The world is heading towards a massive food crisis. The warning comes from Ryan Peterson, founder and CEO of freight forwarder Flexport.
Peterson gained notoriety late last year at the height of the supply-chain meltdown. While business leaders everywhere were cracking down on badly delayed shipments and unavailable supplies, Peterson did something that was both simple and brilliant: He took him and a trucking partner on a tour of Long Beach/Los Angeles. Hired with a small boat to go. Port complex so that he himself could see what the problem was. They noticed that the most pressing issue was too many containers and no place to put them while they waited to return to China, and a local rule forbidding the stacking of more than two containers to keep things unnecessarily. was doing worse. He explained it all in a series of tweets, suggesting that the ban on holding more than two tall containers should be temporarily suspended. Long Beach officials were among the millions of people reading the tweets. He took Peterson’s advice, and was hailed as the “CEO who saved Christmas”. This cemented its reputation as the world’s most knowledgeable specialist in logistics.
These days, Peterson is warning of a very serious problem that the whole world must come together to solve, he explained during a Q&A event. Confrontation Conference in Toronto This week. When a Syrian attendee asked Peterson if he was doing anything in the area of food shipping, he replied, “I wish we were doing more in that space than we do.” Flexport handles containerized freight and air freight, he explained, while most food is shipped either in refrigerated containers and in bulk in what he called “the most important food.”
But, he adds, “probably the most important problem in the world for us to work with at the moment is food shipping.” He said the reason for this is the war in Ukraine. “Russia and Ukraine are the world’s first and fifth largest grain exporters. Something like 30 percent of the world’s wheat exports comes from those two countries, and most of that is not going to reach the market.”
No one can send anything to (or into) ports in the Black Sea because the area is now a war zone, he explained. While some of that could be replaced by rail or truck shipping, he said there are not enough trains and trucks across Europe to carry the bulk of the grain that was previously shipped by sea. “And so, the simple reality is that you won’t be able to get enough grain from those countries.”
This will result in a food crisis in developing countries, he said. “The food crisis almost always leads to revolution and war. This is a terrifying problem.” Peterson said he was trying to learn as much as he could about food shipping, and it was a problem he planned to work hard on in the coming year — even though it wasn’t a problem Flexport currently has. was equipped to address. “I don’t think we’ll be the one who solves this problem for humanity’s sake.”
Shipping costs should be low – unless there is a long distance strike.
In addition to the impending food crisis, Peterson noted that shipping times from China to the United States have improved in recent months, and shipping prices that had soared to astronomical highs were beginning to come down. However, he warned that the contract between International Longshore and Warehouse Union and West Coast Ports would expire on 1 July and that a new contract had not yet been signed, increasing the risk of a strike that could halt shipping. . track. Meanwhile, he said, many US companies are moving manufacturing to Mexico because shipping there is less expensive and easier than shipping from China, and labor costs are still lower.
Asked how he became interested in logistics, Peterson explained that he and his brother had started a business buying motorcycles in Asia and selling them in the United States. “That’s when I found out that international shipping was messed up,” he said. The shipping companies Peterson worked with were not customer-focused and used little or no technology, he said. He realized that there is an opportunity not only to solve a difficult problem, but also to make a difference in the world.
“Global trade has lifted a billion people around the world out of poverty by opening markets for them,” he said. “The global system that allows anyone to send anything anywhere has been one of the most powerful forces for good around the world. And yet, it’s a nightmare. It’s hard to find a place to work.” There’s a really good heat map for this, something that’s very important, yet very difficult. And we still think it’s tough and important.”