Browsing Tag: amazon

    Brazil’s Geography Problem
    Articles, Blog

    Brazil’s Geography Problem

    August 14, 2019


    This video was made possible by Skillshare. Learn from 21,000 classes for free for two
    months at https://skl.sh/wendover3. There are plenty of lines you can draw on
    the globe but perhaps none is more consequential than the equator. Of the 15 wealthiest countries
    in the world as measured by GDP per capita, all are in the northern hemisphere. Only 800
    million of earth’s 7.6 billion residents live south of the equator. There is a clear
    divide between north and south but of those 800 million people a quarter of them, about
    207 million, live here in Brazil. The country is an exception to the global trend. Brazil
    is the fifth most populous country in the world and the most populous entirely within
    the southern hemisphere. Its economy has grown enormously and the country is quickly developing.
    Although, the very land it sits on stacks the odds against it. Its location gives it
    a disadvantage. Given this, the question is whether Brazil can develop into a world superpower
    by the likes of the US, Europe, Russia, India, and China or if the country is doomed to fail? Brazil, of course, looks like this but in
    reality almost 80% of the country’s population lives here—within 200 miles of the coast.
    You do see a concentration of population near the coast in any country as it provides a
    cheap and easy means of transportation by boats and a source of food through fishing
    but few countries have such a severe concentration of people by the oceans as Brazil. This small
    area, for example, is home to three of Brazil’s six largest cities. Normally this would help
    development as the area in between cities will urbanize but this map doesn’t tell
    the whole story—this one does. You see, this area of Brazil is rather mountainous.
    The major cities mostly exist in small pockets of low-altitude, flat land on the ocean. This
    is because major cities need easy water access to get goods in and out. The majority of Brazil’s
    coast is defined by steep, sheer cliffs. Petrópolis, for example, a suburb of Rio, is a mere 13
    miles from the ocean and yet it sits at almost 3,000 feet of altitude. The rare areas with
    low-altitude land on the water are where cities like Porte Alegre, Rio de Janeiro, and Recife
    are but this pattern has two consequences. First, these cities, while being on flat land
    themselves are surrounded by cliffs and mountainous regions which means their growth is limited.
    There are plenty of cities that exist in mountainous regions but the world’s largest and most
    influential cities like London and Delhi and Beijing all exist in areas with absolutely
    no geographical features limiting their growth. The fact that Brazil’s cities locate in
    rare low-altitude coastal land means that the country will likely never have a megalopolis
    by the likes of the Pearl River Delta or the US Northeast. It takes a surprising six hours
    to drive between Rio and Sao Paolo and since there’s no low-altitude coastal land in
    between them, there are really no major cities in between them too. Brazil’s cities are
    confined to the geographically convenient areas which are spread out from each other.
    This means the cities can’t collaborate easily with each other thereby limiting Brazil’s
    impact on the world stage. Like any large country, Brazil’s development
    potential is also linked to how it gets its food. This, in fact, might be Brazil’s greatest
    obstacle as it really doesn’t hav e much great farmland, at least yet. The country’s
    main agricultural region is its south which is blessed with great soil and great rivers
    that help transport crops away from their farms. Interestingly, the same elevation that
    leads to steep coastal cliffs causes rivers to run in a counterintuitive direction. The
    Tietê river, for example, starts near Sao Paolo a mere 10 miles away from the Atlantic
    ocean but then runs inland almost 500 miles where it flows into the Paraná River which
    eventually flows out into the ocean near Buenos Aires, Argentina. If a farmer wants to export
    their food abroad, it’s often cheaper to first ship it the thousands of miles by boat
    on these rivers than just hundreds of miles overland to Brazil’s coast due to their
    poor road infrastructure. This means that Argentina gets the business of packing up
    and shipping Brazil’s food to other countries. That’s just lost money for Brazil as a result
    of their geography. Brazil’s south, though, does not even have enough land to feed the
    country’s own 200 million residents. Given that, the question is where to put the rest
    of the farms. In Brazil’s north is the Amazon basin. The
    central feature of this region is, of course, the Amazon River which is navigable for boats.
    Normally this feature would lead to a significant population as navigable rivers serve as cheap
    and easy transport for crops and goods but the banks of the Amazon are a tough place
    to farm or live. Not only are they muddy and unstable which makes building difficult, but
    the Amazon also regularly floods which means that every year many of the communities on
    the banks of the Amazon can have their streets underwater for months. Building and living
    in the Amazonian cities is difficult, but what’s more difficult is building the roads
    in and out. The largest city in the Amazon, Manaus, is home to 2.6 million people, it’s
    as big as Baltimore, and yet there are only three roads connecting the city to the outside
    world. Many of the smaller towns around the Amazon have no roads going in and out as its
    just incredibly costly and difficult to build roads through the rainforest. In fact, rather
    unbelievably, there is not a single bridge spanning over the Amazon so there is no way
    to drive from the northernmost region of Brazil to the rest without taking a ferry. Overall,
    this whole area is just empty. Even if there was the infrastructure to transport crops
    to market, farming in the Amazon involves clearing huge amounts of land and even then,
    the soil is relatively infertile which leads to poor yields. Despite being Brazil’s largest
    state, Amazonas is home to just 1.8% of its population. It just costs too much to build
    the infrastructure needed to live there. To the south of the Amazon, though, is an
