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Supply Chain Solution: “Overwhelm the Bottleneck”


Thread by @typesfast on Thread Reader App – Thread Reader App

Yesterday I rented a boat and took the leader of one of Flexport’s partners in Long Beach on a 3 hour of the port complex. Here’s a thread about what I learned.

First off, the boat captain said we were the first company to ever rent his boat to tour the port to see how everything was working up close. His usual business is doing memorial services at sea. He said we were a lot more fun than his regular customers.
The ports of LA/Long Beach are at a standstill. In a full 3 hour loop through the port complex, passing every single terminal, we saw less than a dozen containers get unloaded.

There are hundreds of cranes. I counted only ~7 that were even operating and those that were seemed to be going pretty slow.
It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.
Right now if you have a chassis with no empty container on it, you can go pick up containers at any port terminal. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis.

“The circulatory system our globalized economy depends on has collapsed.”

 

If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container. And if nobody goes to pick up the next container, the port remains jammed.

With the yards so full, carriers/terminals are being highly restrictive in where and when they will accept empties.

Also, containers are not fungible between carriers, so the truckers have to drop their empty off at the right terminal. This is causing empty containers to pile up. This one trucking partner alone has 450 containers sitting on chassis right now (as of 10/21) at his yards.

This is a trucking company with 6 yards that represents 153 owner-operator drivers, so he has almost 3 containers sitting on chassis at his yard for every driver on the team.

He can’t take the containers off the chassis because he’s not allowed by the city of Long Beach zoning code to store empty containers more than 2 high in his truck yard. If he violates this code they’ll shut down his yard altogether.

With the chassis all tied up storing empties that can’t be returned to the port, there are no chassis available to pick up containers at the port.

And with all the containers piling up in the terminal yard, the longshoremen can’t unload the ships. And so the queue grows longer, with now over 70 ships containing 500,000 containers are waiting offshore. This line is going to get longer, not shorter.

This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.

Alright how do we fix this, you ask? Simple. And we can do it fast now.

When you’re designing an operation you must choose your bottleneck. If the bottleneck appears somewhere that you didn’t choose, you aren’t running an operation. It’s running you.

You should always choose the most capital-intensive part of the line to be your bottleneck. In a port that’s the ship to shore cranes. The cranes should never be unable to run because they’re waiting for another part of the operation to catch up.

The bottleneck right now is not the cranes. It’s yard space at the container terminals. And it’s empty chassis to come clear those containers out.

In operations when a bottleneck appears somewhere that you didn’t design for it to appear, you must OVERWHELM THE BOTTLENECK!

Here’s a simple plan that @POTUS and @GavinNewsom partnered with the private sector, labor, truckers, and everyone else in the chain must implement TODAY to overwhelm the bottleneck and create yard space at the ports so we can operate against.

1) Executive order effective immediately overriding the zoning rules in Long Beach and Los Angeles to allow truck yards to store empty containers up to six high instead of the current limit of 2. Make it temporary for ~120 days.

This will free up tens of thousands of chassis that right now are just storing containers on wheels. Those chassis can immediately be taken to the ports to haul away the containers.

2) Bring every container chassis owned by the national guard and the military anywhere in the US to the ports and loan them to the terminals for 180 days.

3) Create a new temporary container yard at a large (need 500+ acres) piece of government land adjacent to an inland railhead within 100 miles of the port complex.

4) Force the railroads to haul all containers to this new site, turn around and come back. No more 1500 mile train journeys to Dallas. We’re doing 100-mile shuttles, turning around, and doing it again. Truckers will go to this site to get containers instead of the port.

5) Bring in barges and small container ships and start hauling containers out of long beach to other smaller ports that aren’t backed up.

This is not a comprehensive list. Please add to it. We don’t need to do the best ideas. We need to do ALL the ideas.

We must OVERWHELM THE BOTTLENECK and get these ports working again. I can’t stress enough how bad it is for the world economy if the ports don’t work. Every company selling physical goods bought or sold internationally will fail.

The circulatory system our globalized economy depends on has collapsed. And thanks to the negative feedback loops involved, it’s getting worse not better every day that goes by.

