1 00:00:10,840 --> 00:00:14,760 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,880 --> 00:00:20,240 Speaker 1: I'm Joe Wisental and I'm Tracy Halloway. Tracy, By this point, 3 00:00:20,280 --> 00:00:23,599 Speaker 1: I think are any Odd Lots listener really anyone in 4 00:00:23,640 --> 00:00:27,640 Speaker 1: the world is totally familiar with the supply chain disruptions 5 00:00:27,960 --> 00:00:31,240 Speaker 1: and the bottlenecks, particularly at the ports and particularly at 6 00:00:31,240 --> 00:00:35,360 Speaker 1: the Port of Los Angeles. Wait, there's supply chain disruptions. 7 00:00:35,560 --> 00:00:38,120 Speaker 1: Have you not heard about it? I haven't. I haven't 8 00:00:38,159 --> 00:00:41,040 Speaker 1: spent hours of my life this year talking about supply 9 00:00:41,120 --> 00:00:44,640 Speaker 1: chain disruptions. No, you're absolutely correct. There are all sorts 10 00:00:44,680 --> 00:00:47,120 Speaker 1: of superlatives that you could throw around, but we know 11 00:00:47,159 --> 00:00:49,320 Speaker 1: that there are dozens and dozens of ships, for instance, 12 00:00:49,360 --> 00:00:51,720 Speaker 1: waiting off the coast of the Port of l A 13 00:00:51,880 --> 00:00:54,920 Speaker 1: trying to doc We know that this has become a big, 14 00:00:55,160 --> 00:01:00,520 Speaker 1: big issue for the Biden administration as well. Yeah, exactly. 15 00:01:00,560 --> 00:01:05,080 Speaker 1: I mean, obviously bottlenecks perhaps contribute to inflation, It creates 16 00:01:05,080 --> 00:01:08,920 Speaker 1: anxiety around the holidays because people worry about gifts getting shipped, 17 00:01:09,240 --> 00:01:11,120 Speaker 1: and of course you know it's not great for the 18 00:01:11,120 --> 00:01:14,720 Speaker 1: economy overall. So we have a very special guest today, 19 00:01:14,800 --> 00:01:17,800 Speaker 1: and I want to jump right into our episode to 20 00:01:17,840 --> 00:01:20,520 Speaker 1: discuss it, We're gonna be speaking to a John Porcari. 21 00:01:20,640 --> 00:01:25,120 Speaker 1: He's a former Deputy Secretary of Transportation during the Obama 22 00:01:25,200 --> 00:01:29,200 Speaker 1: administration and he is currently serving as Port Envoy to 23 00:01:29,240 --> 00:01:32,479 Speaker 1: the White House Supply Chain Disruptions Task Force. So he's 24 00:01:32,480 --> 00:01:36,639 Speaker 1: been tasked by the Biden administration to fix the ports 25 00:01:36,680 --> 00:01:39,920 Speaker 1: situation or to help fix it. John, thank you so 26 00:01:40,000 --> 00:01:43,480 Speaker 1: much for coming on Odd Lots. It's my pleasure. So 27 00:01:43,600 --> 00:01:46,680 Speaker 1: I want to start with the actually sort of theoretical question, 28 00:01:46,920 --> 00:01:51,360 Speaker 1: which is, what is it that a overseer representing the 29 00:01:51,480 --> 00:01:56,960 Speaker 1: government can do in theory to help coordinate a solution 30 00:01:57,320 --> 00:02:00,920 Speaker 1: to these bottlenecks that some of the private public actors 31 00:02:01,080 --> 00:02:06,720 Speaker 1: currently involved couldn't do with previously without some kind of oversight. Well, 32 00:02:06,760 --> 00:02:09,800 Speaker 1: first and foremost, the role is an honest broker role. 33 00:02:10,160 --> 00:02:13,160 Speaker 1: It's to get the parties together. And if you think 34 00:02:13,160 --> 00:02:15,640 Speaker 1: of the whole supply chain, these are parts of the 35 00:02:15,680 --> 00:02:19,000 Speaker 1: supply chain that typically in the past have not talked 36 00:02:19,040 --> 00:02:22,040 Speaker 1: to each other much certainly have not exchanged data. So 37 00:02:22,080 --> 00:02:25,880 Speaker 1: that honest broker role is a crucial one in unlocking 38 00:02:26,320 --> 00:02:30,800 Speaker 1: underlying operational issues and pushing hard for the kind of 39 00:02:30,800 --> 00:02:33,640 Speaker 1: collaboration that you're actually seeing at the ports of Los 40 00:02:33,639 --> 00:02:36,840 Speaker 1: Angeles and Long Beach right now, where goods movement is 41 00:02:36,919 --> 00:02:39,040 Speaker 1: much more fluid than it was six or eight weeks ago. 42 00:02:39,960 --> 00:02:42,320 Speaker 1: So presumably as part of this role, you have been 43 00:02:42,400 --> 00:02:44,680 Speaker 1: spending a lot of time at the ports talking to 44 00:02:44,840 --> 00:02:48,799 Speaker 1: various parties. I'm curious what you're learning there. Is there 45 00:02:48,800 --> 00:02:51,400 Speaker 1: anything that surprised you and what have you sort of 46 00:02:51,440 --> 00:02:57,280 Speaker 1: pinpointed as the major issues here. It's uh, it's very interesting. 47 00:02:57,320 --> 00:03:00,120 Speaker 1: I thought I knew the industry pretty well having the 48 00:03:00,160 --> 00:03:04,200 Speaker 1: Port of Baltimore, UH in the past, but the scale 49 00:03:04,240 --> 00:03:07,520 Speaker 1: and scope of the two ports, which are really one 50 00:03:07,600 --> 00:03:12,200 Speaker 1: large port complex, Los Angeles and Long Beach, is just amazing. 51 00:03:12,240 --> 00:03:15,280 Speaker 1: So the container imports coming into the country are coming 52 00:03:15,320 --> 00:03:20,560 Speaker 1: through those ports, and the pandemic really changed everything in 53 00:03:20,680 --> 00:03:23,600 Speaker 1: terms of trade as well. So during the pandemic, we 54 00:03:23,680 --> 00:03:28,560 Speaker 1: switched our buying patterns from restaurants and theaters to buying things. 55 00:03:29,440 --> 00:03:32,120 Speaker 1: The pandemic laid bear and underlying reality, which was the 56 00:03:32,120 --> 00:03:37,000 Speaker 1: goods movement chain was creaking along showing its seams before 57 00:03:37,040 --> 00:03:40,360 Speaker 1: the pandemic. But what we ended up with during the 58 00:03:40,400 --> 00:03:43,400 Speaker 1: pandemic with those change buying patterns was really gridlock at 59 00:03:43,440 --> 00:03:47,160 Speaker 1: those two ports. Congestion on the container movements at other ports, 60 00:03:47,240 --> 00:03:50,720 Speaker 1: but gridlock at those two. Can you give an example. 