Interview with CEO of Flexport: Supply chain crunch, modern logistics
noahpinion.substack.com
noahpinion.substack.com
It's interesting that he got this data by asking the owners of the many different companies involved (Ports / shipping / trucking).
Is this gridlock something that could be solved at-scale through short-term government intervention? That is, could the military provide "Free" storage in a boneyard out in the desert near LA for 6-24 months? Could permits and/or fees be waived to provide incentives? Should a new "Reef" be built by depositing 10k empty containers out in the Pacific (ick!)? The problem seems to be getting worse, and tipping points best avoided...
Seems like 1-off efforts to unlock the gridlock may be needed.
Interesting podcasts for more background:
https://www.bloomberg.com/news/articles/2021-11-25/the-white...
https://podcasts.apple.com/us/podcast/gene-seroka-on-the-log...
Presumably there are complexities around this, but it sounds like they want ships to take back empties and the ships aren't because it's not worth the extra time and weight. A single actor, the port, should have the authority and incentive to demand it.
Curious why that isn't the case.
Not sure how that's anything moved. See visa/Mastercard to take your premise further.
And it seems that root cause is ships bring more containers than they take with them.
So maybe, part of the solution could be a mandate of ships to take an amount of empties?
No, that's not the root cause. The root cause seems to be a combination of cascading events that causes a deathspiral: https://cdn.substack.com/image/fetch/f_auto,q_auto:good,fl_p...
"ships bring more containers than they take with them" is a symptom, not a cause. Mandating "ships to take an amount of empties" doesn't really fix the problem because shipping companies already want the ships to fill with empties, but can't because of other factors (see chart). Forcing ships to fill ships with even more empties presumably also makes things worse, by causing ships to occupy dock space.
Abd what about toys when everyone is talking about saving Christmas ? You'll make triple sure you have one, maybe even buy several from several sources.
I've seen myself do that with difficult to import goods, and price is always a lower factor than need. Price would eventually push me out, but there s a twilight zone when it's just right to panic buy stuff that werent supposed to be rare.
The surge demand has suddenly depleted the free spots is removed until its a trickle. Then you get this result. The ships are stuck because the ports had no incentive to reserve space for empties.
Or, something like bufferbloat.
It does seem that they people who have control over this situation don't have much on an incentive to improve it.
In particular fixing any piece of this loop would fix the others... eventually they just ran the port cranes longer and opened up the hours that trucks could go in/out. Is it "solved"? No, but the local pre-Xmas crisis is averted, which is basically peak for the year.
UPS delivers the end product from a warehouse to the customer's house.
But first the company selling that product had to get thousands of units of the product from the manufacturing facility to its warehouse. Before that they had to get all of the components or raw materials for that product to the manufacturing facility. Many of those components would have been manufactured by a different company that had to get its own components and raw materials to its own facility, and on and on down the chain. And these could be huge quantities of materials that require heavy machinery to transport and a lot of coordination to make sure that's available at the right time. They can't just get dropped off at the front door like a UPS delivery.
As far as I understand it, Flexport is basically building the rails for all of the different logistics and freight companies involved in this kind of commercial shipping to talk to each other more efficiently. Apparently many of them are still using phone calls and fax machines to organize these kinds of deliveries.
Until recently UPS had freight business as well, from what I know, it wasn't doing so well and they sold it to another company. UPS has massive supply chain business, they can deliver from manufacturer to the end user, from what I know, it roughly 30% of their business. And if you $big$ enough, they can manage all your inventory and manage entire logistics needs.
Basically, if you want to buy goods from China, usually you do it by container load. You rent the container, get a 3pl ( a broker) to arrange the shipments and port
If you want to ship less than a 20 foot container load, e.g. a pallet, your goods are shared between multiple parties who also are shipping that container.
Flexport can handle those clients and also clients who want to ship full containers of goods overseas
Basically, modern online freight forwarding and logistics. That industry is still very manually driven with old tech (edi and xml) that aren't consistent across shipping ports
I would say it's kind of like the Uber eats for shipping containers... where takeout meals are pallets and Uber drivers are 40 foot containers, the hungry customer is the business buying the goods from the restaurant
That original interview experience was... interesting. I went through the usual HR type introductory interviews, and then I went through several rounds of coding interviews. Finally, I had a chat with the older gentleman who was in charge of all of their IT. From the very first moment, he seemed utterly disinterested in the call. He would not look into the camera - never made eye contact... asked questions as if reading from index cards, but registered no recognition of any responses. To me it was obvious that he either did not like me (from before we said hello) or was already determined not to hire me. That's fine, but I could have done without the awkard call. Then, two weeks later, they told me "No thanks" with no information as to why.
