Big Technology Podcast - Trade War Scorecard: What's Changing, Who's Winning, What's Next — With Ryan Petersen

Episode Date: July 9, 2025

Ryan Petersen is the CEO of Flexport. Petersen joins Big Technology to discuss how the latest round of tariffs and trade-war maneuvers are rewiring supply chains worldwide. Tune in to hear him unpack everything from 145 % “Liberation Day” duties and $5 K containers to the death of the de minimis loophole and what it means for Amazon, Temu, and Shein. We also cover the Panama Canal drought, AI that robocalls 400 K truckers, warehouse-robot reality checks, and why customs fraud just became the DOJ’s No. 2 white-collar priority. Hit play for a rapid-fire scorecard on what’s changing, who’s winning, and what’s next in global trade. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: [e-mail]

Has Trump's wave of tariffs or the threat of them changed the global supply chain at all and are big tech companies like Amazon and Apple in any different position today than they were before the inauguration? We're joined today to talk about it all by Ryan Peterson. He's the CEO of Flexport and he's here with us in studio to cover this all. Once again, it's great to have you on the show. Right. My pleasure.

So talk a little bit about what's happened. We're months past Liberation Day. It's kind of funny to even be talking about it because. It's one of those news events that started with this big promise of massive tariffs and then subsequent pauses. You have an unbelievable view as the CEO of Flexport because you can see how cargo and shipping is moving around the globe. Is anything fundamentally different today than it was before Liberation Day? Yeah. Well, if you're a brand that's importing goods, especially from China, your tariffs are higher.

We've had a 30%. Terrets are currently 30% plus whatever was pre-existing. So that's a pretty big deal. I mean, it costs one of 30%. But it's way better than immediately after Liberation Day. Remember, they ratcheted it up to 145%. And it stayed at 145. This is on Chinese-made goods coming to the U.S.

It was at 145 for five weeks. And so during that five-week period, the volume of cargo from China to the U.S. dropped by 60%. Just a massive decline. And that's a big part of, likely a big part of why they ratcheted back to 30 was there was sort of, this was a decoupling rate. That was a rate at which these economies would decouple, in a very non-graceful, unplanned kind of potentially catastrophic way. Now, since the tariffs got relaxed back down to 30%, we've had an 80% increase in volume from China to the U.S.

Above the pre-tariff levels. See, that's like the classic bullwip effect. You had a huge decline, and now this surge. Now it's starting to come back down a little bit, regression to the mean. But we're still well above the original volume levels because we've got that five-week period where it was down so much that needs to be made up for by more cargo coming in. So some of these things, their net result has been much higher freight prices because there's not enough ships to move all that cargo. So price gets bid up. Very similar to COVID.

A little bit similar. It's kind of like a micro-COVID. The difference, I think the big difference with COVID is that people were buying way more stuff, whereas in this period, because they were at home, there was a lot of stimulus, there was a shift from goods onto services back in, or sorry, from services onto goods back in COVID, that we're not, there's none of that. So it's like, yeah, your costs went up. Your supply chain disruption is there without the silver lining of like, well, at least people are buying more stuff. So if you're in a brand's position, it doesn't feel like COVID, really. I guess the other big thing is. So you get the higher cost with that.

the higher interest. Before you move to the other thing, during COVID, like actually right after COVID, or maybe mid, it was about $20,000 to bring a container in from China to the United States. It's gone back down, it went back down to around 1.5,000, when things normalized. What is it now? I didn't check this week.

I've been traveling, but it's probably $5,000 or so from China. So not something that we're going to immediately see in higher consumer prices. It was at two a couple months. ago before the tariffs hit and it's gone up. It has gone up quite a bit. But yeah, I think that the tariffs and the shortages, if any, from that five-week period of no shipping, be more likely to contribute to inflation than the tariffs themselves. Yeah, or then the freight prices. But I think all of this gets relatively smoothed out. I mean, 30% from China, it's set to go back to 54% on August 18th. I want to say 18th is the 90 day. It's because it's just a pause on the

China stuff. So you had a pause of 90 days from April 8th for rest of China. You had 90 day pause till July 8th. And then a 90 day pause for China that ends in August 18th. And that's when the tariffs will go back up if no deal is worked out by those dates. So, those things could be very disruptive and lead to inflation. But current level, 30%, it feels like brands will mostly absorb that and not pass it. They'll pass it through a little bit, but it's, remember, this is 30% on the cost. Right, what they pay for the goods. And not what we pay.

And I think that typically a company will mark up what they get from China by, what, three times? Three times is a reasonable assumption. So that math says, okay, you might see a 10% increase in your price and things from China. It's not nothing. I would probably feel that. Some of that will get absorbed likely with factories, discounting things, in order to say competitive, possible currency move.

I think this is what the Trump administration would like to have happen. Well, they'll spend, no matter what happens, they'll make it seem like that's what they wanted. If you listen to them. Mission accomplished. Yeah, yeah, yeah. So if China devalues their currency, they go, cool, we didn't hurt inflation.

but of course if they devalue their currency it makes our exports even less competitive it'll be harder for them to buy our stuff so it makes it easy for them either way they can spin it and say well if they devalue great no inflation if they let their currency appreciate then we'll say hey look now they're buying more stuff

do you think we were at a good equilibrium beforehand or do you think that some action was needed to be taken I think the problem is very real that the Trump administration is addressing of imbalanced trade and... So talk through that. Explain exactly why they were upset. Well, I think you want... I try to operate from this principle.

I forget where I heard this. I think Charlie Bunger, perhaps, is the first person who shared this, was like, you don't want to get in any argument with anybody unless you feel like you can make their point of view better than they can. So I try to avoid arguments unless I feel reasonably like I could make their argument. So from steel manning it or taking their side, the Trump administration's position on this is they've got three or four very valid points.

I think first off, the United States manufacturing base, like if we don't manufacture, right now China produces 40% of the world's manufacturing output. U.S. post-World War II, we were at 47%. So they're close to the level of economic kind of from a production standpoint dominance that the United States enjoyed when we were the single, basically the hegemonic superpower. What's the U.S.'s percentage of manufacturing? I think we're down to like 16 or something. I forget that exact.