61 00:03:51,000 --> 00:03:53,920 Speaker 1: You mentioned that what your role is an on as 62 00:03:53,920 --> 00:03:57,760 Speaker 1: a broker get people communicating directly or communicating in a 63 00:03:57,800 --> 00:04:00,920 Speaker 1: way they weren't before. Can you give it clear example 64 00:04:01,040 --> 00:04:05,400 Speaker 1: of a situation that was arising because the communication wasn't happening, 65 00:04:05,440 --> 00:04:08,960 Speaker 1: And how opening up that lines has helped improve or 66 00:04:09,000 --> 00:04:13,440 Speaker 1: can improve container through put. Yeah, they're actually multiple examples 67 00:04:13,440 --> 00:04:16,240 Speaker 1: of that. So if you just take it sequentially from 68 00:04:16,320 --> 00:04:21,480 Speaker 1: the ocean carriers to the terminal operators to the cargo owners, 69 00:04:21,480 --> 00:04:24,320 Speaker 1: the beneficial cargo owners at the other end of the 70 00:04:24,360 --> 00:04:28,960 Speaker 1: goods movement stream, there were clear examples where the ocean 71 00:04:29,000 --> 00:04:32,719 Speaker 1: carriers and the terminal operators weren't communicating with each other 72 00:04:33,080 --> 00:04:37,039 Speaker 1: on things as basic as as throughput, and the cargo 73 00:04:37,120 --> 00:04:41,480 Speaker 1: owners who owned what the contents of those boxes in 74 00:04:41,640 --> 00:04:45,960 Speaker 1: many cases had had no intention or no need to 75 00:04:46,040 --> 00:04:49,000 Speaker 1: take those boxes off the docks immediately. They were essentially 76 00:04:49,040 --> 00:04:51,839 Speaker 1: using them for free storage. Uh. And one of the 77 00:04:51,880 --> 00:04:56,280 Speaker 1: early conversations was was clearing that up and and actually 78 00:04:56,640 --> 00:05:01,120 Speaker 1: making sure that everyone understood each other's pressures, motivations and 79 00:05:01,160 --> 00:05:05,000 Speaker 1: what they were doing. The way we've operationalized this is 80 00:05:05,080 --> 00:05:09,440 Speaker 1: we have calls three mornings a week Pacific time, and 81 00:05:09,480 --> 00:05:12,960 Speaker 1: we have everybody on those calls, the ocean carriers, the 82 00:05:13,080 --> 00:05:18,040 Speaker 1: terminal operators, the railroads, trucking companies, the Federal Maritime Commission, 83 00:05:18,080 --> 00:05:22,280 Speaker 1: the Surface Transportation Board, the leadership of both ports, everyone 84 00:05:22,360 --> 00:05:25,119 Speaker 1: who plays a role in that part of the goods 85 00:05:25,160 --> 00:05:30,159 Speaker 1: movement chain. And we literally are fostering real time conversations 86 00:05:30,200 --> 00:05:33,240 Speaker 1: as part of that. So we've moved from the first 87 00:05:33,320 --> 00:05:36,120 Speaker 1: couple of weeks that I was on the job, I 88 00:05:36,160 --> 00:05:39,000 Speaker 1: was in a listening mode and and everybody was pointing 89 00:05:39,000 --> 00:05:42,080 Speaker 1: fingers at everyone else. I get that, Okay, you've said 90 00:05:42,080 --> 00:05:44,760 Speaker 1: your piece. Now it is time to actually be productive 91 00:05:44,839 --> 00:05:46,760 Speaker 1: and to work with each other. And that kind of 92 00:05:46,760 --> 00:05:50,200 Speaker 1: forcing mechanism. On the light side, it's an honest broker role. 93 00:05:50,440 --> 00:05:54,240 Speaker 1: On the little bit heavier side, it's pushing hard to 94 00:05:54,320 --> 00:05:56,839 Speaker 1: get the parties to actually talk to each other. They're 95 00:05:56,880 --> 00:06:00,800 Speaker 1: sharing information now on an ad hoc basis, and in 96 00:06:00,800 --> 00:06:03,240 Speaker 1: the longer term, we want to make sure it's more 97 00:06:03,279 --> 00:06:07,359 Speaker 1: systematically providing transparent data throughout the system to the benefit 98 00:06:07,400 --> 00:06:09,839 Speaker 1: of all the private sector parties that that run the 99 00:06:09,839 --> 00:06:13,280 Speaker 1: good supply chain. I wanted to ask you about this, 100 00:06:13,360 --> 00:06:17,320 Speaker 1: but in terms of incentivizing behavior, how do you actually 101 00:06:17,360 --> 00:06:20,400 Speaker 1: do that given the various stakeholders here and the fact 102 00:06:20,400 --> 00:06:23,320 Speaker 1: that they might have differing interests. So you mentioned one 103 00:06:23,400 --> 00:06:27,480 Speaker 1: company basically, you know, using the port as free storage 104 00:06:27,520 --> 00:06:29,799 Speaker 1: for some of its containers. It's not in its interest 105 00:06:29,839 --> 00:06:33,800 Speaker 1: to necessarily resolve that. Uh. And I know that Jane Siroca, 106 00:06:34,080 --> 00:06:38,159 Speaker 1: another former Ablots guest and the executive UM, the CEO 107 00:06:38,240 --> 00:06:40,160 Speaker 1: of the Port of l A, he was talking about 108 00:06:40,200 --> 00:06:43,320 Speaker 1: how it's been a sort of uphill battle to get 109 00:06:43,440 --> 00:06:48,080 Speaker 1: companies signed onto the Accelerate Cargo l A program. So 110 00:06:48,120 --> 00:06:51,800 Speaker 1: how do you actually incentivize that behavior? Are there sticks 111 00:06:51,920 --> 00:06:55,760 Speaker 1: or carrots that you can use in this process? There 112 00:06:55,800 --> 00:06:59,760 Speaker 1: are both carrots and sticks, um, and wherever possible, we've 113 00:06:59,760 --> 00:07:03,839 Speaker 1: been incentivized and using carrots. So starting with pushing the 114 00:07:04,000 --> 00:07:08,080 Speaker 1: ports themselves to go seven, to make sure that they're 115 00:07:08,120 --> 00:07:12,120 Speaker 1: capable of going seven, and make sure that labor who 116 00:07:12,200 --> 00:07:17,200 Speaker 1: signed on very quickly signed on readily to seven operations 117 00:07:17,200 --> 00:07:20,360 Speaker 1: that they were together sending a strong signal a green 118 00:07:20,480 --> 00:07:23,680 Speaker 1: light that were open for business. Um, we have lots 119 00:07:23,720 --> 00:07:26,160 Speaker 1: of off peak capacity. If you want to move your 120 00:07:26,160 --> 00:07:28,680 Speaker 1: cargoes in and out of the ports, exports as well, 121 00:07:29,480 --> 00:07:32,640 Speaker 1: off peak nighttimes is the time to do it. You 122 00:07:32,680 --> 00:07:36,000 Speaker 1: all are familiar with our peers around the world, most 123 00:07:36,040 --> 00:07:40,280 Speaker 1: of whom are seven in their operations. The United States, 124 00:07:40,440 --> 00:07:43,120 Speaker 1: its ports and it's good supply chain are in many 125 00:07:43,120 --> 00:07:47,040 Speaker 1: ways an anomaly because we're not. So it was it 126 00:07:47,120 --> 00:07:50,680 Speaker 1: was first the incentive the carrots of the capacity that's 127 00:07:50,680 --> 00:07:54,160 Speaker 1: available off peak, and then matching that, marrying that if 128 00:07:54,200 --> 00:07:58,680 Speaker 1: you will, with major cargo owners that can drive those 129 00:07:58,720 --> 00:08:01,560 Speaker 1: kind of volumes that can actually change the use of 130 00:08:01,600 --> 00:08:05,600 Speaker 1: the ports, including the middle miles of trucking and and 131 00:08:06,320 --> 00:08:10,040 Speaker 1: rail and putting those things together. And so if you 132 00:08:10,600 --> 00:08:13,200 Speaker 1: look back on the last eight weeks or so, there 133 00:08:13,200 --> 00:08:16,320 Speaker 1: actually is a logical sequence to the starting with getting 134 00:08:16,400 --> 00:08:20,520 Speaker 1: the ports to give a green light labor saying absolutely 135 00:08:20,560 --> 00:08:24,200 Speaker 1: we're on board, going to a number of the very 136 00:08:24,280 --> 00:08:28,040 Speaker 1: large cargo owners they can drive the market, and saying okay, 137 00:08:28,080 --> 00:08:31,720 Speaker 1: it's your turn to make sure your warehouses, your distribution centers, 138 00:08:31,720 --> 00:08:35,040 Speaker 1: your fulfilming centers are able to