Hello again, dear reader!

Vasco da Gama’s return voyage around the Cape of Good Hope took nearly two years. Magellan’s daring journey around Cape Horn took almost three. Shipping moves much faster these days, but the twin choke-points of Suez and Panama mean today’s supply routes look more like something out of the sixteenth rather than the twenty-first century. Read on to find out how longer routes put rates and ports under immense pressure.

Also, American workers are getting lonelier! This is not only bad for their health, but it’s terrible for business. With motivation down and absenteeism up, organizations are looking for solutions - should we roll back the remote working revolution because it’s creating a loneliness epidemic? More on that below.  

This issue features plenty of other bits and pieces, including AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets. It is followed by an excerpt from my upcoming book and a final chuckle. 

Let’s set sail.

Industry Highlights: Choke-Points Crushing Global Shipping

Diverting shipping around the Cape of Good Hope not only adds time, fuel, and cost to a journey, but it also puts the entire shipping ecosystem under immense pressure. 

You’ve undoubtedly heard about most, if not all, of the challenges currently squeezing supply chains. Let’s run through the list: Iran-backed Houthi militias are attacking shipping in the waters off of Yemen - container ships arriving at the entrance to the Red Sea are down 90% in 12 months. Further south, pirate attacks off Somalia are resurgent, while Iran’s Revolutionary Guards spooked shipping lines after seizing the MSC Aries last month in the Strait of Hormuz. Closer to home, a drought in Panama has forced the Canal Authority to limit not only the number of vessels transiting from the Atlantic to Pacific oceans, but also to limit vessels’ draft (the depth of the hull under the waterline). Finally, European ports have become impossibly congested after an overproduction of Chinese EVs led to a flood of exports to Europe, overwhelming distribution networks. 

The issue, as explained by the Financial Times, is that these disruptions are happening simultaneously. The usual responses won’t work: a shipping line would normally avoid the Panama Canal problem by rerouting ships from Asia to the US east coast through the Suez Canal. But with the choke-point situation in the Red Sea, this isn’t an option either. So - around Cape Horn and the Cape of Good Hope we go - 16th-century style. 

The workaround is to take the cargo to different ports and have it shipped from there to the end destination. This means ports that were never designed to handle massive volumes are being overwhelmed, with containers piling up on land and fleets of ships anchoring at sea, waiting their turn. 

For example, ports at the Western end of the Mediterranean are suddenly in huge demand, as ships enter port to trans-ship (transfer their cargo to a smaller ship, train, or truck) before the cargo is taken to eastern Mediterranean ports like Greece or Turkey. Vessel schedules have become way less reliable. Ships arrive with very little warning, which creates further delays and dwell time as there often isn’t a vessel available to take the cargo. 

A similar situation is playing out in the Middle East, where shippers are trans-shipping from Dubai rather than Jeddah, with the cargo then transported by truck to Saudi Arabia. Companies trying to move perishable, time-sensitive goods like food and flowers suffer the most. 

And in Panama, vessels work around the draft restrictions by lightening their loads. They drop containers at the entrance to the canal to be transported by the Panama Canal Railway, allowing the ship to sit higher in the water, transit the canal, and then pick up the containers again at the other end. You'd be right if you think this sounds complicated, time-consuming, and expensive. 

Shipping rates, of course, have jumped. As of May 2024, spot rates between Asia and the US east coast were $5,584 per 40ft container (up from $2,434 twelve months previously) and rates between Asia and North Europe climbed from $1456 to $4766 in the same period. It’s bad, but nowhere near as grim as during the pandemic. 

Speaking of the pandemic, one of the reasons we haven’t seen a major supply chain collapse yet is most likely due to lessons learned during 2020 and 2021. Companies are holding bigger stocks of business-critical components and goods, Just-in-Time supply chains are out of fashion, and businesses are infinitely more aware of the risks than they were pre-COVID. That being said, with things already this dysfunctional, we will be in trouble when the pre-Christmas volume peak begins to bite in a few months. 

