Nov 01, 2021 06:00:00

Who can survive the '100-year economic crisis'?

A forwarder is a business that acts as an intermediary between a company that wants to sell products overseas and a local sales company. Start-up of logistics forwarder ' flex port Ryan Petersen's is CEO and co-founder of' is, from experience and eyes in logistics, will not discuss 'what has become a bottleneck of the modern supply chain.'

What caused all the supply chain bottlenecks? Modern finance with its obsession with 'Return on Equity.'

— Ryan Petersen (@typesfast) October 28, 2021

Mr. Petersen is a person who attracted a lot of attention because he solved the problem of Long Beach, California, USA with the power of Twitter. At one point, Petersen was wandering around the harbor on Long Beach and Los Angeles by boat, and as many as 70 huge container ships were unloading at the harbor and waiting for unloading for days. I noticed that. Later, it turned out that the reason for this was that the dock was so crowded that the truck couldn't return the empty container and the driver couldn't pick up the container with the luggage.

The real story behind'tweetstorm that saves Christmas' --Los Angeles Times
https://www.latimes.com/business/technology/story/2021-10-28/the-real-story-behind-a-tech-founders-tweetstorm-that-saved-christmas

When Mr. Petersen to post to Twitter the above situation, Coinbase Chief Executive and Mr. Brian Armstrong is a responsible person, of the Heritage Foundation char Mr. main Yoesuto of reaction. The post quickly spread and reached California Governor Gavin Newsom. Mr. Petersen advised the city to 'relax the height restrictions on container stacking,' 'introduce spare trucks,' and 'create new storage areas,' and the city of Los Angeles actually took some measures. Implemented. This case got a lot of attention as one Twitter post actually moved politics.

Mr. Petersen is newly discussing 'what is the bottleneck of the supply chain' on Twitter.

Petersen points out that modern businesses and finance rely on return on equity (ROE). ROE is a number that shows how much profit is generated from equity capital (net worth), but Petersen argues that many CEOs have used almost all of the company to show good ROE. I am. For this reason, there is no surplus in the company, and it is impossible to strategically stockpile or generate funds for research and development. Petersen said the 'cushioning material' had been removed from the economy as a whole as the focus was on improving short-term ROE.

People's demand has peaked in the last 100 years, and infrastructure has not kept pace with this demand storm. Since there is no surplus in the logistics company, it is not possible to prepare additional chassis, containers, warehouses, and storage locations that are connected to trucks and used for transportation. Also, the brand does not have extra inventory and the manufacturer does not have extra materials or components. In addition, few people have loyalty to companies that don't care about themselves, making it difficult to recruit personnel when demand surges.

Companies use FIFOs (first-in first-out) and LIFO (last-in first-out) to show greater profits and ROE and raise stock prices, but they do not consider the costs of price increases, Peter said. Mr. Sen. NIFO (next-in first-out method) is a good way to take into account the cost of replenishment, Petersen said, and many of the listed companies' quarterly earnings reports are 'fake' due to the choice of accounting method. Pointed out that it is full of.

'Many well-run businesses reduce their accounting profits to reduce taxes, free cash and reinvest in value creation. Currently, many publicly traded companies are against it. We're doing that, and we're trying to exaggerate our profits and get more money and praise from Wall Street, 'Petersen claims. Due to these problems, the only survivors in the event of an 'economic catastrophe' are companies that strategically stockpile fixed assets and invest in employees and talents to earn their trust, mainly family-owned companies. He expressed his intention to become a founder-led company.

In the United States, raising the tax rate for capital gains taxation is being considered. If this were to happen, the hired CEO would have to sell more of the company and eventually lose control of the business. Petersen said it is the founder-led companies with 'cushioning materials' that can avoid this situation and survive the economic crisis of supply chain collapse.