receive these cargoes and 139 00:08:35,120 --> 00:08:38,120 Speaker 1: let's work off peak You can't flip a light switch 140 00:08:38,280 --> 00:08:41,680 Speaker 1: and and have it happen overnight, but you can change 141 00:08:41,679 --> 00:08:44,600 Speaker 1: the way that we operate collectively as a system over time. 142 00:08:44,960 --> 00:08:46,880 Speaker 1: What you're seeing now is more and more of that 143 00:08:47,000 --> 00:08:50,200 Speaker 1: that that is actually happening. And those two ports are 144 00:08:50,200 --> 00:08:53,320 Speaker 1: operating much more more fluid lee than they did a 145 00:08:53,320 --> 00:08:57,600 Speaker 1: few weeks ago. But they're also moving much more towards 146 00:08:57,600 --> 00:09:00,760 Speaker 1: twenty four seven operations and doing that, which is where 147 00:09:00,760 --> 00:09:20,760 Speaker 1: the long term capacity is. Just on seven question, two 148 00:09:20,880 --> 00:09:23,440 Speaker 1: quick things come to mind is A. I mean, I 149 00:09:23,480 --> 00:09:26,240 Speaker 1: think one of the big stories in the economy these 150 00:09:26,280 --> 00:09:28,719 Speaker 1: days is tight labor markets. So I'm curious if that's 151 00:09:28,720 --> 00:09:32,680 Speaker 1: a challenge, just like finding the additional hours and too. 152 00:09:32,920 --> 00:09:36,120 Speaker 1: You know, we had an episode recently with Ryan Peterson, 153 00:09:36,160 --> 00:09:38,440 Speaker 1: the CEO at flex Sport. He talked about some other 154 00:09:38,520 --> 00:09:41,640 Speaker 1: things that make this more difficult, like say, local town 155 00:09:41,800 --> 00:09:45,440 Speaker 1: ordinances where the inland warehouses exist may have rules that 156 00:09:45,520 --> 00:09:48,320 Speaker 1: say no delivery after a PM because the neighbors don't 157 00:09:48,360 --> 00:09:51,600 Speaker 1: like noise pollution and so forth. How much is a 158 00:09:52,280 --> 00:09:54,200 Speaker 1: you know, how do you solve the labor part and 159 00:09:54,200 --> 00:09:56,280 Speaker 1: then just some of the dealing with you know, local 160 00:09:56,400 --> 00:09:58,840 Speaker 1: entities that probably you know, the White House isn't typically 161 00:09:58,920 --> 00:10:01,600 Speaker 1: used of dealing with or maybe the towns local rags. 162 00:10:01,800 --> 00:10:03,600 Speaker 1: How do you sort of clear those out so that 163 00:10:03,640 --> 00:10:05,679 Speaker 1: at least on a temporary basis, that doesn't become a 164 00:10:05,720 --> 00:10:10,040 Speaker 1: big problem. Yeah, good questions. At first. On the labor side, 165 00:10:10,559 --> 00:10:12,840 Speaker 1: labor has been a true partner from the very beginning. 166 00:10:13,040 --> 00:10:15,280 Speaker 1: First of all, working through the pandemic. You know, we 167 00:10:15,320 --> 00:10:18,560 Speaker 1: have a new definition of frontline workers and uh UM 168 00:10:18,720 --> 00:10:24,559 Speaker 1: the i l WU, the Longshoreman's Union lost about twenty 169 00:10:24,800 --> 00:10:28,920 Speaker 1: members to COVID and kept working throughout the process and 170 00:10:29,440 --> 00:10:33,280 Speaker 1: very early on signed on over the longer term because 171 00:10:33,280 --> 00:10:36,040 Speaker 1: we know today's volumes are likely the floor for the future, 172 00:10:36,120 --> 00:10:40,199 Speaker 1: not the ceiling. We're clearly on the recruitment, retention, and 173 00:10:40,400 --> 00:10:44,440 Speaker 1: especially training side for our longshoreman. We're going to have 174 00:10:44,480 --> 00:10:48,319 Speaker 1: to make sure that we're providing the training and other 175 00:10:48,360 --> 00:10:50,920 Speaker 1: opportunities that they need. And then when you get to 176 00:10:50,960 --> 00:10:54,480 Speaker 1: the local part of it. As a former former local 177 00:10:54,800 --> 00:10:59,479 Speaker 1: UM government person myself, land use is a local prerogative 178 00:10:59,600 --> 00:11:01,959 Speaker 1: UM and it is in the US. It has done 179 00:11:01,960 --> 00:11:05,040 Speaker 1: at a local level. We've worked this at a retail level, 180 00:11:05,160 --> 00:11:07,920 Speaker 1: and it's been things like talking directly to mayors and 181 00:11:08,000 --> 00:11:12,480 Speaker 1: city managers about specific sites and trying to bring together 182 00:11:12,920 --> 00:11:16,440 Speaker 1: that local government with for example, some of the Steven 183 00:11:16,640 --> 00:11:19,520 Speaker 1: Oring and other companies that want to use those sites, 184 00:11:19,960 --> 00:11:24,120 Speaker 1: and being again the honest broker in that relationship and 185 00:11:24,200 --> 00:11:27,920 Speaker 1: at least one case, working through what the potential benefits 186 00:11:28,200 --> 00:11:30,920 Speaker 1: for the city can be. You know, what, if you're 187 00:11:30,960 --> 00:11:33,760 Speaker 1: going to use this site on a temporary basis, what's 188 00:11:33,800 --> 00:11:37,080 Speaker 1: in it for that municipality and can they, for example, 189 00:11:37,840 --> 00:11:41,679 Speaker 1: get some tree planting other environmental benefits out of it 190 00:11:41,760 --> 00:11:45,640 Speaker 1: in addition to revenue. So where necessary, we've done it 191 00:11:45,679 --> 00:11:49,640 Speaker 1: on a case by case in retail basis. I'm pleased 192 00:11:49,640 --> 00:11:51,240 Speaker 1: to say that we have a great partner in the 193 00:11:51,280 --> 00:11:54,439 Speaker 1: State of California in this where the state is doing 194 00:11:54,520 --> 00:11:57,880 Speaker 1: that as well, and the state, given their daily working 195 00:11:57,960 --> 00:12:03,920 Speaker 1: relationship with municipalities and counties throughout the state, is trying 196 00:12:03,960 --> 00:12:07,560 Speaker 1: to open up sites as well. Uh, the Inland Empire 197 00:12:07,640 --> 00:12:12,079 Speaker 1: area has about two billion square feet of distribution facilities 198 00:12:12,120 --> 00:12:14,160 Speaker 1: and a vacancy rate of two percent. And we can 199 00:12:14,200 --> 00:12:17,160 Speaker 1: all do the math and understand how tighter market that is. 200 00:12:17,920 --> 00:12:21,040 Speaker 1: The solutions that you've seen that are short term solutions 201 00:12:21,240 --> 00:12:24,720 Speaker 1: have been For example, for port properties that are in transition, 202 00:12:24,720 --> 00:12:28,200 Speaker 1: they may have been former brown field properties that will 203 00:12:28,320 --> 00:12:30,760 Speaker 1: will be converted over time to port uses, but as 204 00:12:30,760 --> 00:12:34,360 Speaker 1: an interim use are used for empty container storage. There 205 00:12:34,360 --> 00:12:38,120 Speaker 1: are a number of private sites nearby the ports that 206 00:12:38,160 --> 00:12:41,160 Speaker 1: have been used for the same that capacity is close 207 00:12:41,240 --> 00:12:45,440 Speaker 1: to being maximized. But there's also work further inland, for example, 208 00:12:45,480 --> 00:12:48,800 Speaker 1: to identify properties that can be used. We started early 209 00:12:48,840 --> 00:12:52,080 Speaker 1: on by looking at U S Government properties, both military 210 00:12:52,080 --> 00:12:56,000 Speaker 1: and civilian that might be useful for those purposes. And 211 00:12:56,040 --> 00:12:58,360 Speaker 1: we've been through several rounds, as you know, of a 212 00:12:58,440 --> 00:13:01,960 Speaker 1: base relignement and closure process says where the military surplus 213 00:13:02,000 --> 00:13:04,720 Speaker 1: most of their property that they didn't weren't truly using 214 00:13:05,160 --> 00:13:09,080 Speaker 1: and weren't essential for national defense. So it's kind of 215 00:13:09,080 --> 00:13:12,680 Speaker 1: slim pickings for both on both the civilian and military 216 00:13:12,720 --> 00:13:16,520 Speaker 1: side for properties. The States looking at state properties as well, 217 00:13:17,000 --> 00:13:19,440 Speaker 1: and as I mentioned, there's a number of private properties. 