00:34:03 · Ryan Petersen
[00:34:03] S1: Not to my knowledge where like piece of paper representing, but paper is a relatively new innovation. I don't know if the Egyptians had this and these long distance kind of trust based networks just incredibly hard. Mean, today it's very hard. It's this complex coordination problem trying to get, people with different incentives and information and timing and to coordinate. It's what makes Flexport hard and fascinating. The problems that we solve is like, I've gotta coordinate people on different continents who don't even speak the same language in some cases, although English has largely emerged as the language of trade through AI. We've actually... A couple months ago, we launched it. Now people can talk to each other in their native language, the AI just translates it so you can do trade in your own language. But English as an innovation was actually really important for this. It's, like, being able to communicate is hard. I I... I'm admirer. Like, we have competitors. People think I hate on our competitors, but I don't actually. We... I'm admiring of, like, our... One of our competitors was founded in 1890. I mean, forget the Internet. This is, before the telephone. They were doing trade on the telegraph, like Morse code. It's kind of interesting. Like, how did they do this? How did they figure it out? And it... At that time, like, the bill of lading was a real innovation. Like, you didn't have to transport not only the gold, but the goods. Like, you you could transport the goods to the port, sell the bill of lading. So now whoever holds this bill of lading can go to the port and pick up the goods. I didn't have to move the goods to the market and sell them. I could just sell you the piece of paper and you go figure it out from there. That was like a serious innovation five hundred years ago. It's absurd that that, by the way, still how a lot of trade takes place. Something like... Our statistic is about 5% of our customers require an original bill of lading.
00:35:53 · Ty Morse
[00:35:53] S0: In paper form?
00:35:54 · Ryan Petersen
[00:35:54] S1: In paper form. And it's still a part of our stack, is like mailing these pieces of paper around the world. It's absurd. But people require it. In some cases, banks require it in order to unlock payment. It's somehow seen as like secure, collateralized payment instrument. It's absurd. I mean, it's like not very hard to fake a piece of paper. Speaking of competitors, one of our competitors is DHL. Most people know DHL because they're a parcel business. That's why they're a famous company, but they're also one of the biggest freight forwarders in the world. And the original DHL business, the parcel business started because with the invention of the shipping container, the shipping container is very efficient, very fast. And now the containers were outrunning the mail and the mail was carrying these bills of lading to serve as title for the transfer of the goods. The containers were showing up at the port and the titles were not there to do a transfer. And it's just like a very broken system. So DHL actually formed as the original sharing economy company where you could... They... What they would do is you'd be a courier. Anybody could sign up to be a courier for DHL and they would buy you a plane ticket wherever you wanted to go, but you had to carry a duffel bag full of bills of lading. And then those would be serving as title for container shipping. That was the origin of DHL as a logistics network was actually... They didn't have any planes or parcel network or anything like FedEx and UPS. It was just travelers, like, stuffing... I mean, I don't know how they answered that. It was pre TSA. Like, no one was asking, did you pack your own luggage? Because you'd have to be like, DHL gave me this stuff. I have no idea what's in there. But, yeah, that is still largely the way trade is going. I mean, I was just in our Thailand office a month ago, they were showing me... Thailand, it's even worse. The way, it's illegal to criticize the Thai... This isn't against the king of Thailand.
00:37:47 · Ty Morse, Ryan Petersen
[00:37:47] S0: Okay. [00:37:47] S1: Just to be clear, because that's illegal. You can go to jail. Right. I'm not criticizing the king of Thailand. [00:37:51] S0: You're not even criticizing. You're just noting an observation. [00:37:53] S1: Well, I will criticize this this one policy they have, which is you have to pay the government a stamp tax, and the stamp for any bill of lading, you have to print this government stamp and put it on there to prove that you've paid a... I think it's 2¢. It translates to 2 US cents, which, of course, it costs way more to buy the stamp and stamp it on there than it does do it. And I was with our team looking at this process, and it turns out you can buy this digitally, and there's a QR code that you can print on there to prove that you've stamped it. So that's now how we do it. But, like, the stamp tax is also this is why I got in some trouble. I had to delete my tweet because I was reminding the Thai government that this was... The stamp tax is what led to the American Revolution. They put us the exact same thing. You had to you had to pay the British king for a stamp to put on your documents. And they thought I would... You know, I would say, hey. This is why we overthrew the king George the third. It was a it was a policy like this. I was not meaning to say that they should overthrow the king of Thailand. I'm sure he's a good guy. He's been there for a long time, so I'm not I'm not advocating for that. [00:38:56] S0: Love that guy. [00:38:57] S1: Just to be clear, I'm a big fan.
00:38:57 · Ryan Petersen, Ty Morse
[00:38:57] S1: Just to be clear, I'm a big fan. [00:38:58] S0: So we saw a little bit of, you know, maritime choke points in 2022 with the Ever Given, but now we're seeing it full fledged, you know, really disrupting trade routes, with the Strait Of Hormuz. Can you just talk about how, like, the Strait Of Hormuz is impacting things?
00:39:13 · Ryan Petersen
[00:39:13] S1: So Ever Given was that ship that got stuck. That was only for a week, so it was... It ended up being more humorous than anything. Although we had 44 containers on that ship and about 1,200 of them stuck afterwards. So as funny as it was for the meme economy, the real economy was pretty pissed off. Like, those people didn't see their cargo for a long time. Actually, most of them never got there. Jeez. Cargo went to, basically went to... They just got paid by the insurance companies. But starting that wasn't a big deal. What's happening now is a very big deal. We've been reminded like reawakened that physical world matters over the last few years, over the last decade really, because I think our economy has become so memeified and digitized and financialized that we're like, on Maslow's pyramid, we're all living way up here in La La Land and forgetting that the physical world down here underlies it all. And then underlying that is peace and order. Those are prerequisites for civilization. And we take them way too much for granted. Trade is like a mechanism for building civilization because every time two companies, two parties, two people do trade, we exchange something, we're both made better off or else we wouldn't do it. And that is the creation of wealth. New wealth has been created in the world. This is what AOC and everybody gets wrong. It's like, it's not a fixed pie. Like, if I make something, you buy it. I didn't take anything from you. We're both made better off.