1/39
@Molson_Hart
Supply chains are like refrigerators.
Everyone needs them.
No one knows how they work.
1. Air freight will not solve this. It’s too expensive and there isn’t enough capacity in planes to replace boats, which move more goods by cubic volume.
2. You also cannot solve this the way the world did with Russian oil.
Unless, the U.S. Customs starts encouraging major customs fraud and allowing everyone to relabel their Chinese goods as Korean, Japanese, Taiwanese, and Vietnamese (the other nearby port countries), this product cannot come here. There will be massive amounts of cheating, more than ever, but we cannot solve this through rerouting.
3. This is not just about empty shelves and it’s not solved by buffer inventory.
It’s also about jobs, jobs in warehouses, jobs in the port, jobs in trucking and logistics, and jobs in purchasing.
And trust me, it doesn’t matter what your buffer is, you will go out stock because some products always sell more than forecast.
Final thoughts:
When Trump was first elected, I sent my resume to 3 connected people in the hope that I might be able to assist the administration and, more importantly, the country.
The responses I got ranged from silence to “get out of here, no way.”
I’m politically independent and spoke to the Biden administration when I had an opportunity, but this administration is not (yet?) listening.
It’s been odd to see them attempt goals that I support (bringing manufacturing back and American economic revitalization), but do so in a counterproductive way.
And now I am close to having lost all hope that these goals can be achieved in a way that benefits us, Americans.
We will see what happens…
[Quoted tweet]
The White House has put itself and the country in a bad situation but doesn’t realize it yet.
Around April 10th China to USA trade shut down.
It takes ~30 days for containers to go from China to LA.
45 to Houston by sea, 45 to Chicago by train.
55 to New York by sea.
That means that there are no economic effects of what was done on April 10th until about May 10th.
Around that time (it’s already started to happen) trucking work is going to dry up. Warehouses will start doing layoffs because no labor is needed to unload containers and some products will be out of stock, reducing the need for shipping labor.
All this will start in the Los Angeles area.
After about 2 weeks, it’ll start hitting Chicago and Houston.
Let’s say the White House, after 3 weeks, changes its mind, on May 31st.
“This isn’t working out like we thought it would. Tariffs back to 0.”
Let’s say China says “bygones be bygones, we’ll go back to how things were”.
Let’s say every factory in China that got screwed by their orders being cancelled says the same thing “no problem, we’ll make and ship”.
The problem is, even under the most favorable conditions of China and the factories restarting economic ties as though nothing happened, it will be at least another 30 days before economic activity is revived.
And that’s just in LA.
In Chicago/Houston, you’ll need to wait another 45 days.
New York, at that point, will still be getting containers from before April 10th, they will then have 50 days (May 31 minus April 10) of zero economic activity at the ports, in trucking of Chinese goods, in warehousing.
The whole situation is a bit like lockdowns. Once you shut down, it takes a long time to get economic activity back to where it was, if you ever can.
And again, this assumes, that China and its factories, which make things you can’t buy elsewhere, will start right back up again as though nothing happened, which is unlikely.
It’s almost like we’re speeding towards a brick wall but the driver of the car doesn’t see it yet.
By the time he does, it’ll be too late to hit the brakes.
2/39
@greggcarey
@Jason please read these closely.
3/39
@caseyames
And this completely ignores the supply chain shock well see if everyone starts shipping shyt again at the same time.
I know you know that, but it'll 100% be a reality even in the best case
4/39
@endurise8
Transport is one thing but do you know if manufacturing has stopped in China
5/39
@cryptosmiff
@chamath says send a fat check and theyll listen
6/39
@Thrasymachus5
@threadreaderapp unroll thread
7/39
@KingBob53
It gets the layoffs the FED is desperately seeking
Sad but the truth
8/39
@Lilli8947
@threadreaderapp unroll
9/39
@RZ_3_
What are major retailers like Walmart, Home Depot etc all planning to do? Still shipping and will raise prices? Pause, allow stocks outs?
10/39
@Glen_Evans_01
well-deserved follow.
11/39
@waters_deng
Our government has been focused on tearing down China instead of building up America. It's the wrong approach. If we invest half of the money that we use to fight foreign wars, we can modernize our infrastructure and rebuild our manufacturing sector without tariff wars.
12/39
@KurtisHanni
This last year+ has been a dream.
I meet with business owners daily to look for financial solutions.
We help them:
1. Optimize their cash flow
2. Create more profit
3. Pay less taxes
But more than anything, we’re a strategic partner and coach.
Someone they turn to when they don’t know the answer. When the times get tough.
I’ve had more than one business owner tell me they’re sleeping better, more present when with family, and feel like they’re finally in control of their business (instead of it controlling them).