218 00:13:19,559 --> 00:13:23,200 Speaker 1: These are short term operational strategies, and the whole thrust 219 00:13:23,240 --> 00:13:25,640 Speaker 1: of the work we've been doing has been bifurcated into 220 00:13:25,679 --> 00:13:30,760 Speaker 1: this short term operational changes and and longer term, more 221 00:13:30,880 --> 00:13:34,320 Speaker 1: fundamental changes that will make for a more efficient private 222 00:13:34,320 --> 00:13:38,160 Speaker 1: sector goods movement chain in the In the short term, 223 00:13:38,320 --> 00:13:41,199 Speaker 1: most of these operational changes that we could talk about 224 00:13:41,240 --> 00:13:44,800 Speaker 1: both both on doc at the ports and inland work 225 00:13:44,840 --> 00:13:47,320 Speaker 1: at the margins. But the fact is those margins add 226 00:13:47,400 --> 00:13:50,280 Speaker 1: up um and if you keep working this process, you're 227 00:13:50,320 --> 00:13:52,559 Speaker 1: getting more and more in the way of operational improvements. 228 00:13:52,840 --> 00:13:54,680 Speaker 1: That's what you've been seeing the last couple of weeks 229 00:13:55,160 --> 00:13:58,800 Speaker 1: at the two ports, where throughput is much better than 230 00:13:58,840 --> 00:14:02,960 Speaker 1: it has been. The process of picking up empty containers 231 00:14:02,960 --> 00:14:07,240 Speaker 1: through what are called sweeper vessels, bringing essentially empty vessels 232 00:14:07,280 --> 00:14:10,560 Speaker 1: in and just loading them up with empty containers and 233 00:14:10,559 --> 00:14:13,439 Speaker 1: sending them back to their points of origin is done 234 00:14:14,040 --> 00:14:17,640 Speaker 1: now on a systematic basis. Uh, that's actually really making 235 00:14:17,679 --> 00:14:20,400 Speaker 1: a difference. Well, maybe we could talk about some of 236 00:14:20,400 --> 00:14:24,120 Speaker 1: those longer term solutions as well. And I'm aware that 237 00:14:24,120 --> 00:14:26,920 Speaker 1: the White House put up a blog recently calling on 238 00:14:26,960 --> 00:14:31,240 Speaker 1: the maritime watchdog, the Federal Maritime Commission, to actually do 239 00:14:31,360 --> 00:14:36,280 Speaker 1: something about the big three shipping alliances who basically control 240 00:14:36,600 --> 00:14:39,520 Speaker 1: a lot of the routes and rates um for the 241 00:14:39,560 --> 00:14:42,200 Speaker 1: containers that we've been talking about. What are some of 242 00:14:42,240 --> 00:14:46,400 Speaker 1: the measures that you think the FMC should actually consider 243 00:14:46,640 --> 00:14:52,160 Speaker 1: in UM, you know, taking on this very very large industry. Well, 244 00:14:52,160 --> 00:14:54,960 Speaker 1: the FMC, of course, is an independent agency. And before 245 00:14:55,000 --> 00:14:58,640 Speaker 1: I get to the FMC, I think we should briefly 246 00:14:58,640 --> 00:15:02,000 Speaker 1: outline some of the intermediate term steps that are already 247 00:15:02,080 --> 00:15:05,960 Speaker 1: underway at the federal and state level. So, for example, 248 00:15:06,360 --> 00:15:10,080 Speaker 1: an unprecedented partnership between the state of California and the 249 00:15:10,080 --> 00:15:12,920 Speaker 1: federal government was announced two weeks ago by the White 250 00:15:12,920 --> 00:15:17,720 Speaker 1: House where a five billion dollar credit facility basically a 251 00:15:17,760 --> 00:15:21,240 Speaker 1: five billion dollar credit line for the TIFFIA and RIFF 252 00:15:21,320 --> 00:15:25,320 Speaker 1: loan programs, which are the two federal infrastructure loan programs, 253 00:15:25,880 --> 00:15:29,000 Speaker 1: was extended to the state of California. UM. And if 254 00:15:29,000 --> 00:15:31,960 Speaker 1: you think about how federalism works in the US, where 255 00:15:32,520 --> 00:15:35,240 Speaker 1: some of the funding is at the federal level, but 256 00:15:35,320 --> 00:15:37,840 Speaker 1: the project selection is at the state and local level, 257 00:15:38,320 --> 00:15:41,480 Speaker 1: that actually gives the state of California a hunting license 258 00:15:41,760 --> 00:15:45,160 Speaker 1: for the first time ever to actually build a program 259 00:15:45,240 --> 00:15:48,480 Speaker 1: of projects not just at the ports, but inland from 260 00:15:48,480 --> 00:15:50,960 Speaker 1: the ports. So it might be rail capacity, it might 261 00:15:50,960 --> 00:15:55,360 Speaker 1: be rail grade elimination projects. UM, it might be freeway capacity, 262 00:15:55,680 --> 00:15:59,840 Speaker 1: it might be purchasing sites and modifying them for you 263 00:16:00,120 --> 00:16:03,720 Speaker 1: his intermodal container transfer facilities. One of the early steps 264 00:16:03,920 --> 00:16:08,440 Speaker 1: was this unprecedented deal with the state of California to 265 00:16:08,640 --> 00:16:12,120 Speaker 1: put the state in the business of actually caring about 266 00:16:12,120 --> 00:16:14,320 Speaker 1: the goods movement chain throughout the state. And this is 267 00:16:14,360 --> 00:16:16,560 Speaker 1: not just southern California, by the way, so it's for 268 00:16:16,640 --> 00:16:19,400 Speaker 1: the Port of Oakland, for example. It's every bit is important, 269 00:16:19,800 --> 00:16:22,280 Speaker 1: and the state has been very aggressive in building this 270 00:16:22,400 --> 00:16:26,200 Speaker 1: program of projects and working through a process with all 271 00:16:26,200 --> 00:16:30,040 Speaker 1: the stakeholders to prioritize that and and what you'll see 272 00:16:30,560 --> 00:16:34,480 Speaker 1: is a whole generation of projects where the local funding 273 00:16:34,920 --> 00:16:38,320 Speaker 1: at the state and local level is actually a long 274 00:16:38,400 --> 00:16:41,520 Speaker 1: term loan program that the federal government is extended to it. 275 00:16:41,600 --> 00:16:45,200 Speaker 1: So that's one important part of it. The other part, 276 00:16:45,440 --> 00:16:49,240 