But it's pretty, and it's falling really fast. So that's valid. From a national security standpoint, if you can't produce things, you can't produce cars, you can't produce tanks. Your car in a war, your car factories become your tank factories. And on down the line for a huge range of things, pharmaceuticals, health care, like a lot of stuff. If we're dependent, then we're less. secure. So I think that's valid. Two is if you look at currency and leaving aside China,

but so you just look at Vietnam, for example, where Vietnam has had this manufacturing boom for the last five years, a 20, 30 percent growth annually each year, their currency is the Vietnamese dong and it's pegged to the dollar. It hasn't appreciated it at all. And in any kind of a free market economic system, that much, that many more dollars flowing into the economy, that much, that foreign direct investment and purchasing of their goods, you would have an appreciation of the dog. It would go up, and that would help to self-regulate the trade between these countries, and it would make... So they're clearly, you know, they're literally pegging their currency to the dollar, which means they're manipulating their currency to give them their manufacturers

an advantage. So can you outline that so if it's kept artificially low? Makes their stuff cheap, and so we buy more of it. And it makes them buy less of our stuff because they can't afford our staff. So that's reasonable. I think that's valid. It's then at the end of the day, it's industrial policy. These are government policies designed to help their manufacturers and at the expense of our manufacturers.

Another one would be sort of environmental regulations are way more lax in these countries than ours. We're putting all kinds of environmental controls on our manufacturing and permitting and whether it's carbon emissions, especially in Europe. but all sorts of environmental regulations that they don't have. And so that's hurting ourselves. They can point to suppression of organized labor movements or even just like cultural things. I mean, China, you work six days a week.

It's cultural and is a government, I don't know. In Korea, it used to be a national law. You had to work six days a week. That's putting them at a real advantage from a production standpoint. then you can also look at our my mom is actually a biochemist that helps companies with food safety regulation so she's deep super deep in this of in Europe they don't allow genetically modified foods for scientific health and safety reasons but the Trump administration the US government has always been well these are kind of pseudoscience fake science our argument from our

scientists is hey these foods are safe and you're just doing it actually to protect your farm to protect your production processes. I mean, I'm a fan of that. I don't really want to go to France and just see, like, all these nice farms wiped out. I want to go there on vacation and enjoy my, enjoy the scenery of the quaint little farming village. But I get the point. So you can make a long list of things. Now, the question is, is now from a, from the Trump administration's perspective, tariffs are the best, easiest weapon.

Maybe that's too strong of a word. But easiest tool in the toolkit to use to combat this. So it's not necessarily, yes, it is also true that their tariff rates on U.S. goods are higher than our tariffs on theirs. But it's actually all these non-tariff barriers to trade that give their manufacturers an advantage over U.S. manufacturers. And tariffs just happen to be the easiest way to respond to that because it's simple and straightforward. So then the question is, is effective. You know, you have to judge outcomes not by their intentions. The problem is real.

I can state those things. The question is, do tariffs putting up tariff barriers actually increase American manufacturing or leave it the same or decrease it? And what we've seen over the last few weeks is it's going to decrease American manufacturing. Wait, why? Because you have a huge number, because these supply chains are very globally interconnected. And so, for example, U.S., if you're manufacturing for export, where you have to import the goods and pay duties on the components.

And then your products is now more expensive to produce. And if you instead produce those goods in Mexico that didn't have the tariffs on Chinese goods, you wouldn't, your cost would be lower. Not just the labor cost, but you wouldn't have to pay the tariffs. So anybody who's exporting, this is really hurting them. You're adding a lot of complexity. People are moving goods all around. So you're actually, you know, at the end of the day,

United States labor costs is just not going to be competitive for a large range of products. And so, yeah, okay, maybe you, maybe, it's hard to read the Trump administration's intentions in this, but the result is we're not giving the market enough clarity of what the tariffs will be when. And so if you did want to move back to the U.S., you're kind of paralyzed right now because the environment's changing so fast. We're, you know, Latin America has got a 10% duty rate? Is that going to go up or down? We don't know. If you thought it was going to stay, probably, you know, you want to just set up in Mexico for your plant. But if it's going to go up a lot, then maybe you set it in the U.S. But we don't know what's going to. It could change any day

now, any week. And so you don't have the certainty that you need to make investments in the United States. And you'd follow that up with like maybe it's just inherent in the U.S. system that's difficult to give people such uncertainty because will Trump win them, will the Republicans win the midterm? There's this Supreme Court case that's going to get worked through. Does he even have the power? The tariffs legal. Are the tariffs legal? The Constitution makes very clear that the tariffs are in control of the Congress, not the presidency. And he was able to implement them because he has emergency powers to tackle fentanyl. Is that sort of the argument that they have? They use that for some of the tariffs. So they use that fentanyl emergency for China. For China,

for Mexico, Canada. Okay. And the rest? That one's not being challenged, actually. Okay. That's not the lawsuit that they lost. The rest, they used just a national security argument in general that trade deficits were a national emergency.

Okay. And therefore, they could just apply it blanket on everyone. That's the one that they lost the court case and it's going to work its way to the Supreme Court over the next six months or so or some timeline. So it's very interesting what you're saying is that there were, there are companies that manufacture in the U.S., maybe U.S. producers, but they have to import some of their components from abroad. And they can't, there's no American manufacturer that's going to produce,

let's say, some, you know, certain type of nut for a air conditioner, right? Let's talk about an industry. We do well. We love air conditioning. Maybe that's, you know, one of the great American industries. So you could end up seeing those air conditioner manufacturers move to Mexico because they won't have to pay the import duties on those nuts and bolts that they use for their unit. Yeah.

And especially if they're selling that, if they're exporting it to the rest of the rest of, of the world. Because they're, you know, if they were just for the U.S., now you'd have to import it from Mexico and still pay the duty, so it doesn't save you much. But if you're selling to Latin America, you're selling to Europe, you don't want to bring stuff to the U.S. because you'll have to pay this duty on the components and jack your price up. There's also a lot of exemptions in the system. So, like, I work with a customer. One of our customers makes bicycles in the U.S. And under the current setup, bicycles can be imported duty-free, but bicycle components can not. So they've decided after a decade of manufacturing the U.S. that they now have to produce overseas

because they can import the finish goods and not pay duty, but if they import the components, they have to pay duty. So, I mean, I've seen a dozen examples in the last few months of companies that were producing in the U.S. and decided to stop. That's crazy. And I've seen nobody who said, oh, okay, as a result of this. I'm going to set up a plan in the U.S. There's some headlines, you know. He gets people to come to the White House and talk about it. And I'm not saying those people aren't real, but I haven't met with them.

And all the ones I'm meeting with are like, and it's just totally derailing my business. But I would think that it would lead more to come to the United States because you talk about uncertainty. Well, the certainty is that if you manufacture in the United States and you sell the United States, you have zero in terms of tariffs. If you can get all of your subcomponents made in the U.S., that's true. It's just that these manufacturers are all ecosystem driven. There's, like, subcomponents, and it's very hard to replace them. You know, it's very sticky in electronics in southern China. It's like you drive down the street.

