Craig Fuller on the Huge Challenge of Getting the Ports To Operate 24/7

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

So Tracy, we've been covering supply chain issues for quite a long time on Odd Lots.

I think probably longer than much of the media. What do you think? I feel like we've been ahead of this.

Tracy Alloway (0:31)

I think that's fair. I feel like we've certainly been talking about it for over a year in excruciating detail at times, whereas other people are only just starting to cover it somewhat superficially.

Joe Weisenthal (0:43)

Yeah, all right. So I'm glad we got that shoulder padding out of the way. But in all seriousness, one of the nice things about this is about having been talking about it for so long is A, we can have a point of reference because we've talked to some guests earlier in the year and now we can talk about how things evolved.

And as you say, we can drill deeper because every time we have one of these conversations, recently we talked to Ryan Peterson of Flexport, we recently talked about more of the commodity side, Jeff Curry, each time we have these conversations, I kind of have more questions that I want so we can sort of drill deeper.

Tracy Alloway (1:18)

Yeah, it's a really iterative conversation in some ways because every time we have a logistics or a supply shortage episode, I always come away with additional questions or thoughts. And one of the big ones that came up recently on the last episode with Ryan Peterson was that idea of why there isn't a secondary market for containers and container shipping. And this is something that has sort of come up again and again on these episodes.

In many ways, it feels like the logistics industry is kind of old fashioned.

Joe Weisenthal (1:50)

Yeah, so that's kind of what's blowing my mind in multiple ways. It's like people always talk about like the, oh, the economy is overfinancialized. And that's kind of this cliche. And oftentimes I would say people who even say that may not have a clear idea of what they even mean by that. It's just sort of this intuition that people have.

But in some ways, I feel like when it comes to logistics, the economy feels underfinancialized. There is a lack of formal financial instruments. There is a lack of like liquid secondary markets for capacity. There's a lack of hedging tools, it feels like, for many of the players in this market. And this, you know, it's all the way down the line, from shipping to rail to trucking. And so like, that's kind of surprised. And then the other thing that is interesting to me, and it's very closely related, is like the B2B market for logistics, it just feels so ancient.

Beyond the financialization, it's like, like I'm on this like, I like join like surreptitiously, this like WhatsApp group for like truck drivers. And it's basically like, people's like, no, it's like literally, it's like people's like-

Tracy Alloway (2:55)

Everyone's gonna go looking for you now.

Joe Weisenthal (2:56)

No, I know, but it's like people posting these things like, oh, anyone in Spokane, Washington have capacity. Anyone in Rockville, Maryland have capacity.

And it's like, we're used to like from like a B to C, like consumers, it's like, we get this like, we can trade QPS and FedEx and it's super like smooth. And when you like sort of look behind the scenes, everything feels like it's sort of so like, so glued together, duct taped together.

Tracy Alloway (3:23)

Yeah, it's kind of crazy to think that the supply chain depends on, you know, a random trucker seeing like something posted on a message board or WhatsApp and going, oh yeah, I'm free next week. I'll take that job. And this kind of gets back. I mean, this is very much related to the conversation we've been having for the past year or so, which is all about how do you actually solve the supply chain problem. So we are starting to see all these different solutions being proposed right now.

Biden was just talking about increasing capacity at the Port of Los Angeles.

Just last week, we're recording this on October 20th. And so it's getting more and more attention. You're seeing more and more people suggest ways to fix it. And of course, the question is, are any of those going to work?

Joe Weisenthal (4:06)

Right. And so that is sort of the big news that maybe we can key off our discussion on today. The White House clearly feeling some urgency on the supply chain stress and making this effort. It's like a multi-company effort with the Port of Los Angeles.