Speaker 1: which is an order of magnitude larger and is truly historic, 277 00:16:49,720 --> 00:16:54,120 Speaker 1: is the President signing on Monday the bipartisan Infrastructure Deal 278 00:16:54,200 --> 00:16:58,920 Speaker 1: which brings seventeen billion dollars to the ports um more 279 00:16:59,000 --> 00:17:02,720 Speaker 1: or less evenly divided between waterside and landside. That's as 280 00:17:02,760 --> 00:17:04,840 Speaker 1: a former port operator, I can tell you that is 281 00:17:04,880 --> 00:17:07,480 Speaker 1: in order of magnitude and then some more than the 282 00:17:07,480 --> 00:17:10,800 Speaker 1: federal government's done before. Let's let's get into what can 283 00:17:10,840 --> 00:17:13,120 Speaker 1: be done with the ports. And one thing I'm particularly 284 00:17:13,160 --> 00:17:15,960 Speaker 1: curious about is you mentioned at the beginning all the 285 00:17:16,000 --> 00:17:19,800 Speaker 1: ports around the country are stressed to some extent, but 286 00:17:19,920 --> 00:17:22,879 Speaker 1: not to the level of the Port of Los Angeles 287 00:17:23,000 --> 00:17:24,399 Speaker 1: or the Port of Los Angeles in the Port of 288 00:17:24,440 --> 00:17:28,120 Speaker 1: Long Beach. Are there things that you're working on right 289 00:17:28,200 --> 00:17:30,320 Speaker 1: now that you can do in the short term to 290 00:17:30,440 --> 00:17:32,879 Speaker 1: make it so that ships can go to a different 291 00:17:32,920 --> 00:17:35,639 Speaker 1: port and find, you know, a port where they're not 292 00:17:35,720 --> 00:17:38,600 Speaker 1: having the same issues, to relieve some of the congestion, 293 00:17:38,720 --> 00:17:42,359 Speaker 1: or building out inland infrastructure so that those ports, whether 294 00:17:42,359 --> 00:17:44,760 Speaker 1: it's on the East Coast or in Georgia or Texas 295 00:17:44,880 --> 00:17:47,439 Speaker 1: or somewhere else, can have the capacity to take on 296 00:17:47,560 --> 00:17:51,320 Speaker 1: more throughput. And is that also part of other short 297 00:17:51,440 --> 00:17:54,000 Speaker 1: term things and other long term things that can ease 298 00:17:54,000 --> 00:17:58,280 Speaker 1: our reliance on those two ports in California. Yes, excellent question. Um, 299 00:17:58,520 --> 00:18:00,760 Speaker 1: let's remember what we're trying to do. We're trying to 300 00:18:01,760 --> 00:18:06,520 Speaker 1: build in resiliency, fluidity, and velocity in the ports system, 301 00:18:06,640 --> 00:18:10,920 Speaker 1: and so on the resiliency side, you're already seeing some 302 00:18:11,080 --> 00:18:14,400 Speaker 1: of movement by the ocean carriers to diversify their ports 303 00:18:14,440 --> 00:18:17,840 Speaker 1: a little bit, to to change the trade routes in 304 00:18:17,880 --> 00:18:20,720 Speaker 1: the vessel strings to some extent to give them a 305 00:18:20,760 --> 00:18:24,800 Speaker 1: little bit more resiliency. And today it's because of congestion 306 00:18:25,320 --> 00:18:28,320 Speaker 1: UH in those two ports, but tomorrow it might be 307 00:18:28,720 --> 00:18:31,639 Speaker 1: natural disaster, it might be some of the economic upset, 308 00:18:32,119 --> 00:18:35,360 Speaker 1: so you're seeing some of that. One example of what 309 00:18:35,400 --> 00:18:37,800 Speaker 1: we're doing in the short term as well is with 310 00:18:37,880 --> 00:18:40,119 Speaker 1: the Port of Savannah, the number four ports in the 311 00:18:40,160 --> 00:18:44,280 Speaker 1: country for containers, where we've worked with them and they've 312 00:18:44,280 --> 00:18:48,080 Speaker 1: been very innovative in identifying a number of interior pop 313 00:18:48,200 --> 00:18:51,760 Speaker 1: up sites that are on rail lines. You can have 314 00:18:52,560 --> 00:18:55,960 Speaker 1: rail to truck connections at that are inland in the 315 00:18:56,000 --> 00:18:59,680 Speaker 1: state of Georgia and in North Carolina for example, UM 316 00:18:59,720 --> 00:19:04,200 Speaker 1: and we've found a way to actually help fund those projects. 317 00:19:05,000 --> 00:19:07,200 Speaker 1: You'll see the first of them up and running in 318 00:19:07,240 --> 00:19:09,000 Speaker 1: the next thirty to forty five days. So these are 319 00:19:09,119 --> 00:19:15,119 Speaker 1: very short term where basically you're taking incoming loaded containers 320 00:19:15,160 --> 00:19:18,240 Speaker 1: that are important to the country through Savannah. They're going 321 00:19:18,359 --> 00:19:21,080 Speaker 1: on rail out to these sites where they can transfer 322 00:19:21,160 --> 00:19:24,600 Speaker 1: by truck, so you're that much closer to the target markets. 323 00:19:25,240 --> 00:19:28,639 Speaker 1: But one of the really important additional benefits is on 324 00:19:28,680 --> 00:19:33,119 Speaker 1: the export side for agricultural exports, the agricultural exports that 325 00:19:33,200 --> 00:19:37,080 Speaker 1: go through containers, and Georgia Savannah is the number one 326 00:19:37,119 --> 00:19:42,680 Speaker 1: port country for containerized agricultural exports. Um those same pop 327 00:19:42,800 --> 00:19:47,400 Speaker 1: up sites are hundreds of miles closer to the agricultural sources, 328 00:19:47,400 --> 00:19:50,440 Speaker 1: so it's a lot easier to have a short dray 329 00:19:50,640 --> 00:19:54,520 Speaker 1: of relatively short truck run to these pop up sites 330 00:19:54,840 --> 00:19:57,360 Speaker 1: where you're putting it on trains and then out through 331 00:19:57,359 --> 00:20:01,760 Speaker 1: the port of Savannah. That's one example of short term 332 00:20:01,920 --> 00:20:05,280 Speaker 1: operational changes that really in this case on both the 333 00:20:05,320 --> 00:20:09,199 Speaker 1: important export side help. We're encouraging other ports to do 334 00:20:09,240 --> 00:20:12,639 Speaker 1: the same. You'll see, I think in generation of projects 335 00:20:12,720 --> 00:20:16,720 Speaker 1: in the short term around the country that will help 336 00:20:16,880 --> 00:20:21,320 Speaker 1: maximize the existing on doc capacity through interior pop up sites. 337 00:20:21,680 --> 00:20:26,080 Speaker 1: The fundamental issue is the docks themselves. The ports themselves 338 00:20:26,440 --> 00:20:29,040 Speaker 1: are such valuable pieces of real estate that you don't 339 00:20:29,080 --> 00:20:32,119 Speaker 1: want containers dwelling there a second longer than you have to. 340 00:20:32,200 --> 00:20:34,280 Speaker 1: You want to get them interior, or you want to 341 00:20:34,280 --> 00:20:37,120 Speaker 1: get them out back on ships and to their target 342 00:20:37,200 --> 00:20:41,959 Speaker 1: markets overseas. This might be slightly outside of your direct remit, 343 00:20:42,080 --> 00:20:46,119 Speaker 1: but there are people out there who argue that you know, 344 00:20:46,200 --> 00:20:48,840 Speaker 1: one of the fundamental problems here is that America is 345 00:20:48,880 --> 00:20:53,240 Speaker 1: just getting too much of its supply of goods from abroad. 