I’d be happy to lead this effort for the federal or state government if asked. Leadership is the missing ingredient at this point.

Comments on this entry are closed.

  • leelu October 23, 2021, 7:47 AM

    He was kinda making sense until he got to the ‘force the trains to do 100 mile loops.
    If you cab keep from rolling on the floor laughing till the end, you will see he’s putting himself for the job of clear the docks czar.
    Tool.

  • Ann Barnhardt October 23, 2021, 7:53 AM

    Isn’t it adorable how he thinks this isn’t intentional, and that catastrophic global economic collapse isn’t the conscious goal?

    • Mike Austin October 23, 2021, 8:39 AM

      Indeed. I thought the same thing—except I didn’t use the word ‘adorable’! He recognizes the effects but not the cause. His ‘solutions’ therefore would solve nothing.

    • Sisu October 23, 2021, 9:02 AM

      Ann, I understand your cynicism but think in the above article it is misplaced. … Perhaps some thinking member(s) of the bureaucracies are realizing “the Grand Plan” to destroy the economy and country is failing (or in need of “better” leadership); they will read this article, and realize it presents more than a comprehensive set of specific steps to alleviate the “bottleneck”, it offers a “face saver” to the demoncrats who only know how to destroy not “fix / solve” any societal problem. … Thus, what if a “hero(ine)” demonrat were to seize the opportunity ? … Constantly, the lower level sociopaths will see an opportunity to gamble, form a cabal for the sole purpose of promoting themselves, and thus either lead or partially usurp the national and state sociopaths. Remember the system rejuvenates and perpetuates itself based on competition among the sociopaths; each is always attempting to “game” another and their cabal.

  • John Venlet October 23, 2021, 8:06 AM

    It’s a pity that the U.S. no longer seems to have the men, the minds, nor the can do attitude that managed to defeat the blockade of goods accomplished by The Berlin Airlift, back in the day.

    • Mike Austin October 23, 2021, 3:08 PM

      The Berlin Airlift was more than 70 years ago. We no longer possess the foundational elements that we did then. Recall that we built the Empire State building in 18 months—in the middle of the Great Depression. Could we accomplish that today? Stop laughing.

  • Anne October 23, 2021, 8:37 AM

    Excuse me. I don’t know what a “chassis” is in this situation. Of course, I understand the term relating to cars, trucks, etc. Just not sure what part of this system it is.

  • Richard October 23, 2021, 8:58 AM

    As with everyone of these fabricated”crises”, the question remains: who benefits? All part of teeing up the ball for the Great Reset. Lowered expectations, social credit scores, and the tender mercies of Bolshevism.
    Let’s go, Brandon!

    • Mike Austin October 23, 2021, 9:13 AM

      All true. You hit it on the head.

      And—of course—“Let’s Go, Brandon!”

    • Anne October 23, 2021, 9:53 PM

      A picture always helps!

  • Dirk October 23, 2021, 10:21 AM

    Really, do you people really believe a few hundred ships anchored out, is the issue? Do you really think Unions, and shipyards are causing a world wide shortage. Or do you believe it when a “ official” says in substance, this shortage will self correct AFTER everybody get the shots?.

    Your lords are punishing you, for being very bad citizens, in fact their replacing you with the “Putty People” from around the world. Their playable, and absolutely corruptible, difference is give a Afganny a dollar, where we require at least 500.00 to shrug your principles off.

    I don’t need to be right, my hedge, on food/ life longevity is pure gold.

    Regardless, SEVEN, plus years of food stashed around, a couple counties,,,,,make Us inflation proof.

    I’ll ask again, WHO here didn’t see this, and worse coming.

    But then in a few years we’ll all be laughing,,, joking about that third Obama term, you know the one, he mention, when he recently described his “ Ideal dream job”,,,,,,,as running a country, from his basement, with zero accountability.

    FuckJoe Biden, really should be Fuck Obama”.

    VI

    • Vanderleun October 23, 2021, 10:24 AM

      How about… “FUCK JOBAMA”?

