Economics Nobel

should go to Ryan Petersen for unclogging the port of LA:

A miracle occurred this week. Everyone I have talked to about it, myself included, is shocked that it happened. It’s important to

  • Understand what happened
  • Make sure everyone knows it happened
  • Understand how and why it happened
  • Understand how we might cause it to happen again
  • Update our models and actions
  • Ideally make this a turning point to save civilization

That last one is a bit of a stretch goal, but I am being fully serious. If you’re not terrified that the United States is a dead player, you haven’t been paying attention – the whole reason this is a miracle, and that it shocked so many people, is that we didn’t think the system was capable of noticing a stupid, massively destructive rule with no non-trivial benefits and no defenders and scrapping it, certainly not within a day. If your model did expect it, I’m very curious to know how that is possible, and how you explain the years 2020 and 2021. That initial tweet got 16k retweets and 33k likes, and even the others got 1000s of likes as well, so this successfully got many people’s attention. It’s worth paying attention to the details here, as this was crafted in order to spread and be persuasive, and also crafted to make people angry or to blame anyone. It’s a call to positive action. In particular, I notice these characteristics:

  1. Starts with a relatable physical story of a boat ride, and a friendly tone.
  2. Tells a (mostly manufactured) story that implies (without saying anything false) how the ride led him to figure these things out, which gives rhetorical cover to everyone else for not knowing about or talking about the problem. We can all decide to pretend this was discovered today.
  3. Then he invokes social consensus by saying that ‘everyone agrees‘ that the bottleneck is yard space. Which is true, as far as I can tell, everyone did agree on that. Which of course implies that everyone also knows there is a bottleneck, and that the port is backed up, and why this is happening. The hidden question of why no one is doing much about this is deflected by starting off pretending (to pretend?) that the boat ride uncovered the problem.
  4. Describes a clear physical problem that everyone can understand, in simple terms that everyone can understand but that doesn’t talk down to anyone. He makes this look easy. It is not easy, it is hard.
  5. Makes clear that the problem will only get worse on its own, not better, for reasons that are easy to understand.
  6. Makes clear the scope of the problem. The port of Los Angeles effectively shuts down, we can’t ship stuff, potential global economic collapse. Not clear that it would be anything like that bad, but it could be.
  7. Gives a decision principle that’s simple, a good slogan and again can be understood by everyone, and that doesn’t have any obvious objections: Overwhelm the bottleneck.
  8. Gives a shovel-ready solution on how to begin to overwhelm the bottleneck, at 0 cost, by allowing containers to stack more.
  9. Gives more shovel-ready solutions on top of that, so that (A) someone might go and do some of those as well, (B) someone can do the first easy thing and look like it’s some sort of compromise because they didn’t do the other things, (C) encourage others to come up with more ideas and have a conversation and actually physically think about the problem and (D) make it clear the focus is on finding solutions and solving problems, and not on which monkey gets the credit banana.
  10. Makes it clear solutions are non-rivalrous. We can do all of them, and should, but also do any one of them now.
  11. Gives a sense of urgency, and also a promise of things getting better right away. Not only can you act today, Sir, you are blameworthy tomorrow if you do not act, and you will see results and rewards tomorrow if you do act. Not only reactions to the announcements, physical results on the ground. That’s powerful stuff.
  12. Ends by noting that leadership is what is missing. You could be leadership and demonstrate you’re a good leader, or you can not do that and demonstrate the opposite. Whoever solves this is the leader.

All of it is due to zoning. Zoning kills.
2021-11-05: Things are better, but far from resolved, and of course the story is more nuanced than it first appeared:

it seems clear that Ryan noticeably improved the situation, but the situation is far from solved. Solving it will be a long term process, and we’ll be playing bottleneck tennis as solving one problem highlights others and makes them worse. There’s still lots of low-hanging fruit on the logistics front, starting with Ryan’s change only being implemented in Long Beach and not Los Angeles. There’s also signs of other solutions starting to come online, and that could be helped along in terms of making it shovel-ready and finding the right physical solutions.

2022-02-15: This profile makes the case that things are much more complicated, and Ryan doesn’t understand things as well as he should. Or perhaps they’re just jealous that Flexport has a much nicer UI:

For most everyone else in the logistics business, it was exasperating. “When Ryan Petersen does his interviews, people in the industry typically get upset because he tends to simplify things a lot. He appears sometimes uninformed”. Container stacking had limited impact. Petersen’s bolder proposals, such as the creation of a government-sponsored railhead depot, remain untouched. “There isn’t a silver bullet for this.”

2022-10-06: Flexport also stepped up for Masks in a huge way

When the pandemic hit and we saw there are not enough masks in our hospitals, I found that to be totally unacceptable at a civilization level. We owe this to our first responders, to our doctors. If you asked me to go in there without a mask with some weird disease that might kill me and that no one knows anything about, to serve these patients, I don’t know if I could. These are real heroes that were willing to do it. If you don’t have masks and the doctors don’t show up for work, civilization collapses pretty soon after that. That was very unacceptable to me. I rallied a team at Flexport and we stepped up.

A big part of why there were not enough masks is because all the world’s airplanes were grounded during the pandemic. They were not really flying to China. 50% of the world’s air freight flies in the belly of passenger planes. If those passenger planes are grounded, there is no air freight capacity. We found there were lots of masks available in China. They have ramped up production, but we don’t have air freight to get them in. The rest of the world, as far as I can tell, looked at that problem, put their hands up, and said, “Eh, fuck. I guess our doctors are going to suffer. Let’s watch this on TV and see what the people are saying.”

If you listen to the problem statement, 50% of the world’s plane flies in the belly of passenger planes and those are grounded right now. The solution is so obvious. Look at all the planes that are grounded. I managed through investor networks and connections that I have been fortunate enough to build over the years. I called the airline CEOs and I was like, “Hey, can we use your planes? We are going to go get some masks to save America’s hospitals.” One hundred percent of them said yes. United Airlines gave us free flights. Atlas Airlines gave us a 747 for free. We were getting Dreamliners for a 200k round trip. Ask your super-rich friends if that is a good deal on a private plane, a round trip to China on a Dreamliner. We flew 83 planes, completely full. We filled the overhead bins and the seats. In the end, we shipped 500m masks to America’s hospitals.

It was like, “Wait a minute. Why are we the ones doing that? We’re not supposed to be in that industry.” The value in that lesson for the whole world is naïve optimism. Try it. Let’s see if we can solve the problem. You can do more than you think you can. It was very inspiring for everybody at Flexport to see, “Whoa, this is working. We actually made this happen.”

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