You can find every component you want. You don't have to make everything yourself. You're assembling things. But, yeah, I mean, we have to judge policies by their outcome, not their intention. I think that's the thing that everybody seems to get wrong in D.C. all the time. They got good intentions, and then actually they screw things up. And economies are not really meant to be centrally planned. And that said, I made the case why there's some very legitimate problems in the U.S. trading system that need to be addressed.

So kudos to trying to solve them. But I just think the way that it's being done is just very abrupt and not giving companies enough time to plan. If you were to instead go, hey, this is where tariffs are going to go on a multi-year time horizon. And like, it's going to go up every quarter by this much, start moving and, like, give people just more. clarity of where things are going to go. I think businesses get adapted that way better and set things up in the right direction. Yeah. No, it's interesting. I was going to ask you, like, have you seen actual movement of capital, one country to the other? And I'm actually surprised to hear you not say that there's any that's come into the U.S., at least from among your customers.

Not amongst our customers. I haven't seen any flowing to the U.S., but I'm seeing a ton of movement out of China. That's the one thing that was very clear in all the directives. It's like, hey, tariffs on China are here to stay. They're much high. than the rest of the world. That's a long-term trend. Also, just on labor costs, like Chinese labor. You're not in China anymore for cheap labor. Like, you're there because they're the best of manufacturing things.

Which is really interesting story over the last 20 years that they became the highest quality manufacturer. Right. They're not the cheap labor anymore. So it's, but brands are now exploring rapidly, okay, I need to set up in Southeast Asia. Vietnam's growing like crazy. Thailand, big winner, Malaysia, India. But it's hard for them to pull the trigger on long-term investments. I think crazy to pull the trigger on a long-term investment

until you have more clarity of like where do duty rates land on the rest of world. Can they get some longer-term view? Can they settle down and just be like, yep, this is the new normal instead of at least give me three years until the end of the Trump administration so we can plan what that looks like if it's changing every couple weeks, it's a little crazy to absorb the pain. And then if you have to move your supply chain twice, it'll be a nightmare. That's right. Is it, in these other countries in Southeast Asia, you mentioned Thailand, Vietnam. Is it local manufacturers that these companies are working with? Or is it Chinese

manufacturers? It's mostly Chinese manufacturers. So talk about that. This is a very important point. Yeah, it's most of the Chinese companies setting up, setting up an entity in the country, hiring. Many cases actually getting the workers, they have to learn Chinese, Vietnamese workers. Really? Chinese managers. They give them some period of time to learn Chinese if they want to keep their job. That's, and Chinese companies have been setting out factories all over the world to do this.

Can I just say that if your goal is to have this national security side of this, which is you don't want your manufacturing to be controlled by a single country, a.k.a. China. And so therefore, you put up this big trade barrier with China, but you still have Chinese companies running your operations in Vietnam or Thailand. Aren't you just as susceptible to those national security risks? For sure. And it's, you know, our legal systems are difficult to work around that because Customs has a legal definition of what's made in Vietnam.

And it doesn't, you know, companies, Vietnamese, as a Vietnamese entity, the work is done in Vietnam. We have this thing called substantial transformation. Because actually, it's not just that. All the sub-components are made in China, too. They're shipping them down to Vietnam and applying enough value through other components that are made in Vietnam plus the labor costs.

It's called substantial transformation. So there's a legal definition of what means, what makes made in Vietnam on a product. They're doing the bare minimum. It's still largely a Chinese product being assembled in Vietnam. So, yeah, I think that's very, very valid if, like, if you really solved your problem, not really. I've had this galaxy brain idea that maybe Apple to sort of deal with some of the blowback they're getting from the Trump administration for moving their production from China to India and not the U.S. But they would just send the boxes to the U.S. for, like, some final assembled in the U.S. stamp.

But it has to be more than that. By hearing what you're saying, it has to be what to talk about this. Right. Can't they argue that it's valuable? It's a branding value for them to say this is finished in America and therefore? I'm not a customs expert, but our team has many customs experts on it that explain it. And it's a hard, it's a relatively high threshold to clear it to become made in. But, you know, even the Indian iPhones and whatever is still like most of the components are coming from China. Okay. But of course, right, the semiconductors coming from Taiwan. These are very global. There's parts that are made in America. I think the same. and the IP and the ownership. It's some of these rules were really like antiquated relative to the complexity of the modern global economy.

And you look at even the customs, it's called the harmonized schedule. This is how goods are classified to determine their duty rate. Every good has one and only one HS code, harmonized schedule code. And that says, okay, you know, your shoes, has a different code. if it's like rubber sole versus leather, you know, all the different things. Well, there's like 80, if you actually go look at this code, you can see how old it is. I mean, it's going back to the 1800s or whatever. I mean, it really got formalized with the World Trade Organization in the 60s and 70s and 80s.

But there's like the electronics code is like this thin and the clothing code is like that thick. maybe that needs smutating. The time that this was invented, like clothing, you know, I have every type of variation. And then all of electronics is like tiny little set of variations. It creates, I don't know, oversimplifications that go into it of like. And also really interesting opportunities, like people trying to claim that this is, computers are exempted right now.

Right. There's a computer and everything. So everybody in the world is trying to claim that this is actually a computer. It's not a watch. It's a computer. And then you get, you know, how do you get, I've seen a lot of different. people trying to play these games and for good reason, you know,

if you can get zero percent duty instead of 30 percent. And do customs agents go along with that? Like that watch is a computer? You have to go through. Like your garment has to be a computer, right? There's a process that you go through to get what's called a binding ruling from customs. So you can get them to rule on your product and say,

yes, it is this. So, yeah, that's what a big point, actually FlexPort has a business that's completely backlogged right now to try to trade. advisory where we have consultants that are experts in all these things. I mean, I'm really at the chauffeur knowledge level here is just sharing you what I'm driving the, I'm the chauffeur driving the experts around and listening to what I hear them say. I'm not an expert on all the ins and outs of customs regs, but I know enough to be dangerous. There's another component to this,

another game that companies are playing where they're faking the cost of the goods that come in and trying to enter some other arrangement with the factory. Like you pay like, let's say you have a thousand dollar air conditioner just to keep going. It's an expensive one. That's what you're paying to, you know, that's your cost of the unit. Now some companies are playing games like sell it to me for $100, the actual machine, but I'll pay you a $900 per unit like service fee or consulting fee. It is a felony to break customs law and you should really work with I'm not doing this. I know, I know it's not you, but this is a message you should be careful what you do um it's a there's a lot of games you can play and they're

not it's not good idea unless you make sure you have good legal advice about these types of things because customs will come after you um it's a felony and are there a lot of people sitting in u.s prisons for customs felonies it's their no the DOJ has said it's their number two area of white collar crime that they are investigated their number two priority number one is health care fraud and number two is customs fraud. Wow. And that's an announcement they made a couple months ago that this is their, so expect it. Enforcement said it all time high.