The Future of Work: Workers Are Getting Lonelier - even in the office

Last year, the U.S. Surgeon General declared a loneliness health epidemic. Headlines at the time focused on the deadly dangers of living alone, with studies linking loneliness to very real health risks, including increased vulnerability to disease, higher blood pressure, strokes, and depression. 

A recent WSJ article delved into the loneliness epidemic in the context of the American workplace - or, more specifically, in the context of the remote working revolution. A Cigna poll of 10,000 workers found the number of U.S. adults who call themselves lonely has jumped from 46% in 2018 to 58% in 2024. Worker loneliness is a business concern: it reduces motivation, drives up staff turnover, and increases worker absences. The same Cigna study estimated that loneliness costs U.S. companies $154 billion annually in absenteeism. 

Is remote working the culprit? There’s an argument to be made that it’s impossible to build meaningful connections through a Slack chat or a Teams call, meaning remote workers will not forge the “work buddy” relationship that can make going to the office a joy. Yet, we should remember that for many Gen Z members, online relationships are everything. At the same time, the benefits of remote working (no commute, work from anywhere, etc) should mean people can spend more time strengthening in-person relationships outside of work. 

Interestingly, a Gallup study found that workers in all settings, from fully remote to fully onsite, are experiencing similar levels of loneliness:

Hybrid work has emerged as the great compromise in the remote vs. office wars, but it comes with a thorny problem: hybrid workers tend to fill their onsite days with back-to-back meetings. And meetings, surprisingly, can make people more lonely. A 2023 Perceptyx survey found “people who described themselves as ‘very lonely’ tended to have heavier meeting loads than less-lonely staffers … more than 40% of those people spent more than half their work hours in meetings.” 

The real way connections are built, according to the WSJ, is through “serendipitous connections.” A Syndezo study found coming to the office yields a 20% to 30% boost in ties, with people who engage in small talk or “exchanging pleasantries” reporting less stress and more positivity toward co-workers. “Such interactions are substantially harder to replicate in a virtual environment,” the study found.

Let’s talk solutions. Should we double down on in-office attendance? Companies are pushing to improve workplace friendships and boost a sense of connectivity among workers by increasing in-office days from two to three or three to four. 

One company mentioned in the WSJ piece asks workers to “serve as designated hosts during lunchtime, encouraging people to sit with colleagues they don’t know in common areas and chat, and suggesting conversation topics.” To me, this sounds a little forced. I know more than a few people who would react to such attempts with a massive eye-roll. But in a remote or scattered environment, it’s definitely a good idea to host gatherings for employees who never see each other. 

Ernst & Young’s solutions sound a little more practical. They ask managers to use the first five minutes for remote video calls to “engage in conversation as real human beings.” They are also training some 1,600 employees to “spot and reach out to co-workers struggling with issues such as isolation.” Tellingly, the professional services firm has created a new Chief Well-Being Officer role to manage the impacts of the evolving work environment. 

I think there’s also a connection to be made here with the introvert/extrovert factor: some people thrive working alone, while others find it exhausting unless they can draw energy from people around them. And the all-encompassing nature of digitization means that even fully onsite employees spend most of their time staring at a screen. 

What’s the takeaway here? Loneliness is real, its impacts are dangerous for workers and bad for business. Coming into the office more often might help, but not if the time is spent dashing from meeting to meeting. Building connections can’t be forced from above but requires a genuine commitment from individuals … and lots of coffee dates.

AI Insights

• If AI can do your job, maybe it can also replace your CEO: This isn’t the first time I’ve heard this argument, and it’s a fascinating debate. A CEO’s job is about making decisions based on the best-possible data - and AI can certainly manage that. But can AI also create a vision, lead a team, and inspire?    

• Transformation of the physical world will be driven by AI in the next 5-10 years: Thanks to recent advancements in AI tech, many industrial tasks once thought impossible are now feasible. For example, AI can accelerate the development of advanced materials, enable robotic automation in remote locations, optimize energy-intensive industrial processes, and facilitate reshoring of manufacturing. 

