Entering an age of transparency

Third in a two-part series on supply chains

One of the buzzwords in higher education is “high impact learning” or, as my institution acronymized it, SHIP (“student high impact practices”). This acronym inevitably led to the phrase, “SHIP happens.”

What I didn’t appreciate at the time is that Ship Happens is also the name of a podcast inspired by surging demand for home furnishings that, until only recently, outpaced the world’s factories’ capacity to make and ship the stuff. Okay, not just home furnishings. But, as pandemic lingered and loitered, enough consumers started outfitting home offices and re-decorating that with regularity our industry has made headlines in stories concerning supply chain issues. 

A podcast on global shipping and supply chains? Public awareness of even the existence of supply chains is a recent phenomenon. But, for terms such as “supply chain resilience,” “in-sourcing” and “deadheading” to enter common parlance? It is worth noting. 

This podcast produced and distributed by Freightos, a digital global shipping platform, is evidence that information previously reserved for industry insiders and, well, nerds is suddenly, bracingly salient to consumers, many of whom simply want to know when they’ll get their damn sofa. 

History of the box

Earlier this year, I wrote two columns exploring the history of the box, the lowly shipping container, including its standardization and spiraling per unit costs to move it from one end of the earth to the other and back again. That series is archived here and here. 

“You never really pay attention to something until it’s broken,” Eytan Buchman, chief marketing officer at Freightos, told the New York Times, for an article that ran in early April. 

As Ship Happens describes itself, “The TV you ordered as a holiday gift is 90% more expensive than last year, local stores have been unusually empty, and the Port of Long Beach is on the news at least once a day. It all comes back to global freight and the supply chains that connect the world.”

Guests include executives in logistics, e-commerce business owners and executives from the cargo airlines and shipping companies. The podcast is just another media channel that is educating the wider public about the complex system that moves everything we need to and from sites of production to home or store delivery.

The Ship Happens podcast launched in November, and in addition to educating the public, or an increasingly savvy subset of the public, it is also great marketing for Freightos, a company that digitally manages global trade bookings for international shipping. Podcasts are a (relatively) new arrow in the quiver in the fight for mindshare.

Sabermetrics

The sudden and seemingly sustained interest in shipping-related data and trends looks and feels a bit like the trend in professional baseball that has analytics increasingly threaded into broadcasts and commentating. Once the province of “seamheads,” or baseball nerds, now statistics such as spin rate, launch angle, exit velocity and pitch shapes are, if not common, then certainly on the rise. Broadcast booths are re-tooling to include analytics-savvy voices.

A recent broadcast of a Yankees-Blue Jays game noted that the videoboard at Toronto’s Rogers Centre wasn’t displaying hitters’ batting averages, going instead with OPS (on base percentage plus slugging). This shift in evaluating and announcing players is of a kind with substituting, say, furniture pricing for when the item might actually arrive, or when a consumer might be able to sit on the damn sofa.

In both instances, with both OPS and delivery dates, the objective is to forecast, to make predictions, and to have some confidence of being right. When you see a baseball player step up to the plate with an OPS of above 1.000, as a fan you can expect something good — a home run or at least a base on balls. Delivery dates, too, are predictions based on past performance. 

The problem during and since the peaks of pandemic is that past performances no longer are valid or reliable as data. Forecasting now requires a dizzying calculus that at least attempts to account for a wide range of probabilities and contingencies wriggling around like cats in a bag. They include port delays, Covid surges, and, if they’re really good, even freighters stuck in canals in Panama and the Suez. 

The similarities between baseball and supply chains don’t end with Big Data. Like most teams looking for reliable middle-inning relievers, furniture companies are having a difficult time finding, training and keeping good workers. The “Great Resignation” is the term being used to refer to the droves of workers who have left full-time, single-employer work for early retirement, part-time positions more sensitive to life-work balance and, in many cases, simply the great unknown. 

In baseball, defenses compensate for high OPS with, among other things, positioning “shifts,” or the unorthodox positioning of players that are mapped using algorithms. Their ubiquity suggests that they work, and they certainly pass the eye test.

In shipping, this compensation is known as supply chain resilience and contingency. If Factory A can’t fill the order, what’s Plan B? 

And all of this is getting decided before the proverbial first pitch. 

An age of transparency

It has to be a good thing in home furnishings as it is in baseball for the “fans” to know more about the variables, predictions, scenarios and outcomes. Certainly, their buying habits suggest phenomenal resilience in terms of paying ever more for sofas, cars, homes and, of course, toilet paper, the commodity that started all of this back in March 2020. 

Big data is here to stay, in other words, and home furnishings concerns are well advised to deploy more assets to their collection, analysis and dissemination. We are entering an age of transparency. This is part of the “new normal” people have been talking about as pandemic morphs into a semi-permanent, but less fatal, global human condition. 

A huge difference between baseball and global shipping is, of course, rules. The hitters and, increasingly, fans don’t like the defensive shifts. Why is a shortstop in right field? Put him back in the hole between second and third where at least historically he has belonged, if for no other reason than to allow us fans to compare, say, Francisco Lindor with Derek Jeter. 

MLB is widely expected to ban or at least constrain shifts beginning next season. Rules in global shipping? Oh, wouldn’t that be nice! How about a limit on how quickly and how significantly rates can change? Gary Friedman, can I get an “Amen?”

The premium on data, however, will continue. Unpredictable supply chains, continued labor shortages, breathless inflation and the attentions of everyone from hedge funds, central banks, governments, watchdog groups and, yes, even podcasters will keep the demand for yet more, better data quite high. I haven’t even mentioned a volatile Ukraine-Russia conflict. We all need help clearing free from the farrago of rumor and half- or even quarter-truths.

So, ship will continue to happen for the foreseeable future. 

Maybe I should crank up a podcast. Baseball looks like it’s pretty well covered, but home furnishings? To borrow a phrase from showrooms throughout the industry, there might just be enough pent-up demand. I could call it, “Predicting when you’ll get your damn sofa.”

Thanks for listening.