They're ratching it up. And, yeah, I think you don't want to mess around. These guys have guns. Yeah, so this is something that happened alongside the tariff levies. Yeah, and this was going to happen. So, and there are legal ways to reduce your valuation of your goods. What are the legal ways? Well, you can get, if you.

If there's U.S. goods that are inside of that, you can deduct that portion. You have to go through all the right paperwork processes and show it. You can, what's called an assist, if you do KAPX into the factory, or you've gotten some of the R&D for it. Again, I'm not an expert, but it's a, our Flexport team has a lot of expertise in this. This general practice is called Trade Advisory. So Flexport has a trade advisory group that helps people with this, but there are other lawyers. and some of it's in law firms, other logistics companies and customs brokers have this practice that can help brands do this. You want to make sure you're partnering with somebody good who can, you know, you can make some case that it's a lot like representing yourself in a court of law.

Like, yeah, you can do that, but like maybe it's good to get a lawyer if there's any kind of gray area and what you're involved in. And it's kind of like that. Totally. All right, folks, in case it's not clear, Ryan runs Flexport. We should have done a deeper introduction. But this is, I think, your fourth or fifth time on the show. So it's tech-enabled freight forwarding. So you believe in the global system because, well, I guess maybe philosophically, but also that's your business, just by definition, you're into that idea.

I want to ask you just like we've talked about this a couple of times, but again, it gets to this question of if you do the design, that the U.S. does a lot of the design of products at home and then manufacturing abroad and then they ship it globally. Are you getting a good deal if that is your economy? in general yeah i mean it's done really well for us and if you look at the profit pools like nike designs their stuff in america markets it brands it it's produced i think largely in vietnam and other parts southeast other parts of asia probably all over the world these days but um you know the amount that they pay for the shoes i don't have any inside knowledge on nike you can there's public reports on this stuff like the vast majority of the profit in the shoe is actually accumulating to the brand to the design to the to the shareholders

and just pretty clear like a system that's led to a lot of prosperity in the United States and globally frankly I think my big problem with the way this is all addressed is it's a lot of zero-sum negative sum mindset conversation where like in trade both sides win by definition. That's why we're doing trade. And it's just like we shouldn't lose sight of that. The fact that both parties are made better off when you do a trade and free market economics. Now, where it becomes complex is when you go, wait, but if their government is intervening in the market, then shouldn't our government intervene in the market? That's kind of the Trump administration's perspective here is like, hey, you know, I listed all those ways that their governments may be intervening

So it's not a free market and therefore do we want our government to come and be free market or come and be put our thumb on the scale and help American companies win more? I just think it's a bit naive like you know the reality is let's say what we want is cheap stuff like as a buyer as a human being you like you want to have more things that are cheap and affordable like it really pissed me off when Trump said. like, oh, you know, you only need two dolls instead of 20 dolls or whatever. It's like, easy for you to save. But like my daughter, she wants more dollars, I promise you. Yeah. And if you have to spend more stuff on that because it's made in America, if the dolls are made in America and I got to spend, I can only buy two of them and I got to spend more of my income on that, I have less money to spend on other stuff, which will go to other people in America. Like, it's a, you know, I'm going to be buying other.

Now I'm buying less things. It's a very simplistic kind of like, it's very hard. It's a complex adaptive system, the economy. It's a very complex ecosystem of moving parts and second order effects that are really hard for a central planner to ever figure out. The Austrian School of Economics is correct. Like, we should not screw with this that much. The one, I just want to do one quick follow up to that.

Then we'll go to break. I mean, we've talked about the capital, so factories, manufacturers. we've talked about shipping, we've talked about trade and stock, but like the other side of that is labor. And our system's capitalism. I'm pro-capitalism, right? I'm sure you are as well. And, but I think like part of that is the, to the gains will go to the, the gains will go to the people who own the capital. But the other side of that is they're, they also needed a labor force in some way to help make the things. And when you've separated in some ways, the capital becomes less about the factory, more about the idea and the labor.

is elsewhere, then that divide leads to some unhealthy dynamics in a society. Does that, what do you think about that? That's what Karl Marx said. Well, I mean, I'm not suggesting communism is the right way to solve this. Capitalism itself is a Marxian term. It comes from Karl Marx as the inventor of the term capitalism. And, you know, you talk about free markets where people are free to buy and sell what they want because it makes them better off if they do that.

that's like labor, what is labor? I mean, we're all part of labor. This idea that cap, I don't know, I've never met a capitalist. All the people I know who have a lot of money also work really hard. They're also like involved in labor. This is like very odd distinction. Like, what am I a capitalist or am I a worker? Because I work harder than anybody I know.

Am I a capitalist? I think, well, I don't know how much money. You're probably going to beat me in this argument. I know. It's a reasonable argument. I just want to just talk it through. I think, look, I think you are, you can work really hard, but if you own the capital, then you're going to end up getting much further ahead than somebody that comes in for a paycheck and is pure labor. Like, of course, if you own the capital, you're also working, but I don't know.

I don't know. I think we also take the first, you know, people who own the company, they're the last ones to get paid too. I mean, when companies lose money, the bigger the risk, the bigger the reward. get paid and the owner doesn't get anything, right? And so there's some degree of like, well, you get paid last, not first. And yeah, you take more risk. Now, so yeah, I think I personally, I just think that we'll be better off if the government intervenes less in the economy. Now, there are certain reasons why there's good reasons for the government to intervene and provide a sense of justice or like real justice enforcing laws. safety, defense, there's a lot of public goods that are under-provided by a free market.

Like, these are all valid reasons. We need a government. I'm not like some anarchist by any means. But it really is very, very tempting to ask the government to come and make our lives better. And they almost always screw it up. Right. And, like, it's very funny to see now the Republicans are the ones. It's a different position for them.