      • Sisu October 23, 2021, 10:56 AM

        You should consider adding “Like/Dislike” or “Thumbs-up/Thumbs-down” “buttons”.

        Regardless, “F**K JOBAMA” gets a “Like”.

      • Mike Austin October 23, 2021, 11:46 AM

        Trojan Horse or Manchurian Candidate? I’ve been thinking a great deal lately—not always a good and noble thing for me to do—about the real relationship between Obama and Biden. What if…it was Biden all along and not Obama? Biden has been in government 4 times longer than Obama. It was Biden who sat at Obama’s right hand all during those grotesque “Obama Years”. And Obama at his worst was nothing like we are seeing today with Biden, who is far more radical than even the most jaded of conspiracy theorists even conceived about that Muslim, bi-sexual and friendless mulatto. Biden wiped out four years of Trump in two weeks. Biden appears to be Obama on steroids, cocaine and meth as he carries out everything Obama—or who was really behind him—ever dreamed of. Obama tried to hide his hatred of the American people. Biden wears this hatred on his shirtsleeve.

        The media has told us for years that Biden was “just old Joe”, “lunch pail Joe” and an old union man with close ties to hard working Americans. Not even the media could make any such claim about that sleek sociopath Obama. And some of Obama’s people have come out publicly against Biden’s policies both foreign and domestic.

        So what’s going on here?

        • John P Coggeshall October 23, 2021, 7:22 PM

          Hey…no…really…NO, REALLY…after 50 or so years in “government”…do you actually think that “Joe Biden” is that smart?…personally, I have not been asleep for 50 or so years…

          • Mike Austin October 24, 2021, 5:35 AM

            I never mentioned intelligence. Perhaps you could infer a rather low cunning in Biden. There is a reason he has been elected and re-elected to office for some 40 years now. Since you have been awake that entire time, perhaps you would be kind enough to inform me how that happened.

      • Dirk October 23, 2021, 2:21 PM

        Works for me.

        • Anonymous October 23, 2021, 4:10 PM

          Nothing a precisely placed .300 Winchester Magnum can’t fix in a jiffy.

  • ghostsniper October 23, 2021, 11:25 AM

    1000’s of empty containers
    1000’s of homeless derelicts
    match made in heaven

    For the slow folks: Pack the containers full of homeless, send the containers to distant lands.

  • Dennis October 23, 2021, 11:44 AM

    Watch out, they get upset when you disparage their JOBAMA’S!

    Let’s go, JOBAMA!

  • Dennis October 23, 2021, 11:52 AM

    Also check this interesting liberal ball and chain spelled out on Watts up with that.

    https://wattsupwiththat.com/2021/10/21/are-californias-strict-emissions-laws-causing-us-supply-chain-chaos/

    • Mike Austin October 23, 2021, 3:00 PM

      My guess would be that this is just another link in the whole drama of the entirely government-caused “supply chain chaos”. Interestingly, a concomitant problem associated with this “chaos” is inflation—again, a government-caused problem.

      The solution to this is quite simple: China needs to export goods to the US, as her economy is on the verge of bankruptcy due to, among several other factors, the collapse of Evergrande, China’s second largest real estate developer. China will, sooner rather than later, order her Manchurian Candidate and his acolytes to solve the problem. Biden will of course obey. And of course take the credit.

      Writers commenting on this issue seldom understand—or admit—that China needs the US far more than the US needs China. If I owe you $100, that’s my problem. If I owe you $24,000,000,000,000, that’s your problem. Good luck getting me to pay. Imagine if the US simply said, “Ok, we are bankrupt. Tough break for those whom we owe money.” Of course the international types at Financial Times and the Economist would go into cardiac arrest and come up with myriad reasons why that cannot be done. Pundits—fellators, really—like David Goldman, Fred Reed and Thomas Friedman would clutch their pearls and cry into their box wine. But normal folks would be fine except they would not have Walmart anymore.

      So the two main factors at play here are: 1. China desires to completely outmatch the US economically, politically and militarily; 2. China also desires to enrich herself at the expense of the US.

      These two desires cannot happen at the same time. China will of course choose number 2.