I can’t imagine anything more rewarding.
For people watching from the sidelines, it seems like an overnight success.
But in reality, it came after a 15+ year career of day-in and day-out partnering with my CEOs as a full-time CFO.
Now instead of building one business at a time, I get to help many at the same time!
Today, I’m headed to meet with a group of other business owners to learn and grow together.
I am truly living the dream!
13/39
@WojtekSar
It's not even about the transport industry, because that's the tip of the iceberg. The production industry will suffer even more, because some elements won't reach the factory on time and the lines will have to be stopped, this will cause downtime, quality problems - layoffs
14/39
@JoaodosReisAlb1
I know how a refrigerator works.
15/39
@Fly_Sistah
I was told years ago to "be a student of the business", basically understand every aspect of how your company works & how products reach customers. So many people have no idea what's about to happen.
[Quoted tweet]
Trump said he’d impose a baseline 60% tariff on Chinese exports. Laptop prices could spike by 50%. The cost of video game consoles could rise around 40%, making the upcoming PS5 Pro cost almost $1,000. The Switch 2 may be backward compatible, but it may cost quite a bit more.
16/39
@HughEdw54983916
There are ways. Anyone who has worked in logistics in Russia can explain.
17/39
@Tarde_WaterBear
purchasing depts, buyers, accountants who deal with inventory/production costs know.
it doesn't take much to destroy even a small part of that supply chain & when it breaks it's absolutely H*LL getting needed vital parts for MRP needs.
although Recession KILLS production needs
18/39
@FinDataByLig
@SeanDuffyWI @howardlutnick
19/39
@fullmoon6661
I thought refrigerators were quite well understood lol
20/39
@FormFollowsFctn
Whaddya mean nobody knows how a refrigerator works?
21/39
@GerauDub
It may be the biggest economic shock to the US since lock down but there will be billions to be made exploiting this situation.
22/39
@mavy85
Does it bring more goods to other parts of the world? Ships will have soon some free capacity.
23/39
@VictorishB123
The "bring back manufacturing" rhetoric from the admin puzzles me. US manufacturing output has been increasing. What has been in decline is number of people working in manufacturing but that seems to be by choice. We have 500,000 unfilled openings and 1 million expected by 2030.
24/39
@carrybeyond
And you’re not supposed to turn a refrigerator off.
25/39
@LucasPacioli1
Yet a good faith effort to understand basic HVAC concepts explains how refrigerators work. Same with supply chains.
26/39
@Heather20164
Agreed I used to work in the industry and I did for 18 years. The other problem is with LTL companies who may possibly have a delivery somewhere they will come back empty and the ruins the whole pricing system so rates will go up. Same goes for anything in the air
27/39
@Laxman35895072
@SecScottBessent
@POTUS
@realDonaldTrump
28/39
@driszhor
I know how refrigerators work.
29/39
@TedLohr
CTR’s are like your Tupperware. Everyone has too much to fit in their storage drawer. So there needs to some in the drawer, some in use in the fridge, and some in the dishwasher. We are now approaching a moment (like Covid) where all the CTR’s will be in the wrong places
30/39
@Oof86583180
Like the Defense of Department did, we're gonna find a lot of intermediate goods is Chinese stuff rebadged "Made in the US".
31/39
@Bitcoinsyrup
Respectfully, you have a decent grasp of 2nd and 3rd order downstream effects. However, you assume you see all the variables the administration sees, and you just dont. You can't make these blanket statements without having an even higher overview.
32/39
@plantifull
thank you for sharing and doing what you can to help online
33/39
@CapitalFixation
Can you buy your way to a conversation with the trump coins? Not kidding.
34/39
@beverlyray8700
Dangerous malignant narcissist driving the car toward the cliff.
35/39
@smartalek180
Followed for factuality.
36/39
@TurbulentTimes7
47 is turning into a disaster. Cacklin Kamala would've been better than this utter
show disappointment.
37/39
@KratoskaPeter
Not just jobs in trucking, warehousing but in the stores. Do you think Walmart will keep people standing around? Americas 3 biggest employers Walmart, Amazon, Home Depot, lowes, target.... Dollar stores.
38/39
@GordonChum29691
It is a controlled demolition of the economy.
"You will own nothing, and be happy."
(that you're still alive)
39/39
@VelvetFucsia
Cartels are going to jump at this new opportunity & hopefully diminish their fentanyl & other illicit drug operations. @Mercadolibre
/search?q=#MELI stands to benefit
To post tweets in this format, more info here: https://www.thecoli.com/threads/tips-and-tricks-for-posting-the-coli-megathread.984734/post-52211196
prospect.org
bsky.app
lizzy-tish.bsky.social