It's very different. And by the way, my suggestion is not like government has to fix this. It's more just like we're in a very, you are somebody who sees this more than most. So we're in a very unique system where you, I think that Marx is, I haven't read Marx in detail, but I think his argument was capital takes advantage of the labor. What I'm saying is we now have this global system. And you're talking about how it's advancing, right, where you have capital in one area, labor in one area so I mean where where does and labor will always be the thing that gives

the employment to the masses you would think by definition if you want to use that yes so then what happens to the people I don't think this is like this is like an accusatory question it's just like something that's kind of fun to explore with you yeah I don't know I just think the economy is so much more complex than people want to give it you know simple answer that we know I mean we know that for sure now. Yeah. The tariffs have illuminated that. Yeah. And that's the problem with all attempts to intervene is that you usually make it worse. Okay. All right. We're going to talk about some intervention on the other side of this break, which starts with the closing of the de minimis loophole and maybe the end or the dissolution of the power of Timu and Sheehan

and how Amazon is going to handle all that. We'll be back right after this. And we're back here on Big Technology podcast with Ryan Peterson, CEO of Flexport. Ryan, Ryan, I, you know, we've talked for quite some time about trade and global regulation and some fun stuff about capitalism and labor before the break, which I don't regret. I'm glad we did that. But I want to talk to you now about like some of the real bread and butter tech issues, which is that this de minimis loophole, which allowed Sheehan and Timu to ship to U.S. customers a sizable amount of merchandise without duties. That loophole is gone. And I'm curious if you can share a little bit about how that has changed things in terms of the way that Americans buy. Yeah, so the de minimis loophole said, I don't like calling it a loophole. It was just a part of it. It was just in the law. It's in the regulations.

It was passed by Congress. It said that goods less than $800 are not subject to customs duties. And it can be done with a very informal customs entry where you don't need to provide as much data about who made the goods and a few other data points. that aren't required. But the main thing was the duties. So that is now going away. Now, what happened, the way that companies took advantage of that program was they shipped either direct from China or other countries into the U.S.

So you'd order from the big famous brands on this for T.Moo and Sheen, but Amazon, Walmart, a bunch of other companies were doing this at scale. You'd buy the goods. They would fly them over in bulk. So you're doing like air freight in bulk. clear the goods through customs one at a time, so there's no duty, and each individual item is less than $800, and then deliver it to your house. So you'd get slightly slower shipping than if it was coming from an Amazon FC fulfillment center, but much lower cost because of the duty

avoidance. So that's like the famous case with shipping from China, but actually what a lot of people don't realize is a huge percentage of the world's apparel, of the American apparel brands had set up fulfillment in Mexico and Canada to do the same thing. only they would do ocean freight from wherever the goods are made, deliver to Mexico, deliver to Canada, and then fulfill one item at a time from Mexico and Canada. So that's gone away for Chinese-made goods, effective on May 2nd. They shut that down. It is imminently, we don't know when, going to go away for goods from everywhere else in the world.

And the immediate result is a huge surge of needing to put fulfillment, wanting to put fulfillment back in the United States. There's no reason to fulfill from Tijuana. It's pretty far. You're shipping to New York from Tijuana. You're better off having a fulfillment center in the middle of the country or have one, you know, on each coast. So that's been a big drive. That will actually, that will, that is resulting in more jobs in the United States. Aha, we found them.

job. Like if you're measuring a policy based on its actual outcome instead of its intention, that was a good one for that, for its own intentions. I'm anti-tariff in all their forms, anti-taxes. So I think I like the old- You want a ship. I like the old exemption. I'm like, hey, less taxes. I'm not celebrating more taxes. And a lot of our customers were using this or now would put in a bad place with companies cost them like 10 million more per year. How? Well, now they have to pay duties. They weren't before. But they were doing 10 million of how is it going to cost them 10 million more

today? It's 30% duty versus zero. Right. Okay. Easily, on a reasonable size company, easily get you a 10 million dollars. Okay. And it's fine, level playing field. It was kind of a crazy weird rule that... You almost said

loophole. Yeah, it's tempted to call it a loophole. It was a strange setup that like, on some level it's like creating it's actually a very good illustration of like the market will find a way people are creative it's my lesson for all of our customers too it's like hey you're in the same level planning field the rules are changing but they're changing for you and all of your competitors at the same time

and so you got whoever's the most creative makes the best decisions can find a way to win when there's a lot of change like what we're seeing right now in tariffs and like the de minimis thing is an example of that like 10 years it went from See if I can remember my stats on this. It went from 100,000 packages a day to 4 million packages a day in the last decade, clearing under de minimis. Now to 70% of that was China. So now, you know, we've eliminated 70% of that in the last month. Does she and Tmu survive?

Well, they're very big global companies, first off. So yes. And they're already finding ways, you know, they have to pay duties, but they're just, back to being a level playing field. So I think you're going to see them, one, produce in other countries and to just pay the duty and continue to compete. Their goods are not that expensive. They have a low cost of production.

So they'll have a – they're going to be well positioned, actually, because they're better at producing things in Asia than American brands are. What about Amazon? I mean, I heard you recently say that 60% of Amazon sellers are in China. Yeah. Is that I heard, yeah. Is Amazon exposed? Very much so.

So talk about that. Yeah, I lived in China 20 years ago and sold things, and I was actually an early Amazon seller. Oh, third party? Yeah, I was one of the first because I remember the day that they announced. With the day that they allowed third party sellers, I was like, I thought it was the most amazing thing in the world. I could go add products to the Amazon catalog. It would just show up. Were you selling your motorcycles through it?

And furniture, actually. Okay. I don't think we sold motorcycles in the way furniture. We've sold a lot on eBay motors for the motorcycles. I think that's still bigger than Amazon for that category. But I remember thinking, like, even back then, these Chinese factories, they make all the products. They don't really need me, except they don't know how to do marketing, and especially not online marketing. But the moment they figure that out, I'm making all this margin, and they don't need me anymore.

And, you know, fast forward. There's a famous email in 2015. I don't know how famous is, but is an email, internal Amazon email, that's kind of, got surfaced recently, I'm probably through a lawsuit or something. I'm not sure why this email is public about how incredible the growth of their Amazon, of their Chinese seller ecosystem is, and that they're going to lean hard into allowing Chinese sellers to reach, the Chinese sellers have realized that Amazon is the conduit to reach the American consumer with no middleman, and that Amazon is to go all in on making that possible back in 2015.

And it's just dramatically accelerated since then. So they've got some exposure. one from terrorists, but two, just like political exposure. It's kind of a bad look if you're in the Trump administration to see these guys who are just like really helping Chinese sellers at the expense of their American sellers. And they were very explicit, like, hey, our American sellers are not going to like this. So let's not make a big scene about it. But we're definitely going to help the Chinese sellers compete.

And yeah, it's become very difficult for a U.S. brand to compete. there because the Chinese are going to be better at producing stuff in China than you are. And if they're just as good at selling online, they win. Right? Like, you don't have a great competitive position. But Trump hasn't said anything about Andy Jassy or Bezos. He's been focusing on Tim Cook. So you think there's like a real political vulnerability there?