      • Dennis October 23, 2021, 7:48 PM

        Guess?

  • Poor Richard October 23, 2021, 2:42 PM

    I have another idea to clear the port. I call it the LA Tea Party. Create an artificial extension to the port with it all and get Americans back to work making things we need. We don’t need an Iphone 16. We don’t need cheap, dangerously made toys from China.
    Stop the whining and start the doing.

  • Casey Klahn October 23, 2021, 6:19 PM

    I read an article saying empty containers were being discarded in people’s yards. Which must be because there are no outbound ships to accept the empties – which means the next shipping run will be short containers – which means WTF didn’t I horde more shit when Biden was sworn in?
    I’ll just say, because I can, that 20 plus years ago I ran a large warehouse in Seattle (on what now is the CHAZ location). The word came down that warehouses were obsolete, and that supply would henceforth be “just in time”. I shook my head. My informed and rational brain knew that warehouses are way cheaper than the interruptions that would occur when the button-pushers and the data geeks took charge.
    The bottleneck will end, someday. In its wake will be headaches, poverty and deprivation, and for some time to come. Fucking Joe Biden is the least we should do to him (and his gang).

  • Anne October 23, 2021, 9:57 PM

    This “mess” is a result of our new masters (Democratic party) not having the spine to stand up to China–the new owners of said party (Zukerberg, Gates, etc.) want to make a nice deal. But, we must never for a minute turn our back on our own unions–what do they want? The confusion comes from the new leadership in the party not being nearly as smart as they think they are!

  • Anne October 23, 2021, 10:59 PM

    Darn. I just remembered that prior to the Red revolution in China there was a 2 year famine.
    Hunger and deprivation in Russia was the lead up to the Bolshevik revolution.
    Do you suppose our new party of the people expect us to be more amenable, more docile, more obedient and less confrontational after a year or two of hunger?

    • Mike Austin October 24, 2021, 5:56 AM

      Hunger and famine have been part of Asian and Russian history for hundreds of years. Sometimes these were caused by Nature; sometimes they were caused by man. They have also been part of warfare since Sumer. Sieges were usually undertaken for the reasons you listed, to render an enemy “more amenable, more docile, more obedient and less confrontational after a year or two of hunger”.

      As for the US Government using this tactic against its domestic “enemies”: probably impossible. Certainly it can starve out those big, Democrat run cities like Chicago and Atlanta. But how to starve the people who actually run the farms in the American Midwest? These folks tend to be conservative and tend to have millions of guns. And most of these areas are either self-sufficient or can acquire necessary goods from like-minded states.

      Take my own state of Oklahoma. We have oil, natural gas, pigs, cattle, wheat, barley—and lots and lots of guns. How many of these can Blue States produce? It is not we who will be starved into submission, but they.

  • Snakepit Kansas October 24, 2021, 10:12 AM

    Threadreader started out correct with efforts to exploit constraints, but then falls into the trap of thinking one person can think of everything, and command the private sector to comply with his directives without understanding what problems such commands would inevitably create. This is how central planning works, or in reality does not work.

    The Theory of Constraints Handbook details how to begin solving problems such as the overload of container ships at our ports. Identification of where the problem is at was well identified by Threadreader in noting that only a few of the cranes were working unloading ships due to lack of space to put containers. Let’s assume from this observation that IS the constraint. Exploit the constraint and find out why the containers cannot be removed as fast as they could be unloaded from the ships. My guess is that private industry already knows what the solution is, but there is a legal or union rule preventing this from being solved. I would ask the managers and workers at that site what they needed to clear out the queueing area. I bet you a Ben Franklin you could find an answer in 15 minutes. Solve whatever it is preventing faster movement from queueing and then you can unload ships faster. All we have done is moved the constraint away from the loading docks and further down the processing line. Not far down the line there will be problems with capacity of truckers, union rules or some other NEW constraint to work on BECAUSE we have MOVED the constraint. Solve that problem and keep it moving. Rinse and repeat. This is how problems are solved in manufacturing. Unfortunately, union rules or environmental regulations or some other intervention (good or bad) by the government has likely contributed to our current supply chain problem. A good manager will identify constraints and remove hurdles so that people working the job can improve the situation. Chances are we do not need the National Guard, or a new Supply Chain Czar or Executive Action to solve this. It will not be fixed over night, but it can improved and resolved in much shorter time than with central planning. I shut up now.

