Founder and CEO of Flexport. Tariff whisperer
USA
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- Followers 523,845
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Flexport is hiring salespeople in the US, Canada, Mexico, Netherlands, Germany, Denmark, Sweden, Belgium, UK, Ireland, Spain, France, Italy, Switzerland, Singapore, China, India, Thailand, Taiwan, Indonesia, Australia and probably somewhere else I forgot
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Flashback to when the mob in San Francisco took down the statue of Ulysses S Grant, the Union general who won the civil war and freed the slaves.
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46% tariff on Vietnam and 49% on Cambodia is an absolute bomb. So many companies moved all their production there to get out of China.
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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.
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I saw two guys smoking fentanyl and a guy taking a dump on Market street in Sn Francisco during my afternoon walk yesterday.
I also got a ticket for running a stop sign on my bicycle and city fire inspectors are making my company dismantle all our office phone booths bc they don’t have sprinklers.
Anarcho tyranny
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Me remembering the last time I thought about the Port of Baltimore this much...
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I’ll never understand people who choose the aisle seat over the window seat.
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The cyber attack that has rendered the largest international logistics company in the U.S. totally non-operational since last Sunday seems under-reported.
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So we’re exempting all advanced electronics from Chinese tariffs and putting a 125 pct tariff on textiles and toys?
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My first attempt to get Starlink working on this Delta flight a failure thus far
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With 9.1% inflation if your portfolio makes less than 12% per year, the IRS takes 100% of your real dollar returns
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When Henry Ford died his heirs discovered he had $700M in physical cash in the company’s vault. Nothing in the bank.
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Dear @DOGE please look into the U.S. Mint in San Francisco. It occupies an enormous block of prime commercial real estate and all it does is produce special commemorative coins for collectors. The coins aren’t even cool.
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On April 17th the U.S. Trade Representative's office is expected to impose fees of up to $1.5M per port call for ships made in China and for $500k to $1M if the ocean carrier owns a single ship made in China or even has one on order from a Chinese shipyard. 🧵 1/
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Every airline will install Starlink in the next 2-3 years. I will only fly with Starlink when given the choice and most business travelers are like me.
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You can ship a 40 foot container from Belgium to China for $50 and people think capitalism is failing.
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Buried in today's Executive Order on tariffs is a bombshell:
Duty free "de minimus" shipping is being eliminated from ALL countries as soon as the systems are ready.
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In the 3 weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60% industry wide. 🧵
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Update: The city of LB just announced it has temporarily suspended container stacking limitations.
Thank you everybody who called the governor and the mayor to request. They got the message, you can stop now...
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.
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Do any hotels let you just go to straight to your room with a mobile app without spending 10 minutes checking in?
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What caused all the supply chain bottlenecks? Modern finance with its obsession with "Return on Equity."
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It might be that many software business models don't work when engineers cost $400k/year.
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In 1979 the city of Shenzhen only had 2 telephones
Community note
In 1979 the city of Shenzhen had around 2700 telephones
scmp.com/article/383818
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Flexport's team was able to reverse engineer the formula the Administration used to generate the "reciprocal tariffs."
It's quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country.
The chart below shows the predictions of this formula plotted against the actual new tariff rates.
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This picture of McDonalds employees from the era when they cooked in beef tallow instead of canola oil is haunting me. They look so healthy.
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My favorite econ paper correlated the unpaid parking tickets of UN diplomats in NYC with the UN corruption index. They have diplomatic immunity so don't need to pay the tickets, but people from low corruption countries paid anyways.
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I'd be happy to lead this effort for the federal or state government if asked. Leadership is the missing ingredient at this point.
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Thousands, and then millions, of American small businesses, including many iconic brands, will go bankrupt this year if the tariff policies on China don’t change.
🧵
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A 30-70% increase in cost of labor would tank most businesses. But ports are a monopolist, so all the cost increases will get passed on to the carriers who pass it on to the merchants who pass it on to you, the consumer.
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Two of our American customers devastated by the tariffs gave up and sold themselves to their Chinese factories in the last week.
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Put chat GPT on voice mode in your AirPods, rent a lime bike and cruise around London asking about the history of the buildings you see. You will thank me.
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1) Executive order effective immediately over riding 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.
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Rail is best used for freight while humans should fly through the sky at 500 miles per hour because they value their time.
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One of the greatest life hacks is that you can search any (recent) nonfiction author’s name on YouTube to find a talk that delivers 90% of the value of their book in around 30 minutes.
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I criticized the American government a lot the last 4 weeks. The tariffs seem stupidly implemented and are hurting our customers and millions of other businesses and consumers in the U.S.
I spent the last two days in Washington, DC visiting with senior administration officials and republican senators and congress people to learn and share my views. Everyone was respectful and interested in learning what our logistics data is showing about the emerging situation.
At no time did I worry I would be locked up or disappeared for criticizing them. They didn’t even ask me to stop. We take this for granted but it’s not the norm everywhere around the world or through most of human history. And where it is, that’s in large part because of our founding father’s wisdom in creating the Bill of Rights.