Yeah. I mean, remember they put the tariffs in? Oh, Amazon said they were going to list the tariffs as part of the price. And he called them, uh, oh, he's a user. really bad word. We should pull it up, but it was like, I think he called him an unpatriotic company or something like that. He did attack Bezos. I think he called him treasonous. I'm going to get this up. Was it treasonous? It was harsh. I wouldn't want him to call me a treasonous. Person. Yeah. I don't, I don't have the actual language here. Don't quote me. Don't quote me. It was

something like that. It wasn't, it was a comforting you on audio and video. So we're going to They undid it. They undid it. Amazon undid the decision, which, by the way, I thought it was a mistake. They should have said, yeah, we're showing you the tariffs so that you know you should buy goods made in America. Then you'll have no tariff on those goods. They could have framed it. They could have spun it a lot better, but instead they just backed off immediately. Yeah. Well, apparently it was something, I spoke to the company as something that was like floated internally, but was never going to, but that could just be spin. I don't know. It was serious enough that it made its way out to the press. So. But they have exposure here. I think, I don't know. Political exposure, economic exposure, probably some of both.

But they also just, on the flip side, for the de minimis thing in particular, I think Amazon's better off with de minimis not existing. Because de minimis is shipping direct from China to the U.S. consumer, it skips their fulfillment network. Right. Which is where they put all the cap-x and huge competitive differentiator, the fact that they have fulfillment centers everywhere and ship so fast and so cheaply. It takes away, if you're shipping from China, I mean, that's what Let Timu get to 25% of Amazon's scale in five years, is that they skip all that fulfillment center infrastructure. So it's de minimis going away is probably good for Amazon and Walmart. So where's the vulnerability then? Just in broader, broader tariffs concepts and broader if the U.S. is going to crack down on, like the one that is getting circulated right now is a crackdown.

We'll see if it's how this comes through. familiar enough with how the sausage gets made in Washington, but there's some bills circulating to a ban foreign importers of record. So a foreign importer of record is what these Chinese sellers are that are selling on Amazon. They don't have a U.S. legal entity. You don't have to be an American company or even a foreign-owned company with an LLC in the United States to import goods into the United States. You can import goods as a foreign company with no legal status in the United States other than what's called a foreign importer of record or a non-resident importer. There's a wide, there's a huge demand amongst the Amazon seller community, the American

companies, to ban this practice. Because what ends up happening, the reason they really hate is that one of these companies, if it's a Chinese company, or it doesn't have to be Chinese, it can be from anywhere in the world that can do this. You import goods into the U.S. if you declare the valuation instead of, let's say it's $100,000 with the goods, but you say it's only worth $10,000. You've cut your duty by 90%.

It gives you a huge competitive advantage in selling it. And you can't go to trade prison. And when you get caught, CBP Customs Border Protection is not sending agents to China to arrest the people. And in fact, it's probably going to be one of the things that's going to be demanded in a good, in a well-crafted

deal with China and other countries is you must extradite people who commit customs fraud in the United States. Well, one, is there's this bill, and I don't know if it can be done by executive order or not, but I know it could be done by Congress, and there's a bill circulating probably several bills to shut this down. It's bipartisan support, I think, to not allow foreign importers a record. But likely also, it's, hey, you have to allow U.S. customs some kind of jurisdiction or an extradition program to get when people commit customs fraud in the United States

from your country, you've got to turn them over to us. And so if they were to shut that down and 60% of all Amazon sellers are in that program, yeah, that would be painful for them. That would be rough. Yeah. Yeah. So probably just like Apple, they've over leveraged on China, Amazon. Potentially. I don't know. I'm like, I love, I think China's incredible place to do business. I wasn't saying, I wasn't arguing with that.

There's more just like politically, politically, economically, you have to be careful that you don't put your whole business in a politically or economically vulnerable area. With this administration, I think that's fair to say. Yeah. A couple of kind of wild ones to ask you as we close. I have some, I'll say off the beaten path question. So you bought Shopify logistics. I just want to know how soon you think logistics and fulfillment will be done with like 100% robots. Oh.

Yeah, you know, I'm not close enough to the thing. It's a ways out. The current technologies that I've seen aren't there. Humans are just so dexterous and intelligent and not that expensive. It's a very high bar to clear for these robots because humans are really good at the job. And if you were to, let's just say, invert the problem and say, okay, I have made you this humanoid robot. that has all the characteristics of a human. His IQ is a hundred, you know, problem-solving abilities of a human,

dexterity of a human, it can run around and use its brain and pick anything and bring it. And it's only $20 an hour. You don't have to buy the robot. I'll just rent it to you for $20 an hour. You'd be like, cool, I'll take 500 of them and run a fulfillment center. That's true. You're like, oh, that's what we have right now. And it's, so it's a very high bar to clear for these fulfillment center robots.

robots. In fact, the big case for them is less on the humanoid side. It's more density. Humanoid actually doesn't solve a lot of problems because you don't get more density out of your warehouse. You want real estate density. You want to be able to stack the goods all the way to the ceiling, jam them in. So it's more, the form factor is not going to be humanoid, most likely in the fulfillment environment. It's what already exists is like auto store is a leader in this. and symbiotic is a really interesting company, a public company. It's really about generating more density and lowering the error rate. Humans make more mistakes than these systems in theory.

So some of that's here now, but I think before there's no, at least at FlexPora, we're so, we have minimal robots in our fulfillment centers. We're mostly people doing the job. And I don't want to spend the CAPX. And the other problem is if the technology is improving as fast as they say, then I definitely definitely don't want to buy it. I'll wait until next year, and the year after, and the year after. And so that becomes an interesting problem of like, how do you figure out when's the right moment? I don't want to spend it. So probably it's a financial, it's also financial engineering

and financial models that have to be developed here where you're renting me the robot. Maybe that's the benefit of humanoid though, by the way, is like upgrade cycles could be easier. You just replace one at a time instead of having to, I don't want to buy a hundred million dollar system for my building, you know. Right. I mean, maybe you have like a humanoid that like has like these baked in stilts, so it can, like, go up to, like, 50 feet and then just come back down and you can stack things? What do you say? Yeah, robot forklifts.

There's a lot of, you know, vacuum tubes. I don't know. There's a million. The Symbolic one, if you can go on at Symbolic.com and check out. I think they have some of the stuff on their website. Some really cool. That's a public company. SoftBank is making a lot of investments in robotic systems from warehouses.