346 00:20:53,320 --> 00:20:55,320 Speaker 1: And I mean you mentioned when we first started out 347 00:20:55,359 --> 00:20:58,840 Speaker 1: this conversation that the pandemic really changed everything in terms 348 00:20:58,920 --> 00:21:02,080 Speaker 1: of trade. We are just importing much, much more than 349 00:21:02,080 --> 00:21:05,480 Speaker 1: we had previously. Does anything in the past experience of 350 00:21:05,520 --> 00:21:08,240 Speaker 1: a year and a half suggest that maybe the White 351 00:21:08,240 --> 00:21:12,520 Speaker 1: House should be reconsidering it's general trade policies towards China. 352 00:21:12,600 --> 00:21:14,720 Speaker 1: And I can kind of see you arguing this this 353 00:21:15,080 --> 00:21:18,480 Speaker 1: either way, Like you could either lower tariffs in order 354 00:21:18,520 --> 00:21:21,040 Speaker 1: to increase the flow of goods into the States and 355 00:21:21,160 --> 00:21:23,480 Speaker 1: hope that the ports can handle more of it, or 356 00:21:23,600 --> 00:21:25,920 Speaker 1: you can maybe, um sort of swing the other way 357 00:21:25,920 --> 00:21:27,840 Speaker 1: and say that we need to be fostering more of 358 00:21:27,840 --> 00:21:33,800 Speaker 1: our manufacturing capacity within the United States itself. It's a 359 00:21:33,800 --> 00:21:37,240 Speaker 1: great question, Tracy, and Um. You have to go back 360 00:21:37,280 --> 00:21:40,359 Speaker 1: to the very beginning of the Biden administration when the 361 00:21:40,400 --> 00:21:45,920 Speaker 1: President signed Executive Order on Competitiveness and set up very 362 00:21:46,000 --> 00:21:49,800 Speaker 1: quickly after that a Supply Chain Disruption Task Force. This 363 00:21:49,840 --> 00:21:54,320 Speaker 1: is a cabinet level task force. The president's tasks his cabinet, Essentially, 364 00:21:54,520 --> 00:22:00,440 Speaker 1: the Secretaries of Transportation commerce, agriculture, and others to look 365 00:22:00,480 --> 00:22:03,760 Speaker 1: at some of the fundamental issues and while we're making 366 00:22:03,840 --> 00:22:07,399 Speaker 1: short term corrections and working with industry partners in the 367 00:22:07,440 --> 00:22:09,920 Speaker 1: short term, to really think about the long term as well. 368 00:22:10,000 --> 00:22:14,600 Speaker 1: So on a topic like semiconductors, where as you well 369 00:22:14,680 --> 00:22:17,919 Speaker 1: know the impact that the semiconductor shortage has had on 370 00:22:17,960 --> 00:22:21,120 Speaker 1: the auto industry, for example, what should be the right 371 00:22:21,160 --> 00:22:24,200 Speaker 1: balance for the long term in the country's best interests 372 00:22:24,680 --> 00:22:30,800 Speaker 1: between domestic manufacturer and overseas manufacturers. So this Supply Teams 373 00:22:30,840 --> 00:22:35,159 Speaker 1: Disruption Cabinet level task force has really gotten a headstart 374 00:22:35,280 --> 00:22:38,240 Speaker 1: and a running start on looking at some of those 375 00:22:38,440 --> 00:22:43,320 Speaker 1: UM issues and in rethinking what's in the best term 376 00:22:43,640 --> 00:22:46,120 Speaker 1: interests of the United States. And I think we all 377 00:22:46,920 --> 00:22:49,760 Speaker 1: take to heart the lessons that have been learned during 378 00:22:50,080 --> 00:22:54,880 Speaker 1: by the disruptions in the pandemic, a COVID incident in Vietnam, 379 00:22:55,720 --> 00:23:00,760 Speaker 1: cant impact clothing in the uf UM, those kinds of 380 00:23:00,880 --> 00:23:04,879 Speaker 1: disruptions to a just in time inventory system or something 381 00:23:04,880 --> 00:23:07,320 Speaker 1: that I think people are thinking long and hard about 382 00:23:07,480 --> 00:23:11,040 Speaker 1: UM and and making sure that we're not as vulnerable 383 00:23:11,040 --> 00:23:30,480 Speaker 1: in the future. John, I know we're very mindful of 384 00:23:30,520 --> 00:23:32,280 Speaker 1: your time, and you just have a few minutes left. 385 00:23:32,320 --> 00:23:34,919 Speaker 1: I just want to get very clearly where things stand 386 00:23:34,960 --> 00:23:38,399 Speaker 1: in terms of progress. You mentioned speed and throughput of 387 00:23:38,600 --> 00:23:43,240 Speaker 1: containers improving, but I see other measures, specifically measures of 388 00:23:43,520 --> 00:23:46,400 Speaker 1: how many ships are waiting in the water or how 389 00:23:46,440 --> 00:23:48,800 Speaker 1: many days they're waiting in the water, that still seem 390 00:23:48,880 --> 00:23:51,359 Speaker 1: to be going up. Talk to us about what stats 391 00:23:51,440 --> 00:23:54,720 Speaker 1: are improving and what stats it looks like the ship 392 00:23:54,760 --> 00:23:57,520 Speaker 1: one has not started to improve. How soon will it 393 00:23:57,560 --> 00:23:59,920 Speaker 1: be until that the number of actually ships just waiting 394 00:23:59,920 --> 00:24:03,359 Speaker 1: to unload start to come down. Well, everyone looks to 395 00:24:03,560 --> 00:24:06,760 Speaker 1: the number of ships in San Pedro Bay because it's 396 00:24:06,760 --> 00:24:10,239 Speaker 1: a great visual and UH it is UH at an 397 00:24:10,240 --> 00:24:13,679 Speaker 1: all time high. What that doesn't measure is the actual 398 00:24:13,720 --> 00:24:17,160 Speaker 1: t e US the containers that are importing and exporting 399 00:24:17,200 --> 00:24:20,080 Speaker 1: through that and UM. Part of what's going on in 400 00:24:20,119 --> 00:24:24,159 Speaker 1: the vessel count is that there are new entrant carriers 401 00:24:24,280 --> 00:24:28,800 Speaker 1: ocean carriers UH that are running relatively small chartered vessels. 402 00:24:28,800 --> 00:24:30,840 Speaker 1: So these might be three thousand or four thousand t 403 00:24:30,920 --> 00:24:34,840 Speaker 1: EU instead of the twenty four thousand t EU behemoths 404 00:24:35,320 --> 00:24:38,720 Speaker 1: that that are that you see in the ports many 405 00:24:38,760 --> 00:24:42,760 Speaker 1: other times. So the vessel count is very misleading. You 406 00:24:42,760 --> 00:24:46,320 Speaker 1: should be looking at the number of containers moving and on. 407 00:24:46,320 --> 00:24:49,840 Speaker 1: On that score, it's actually very good news. So it 408 00:24:49,880 --> 00:24:53,760 Speaker 1: was perhaps a little bit controversial when it was proposed 409 00:24:53,800 --> 00:24:57,240 Speaker 1: a couple of weeks ago and first publicly discussed, but 410 00:24:57,520 --> 00:25:02,280 Speaker 1: the potential to impose a per container fee on the 411 00:25:02,320 --> 00:25:06,440 Speaker 1: ocean carriers for long dwelling containers basically a hundred dollar 412 00:25:06,600 --> 00:25:09,440 Speaker 1: fee that goes up by a hundred dollars per day 413 00:25:09,560 --> 00:25:13,920 Speaker 1: per box for any truck containers that have been there 414 00:25:13,920 --> 00:25:16,760 Speaker 1: more than nine