Again feeling grateful for the first amendment! 🇺🇸
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When you're designing an operation you must choose your bottleneck. If the bottleneck appears somewhere that you didn't choose it, you aren't running an operation. It's running you.
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What's it like working in an industry that doesn't create the most beautiful images in the entire world?
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I want to go on @joerogan to talk about how tariffs are impacting American companies. Who can connect me?
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San Francisco is home to one of only two Liberty ships remaining afloat, the USS Jeremiah O’Brien.
She participated in the Normandy landings 80 years ago today, returning to the beaches 15 times in the subsequent months to keep the allied armies well-supplied.
As the primary U.S. cargo ships of WW2 the Liberty Ships were instrumental to the allied victory.
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What a shit show. Trump told Time Magazine that Xi called him and Chinese embassy is denying it .
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The ferries on the SF bay generate $12M in passenger fares and have $145M in expenses. Ride them while you can, they are amazingly fast, clean, and almost always empty.
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Anyone denying the Chinese are ahead on cars has not been to China in the last 5 years.
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Our dentist does a candy exchange after Halloween every year where they trade candy for toys. Today I asked them what they do with the candy and they said they donate it to an underprivileged school. 🤔
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I have joined Founders Fund. If you are someone who’s out to get revenge after having been wronged by a previous employer or investor, a French technical founder who fled socialism to build your company in America, or a Christ-like figure of any kind, please get in touch.
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Slack makes it so former employees appear in search results forever and can never be removed which means Soham Parekh’s legacy will last for decades at hundreds of Silicon Valley companies.
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The Taiwan tariffs at 32% are massive BUT there is a carve out that they don’t apply to semiconductors.
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Hammurabi’s Code, the world’s oldest surviving legal text, contains 7 laws about shipping.
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All ships in the world have to go 30% slower starting January 1st to comply with UN carbon emissions regs. Cutting the capacity of the ocean network--the circulatory system of the world economy --by 30% will cause untold economic devastation.
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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.
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Tariffs on semiconductors and electronics will be introduced in about a month, according to U.S. Commerce Secretary Lutnick.
Those products were exempted from tariffs just yesterday. The whole system seems designed to create paralysis.
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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.
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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.
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95% of container ships that would’ve transited the Red Sea are now going around the Southern Tip of Africa as of this morning. The ships diverting from their ordinary course are marked orange on the @flexport map below.
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25% tariffs on products from Mexico and Canada went live for all shipments arriving after 12:01 am EST today.
Most “experts” (including me) predicted this was a negotiating tactic and wouldn’t actually go live. But here we are.
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With Elon demanding government employees report on what they got done last week, almost nobody noticed what the office of US Trade Representative got done: Proposed $1M fee per port call for all Chinese made ships at all US ports.
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Just met an American business who's customs duties owed will go from $8M last year to $95M with the new tariffs. Brutal.
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Happy tax day. When Abraham Lincoln introduced the (3%) income tax there were riots in the streets of New York.
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This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.
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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
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Big thing that jumps out is that he’s going hard on Asia and leaving Latin America at 10%.
If you’re setting up your supply chain that message should be obvious.
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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.
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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.
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Why are they making the whole high speed rail elevated instead of laying the tracks on the ground?
Guys, I think I figured out why they’re blowing through the budget.
Community note
This is a bridge over a river that will connect to non-elevated track on either side. Only a few miles of the 171 mile initial segment are elevated as needed to cross rivers and existing infrastructure. These larger structures are being built before track is laid.
hsr.ca.gov/high-speed-rai… buildhsr.com/construction-p… buildhsr.com/construction-p
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Ukraine and Russia are major players in the air cargo market, and not just because their locations put them on the most direct flight routes from Asia to Europe. 🧵👇
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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.
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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.
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Mexican warehouses providing e-commerce fulfillment services that enable brands to avoid U.S. customs duties were just banned from importing apparel by the…checks notes…President of Mexico. 🧵
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Met another US manufacturer who’s decided to produce their product overseas where they won’t have to pay duties on component imports.
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Every company in the world worth more than $1 trillion was founded on the US west coast, including Saudi Aramco which was started in the same building as @flexport here in San Francisco.
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3) Create a new temporary container yard at a large (need 500+ acres) piece of government land adjacent to an inland rail head within 100 miles of the port complex.
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A lot of people ridicule Trump’s Freedom Cities thinking they will be in the middle of nowhere on federal lands in some barren desert.
I love the idea though and think we should put the first one on the former Alameda Naval Air Station on the San Francisco Bay.
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One shipyard in China made more commercial ships last year than the total number the U.S. has produced since World War Two. 8/
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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.
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Sequoia passed on Flexport so many times that I don’t really care who runs the place tbh.
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In today's story about Trump reopening Alcatraz prison the Associated Press called the prison "infamously inescapable due to the strong ocean currents and cold Pacific waters that surround it" with no mention of the "Escape from Alcatraz" triathlon in which 2,000 people complete the swim every single year.
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Maersk just told all container ships to pause voyages through the Suez canal.
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