Where "Purpose" and Supply Chains Collide
Welcome to the 119th edition of The LogTech Letter. TLL is a weekly look at the impact technology is having on the world of global and domestic logistics. Two weeks ago, I argued that the real leap of faith in logistics was not investing in automation, as opposed to seeing automation as a chancy, untested proposition. This week I’m looking at whether “purpose” means making things in America, and what that means to supply chains.
As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.
For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@spglobal.com or on Twitter at @LogTechEric.
One of the best elements of Twitter, for me, is the ability to ingest perspective from people with whom I may disagree, but whom I respect. We all live in bubbles, and we all find it hard to meet enough people in real life who challenge our thinking in a productive way. Twitter can fill that void - I can read something from someone whose ideology I might oppose, but who makes a persuasive case for me to think about something in a new way.
I thought about that when I came across this article from earlier in the week. I can’t quite put my finger on why, but I somehow have never been able to get on the same wavelength with the author (Katherine Boyle, a former journalist who is now a prominent venture capitalist with probably the most prominent venture capital firm, Andreessen Horowitz). Boyle has a way of writing that seems galvanizing, but also somehow patronizing and demeaning. Her grand “American Dynamism” thesis, summarized here, is at once hopeful about the power of human vision and effort, but also just seems to focus on the Twitter-obsessed population (of which I’m a part) that are more talkers than doers.
These types of manifestos play well within the bubble of Twitter (where right or left, nationalist or globalist, people are more alike than they probably even realize). And yet (probably because I’m indelibly part of the Twitter bubble) I find myself drawn to Boyle’s writing. I always feel like I will turn a corner, that I will see the world as she sees it and be as comforted as she is in the notion that there are enough “builders” to offset whatever malaise we Americans might be going through right now. Boyle is in the business of funding “builders” and so it makes perfect sense for her to be obsessed with the notion of builders, just as I’m obsessed with what technology forwarders use or how container lines and terminals assess demurrage at ports. I’ve written in this newsletter - an age ago - about the false narrative of “builders” in the sense that Boyle and other venture capitalists seek out investment opportunities.
That’s all pretext though…let’s get to the substance of Boyle’s most recent piece. In it, she talks about how people need a purpose outside of satisfying their own needs - a higher calling, so to speak. Aside from a detour into how a degradation of family values and a turn away from religiosity is partly to blame - excuse me for a sec while I roll my eyes very, very hard - Boyle is right. We are more motivated when we do something that seems to be meaningful, from the visionary to the worker bee.
For some reason, I read this piece through the lens of “we need a rebirth of manufacturing in America,” probably because Boyle leads a practice at AH focused on American Dynamism. And when I think of American Dynamism, I think of attempts to reinvigorate the US manufacturing base, and turning away from consumptive patterns that revolve around the US outsourcing production of pretty much everything overseas. And that makes this piece, indirectly, about supply chain. So after I finished the piece, I thought, what does an America, brimming with purpose, mean for global supply chains?
Let’s level set first. For all the ink spilled, and hot air blasted, about supply chain strategy, we should first recognize that supply chains are reactive to the world they exist within. If two countries strike a trade agreement, supply chains react to the advantages that agreement creates. They don’t create the trade agreement. If a port strike hampers operations in a key container gateway, supply chains react. They don’t foment the strike. Reshoring (or nearshoring, or friendshoring, or rightshoring) is not a strategic move but a reactive one. Labor costs in the current location went too high. Transit times or freight capacity became too scarce. There’s too much competition for quality suppliers. There’s a political or environmental benefit to moving product closer to the consumption base. Also, as this thread notes, even “reshored” supply chains aren’t really reshored.
Supply chain is the quintessential “if, then” puzzle.
In other words, supply chains focus on market dynamics, not motivational dynamics. Even if we agree that manufacturing should go back to the US, supply chains can’t run on “should.” They have to run on “is.”
In that way, supply chains are a bit at odds with builders and venture capitalists and visionaries. Those groups see themselves as changing the world around them, but supply chains want to find equilibrium or stasis. Supply chains just want to chill. But they can’t chill, because stuff is going on every day that prevents them from chilling. So, if America does collectively find its “purpose,” and that means more manufacturing moves here, supply chains will adapt. But supply chains won’t compel those changes, it will react to them. I think that’s sometimes lost in the American Dynamism narrative - it’s not just that you’re talking about disruptive change. You’re talking about a change that goes against the initial interests of those who needs to change.
And here are some recent discussions, reports, and analysis I found interesting:
If you missed my chat on LogTech Live with Solvo CEO Gaurava Bajaj, make sure you catch the recording.
Feels like I point to something Jonah McIntire does every newsletter, and for good reason. Here’s a piece on how AI is impacting logistics.
Some upcoming events I’ll be involved in:
My guest next week on LogTech Live is Seth Page, chief operating officer of automation-focused supply chain technology provider ThroughPut. Make sure you’re subscribed here to get show updates and to access our episode archive.
The Journal of Commerce’s Breakbulk and Project Cargo Conference is next week in New Orleans. I’m leading two sessions: the first on understanding what the energy revolution means to breakbulk and project cargo shippers, and the second, looking at technologies helping to make the industry more efficient through automation and AI. Check the agenda here. And register here. New registrants can still use the code ERICJ25 to get 25% off registration.
I’m moderating a webcast April 27 with Tive that looks at recent research done on the state of freight visibility in the market.
Our Journal of Commerce webcast on the future of freight procurement is May 23, so mark your calendars now. Details on speakers TBA, but you can already register for the free event.
Registration is open for the Journal of Commerce Inland Distribution Conference Sept. 25-27 in Chicago. I’m leading a trio of technology sessions, including a chat with AVRL CEO Chadd Olesen. Agenda updates will be coming soon. And ping me if you want a discount code.
Registration is also open for the International Association of Ports and Harbors World Ports Conference conference in Abu Dhabi Oct. 31- Nov. 2. I’m leading a number of technology-related sessions. Definitely make plans to be there!
Disclaimer: This newsletter is in no way affiliated with the Journal of Commerce or S&P Global, and any opinions are mine only.