• PwC to become the first reseller of ChatGPT Enterprise: Organizations used to have to reach out to OpenAI directly, but now they can purchase and implement the GenAI tech with the help of PwC’s consultancy muscle. The offering will most suit businesses that want to be on the AI curve, but need a roadmap for development and optimization. 

The Supply Aside

📕 Read - Build: An Unorthodox Guide to Making Things Worth Making

Tony Fadell knows a lot about how to get things built. He led the teams that created the iPod and the iPhone, and has 30+ years of Silicon Valley experience under his belt. “Build” is half autobiography, half guidebook. Each short chapter tells the story of each of Fadell’s famous builds, in a way that helps readers with the problems they are facing right now, such as getting funding for a startup or how to decide whether to quit their job. Check it out. 

What Else I’m Reading

• The art of asking smarter questions: Experts from IMD Business School have created a framework for five types of questions to ask during strategic decision-making: investigative (what’s known?), speculative (what if?), productive (now what?), interpretive (so..what?), and subjective (what’s unsaid?). 

• What went wrong with capitalism? Analyst Ruchir Sharma offers an unconventional take on the problems with modern capitalism. Massively expanded government involvement in developed economies has resulted in “a system so distorted by government interventions is a dysfunctional version of free market ideals.”

• Starbucks staffing algorithm is causing extensive wait times. 40 to 50 minutes’ wait for a cup of coffee? An algorithm Starbucks uses to determine order forecasts and product availability when staffing locations have reportedly led to huge queues and furious customer complaints on social media. 

📺 Watch - What YouTube’s CEO Really Thinks About YouTube

I’ve always found it weird that YouTube has no major competitors in the video social media space. The platform feels like it’s been around forever - it launched in 2005, a year before Facebook was opened up to the public, and since then has experienced a remarkable growth story with $30+ billion in annual revenue and even overshadowing Netflix. YouTube CEO Neal Mohan joined Emily Chang on The Circuit to talk about the creator economy, staying atop the AI wave, and transforming the platform into the world's biggest streamer. Despite these incredible numbers, Mohan believes YouTube “is only just beginning” its growth story. 

👂 Listen - How to slow down but achieve more, with Cal Newport

I’m always interested in advice from productivity experts because for me, staying focused in a world full of distractions is one of the greatest challenges facing today’s workforce. In this episode of Working It, Isabel Berwick interviews Cal Newport, author of Slow Productivity. For Cal, there are two dimensions to slowing down - first, stop underestimating how long a project will take, and second, don’t take on too much work at once. He’s advocating for fewer tasks done better, which will produce more in the long run. Cal also has some wise words on avoiding burnout and slashing the performative aspect of work.  

💡 Think - Feeding the World

I had the good fortune of attending an inspirational talk from the renowned Chef José Andrés, a man whose passion for cooking was matched only by his dedication to humanitarian efforts. Chef Andrés embodies selflessness, using his culinary skills to bring relief to communities in need through his organization, World Central Kitchen. 

Whether it's feeding disaster-stricken families or providing sustenance in war zones, his work is a powerful reminder of the impact one person can make. His energy and passion were infectious, his stories entertaining, and his personality larger than life. There's much to admire about him and his unwavering commitment to making the world better, one meal at a time.

📕 From my upcoming book…

The following is a short excerpt from my upcoming book, Fire the Boss, Keep the Love: 10 Jobs, 10 Exits, 10 Lessons. The release date is coming soon!

“I have left behind more than ten bosses, yet I maintained relationships with nearly all of them.

Of those bosses, a few were amazing, a handful were fine, and a couple were truly terrible.

Each time, I walked into new opportunities and challenges—and learned more about what I wanted from my career.

That’s the ethos of my career: quit strategically, leave amicably.”

Charts of the Week

Quote of the Week

Tweet of the Week

The Final Chuckle

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you want to see me address, email me at [email protected]!

Want more?

If you’d like to read more of my writing on the supply chain, entrepreneurship, or the future of work, check out my website.

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Happy reading this weekend!

-- Naseem