On solving the worldwide shipping crisis


The worldwide shipping crisis is bad. Here are some reasons:

  1. “Just in time” manufacturing, shipping, delivery, and logistics. For several decades, the whole supply system has been optimized for “lean” everything. On the whole, no part of it fully comprehends breakdowns outside the scope of immediate upstream or downstream dependencies.
  2. The pandemic, which has been depriving nearly every sector of labor, intelligence, leadership, data, and much else, since early last year.
  3. Catastrophes. The largest of these was the 2021 Suez Canal Obstruction, which has had countless effects upstream and down.
  4. Competing narratives. Humans can’t help reducing all complex situations to stories, all of which require protagonists, problems, and movement toward resolution. It’s how our minds are built, and why it’s hard to look more deeply and broadly at any issue and why it’s here. (For more on that, see Where Journalism Fails.)
  5. Corruption. This is endemic to every complex economy: construction, online advertising, high finance, whatever. It happens here too. (And, like incompetence, it tends to worsen in a crisis.)
  6. Bureacracies & non-harmonized regulations. More about this below*.
  7. Complicating secondary and tertiary effects. The most obvious of these is inflation. Says here, “the spot rate for a 40-foot shipping container from Shanghai to Los Angeles rising from about $3,500 last year to $12,500 as of the end of September.” I’ve since heard numbers as high as $50,000. And, of course, inflation also happens for other reasons, which further complicates things.

To wrap one’s head around all of those (and more), it might help to start with Aristotle’s four “causes” (which might also be translated as “explanations”). Wikipedia illustrates these with a wooden dining table:

  • Its material cause is wood.
  • Its efficient cause is carpentry.
  • Its final cause is dining.
  • Its formal cause (what gives it form) is design.

Of those, formal cause is what matters most. That’s because, without knowledge of what a table is, it wouldn’t get made.

But the worldwide supply chain (which is less a single chain than braided rivers spreading outward from many sources through countless deltas) is impossible to reduce to any one formal cause. Mining, manufacturing, harvesting, shipping on sea and land, distribution, wholesale and retail sales are all involved, and specialized in their own ways, dependencies withstanding.

I suggest, however, that the most formal of the supply chain problem’s causes is also what’s required to sort out and solve it: digital technology and the Internet. From What does the Internet make of us?, sourcing the McLuhans:

“People don’t want to know the cause of anything”, Marshall said (and Eric quotes, in Media and Formal Cause). “They do not want to know why radio caused Hitler and Gandhi alike. They do not want to know that print caused anything whatever. As users of these media, they wish merely to get inside…”

We are all inside a digital environment that is making each of us while also making our systems. This can’t be reversed. But it can be understood, at least to some degree. And that understanding can be applied.

How? Well, Marshall McLuhan—who died in 1980—saw in the rise of computing the retrieval of what he called “perfect memory—total and exact.” (Laws of Media, 1988.) So, wouldn’t it be nice if we could apply that power to the totality of the world’s supply chains, subsuming and transcending the scope and interests of any part, whether those parts be truckers, laws, standards, and the rest—and do it in real time? Global aviation has some of this, but it’s also a much simpler system than the braided rivers between global supply and global demand.

Is there something like that? I don’t yet know. Closest I’ve found is the UN’s IMO (International Maritime Organizaiton), and that only covers “the safety and security of shipping and the prevention of marine and atmospheric pollution by ships.” Not very encompassing, that. If any of ya’ll know more, fill us in.

[*Added 18 October] Just attended a talk by Oswald KuylerManaging Director of the International Chamber of Commerce‘s Digital Standards initiative, on an “Integrated Approach” by his and allied organizations that addresses “digital islands,” “no single view of available standards” both open and closed, “limited investments into training, change management and adoption,” “lack of enabling rules and regulations,” “outdated regulation,” “privacy law barriers,” “trade standard adoption gaps,” “costly technical integration,” “fragmentation” that “prevents paperless trade,” and other factors. Yet he also says the whole thing is “bent but not broken,” and that (says one slide) “trade and supply chain prove more resilient than imagined.”

Another relevant .org is the International Chamber of Shipping.

By the way, Heather Cox Richardson (whose newsletter I highly recommend) yesterday summarized what the Biden administration is trying to do about all this:

Biden also announced today a deal among a number of different players to try to relieve the supply chain slowdowns that have built up as people turned to online shopping during the pandemic. Those slowdowns threaten the delivery of packages for the holidays, and Biden has pulled together government officials, labor unions, and company ownership to solve the backup.

The Port of Los Angeles, which handles 40% of the container traffic coming into the U.S., has had container ships stuck offshore for weeks. In June, Biden put together a Supply Chain Disruption Task Force, which has hammered out a deal. The port is going to begin operating around the clock, seven days a week. The International Longshore and Warehouse Union has agreed to fill extra shifts. And major retailers, including Walmart, FedEx, UPS, Samsung, Home Depot, and Target, have agreed to move quickly to clear their goods out of the dock areas, speeding up operations to do it and committing to putting teams to work extra hours.

“The supply chain is essentially in the hands of the private sector,” a White House official told Donna Littlejohn of the Los Angeles Daily News, “so we need the private sector…to help solve these problems.” But Biden has brokered a deal among the different stakeholders to end what was becoming a crisis.

Hopefully helpful, but not sufficient.

Bonus link: a view of worldwide marine shipping. (Zoom in and out, and slide in any direction for a great way to spend some useful time.)

The photo is of Newark’s container port, viewed from an arriving flight at EWR, in 2009.

  1. Mike Warot’s avatar

    My understanding is that Los Angeles has additional confounding factors including labor relations/union issues, a shortage of drivers, a set of environmental laws which took a large chunk of the fleet of trucks out of the state, and a law sunsetting internal combustion engines by 2035 which is making it even worse.

    I feel like California is going insane and everyone is going to jump ship.

  2. Doc Searls’s avatar

    I’m sure there are too many confounding factors in all directions.

    As for California, I do like the ship, and miss it here in Indiana. (Though I do like it here too.)

    BTW, congratulations on being the first to post a comment since the system got fixed. Apparently. Comments haven’t been possible here for at least a couple of years.

  3. Tamas’s avatar

    we will have a big inflation problem

  4. Georg’s avatar

    There are long lines of trucks waiting to pick up and drop off containers at the ports in Los Angeles. Will hiring more drivers help with this problem? No. Does this have anything to do with not enough trucks? No. These drivers are paid by per-container delivery, not by the hour, so hiring more drivers will just mean more drivers getting screwed by waiting in line. The port may be a mess, but it does not have ideological causes.

Reply

Your email address will not be published. Required fields are marked *