    • Mike Austin October 24, 2021, 2:25 PM

      “I shut up now.” Please do not. You make a great deal of sense.

    • Redgrandma October 26, 2021, 4:07 AM

      I own a small warehouse company. I have been hearing for at least the past year or two that the delay in getting some of my clients goods in has been the lack of chassis. That is still the problem increased by an order of magnitude. The bottleneck has been clearly identified and it has been building for some time. If the government can halt the pipeline and the border wall with the stroke of a pen, it can rapidly implement some of the suggested solutions here the same way. They are either too stupid, arrogant or evil to do so. Probably a mix of all three.

  • kyo ritendo October 24, 2021, 11:02 AM

    https://market-ticker.org/akcs-www?post=244006

    karl denniger explains why the cargo bottleneck is happening, and why this proposed “simple solution”, isn’t.

    • Mike Austin October 24, 2021, 2:32 PM

      Denninger is an acquired taste; Either one likes his style or one does not. He can be—and usually is—a bit acerbic. He tends to write too much. (I recognize that tendency all too well.) He also cares not a whit what others think of him. And he is a bit of a weirdo.

      I’ve been reading him for years. And will continue to do so. He is sort of a prophet. Prophets are always on the odd side. Always.

  • Fletcher Christian October 24, 2021, 3:52 PM

    I confess to not knowing for sure what the problem actually is in the USA, but I strongly suspect that it’s related to transport; specifically, truck drivers and a shortage thereof.

    Over here in the UK, shortages of all manner of goods are developing, and basic ones at that such as food and cleaning supplies. And one reason is a shortage of truck drivers.

    Truck drivers, as a group, have in the UK been badly treated (appalling food and accommodation at truck stops, being treated with contempt by low-level managers at the places they deliver to and pick up from, that sort of thing) and underpaid for many years. When the pandemic hit many truckers had to stop working; when it ended, many of the older ones decided not to re-start. And young people tended not to join the profession in the first place. The average age for HGV drivers in the UK is around 56.

    Add to that, the shutdown of training schools and test centres for truck drivers for 18 months, and one has a big problem.

    What’s the solution? Simple. Fire all the assholes who think they, who do nothing but shuffle paper all day are superior to people who get their hands dirty. Pay the truckers more, and improve their working conditions. And, just possibly for a short while, offer cheap government-backed (I didn’t say funded!) loans for the necessary training. And extend the hours for test centres; after all, the testers have just had an 18-month vacation.

    Of course, none of that will get done. What will get done is already happening; blame Brexit.

    • Mike Austin October 24, 2021, 5:17 PM

      “I confess to not knowing for sure what the problem actually is in the USA.” Wow. Ok then. Admitted ignorance is still ignorance. Which—of course—leads to impotence.

      “What’s the solution?” Not the ones you proposed. It is not the time for debate, legislatures, essays—or any such things. It is the time for war. I have no idea if the UK will survive. Your nation has been completely subsumed by woke nonsense and “vaccine” mandates. Your people have lost the ability to fight for their own freedom. As such, they are little more than cattle to your ruling classes. In Aristotle’s words, “natural slaves”. Good Lord, your “Health Secretary” is some foreigner named Sajid Javid. Such a real “English” name!

      You blame Brexit? Ok then. As if all of Europe is not heading toward a “vaccine passport”. Brexit would have had no effect at all.

      The future belongs to those who can fight for what they believe. That is, Americans who have 100,000,000 guns. I hope you have heard of this fellow Ecclesiastes:

      “A time to love, and a time to hate; a time of war, and a time of peace.”—3:8

      You Brits cannot fight for anything. Go into the boxcars. After all, your Health Secretary demands it. Obey.

      I thank God for 1776 when real men kicked your ass and gained their freedom. You know that word, freedom? Slave.