The real story behind ‘tweetstorm that saves Christmas’
Ryan Petersen, founder and CEO of freight forwarder startup Flexport, wanted to understand the situation in the ports of Long Beach and Los Angeles. So he rented a boat last week and circled the ship and container standoff that runs up the US supply chain.
As she cruised around San Pedro Bay, Petersen got to see first-hand the more than 70 towering container ships idling at anchor, their $ 64 billion cargo waiting to be unloaded, and the mountains of Steel crates stacked on the docks, waiting for days on end to be picked up and shipped. He learned that the docks were too crowded to accept returns of empty containers, which meant truckers couldn’t pick up a new full container because they were stuck with a vacuum on their trailer frame.
The next morning, Petersen tweeted everything – and his thread became a rare viral sensation on logistics. Big thinkers from business, politics and the media shared his tweets. Coinbase CEO Brian Armstrong shared it with comment: “Bureaucracy and red tape abound. We have to let the free market work. Charmaine Yoest, vice-president of the Heritage Foundation, demand in the thread: “Where is the leadership he calls for?” Scott Adams, Dilbert cartoonist and right-wing political commentator, added that “this appears to be the only possible solution to the supply chain bottleneck.”
Then Governor Gavin Newsom called him.
“He said a bunch of people sent him my tweetstorm – he was hit left and right – so he felt compelled to contact me,” Petersen said. He walked the governor through the wire and explained his political argument.
He had tweeted five concrete recommendations: end zoning restrictions on the height of containers that can be stacked in Long Beach and Los Angeles, call up the National Guard spare truck chassis, create a 500-acre temporary storage yard. or more within 100 miles of the port, force the railways to set up shuttles to this new site, and use a fleet of smaller boats to empty the containers from the docks.
“I let him know that I’m here as a resource, I’m not an activist, I’m not trying to piss him off,” Petersen added. “I think this is a feature that the government is slowly advancing; you don’t want them doing rash things with taxpayer dollars. But it is a problem in the midst of a crisis.
In Long Beach itself, the message went out loud and clear. Friends had tagged Mayor Robert Garcia on the wire, and he passed it on to his staff. At the end of the day, the city lifted the restriction on stacking 9-foot-high containers just two high, and now capped it at four.
“Within hours, we had all decided we had to make this change immediately,” Garcia said. The relaxed rules are in effect for 90 days and only apply to businesses that were already zoned for container storage.
“If you’re in a neighborhood, you don’t want to look at your front yard and see five- or six-story freight containers. It’s a problem of scourge and environmental justice, there’s no question about it, ”Garcia said. But with the holiday season and stacks of dockside containers looming on the horizon, he thought it was worth a try.
Twitter took a victory lap. “The Twitter thread worked! wrote Correspondent Axios Félix Salmon. “Now we just need every city to do it with every height restriction regulation, and permanently” wrote freelance journalist Matt Yglesias. A Bloomberg columnist predicted Petersen’s thread “could be the tweet storm that saves Christmas”.
The impact of this change, however, is difficult to measure. The change only applies to yards in the City of Long Beach that weren’t already zoned for higher stacking levels, which had long been in effect in the industrial area closest to the port. Over 240,000 containers are currently waiting at the docks, and over 500,000 more are on ships offshore.
The CEO of Harbor Trucking Assn., Which represents trucking companies facing these issues every day, says everything helps, but the metric doesn’t change that much. On the one hand, allowing stacks to climb higher does not guarantee that they will.
“I applaud Mayor Garcia for showing leadership in all of this, but the challenge is to get the equipment to stack that high,” said Matt Schrap. Most job sites do not have the necessary top loaders, let alone the skilled operator and the space to stack containers safely and efficiently.
The real problem, says Schrap, is simply that the shipping lines will not take back their empty containers: “The shipping companies have to come and sweep up the empty ones. Adding insult to injury, ocean carriers are charging truckers daily late fees for unreturned empty containers, Schrap said, even if they don’t accept them at the port. “It makes you want to grab your laptop and play it frisbee in the garden,” Schrap said. “It’s the frustration that runs through our veins.”
Bruce White, who owns Three Rivers Trucking in Long Beach and has the necessary equipment, said he has already stacked containers of more than two heights in any part of his yard not blocked by power lines, and didn’t see this change as more than a drop in the bucket.
“Let’s just take a two-acre yard. So what is it, maybe 100 containers? You stack them another level higher, which makes 100 lousy containers – we’re upside down by the tens of thousands, ”White said. He had to fill his yard with 85 empty containers at a time recently when a shipping company refused to accept them at the terminal. “You multiply that by what all the other truckers are doing here, think what a mess that made in just a week.”
Lisa Wan, director of operations for the RoadEx America trucking company, said the company ordered a top loader specifically to be able to move and stack containers months ago – but delivery delays meant it wouldn’t appear until next week.
“We’re lucky to have it, so we’re not complaining,” Wan said. Once that happens, they will be able to stack twenty to thirty empty containers in their yard, freeing up frames for more pickups in the ports.
She also saw signs of improvement at the port itself. Congestion has meant that individual terminals have launched calls for empty containers from some shipping companies to be returned only on certain days – and at certain time slots. But if the return empty appointment is after the appointment to retrieve a full container, neither can happen. A few terminals, Wan said, are finally relaxing their rules to allow empty deposit windows all day.
Los Angeles City Council has not considered the option of relaxing the stacking limit, and Branimir Kvartuc, spokesman for council member Joe Buscaino, whose 15th District covers the port area, said his office was opposed to allowing additional stacking in the city out of concern for residents.
But other measures – not mentioned in Petersen’s thread – are coming into force. The Port of Los Angeles and the Buscaino office are working on opening 12 lots in and around terminals that could store up to 30,000 containers, and the Port of Long Beach has already expanded its temporary storage areas to store 12 000 containers.
Local politicians are betting that a new idle container tax on docks – billed to the shipping companies themselves – will move some boxes. Starting in November, any container destined for a truck parked in either port for more than nine days will incur a charge of $ 100, followed by an increasing charge of $ 100 more each day. If a container is intended for boarding a train, these charges come into effect after only six days on the platform.
The idea is to get the shipping companies to take charge of the situation and start pushing their customers to come and collect their business.
Despite the Biden administration’s announcement in early October that the ports would operate 24/7, only one terminal in the Port of Long Beach has effectively set up 24-hour shifts, and only four days a week. At the Port of Los Angeles, according to spokesperson Phillip Sanfield, 30 to 40 percent of daytime pickup times are not being used as is, so the terminals – which are operated by private companies – are not being used. see no reason to open in the middle of the night.
But the new fees do not apply to empty containers. Schrap, the Harbor Trucking Assn. general manager, said he was baffled by the omission. The reason pickup locations aren’t being used is because empty containers take up space in the backs of trucks, he said. “These charges are a blow to shipping carriers because they need them to be incurred,” said Schrap, “but it’s mind boggling to me that this is not applied to empty containers.”
Petersen, for his part, said he was happy with the response to his tweet thread, even though policymakers are finding different solutions. Even though he Free in a tweet “to lead this effort for federal or state government if requested,” that would have meant moving away from his own rapidly growing logistics business: Flexport’s revenue on track to hit $ 3.2 billion in dollars in 2021, more than double the bookings of the previous year, according to the company.
He predicts that the traffic jam at the port will take months to resolve completely. “It’s a very complex world, and I’m very suspicious of anyone who has this clear narrative of how it’s all going to play out,” he said.
White, the owner of the trucking company, agreed and offered his own prescription. “People ask me what I think the answer is,” he said, “and I tell them: move Christmas to April, because that’s when you’re going to get your stuff. “