know, maybe 0:20:10.280 --> 0:20:14.040 they're a bigger client for the company. But explain exactly 0:20:14.040 --> 0:20:19.120 how that works. Who gets preference on these extremely crowded ships. Yeah, 0:20:19.280 --> 0:20:21.439 and I'll tell the way it's worked traditionally in the industry, 0:20:21.440 --> 0:20:23.119 and then I'll tell you what where I think innovations, 0:20:23.320 --> 0:20:26.119 but there are opportunities are for innovation on top of that. 0:20:26.200 --> 0:20:28.200 It's like traditionally it works by who has the best 0:20:28.200 --> 0:20:32.720 relationship with this person probably named large sitting in Copenhagen 0:20:32.800 --> 0:20:35.600 or something, who's making these decisions, and it is like 0:20:35.680 --> 0:20:38.520 pretty human driven. They're going to look at factors like 0:20:38.560 --> 0:20:40.359