We're a big investor of ours. I'm kind of close to some of the stuff. in seeing it. SoftPank is? SoftBank is a big investor in it, and they're on my board. So they show me stuff all the time, but they haven't yet sold me a system. I see. I see. Maybe one day. Do you believe in their investment in Open AI? I don't know. I don't know the economics of it and the terms of what valuation and stuff, but I do believe in Open AI. I mean, it's incredible.

Okay. I just funds a big investor. Well, a small investor by Open AI scale in that as well. You also, you're using AI to help smooth out. your the fulfillment process within flex port we spoke about it briefly a couple times ago but your teams are using uh i systems to take in a lot of the documents and shipping which come in unstructured make sense of the data put them in your system we i mean we use huge amounts of it and increasing we have a big advantage i think if you look at what's required to win in a i to apply a i like we don't have any advantage in developing the i there's smarter people in

AI by far that don't work at Flexport than that do. But in terms of distribution, deployment, training of models, understanding where to apply, what problems can you solve and then being practical to apply those, I think we just have a huge advantage. If you look at freight logistics end to end, from factory to your customer's door and all the steps that have to take it place to move the cargo and get delivered, we're the only company. We're the only company. in the top 100 by volume that was founded after the web browser was invented. Okay.

And the scale matters because it gives you data to train your models, the domain experience to figure out what problems actually I need to solve. There's some real nuance here that if you're just an AI person, you would never know that this problem exists because you don't experience it.

And then third is the distribution. Like when we solve a problem, the next day, it's available for thousands of enterprise customers to use. I don't have to beg people for contracts to get access to their data or to beg them to give me money to use my model. It's just like constant rapid pace of deployment.

So we have a big advantage over our competition in forwarding. And then similarly, a big advantage over AI-driven startups. Because I'm paranoid that like, okay, I can see here and go, yeah, we're the only one in the top 100 freight forwarders in the world founded after Netscape was invented in 94. But I'm paranoid that there's some kid out there going, yeah, we're the only one. Freight Forward or founded after ChatGPT was invented in November of 2022. But that person, that small startup, of which there are several, many, perhaps, they don't have our data to fine-tune the models or our distribution to go live.

They're having to make AI in a vacuum and then beg people to use it and sign a license, you know, security contract, all this stuff that needs to happen. Like, we just launched product and it goes live the next day. for our customer base. This might be two in the weeds, but are you buying off the shelf or open source and customizing it? Some of everything.

I mean, we've got partnerships with up in AI, Anthropic, Google, we've used for many years. Google's still the best in a lot of things. Google has a product called OR tools. It's not generative AI. It's just like deep learning,

machine learning. But it's an OR sense for operations research. So it's the best for routing algorithms, planning systems, for logistics. It's like really amazing. So we use that. Some startups that are really cutting edge on voice.

What do you use the voice for? We use voice to call truck drivers. Oh, right, right. This is experimental or this is out the door now? It's live. We're making 4,000 or 5,000 phone calls a day. And this is what assigns truck drivers to certain things and gives them opportunities for jobs. So we have 400,000 truck drivers on the mobile app.

But we only have 200,000 loads a year. Okay. I've got too many truck drivers. Okay. They're not going to open the app if there's only a load every two years, right? the simple map. They won't engage. So what we'll do is call. If we think we have a load that they would like, we call them. A-I voice. Yeah. And it understands in the science. It has a full-on conversation explaining all kinds. I mean, it's really good. And it gets better every few months and

cheaper. The price of that's come down about 90% in the last year. And it's becoming quite commodified. So we use vendor, but there's two or three other vendors that are 95% as good. And there's an arms race there that we're benefiting from in a lot of this stuff. I've always, we're also going to use it for more and more things, calling to make appointments at terminals or warehouses, calling to check statuses, collect data, email data collection, a lot of what we do. In fact, the core export technology engine for workflow is workflow engine. It's for moving freight around the world. You need taking unstructured data, like this is done by humans. at our competitors and even in parts of Flexport where you're like smart person understands the

process you give them an unstructured problem you say hey move this from here to here they know what to do they figure it out and what Flex Sports done over the last decade is break that into simple tasks that are so simple that anybody could break that apart into a simple form a web form you could argue that maybe we've spent a decade building simple tasks that we didn't need to that you could just give it to AI give it to AI let it do the complex thing what we're finding right now is that it can't, but it can do the simple tasks. Right. So we set ourselves up beautifully for it.

But as the AI keeps compounding acceleration, you may get to escape velocity, you're like, I don't need the work flow engine at all. I can just run, go do it all on its own. So we'll see. We're saying, paranoid about it, saying as close as we can so that when those breakthroughs happen, we're the first ones to benefit. That's wild. Okay.

I just want to keep in time. We're at the top of the hour. Do I have time for two more questions? Yeah, I'm good. Okay. All right. So I want to ask you about your trip to the Panama Canal. You went down there, apparently there's been a drought impacting the canal's ability to process loads.

But talk a little bit about what you saw and the impact of this drought on the canal's ability to operate. Yeah, the drought. The thing is that droughts are pretty regular occurrence with the El Niño phenomenon. You'll have rainy years and then dry years. So, 20203 was quite a dry year, and that led to 2024, not having enough water in the canal to operate at full capacity. So that led to only about two-thirds the number of ships transiting the canal as were theoretically capable of transiting, which led to a huge bottlenecks and delays. One point you had a 21-day delay of ships waiting to clear the canal. It only takes 22 days to go around.

For the coincidence, by the way. How did you manage to keep your delay? Just under the wire. No, that's probably just people I say, yeah, you have to make me wait 23 days, I'll go around. So it's a natural governing effect there. The market's working things out. Probably. So, yeah, there was drought.

The Panama Canal, I mean, if you're ever, I meet people who went to Panama and didn't go to the canal. I'm like, what are you doing? I went all the way there just to see the canal, and I would do it again. Fascinating, one of the most amazing engineering feats in human history, which is not really easily appreciated until you see it. Because it's not a sea-level canal. That's the reason rainwater matters. It's a freshwater canal. The Suez is a seawater canal.

The Suez came first. The same guy who built the Suez tried to build a sea-level canal through Panama and failed. And it's an impossible task because it's a rainforest and it's a mountainous rainforest. So at a sea-level canal, you're going to get whitewater rivers and waterfalls and mudslides, all the water's flowing into your canal and then turning into a whitewater river racing to the sea. Like, the geology, it would be, we just don't have the energy levels, the resource levels to make a sea level canal through Panama. And they certainly did in the 1800s and they were attempting this. So what they did instead, the Americans came over about 10 years after that failed.