days, any rail containers more than six days. 415 00:25:17,680 --> 00:25:21,840 Speaker 1: We've had some remarkable progress on that front. So the 416 00:25:21,960 --> 00:25:25,800 Speaker 1: number of long dwelling nine day plus containers at both 417 00:25:25,840 --> 00:25:29,080 Speaker 1: Ports l A and Long Beach on a combined basis 418 00:25:29,359 --> 00:25:33,440 Speaker 1: is down thirty Since basically this fee was first proposed 419 00:25:33,440 --> 00:25:36,960 Speaker 1: to go into effect on November one, we have held off. 420 00:25:37,080 --> 00:25:39,800 Speaker 1: The ports have held off on actually imposing the fee 421 00:25:40,040 --> 00:25:43,560 Speaker 1: give so far given the progress that's been made. But 422 00:25:43,720 --> 00:25:47,640 Speaker 1: that has been one of the single most important elements 423 00:25:47,760 --> 00:25:51,480 Speaker 1: in restoring fluidity to the ports, which were grid locked 424 00:25:51,960 --> 00:25:54,520 Speaker 1: by lack of real estate. There are so many containers 425 00:25:54,600 --> 00:25:58,920 Speaker 1: incoming in an outgoing on the docks that they couldn't 426 00:25:59,160 --> 00:26:02,920 Speaker 1: the equipment could even operate in many cases. So that's 427 00:26:02,960 --> 00:26:05,240 Speaker 1: one part of it. The other part that I think 428 00:26:05,240 --> 00:26:08,919 Speaker 1: everyone should take note of is the ocean carriers stepping 429 00:26:09,040 --> 00:26:11,639 Speaker 1: up and with the sweeper vessels that I described bringing 430 00:26:11,640 --> 00:26:16,080 Speaker 1: in empty vessels, filling with both US exports and empty 431 00:26:16,119 --> 00:26:19,000 Speaker 1: containers and sending them back to their point of origin, 432 00:26:19,560 --> 00:26:23,560 Speaker 1: and then um extra loaders where they basically leave more 433 00:26:23,680 --> 00:26:28,280 Speaker 1: of the capacity on a regular cargo vessel to take 434 00:26:28,280 --> 00:26:31,800 Speaker 1: out more empties than what they brought in as as 435 00:26:31,840 --> 00:26:36,520 Speaker 1: full containers. Those two combined efforts are making a real 436 00:26:36,640 --> 00:26:40,560 Speaker 1: dent in the empties that are out there. So there's 437 00:26:40,720 --> 00:26:43,879 Speaker 1: there's real progress to point to a lot of credit 438 00:26:43,920 --> 00:26:46,399 Speaker 1: to the whole team, starting with the two executive directors 439 00:26:46,400 --> 00:26:49,040 Speaker 1: of the ports and their senior management teams, but also 440 00:26:49,080 --> 00:26:52,919 Speaker 1: the ocean carriers, the terminal operators, the truckers, the railroads 441 00:26:53,119 --> 00:26:57,600 Speaker 1: and labor and and all of them. On these operational changes. 442 00:26:58,000 --> 00:27:00,960 Speaker 1: You can both feel it getting better day by day, 443 00:27:00,960 --> 00:27:04,199 Speaker 1: but you can measure the progress and um one of 444 00:27:04,200 --> 00:27:06,760 Speaker 1: the things the White House has done has really put 445 00:27:06,800 --> 00:27:10,160 Speaker 1: together away and you're seeing it in the White House 446 00:27:10,160 --> 00:27:14,280 Speaker 1: blog to actually measure the progress. And so while it's 447 00:27:14,359 --> 00:27:16,960 Speaker 1: a great visual to measure the number of ships out 448 00:27:16,960 --> 00:27:19,760 Speaker 1: there at anchor. What we should be actually measuring is 449 00:27:19,800 --> 00:27:24,199 Speaker 1: the throughput both ways. Do you have signposts for for 450 00:27:24,240 --> 00:27:26,280 Speaker 1: your own success? You know, when do you sort of 451 00:27:26,320 --> 00:27:29,360 Speaker 1: declare problem solved? And what are you looking at and 452 00:27:29,520 --> 00:27:34,680 Speaker 1: making a statement like that in the three goals resiliency, fluidity, 453 00:27:34,760 --> 00:27:39,920 Speaker 1: and velocity, knowing that the fluidity within the ports is 454 00:27:39,920 --> 00:27:43,879 Speaker 1: the single most important element and it drives the velocity 455 00:27:43,920 --> 00:27:47,080 Speaker 1: if you will, of goods getting back to a condition 456 00:27:47,560 --> 00:27:51,280 Speaker 1: where the long dwelling containers are at least at their 457 00:27:51,320 --> 00:27:54,359 Speaker 1: historic lows, if not lower. So, in other words, no 458 00:27:55,000 --> 00:27:59,119 Speaker 1: import is is dwelling on the port longer than it 459 00:27:59,160 --> 00:28:02,560 Speaker 1: has in the past. Uh, that's one obvious measure. Another 460 00:28:02,640 --> 00:28:05,679 Speaker 1: one is the dwell time at the other end of 461 00:28:05,680 --> 00:28:08,480 Speaker 1: the goods movement change. So, how long is a truck 462 00:28:08,600 --> 00:28:12,480 Speaker 1: chassis with a container a full container on it, tied 463 00:28:12,560 --> 00:28:15,000 Speaker 1: up at a distribution center. It shouldn't be more than 464 00:28:15,040 --> 00:28:18,880 Speaker 1: forty eight hours. At the worst point in the system congestion, 465 00:28:19,560 --> 00:28:22,680 Speaker 1: we were seeing some dwell times of eleven days at 466 00:28:22,800 --> 00:28:27,200 Speaker 1: distribution centers. That's clearly a sign that the distribution part 467 00:28:27,240 --> 00:28:30,639 Speaker 1: of it can't handle the volume. A lot of that 468 00:28:30,720 --> 00:28:33,800 Speaker 1: has clued up, so so there are specific measures, but 469 00:28:34,160 --> 00:28:36,159 Speaker 1: it's really important to build for the future at the 470 00:28:36,200 --> 00:28:40,080 Speaker 1: same time. So the the five billion dollar credit facility 471 00:28:40,160 --> 00:28:44,920 Speaker 1: with California, the seventeen billion dollars in the Biparson infrastructure deal, 472 00:28:45,400 --> 00:28:48,360 Speaker 1: and the work throughout the Goods Movement chain on better 473 00:28:48,440 --> 00:28:52,640 Speaker 1: data sharing are three metrics as well that I think 474 00:28:52,640 --> 00:28:55,120 Speaker 1: are important in the mid and long term to follow 475 00:28:55,160 --> 00:28:59,400 Speaker 1: as well. Well, John, we really appreciate you coming on, 476 00:28:59,520 --> 00:29:01,800 Speaker 1: odd Love. There's a real treat given how much we've 477 00:29:01,800 --> 00:29:04,160 Speaker 1: focused on this topic. And uh, maybe we'll have you 478 00:29:04,240 --> 00:29:06,400 Speaker 1: back in a few months when you're ready to, uh, 479 00:29:06,480 --> 00:29:08,760 Speaker 1: when it's no longer a crisis, or when you're ready 480 00:29:08,800 --> 00:29:11,200 Speaker 1: to declare some sort of victory and talk about long 481 00:29:11,320 --> 00:29:13,400 Speaker 1: term vision of logistics. But thank you so much for 482 00:29:13,440 --> 00:29:17,239 Speaker 1: coming on. My pleasure, and let's remember what's at stake here, 483 00:29:17,240 --> 00:29:20,160 Speaker 1: and this is about building a more competitive supply chain 484 00:29:20,400 --> 00:29:23,760 Speaker 1: for the future economy countries. So thank you, absolutely, thank 485 00:29:23,760 --> 00:29:35,520 Speaker 1: you so much. Job. That was great. Thanks John, appreciate it. Well, 486 00:29:35,560 --> 00:29:37,520 Speaker 1: that was really cool. And Tracy, I feel like you know, 487 00:29:37,560 --> 00:29:39,880 Speaker 1: that was It's pretty fun. Some of the players that 488 00:29:39,920 --> 00:29:42,880 Speaker 1: we've gotten to speak to in this whole story. Yeah, 489 00:29:43,000 --> 00:29:45,840 Speaker 1: I mean definitely the big ones. It's really interesting to 490 00:29:45,920 --> 00:29:49,760 Speaker 1: hear from someone who's actually holding the conversations between various 491 00:29:49,800 --> 00:29:52,920 Speaker 1: stakeholders and trying to here's one thing I was thinking, 492 00:29:53,080 --> 00:29:55,280 Speaker 1: like a lot of this is sort of just changing 493 00:29:55,440 --> 00:29:59,000 Speaker 1: behavior that seems to have become embedded in the industry, 494 00:29:59,040 --> 00:30:02,640 Speaker 1: like sort of changing Appits the idea that you know, 495 00:30:02,720 --> 00:30:05,080 Speaker 1: you just like bring your containers and then you dump 496 00:30:05,160 --> 00:30:07,360 Speaker 1: them at the ports and leave them there for a 497 00:30:07,360 --> 00:30:09,600 Speaker 1: while and it's not really a problem, or the idea 498 00:30:09,680 --> 00:30:12,400 Speaker 1: that you have to send your containers to this one 499 00:30:12,440 --> 00:30:16,960 Speaker 1: port alone rather than thinking about maybe sending them elsewhere. 500 00:30:17,040 --> 00:30:18,480 Speaker 1: Like it feels like a lot of it is just 501 00:30:18,520 --> 00:30:23,160 Speaker 1: sort of breaking habitual behavior. Yeah, that's exactly right. Like 502 00:30:23,280 --> 00:30:26,480 Speaker 1: if it's cheaper to use the port as he described 503 00:30:26,480 --> 00:30:29,200 Speaker 1: it as free storage, because let's say, okay, the warehouse 504 00:30:29,240 --> 00:30:34,480 Speaker 1: capacity inland is you have to get someone to truck 505 00:30:34,520 --> 00:30:37,120 Speaker 1: it to one of those inland warehouses a dred truck, 506 00:30:37,280 --> 00:30:39,560 Speaker 1: Like why not just leave it there as long as 507 00:30:39,560 --> 00:30:44,040 Speaker 1: you possibly can. It's clearly, you know, in a stressed environment, 508 00:30:44,400 --> 00:30:47,160 Speaker 1: it's clearly not optimal. But from a sort of like 509 00:30:47,280 --> 00:30:51,280 Speaker 1: individual actor perspective, like why change anything, And so I 510 00:30:51,320 --> 00:30:55,000 Speaker 1: thought that was like a pretty clear example of this 511 00:30:55,080 --> 00:30:57,880 Speaker 1: is a bottleneck. This is like an inefficiency. This is 512 00:30:57,920 --> 00:30:59,720 Speaker 1: a thing that was done for a while because you 513 00:30:59,760 --> 00:31:01,920 Speaker 1: could just sort of get away with it. But when 514 00:31:01,960 --> 00:31:04,440 Speaker 1: the supply chain system is stressed, this sort of like 515 00:31:04,720 --> 00:31:09,080 Speaker 1: individual micro incentives start breaking down the whole thing totally. 516 00:31:09,120 --> 00:31:11,400 Speaker 1: And I think it's good to get some sort of 517 00:31:11,640 --> 00:31:17,120 Speaker 1: clear metrics that they're looking at in reducing some of 518 00:31:17,120 --> 00:31:20,000 Speaker 1: the gridlock in the system. And I think like that's 519 00:31:20,040 --> 00:31:23,000 Speaker 1: probably where a lot of the criticism has come from. 520 00:31:23,000 --> 00:31:26,280 Speaker 1: People say it's getting better, but we don't necessarily see 521 00:31:26,320 --> 00:31:28,600 Speaker 1: it in certain numbers, or we don't know what numbers 522 00:31:28,600 --> 00:31:30,640 Speaker 1: we're supposed to be looking at. So it's good if 523 00:31:30,680 --> 00:31:34,120 Speaker 1: we can sort of benchmark the progress. Yeah, And I 524 00:31:34,160 --> 00:31:37,000 Speaker 1: hadn't thought about his point before that. It's like, Okay, 525 00:31:37,000 --> 00:31:39,080 Speaker 1: everyone likes to look at the number of vessels that 526 00:31:39,120 --> 00:31:43,640 Speaker 1: are floating out there, but ultimately maybe we should just 527 00:31:43,760 --> 00:31:46,880 Speaker 1: you know, still throughput of actual containers might be the 528 00:31:46,920 --> 00:31:48,800 Speaker 1: best metrics, and we'll have to see if they continue 529 00:31:48,840 --> 00:31:50,480 Speaker 1: to come down. Okay, you can have a few weeks 530 00:31:50,520 --> 00:31:53,800 Speaker 1: of success or some you know, it's easy to imagine 531 00:31:53,800 --> 00:31:58,720 Speaker 1: going from bad practices to mediocre practices and then you 532 00:31:58,760 --> 00:32:00,680 Speaker 1: see some improvement and then the question is can it 533 00:32:00,760 --> 00:32:04,120 Speaker 1: just be sustained? But I I hear his point about 534 00:32:04,600 --> 00:32:07,920 Speaker 1: not all, not all ships floating out there are equal size. 535 00:32:08,240 --> 00:32:10,560 Speaker 1: That was really interesting too, about the sweeper the sweeper 536 00:32:10,640 --> 00:32:14,240 Speaker 1: vessels and improving the flow of containers back, which we 537 00:32:14,280 --> 00:32:16,240 Speaker 1: sort of knew was a problem, but I hadn't actually 538 00:32:16,240 --> 00:32:19,880 Speaker 1: realized that that was being addressed in a specific manner 539 00:32:19,920 --> 00:32:24,280 Speaker 1: as he described. Yeah, definitely interesting to hear his viewpoint. 540 00:32:24,320 --> 00:32:26,240 Speaker 1: I was thinking, we need to get Jean Saroka back 541 00:32:26,280 --> 00:32:30,840 Speaker 1: on as well to talk about the cars. I think that. Yeah, 542 00:32:31,000 --> 00:32:34,200 Speaker 1: well I think stay tuned lots listeners because I think 543 00:32:34,240 --> 00:32:37,840 Speaker 1: that might be in the card soon. So yeah, stay tuned. 544 00:32:38,480 --> 00:32:42,360 Speaker 1: Truly comprehensive coverage of the efforts to improve grid luck 545 00:32:42,440 --> 00:32:46,360 Speaker 1: at America's Sports. Absolutely. Shall we leave it there? Let's 546 00:32:46,400 --> 00:32:49,200 Speaker 1: leave it there, all right? This has been another episode 547 00:32:49,280 --> 00:32:51,760 Speaker 1: of the All Thoughts podcast. I'm Tracy Alloway. You can 548 00:32:51,760 --> 00:32:55,080 Speaker 1: follow me on Twitter at Tracy Alloway and I'm Joe 549 00:32:55,120 --> 00:32:57,520 Speaker 1: Wasn't Though. You can follow me on Twitter at the 550 00:32:57,560 --> 00:33:02,080 Speaker 1: Stalwart Follower or producer Laura carl and she's at Laura M. Carlson. 551 00:33:02,400 --> 00:33:06,280 Speaker 1: Follow the Bloomberg Head of podcasts, Francesca Levi at Francesco Today, 552 00:33:06,640 --> 00:33:09,520 Speaker 1: and check out all of our podcasts at Bloomberg under 553 00:33:09,560 --> 00:33:12,080 Speaker 1: the handle at podcasts. Thanks for listening.