They were solving several problems related to shipping, one of which was managing customs. These must be complex problems. But the demos that I saw, at least 2 years ago, were very limited. And when I spoke to the recruiter a year ago, she told me that much of their activities were performed by humans instead of automated systems.
Since I'm an outsider, my perspective could be inaccurate or imagined. But to me it seems like another scenario of gathering funding but not actually having a solution. Perhaps it's a mere exposure scenario, but it seems they advertise jobs on the front page of HN more than other companies. Why do that on HN if they aren't looking for devs or if they are operating with 95% non technical staff? (this was the number provided to me by the internal recruiter)
Is the hiring process bad? Is the turn over that high? The constant advertising gives a bad impression. If they are just expanding at a good clip, it seems there are better ways.
We’ve got a lot of work to do, and HN has good people.
[1] Technically paid with the equity companies give YC I suppose
In 2015 I was laid off from a startup that unfortunately shut down.
During my search I was intro'ed by their VC to the CTO. The CTO told me they were hiring for my exact, kind of niche role. I was pretty pumped as I hadn't really lost a job before and wanted to get something new quickly.
I met the CTO at a coffee shop, he kept asking me a bunch of questions that were clearly more being asked with the intention of picking my brain about a project versus interview questions. I asked him what was up and he said they hired someone for the role the week before, but that he wanted to pick my brain so he kept our time on calendar.
I had taken BART into the city, pushed back a different interview and taken time out of my day so a CTO with a ton of funding could exploit my labor for zero compensation.
I said something along the lines of, "um, okay I need to focus on my job search, good luck." and got up to leave. He then kind of did this act as if I was being kind of a dick for not helping him.
Luckily a Director of Engineering I'd worked with at a past company was sitting two tables away and I said hi and he said he had overheard what happened and I ended up interviewing at his company.
Still, to this day, seeing all of those "Flexport is hiring!" posts has always made me wonder how much of their interview process is just wasting the time of potential employees. They seem like they have a fairly noble mission, which is why I interviewed in the first place. But man, that whole situation still feels really gross to me.
I like problems, and I like solving problems. I've been lucky enough that the pay is honestly just a bonus most of the time. Having a contact at a company I think is cool is way more valuable to me than the cost of taking a train an a few hours of my time.
Examples of some employer reputations:
- Google and Facebook both have reasonably good reputations as employers. Facebook has a reputation for paying better than their typical competitors. But both had much better brands 5-10 years ago and they have since fallen out of favour (in hn comments a lot. Not super sure about programmers at large). A lot of it is also from their worse reputation in the public discourse[1]. I think to some extent they are no-longer new exciting companies, and they are now big enough that they will do more things (in absolute terms) that people don’t like.
- Amazon has a reputation for being bad at engineering, whatever that means, yet somehow aws does much better than the competitor from Google, a company with a reputation for strong engineering. Some people will tell you it’s about sales or customer support and other people will tell you it’s about not deprecating year-old apis that don’t even have the features of the things they replaced.
- Amazon has a reputation for being a bad employer (of engineers) with lots of turnover. Some evidence could be that they (would?) backload their equity vesting schedule because of this turnover but that could also be explained by hiring more people on the margin or putting more weight on retaining employees with more tenure.
- There’s a lot of ‘working at a startup is great fun and highly profitable’ sentiment that probably advantages startups. I think some of it is true, some of it reasonably organic, and some of it promoted by VCs like pg.
- Palantir is thought to be evil by some people.
- Microsoft is uncool (I mean come on, they use windows) and supposedly has terrible or undesirable tech processes (rebase hell due to discontinuous integration, no VC at all, backwards compatibility quagmire, no ‘big’ systems) and also supposedly got full marks on the Joel test 15-20 years ago.
