The Sidekick #004

Baltimore Collapse Rattles Supply Chains

Kris Lance

Kris Lance

VP & General Manager, Una

April 30, 2024

The Sidekick #004 feature image

Intro

Welcome to Issue #004 of The Sidekick! In this edition, we’ll move away from food topics for a bit to check out the supply chain impacts of the Baltimore bridge collapse. The loss of maritime traffic is expected to cost somewhere around $9 million per day, while thousands of port side jobs have been impacted. It’s worrying, but even more disheartening was the misguided focus of topics and how quickly “the masses” seemed to move on from such a critical event. 

Meanwhile, non-compete agreements are dead! This is BIG news for people who have felt trapped in their jobs, and for the economy as a whole which can expect a massive jolt in terms of mobility, innovation, and yes… even pay increases. 

That’s not all. Scroll down to check out some curated highlights from social media, words of wisdom, tech news, people to follow, and more. 

The American Supply Scene: The Baltimore Aftermath

New developments have emerged regarding the container ship, Dali, which struck the Francis Scott Key Bridge on March 26th. The city of Baltimore claims, in a recent court filing, that the ship departed from the Port of Baltimore despite being deemed “unseaworthy.”

The city argues that the ship’s owner, Grace Ocean Private Ltd., should be held liable for the crash and tragic loss of life, countering the company’s attempt to limit its liability in damages. The Dali’s departure from port, despite warning signs and alarms indicating an inconsistent power supply, led to the collision with the bridge just 12 minutes later.

The city asserts that the negligence of the ship’s owner caused the destruction of the Key Bridge and the disruption of port operations, impacting jobs and municipal revenue. As the legal proceedings unfold, the company has yet to respond to these allegations. The owner of the Dali cargo ship filed a federal lawsuit earlier this month, denying responsibility for the accident and seeking to limit the total payout to just $43.7 million; a fraction of the billions that the cleanup and bridge rebuild is expected to cost.

Supply chain impacts

The port remained open to trucks following the incident, but the loss of maritime traffic is expected to cost $9 million (USD) a day. The overall economic toll is likely to be higher as billions of dollars of goods are rerouted amid the prospect of supply chains being snarled for months. It will also mean a substantial loss of tax revenue for the city and state.

Simona Stan, a supply chain and logistics expert at the University of Montana, explained that the Port of Baltimore is the ninth largest U.S. port by overall trade volume. In 2023 alone, it moved around 50 million tons of goods between the U.S. and other countries, much of it in large shipping containers, like those stacked on the ship that rammed into the bridge. Although it’s smaller than other ports on the East Coast and in the Gulf of Mexico, it still plays a critical role in processing U.S. international trade traffic. That’s especially true for some products, such as automobiles, heavy machinery and coal. It also handles a large share of U.S. sugar imports.

The immediate impact will be felt by the 15,000 or so workers in the port and about 140,000 others who depend on it. It doesn’t mean they’ll be laid off, but drastically less traffic will mean less work to go around. Companies and consumers should expect some delays for packages that would have otherwise been processed by the port too. How long those delays remain depends on how much time it takes for ships to be rerouted to other terminals, but it will likely be a matter of days or up to a week or two. Baltimore accounts for 4% of overall East Coast trade, so it shouldn’t have as big of an impact as some of the catastrophes we experienced last year. 

An operations management expert from Johns Hopkins said the key to minimizing economic fallout lies in expedited efforts to rebuild the Key Bridge and restore port operations. That’s going to be an incredibly steep challenge as estimates are hoping that the port can reopen towards the end of May, while bridge estimates give a much lengthier timeline of 5-7 years.

Keeping focus

I don’t think I’m the only one disappointed by the rash of misinformation that broke out in the immediate aftermath of the bridge collision. X isn’t the only social media site that has this issue, but it arguably has the largest reach. Within hours of the crash, X accounts with hundreds of thousands of followers had spread alarming claims including the Dali was being hit by a cyber attack, the foreign crew intentionally rammed the bridge, the “attack” was the start of WW3, and even further dubious assertions. 

Humans always look for answers in the wake of a dramatic event. If there’s an accident, a suicide, a murder or a mass shooting, the first thing people want to know is the cause or motive. What threw me for a loop was how quickly the topic and suggestion of changing the name of the bridge was being proposed.

Picture this… you hear about a key piece of infrastructure collapsing, there’s certain to be loss of life and searches are still underway, there’s going to be billions of dollars in damages and many reputable sources are still trying to piece together answers of what actually happened. Is one of your first questions, “What should we rename the bridge/building?” No way!

