How the World's Companies Wound Up in a Deepening Supply Chain Nightmare

Tracy Alloway (0:10)

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

Joe Weisenthal (0:16)

And I'm Joe Weisenthal.

Tracy Alloway (0:18)

Joe, remember the Ever Given?

Joe Weisenthal (0:20)

Yeah, that was a great story. It's not over yet, is it?

Tracy Alloway (0:25)

So possibly my favorite sort of finance, eco story of all time, it's still going. So there's still this legal thing over what's going to happen to all the actual things that were on the Ever Given after it was stuck in the canal.

And people are still trying to clear the backlog of container ships, the sort of logjam that came from the blockage, months at this point after the thing was actually stuck.

Joe Weisenthal (0:52)

Right, so it wasn't actually stuck, like sort of blocking the canal for that long. I think it was like about a week maybe, or something around that. But it caused all kinds of issues, obviously, and they had to have this huge rescue effort, and that cost all kinds of money.

And then the last I heard about it, I don't know, I probably read an article like a week or two ago, there was some sort of like, some issue with like the boat, the vessel not being allowed to actually continue on its journey until the owners paid up for the rescue operation, and then I sort of lost track of it after that.

Tracy Alloway (1:27)

Yeah, that's exactly right. And of course, the Ever Given, it's sort of, I guess, symbolic of all these logistics stalls that we've had recently during the coronavirus crisis.

And we talked about it before in various episodes, we've talked about basically the surging traffic and shipping container rates going up, but we've also talked about this idea that there's a shortage of lots of different things, including lumber, including semiconductors, and the logistics snarls really play into that, because if you already have a shortage of things like semiconductors, plus you can't actually move them to where they need to be, then everything just gets compounded.

Joe Weisenthal (2:07)

Right, I was just about to use that word compounding, because that's really what it feels like. Like the Ever Given story was like kind of wild, the ship got turned and went into the bank, and that was kind of weird. But it really was sort of like the perfect emblem of this moment, because there are just so many issues. We recently did that episode about with the lumber trader. And so then after that episode, I was like reading about, or I was like following like one of the big sawmill companies, I read their earnings report, and they missed earnings.

Tracy Alloway (2:36)

Joe, I read about this.

Joe Weisenthal (2:38)

Oh, you did?

Tracy Alloway (2:39)

Joe, you read this from my post.

Joe Weisenthal (2:40)

Oh.

Tracy Alloway (2:41)

Yes, you published it.

Joe Weisenthal (2:43)

That was the thing about how...

Tracy Alloway (2:44)

The sawmill company, yeah.

Joe Weisenthal (2:46)

Yeah, they couldn't get enough truck.

Tracy Alloway (2:47)

Yeah, money.

Joe Weisenthal (2:48)

Right.

Tracy Alloway (2:49)

It should have been minting money, but it wasn't.

Joe Weisenthal (2:51)

Sorry. Of course you beat me.

Tracy Alloway (2:53)

Because they couldn't actually move the wood. Okay, so we're all on the same page.

Joe Weisenthal (2:57)

So anyway, all these things are piling up on top of each other, and ships and trucks and boats.

And it doesn't feel like we're getting any closer to some sort of equilibrium. Of course you beat me to that story, Tracy. I don't know why I would have ever suggested otherwise.

Tracy Alloway (3:09)

But look, what's really interesting, well, I'll tell you one thing. I've been trying to ship something on a container from Hong Kong to LA for months now, and I cannot get room on a ship for love or money. So, you know, I've been trying to do this for the purposes of journalism slash science. So I personally know how bad it is.

And the guest that we're about to speak to on Odd Lots is someone that I got in touch with to try to give me some logistics advice and figure out what was going on with my own container shipping woes. And he's really the perfect person to talk to about this, because not only is he the head of a tech platform for global logistics, so this is what he does day in and day out, but he also has about 40 containers still stuck on the ever given. So he can talk about that situation as well.

Joe Weisenthal (4:00)

Well, I'm really looking forward to this. I'm hoping to learn something, and hopefully you get some advice on making your shipment.