- Apparently if you work at an investment bank you’ll be shouted at, work long hours, and be seen as less important than the bankers, but you’ll be highly paid. (Or maybe some subset of those things)
- Some smaller companies can get an outsize positive reputation by writing good/timely/popular blog posts (two that spring to mind are cloudflare and fly.io) or through positive blog posts by employees (e.g. read Steve Yegge’s old post about the ‘good agile’)
To some extent it feels like this sort of brand should matter, but I’m not sure that’s really true. If you only hire new grads then it is probably more important to provide a lot of good free food and fun at campus recruiting events. If you are already able to hire sufficiently many acceptable candidates at an acceptable price, maybe there is no need to increase that price by putting effort into the brand. I think it’s also true that many professional programmers don’t care about or share the opinions about companies that are frequently posted and highly voted on HN, and it is easy to ignore such opinions when weighing up other aspects of a job offer.
On the other hand it feels like some companies do poorly at this by not doing anything at all so improvements could be relatively easy like changing the interview process to avoid candidates feeling shit about it or ‘free’ cultural/process changes like making it easier for employees to produce quality company blog posts. Even a seemingly good organic reputation could be bad if it comes from the wrong place and if you don’t present much of a brand that can be a lot of what you’re left with. It’s also possible to get a poor reputation in a hard-to-control way like Citadel Securities (the market-maker) getting a poor reputation from people who believe what they read on Reddit (while maybe those Reddit true-believers wouldn’t be good hires there is likely still an effect on the margin)
If you’re applying for jobs then it might be worth keeping these reputations in mind: some companies could be better or worse than you’d expect because you’re naturally biased by their poor/good brand.
[1] I think partly they are rightly unpopular, partly the single (er, double) biggest threat to any publication, and partly an easy punching bag for politicians
I don't know anything about Flexport, I know about hiring tech that perhaps helps you to understand what goes behind such processes.
Hiring tech usually can be grouped in 4/5 buckets. Applicant Tracking Systems(ATS) /Workflow tools, Sourcing, Screening / Selection , Offer / Negotiation and Finally on-boarding. In each category depending on type of hire(Full Time/Contract), departments/skills(tech/sales/finance etc), and geographic locations(U.S./Europe/Mexico etc) you could end needing dozens of tools.
It is not unusual for a startup not have tools to manage their workflows yet, the hiring processes evolve a lot in early stage companies, they insource/outsource and shift all the time, each dept or new VP brings theirs own ideas with little standardization etc. Few startups invest in an ATS ( not just buy actually put effort to deploy) at < 500-1,000 head count. It takes a long time for all this to settle down for any growing company.
Workflow tools like ATSes are systems of records designed for compliance and to help the recruiter not the candidate. That means most recruiters have little incentive to update the records of a rejected candidate into the system, they are only measured by offers made/ joined etc, once you are rejected a typical recruiter will loose interest fast, few would even let you know that properly, even fewer would know why you were rejected and update the system ( if it exists at all) .
Hiring managers are also guilty, post an interview rarely do they give comments( to the recruiter after the interview) even if they do, it is even less likely that those can be be shared to a candidate.
Also finally even for companies working on solving hiring problems, it is not easy to solve their own hiring process issues. It is rare for one company to be building all the tools needed by a company to hire. i.e. HackerRank/Codility may build great coding tools, but they still need to use ATS or sourcing tools in their hiring processes, and that can mean their processes are also not perfect and have similar problems.
Interviewed with three different logistics companies last year and the experience got less and less friendly as I made my way up the chain in each of them. All frowning at me in a "well, I don't know about that" kind of way before we even spoke. Maybe they all had gas, I have no idea what was going on.
This is an established business play for VC backed startups.
A SAAS is always two things, the product, and sales. You absolutely must have sales, because no matter how good the product is, you don't have a business if nobody buys it. So the product is optional.
The pitch is "We're the completely automated solution for X", but internally everything is done by hand. You then try to find some customers. If you don't get product-market fit, you shut down without having to spend anything on engineering. But if you do get product-market fit, great! Time to build out the actual automation. During the gap, it doesn't matter how bad your unit economics are, you can just use infinite VC money to hire thousands of people while promising the board you'll eventually lay them all off. You will experience hypergrowth during this period because you can underbid everyone else thanks to your endless spigot of money.
Look at the careers page: https://www.flexport.com/careers/jobs/ Lots and lots and lots of openings for account managers and client solutions associates. I guarantee you these people spend 8 hours a copy and pasting stuff from one form to another, or on the phone reading the contents of text boxes to someone who enters that text into their own green screen terminal.