How Gigantic Ships Are Creating Global Supply Chain Havoc

Joe Weisenthal (0:10)

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

Tracy Alloway (0:17)

And I'm Tracy Alloway.

Joe Weisenthal (0:19)

Tracy, I know it's early morning time in Hong Kong, where you are right now, but did you hear the big news while you were sleeping?

Tracy Alloway (0:29)

Well, I'm trying to think.

I guess I didn't. What was the big news while I was sleeping?

Joe Weisenthal (0:33)

Maybe you saw it before you went to bed, just that they freed the ship.

Tracy Alloway (0:36)

Oh, yeah.

Joe Weisenthal (0:38)

Maybe that happened before you fell asleep.

Tracy Alloway (0:39)

It did, that happened during the working day in Asia. They got it floating and then they got it, I guess, more floating or more free. Yeah, it's good news for global supply chains.

Joe Weisenthal (0:53)

Global factories, retail outlets, everyone breathing a big sigh of relief as the Ever Given ship that was stuck in the Suez for six days. As of right now, we're recording this March 29th, 7 p.m. New York time, it's been free and it's floating again.

Tracy Alloway (1:13)

The thing that I really loved about this very special week where we were all focused on this one container ship that was stuck in a canal was that, first of all, everyone suddenly took an interest in global shipping and transport and global trade, which is something that usually people don't necessarily think of that much, or at least they don't think about how stuff actually gets to them. People think about global trade, but not necessarily the infrastructure and the industry that kind of underpins it.

So last week was a really good one for everyone to sort of sit back and consider how globalization actually works and how the flow of all these goods is actually affected.

Joe Weisenthal (1:56)

Absolutely. Also everyone becomes a container ship expert overnight, but the good news is you and I are kind of experts because we've actually talked to one before.

Tracy Alloway (2:07)

Hey, I have read two books on shipping. So, you know, I feel like I'm firmly up there as an expert.

I'm joking, obviously, but.

Joe Weisenthal (2:15)

Fair enough. But I am, you know, the next best thing because we did an episode back in January where we talked about container ships. And so that turned out to be very, very auspicious because then I knew like two or three facts that I was able to like put in tweets and stuff like that. Which is more than I would have otherwise been able to.

Tracy Alloway (2:36)

Well, look, it was a great episode and there are multiple issues affecting shipping at the moment. So we have the gridlock in traffic because of the coronavirus crisis and also the sort of changes in the direction of global trade. So, you know, stuff getting really snarled between China and the US because lots of people in America are just buying more and more things during the pandemic.

But then we also have a separate issue, which is that ships are so freaking big that A, they get stuck in canals and B, they also contribute to that global snarling of shipping traffic instead of actually alleviating it.

Joe Weisenthal (3:16)

Exactly right. So back in January, we talked about the high cost of shipping these days. We spoke with Marc Levinson, who is the author of The Box, famous book, The Box, how the shipping container made the world smaller and the world economy bigger.

And he said something on that episode, which was very timely, which was that a big part of the problem was that ships are just massive these days, and that creates its own problems for the logistical system of the globe. And then of course, one of the biggest ships in the world ended up jamming the Suez. And that was sort of a freak accident. There was a sandstorm, some really great reporting on exactly how it went down.

Nonetheless, it was sort of an example of what he was talking about, which is that these gigantic ships are bigger and the infrastructure for shipping is not necessarily optimized for ships these large.

Tracy Alloway (4:12)

Yeah, I think that's exactly right.

Joe Weisenthal (4:14)

So I'm very excited. We have Marc back on the podcast. Everyone loved the last one. And this time we're going to focus just on this question, the problem with really big ships. So Marc, thank you for coming back on Odd Lots.

Marc Levinson (4:29)

Hey, Joe, glad to be with you. Tracy, good to be with you tonight.

Joe Weisenthal (4:33)

So the Suez is free again.