And instead of trying to build a sea level canal, we just damned the biggest river in Central America called the Chagra. River and made a huge lake and the canal is actually just an enormous lake and then a very short canal that takes you up to the lake level with locks I had no idea and you actually just sail right across the top of the country on this lake that's crazy it's really crazy you see it you're like oh my goodness how did they we would never attempt such a thing today like we're just going to and first of all they had to overthrow it was part of Colombia Colombia didn't want they were negotiating too hard and Teddy Roosevelt just said no we're taking this away and creating a new country and sent battleships down there to take it from them.

Okay, legitimately crazy. Yeah, we just wouldn't do this kind of stuff anymore at all, much less like put a giant dam on top of your country. So it was... I hope not. We never say never, given away the things are tracking. It was good for the world, the Panama Canal. But yeah, incredible place to go visit and see it firsthand.

But that drought, what's interesting is that there was a drought, but the droughts are relatively common. You can look at the rainfall pattern. And every six to eight to ten years, there's a year with like very low rainfall, El Niño or La Niña, I forget the difference between the two, but it's all part of the same effect on the Pacific, the warming and cooling of the Pacific ocean. And so the 2023 drought was real, but it was entirely predictable. And what happened is in 2016, they expanded the canal. They were very worried that China was going to build a canal through Nicaragua and their monopoly on transiting between the Atlantic and the Pacific. The Panamanian government was very worried about this.

And so they race through to make a wider canal so that bigger, wider ships could make it through. Well, if you make a wider canal in a freshwater canal, more fresh water is going to flow out of your lake. And the lake levels are going to drop. And you need more rain to operate it. And so when the drought hit, the system just didn't have enough water in it. But it's relatively predictable. Like, it's entirely predictable because actually 2014, you had lower rain than 2023. There have many instances of lower rain.

So if you were, you know, you're doing your engineering and you go, oh, okay, let's look at the lowest rain that we've had in the last, I don't know, what you want, 50 years, 100 years. But building it up to that level may have just been prohibitively expensive. And so we might just live in a world where every six years your canal is not operating at full capacity. Wow. That's crazy. What a cool visit. I have to go down there. I recommend it. It's also just a great country, a lot of history, some cool beaches, nature. Yeah, my wife has been, she loved it. So I have to make my way down. Okay, last thing for you. Tom Lee was on recently, the investment strategist. And we're talking through like the Black Swan events we've had over the past five years.

He's been like there's been one every year for the past five years. And then he listed off a bunch, including like COVID, the Bullwip, that we had to the shipping fees that we talked about earlier, that it became, there was so much demand and so little supply of ships that all of a sudden you had inflation because it was $20,000 a container and then talked about the Liberation Day as another one. And I was like, Tom, it's interesting that, like, supply chain is a constant through all of this. Yeah. Well, and don't forget, I'm sure you guys talked about it, but Ukraine War and the planes couldn't fly over Russia anymore. That's been a huge logistics impact.

Right. And we were talking also Gaza and the Houthi's shooting at the boats. He's cut off containerships are not going through the Red Sea for the last 18 months. Yep, and you can go Trump himself was kind of a black swan the first time around and put all these tariffs in.

In fact, you go further back in 2016, we had the cheapest ocean freight in human history. It was actually a glut of capacity. It was the opposite problem is now, but one of the Korean ocean carrier, Hanjin, went bankrupt that year. Since I started Flexport,

there's been one of these black swan just like crazy. We like it. I mean, customers, it sucks for the customers, but it's part of why we like working in logistics. It's like never the same thing. Always learning. Always on your toes. I can read the newspaper every day and have some perspective of like, actually. Yeah. I mean, it's why it's always fun. Our conversations are always fun because you just have this visibility into the global economy

that a few do because of what you do. Yeah. Someone asked me recently if I was stressed out and I was like, yeah, that's how I like it. I want to be stressed. Yeah. Okay. And then the last thing is I was with Dvarkash Patel A couple weeks ago I love him He's great And we were talking about Oh he's awesome

Yeah We were talking about what Oh he was He actually made this point about I was talking to him about Which models are going to be better He goes well you have electronics Like some electronics are better than others

Like sometimes there are companies that are both making TVs But one will just be better at it He goes I don't know why And I said I think it's probably supply chain I'm curious if you think that's the case that companies that do a better job, managing the supply chain, getting the right parts are the ones that are going to be outperforming the others.

Yeah, definitely. I mean, it was. Supply chain is a pretty broad definition. I mean, it's ultimately going to encompass designing your product, producing the product, making the product. So kind of almost by definition, but even in the logistics piece, definitely see companies that have too many people, can't get out of each other's way, too many silos between departments and fighting. of like, there's just a lot of people that have to come together around a supply

you have the designer of the product, the merchandiser who's like figuring out how many of each product to buy and how they're going to sell it and position it. You've got your production sourcing, which factories are we going to work with, the production quality assurance, you have logistics, you have trade compliance, you have finance. I mean, I just listed six or seven to marketing. A lot of departments. And some of these, some companies get, I think, too big where there's too many people

and can't get along. A lot of problems with data sharing that we try to address. I mean, our goal affects where we get all these users to use our platform. So we're not just for the logistics team. All those other people have some skin in the game of figure out what's happening

and want access to the data and want to see what's going on. But, you know, even figuring out what your profit, what price should you charge, if a lot of companies will not have good enough data about their costs down to the individual item level because there's all these like the freight costs

the customs costs the freight costs very different if it's ocean versus air right and you'll see a lot of decisions made without good data about this stuff so those can you know make the product too expensive

you're doing so much air freight should be doing ocean and all of this goes into the equation of what makes a good business and then if you're profitable you can reinvest the profits make your products even better. And if you're not, you can't reinvest.

Operational confidence. That's what it comes down to. 100%. Ryan, always great to have you on the show. Thank you so much for coming on. Yeah, my pleasure. Super fun. And folks who want to learn more about Flexport, the website is Flexport.com.

It is. Flexport.com, check us out. We have a, if you want to learn more about trade and everything that's keep on top of the tariffs, we run a free series of webinars every two weeks. Great. Great webinars. Say with the latest stuff, what's going on. Try to stay on top of this for you.

And folks, Ryan's a great follow on X. can follow him at Types Fast, T-Y-P-E-S-F-A-S-T. Apparently, you are very fast typers. The domain was, the handle was available. I don't know if I'm that fast. There was one moment where I think you demonstrated your fast typing skills, but anyway, we'll say that to the next show. All right, Ryan, thanks again for coming on.

Thanks, everybody for listening. We'll be back on Friday to break down the week's news. Until then, we'll see you next time on Big Technology Podcast.