How misguided have we become? Have we lost our way? I’ll spare you my thoughts in writing but I did cover this in a recent episode of the Sourcing Hero, if you really want to know my true opinion.  In the absence of instant answers, we speculate and we all know that “controversy sells” but in times of crisis or tragedy people should be coming together, not using topics for divisive measures.

UNITED WE STAND, DIVIDED WE FALL!

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Spotlight: Non-Competes Are Dead!

The Federal Trade Commission’s recent announcement of a rule to ban non-compete agreements in employee contracts marks a significant shift in the U.S. labor market landscape. Despite facing legal challenges from business groups, experts argue that the elimination of non-competes would have profound implications for workers, companies, and the economy as a whole.

Supporters of the ban say non-competes have detrimental effects on firms’ profitability, innovation, and employee choice. According to the FTC, eliminating non-competes could lead to the formation of over 8,500 new businesses annually, along with an average wage increase of $524 per year for workers and a significant decrease in healthcare costs over the next decade. Additionally, the ban is projected to spur an increase in patent filings, fostering innovation – we can look to Hawaii as an example of what to expect. Hawaii banned non-competes back in 2015, and experienced a surge in new-hire wages and (importantly) worker mobility. 

Non-compete agreements are prevalent in many industries, affecting around 18% of U.S. workers, or approximately 30 million people. These agreements typically restrict employees from working for competitors within specific geographic areas or time periods after leaving their current employer.

But… hang on, the fight isn’t over yet. The Chamber of Commerce is suing the FTC over the ban, arguing the FTC doesn’t have the authority to make this call. Supporters of non-compete agreements argue for the need to protect trade secrets and long-term investments in employees, but existing mechanisms such as patent laws and non-disclosure agreements should suffice if that’s really the issue.

In all the academic discussion about innovation, productivity, and mobility, it’s important to consider the positive effect this will have on lifting the psychological burden on individuals. Operating under the shadow of a non-compete can be a very uncomfortable experience, with a feeling that your hands are tied and a constant worry that a misstep will land you in hot water. I’m willing to bet that there are countless people who have felt trapped by non-competes but are right now writing their resignation letters to pursue better opportunities. If companies weren’t focused or worried about retention before, I imagine they’ll find it worth their time now.

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Cartoon by Keyvan Varesi

Technology News

What’s going on in the world of technology? Plenty. Here’s some news that caught my attention:

“We Promise This Is Not A Person In A Bodysuit”: Boston Dynamics unveiled a new humanoid robot that moves like no other robot has moved before, super creepy! The new fully electric robot, called “Atlas” highlights a path to commercialization and an entirely new generation of robots (think iRobot). Between Starlink, AI, and these new robots… I think a few people need to rewatch Terminator.

Saudi Arabia ‘scales back’ Megacity: “Neom” is part of Saudi Arabia’s Vision 2030 strategy, to diversify the economy and move away from oil reliance. This unprecedented project is being built in the northwestern Tabuk province but is now starting to be scaled back from the original plans.

The US Army is moving to a unified data reference architecture: The Army is getting its data sorted so it can make better decisions, faster. In my opinion, every organization in the US should follow suit. Unified data is essential for actionable insights, smarter decisions, and to support the next generation of AI. In the procurement world, companies like Forty4hz are leading the way with their INSIA procurement platform that embraces the unified data approach to get ahead of the massive data challenges presented in the industry.

Work/Life and Career Tips

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John Gretton "Jocko" Willink, Jr.

People to Follow

“Unless you do the work, the world will never see your vision. You can’t wait for someone else to do it or to complete the task. The goals and ambitions can only be accomplished by one person: YOU. Therefore, you must do the work.”

John Gretton “Jocko” Willink Jr. is an American author, podcaster, and retired United States Navy officer who served in the Navy SEALs and is a former member of SEAL Team 3. Co-Author of “Extreme Ownership: How U.S. Navy SEALs Lead and Win”; the principles in Jocko’s book will provide guidance for anyone in a leadership position.

Follow him here.

Juvenal ancient rome

Wisdom of the Week

“Give them bread and circuses, and they will never revolt.” 

Juvenal (Ancient Rome)

Modern-day alternative:

“Give them iPhones and social media, and they will never revolt. Unless you ban TikTok.”

Kris Lance

The Best of Social Media

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An accidental ‘pocket tweet’ from the agency responsible for US nuclear deterrence…

Ope, sorry about that!

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See you next time!

– Kris

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