    area known as the Cerrado. This vast savanna used to be in the same category as the Amazon—it
    was empty. The problem was not only that there was no natural network of rivers to get crops
    out of the area but also that the soil was too acidic and lacking enough nutrients to
    easily grow large quantities of crops. Between both the Amazon and the Cerrado being off-limits
    for large-scale farming, that meant that Brazil really didn’t have much land at all for
    farming. 30 years ago, with only the south to farm, Brazil was actually a net importer
    of food—it bought more food from other countries than it sold. That was until researchers discovered
    that all you needed to do to fix the soil was add phosphorous and lime. The phosphorous
    served as a fertilizer in the place of natural nutrients and the lime worked to reduce the
    level of acidity. In the early 2000’s, the country spread more than 25 million tons of
    lime per year and so today the Cerrado accounts for 70% of Brazil’s farmland. In addition,
    Brazil has begun growing soybeans. This plant is normally grown in more temperate climates
    such as the US, northern China, or Japan, but through cross-breeding and genetic modification
    it can be modified to grow in warmer and acidic environments such as the Brazilian Cerrado.
    Thanks to the enormous amount of land Brazil has and these technological advancements the
    country has gone from producing 16% of the world’s soybean in 2005 to 31% today.
    A country’s level of development is often to linked to how good its natural transportation
    system is. That’s part of why the US developed so much so fast—it has a great system of
    navigable rivers right in its agricultural heartland that helps get goods from the fields
    to cities fast and inexpensively. The Brazilian Cerrado, though, does not have that. It doesn’t
    even have much of a preexisting network of roads since before this recent agricultural
    advancement barely anyone lived there. Therefore anyone who wants to farm in the Cerrado has
    to find land, level it, treat it with phosphate and lime, and build roads to get supplies
    in and crops out. Cerrado farms can be profitable but it takes an enormous amount of money to
    build the infrastructure needed to start a farm. It’s not like the US or France or
    China where all you need is some land. The consequence of this is that farms in Brazil
    tend to owned by corporations rather than individuals because only corporations have
    the money to build farms. That therefore increases the level of wealth disparity in Brazil. According
    to the World Bank’s Gini index, Brazil is the 11th most economically unequal country
    in the world. Lower wealth disparity and the emergence of a middle class are indicators
    of economic development so the country should want to fix this. Brazil’s government has
    recognized its infrastructure problem as a source of its wealth disparity and has therefore
    worked to build roads in the interior so that more individuals can run farms but the government
    only has so much money to spend and it’s a big country.
    Brazil does, though, understand the importance of its core. It understands that the coastal
    cities are constrained and that economic development will come from the center. It was partially
    for that reason that the country decided to move its capital from Rio de Janeiro to here—Brasília.
    The thinking was that putting the capital in the core would stimulate the economically
    underdeveloped region and, in many ways, it worked. The city simply did not exist before
    1960 yet today more than 4 million people live in its metropolitan area. Being located
    on relatively flat land unlike Rio, the city can just grow and grow and grow without hinderance.
    Brazil has potential, but its defining issue is that it’s an expensive place. It’s a
    vicious cycle. In order to make money, Brazil needs to invest in its infrastructure but
    without people making money it doesn’t have the tax money to build what it takes t o transition
    into the first world. The question of why tropical countries are less developed is an
    enormous one without a clear answer, but Brazil is one of the most likely candidates to break
    this trend. It certainly lags behind other developing countries like China, but as its
    agriculture industry develops it will become a bigger and bigger exporter which will bring
    more money in. With time, its average income will inch up. The country already does have
    major companies in other industries such as banking, manufacturing, and oil but with how
    big Brazil is, agriculture is the one that’s the world’s focus right now. Only France,
    Germany, the Netherlands, and the United States export more agricultural products per year
    which is good company to be in. Brazil may not have the explosive growth rate of some
    other less developed countries but by continuously taking what it earns and reinvesting it to
    open up more of the country to agricultural production it will continue its path to superpower
    status. One of the common questions I receive is how
    I started making these videos. The first step was learning the skills needed from writing
    to research to sound design and editing, but for each and every one of them there’s a
    course on Skillshare. Skillshare, you see, is an online learning community that has more
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    months exclusively by going to skl.sh/wendover3. Skillshare makes this show possible and its
    a great place to learn or improve your skills so please do check them out, once again, at
    skl.sh/wendover3. Thanks for watching and I’ll see you again in three weeks for another
    Wendover Productions video.

    Not In Our Hood: How People’s Power Beat Amazon (Part 1)
    Articles, Blog

    Not In Our Hood: How People’s Power Beat Amazon (Part 1)

    August 12, 2019


    Amazon – the tech giant which started off as an online bookstore that steamrolled high street retailers out of business, today sells three billion products across eleven markets. It’s made its boss Jeff Bezos the world’s richest man who makes on average nine million dollars every single hour. The man seemed unstoppable, especially when he secured 2.8 billion dollars of taxpayer cash in exchange for choosing New York City as the site for Amazon’s second headquarters, dubbed HQ2. But then, this happened. When we fight, we win! Whose city? Our city! Shira first of all, what’s your reaction on Amazon officially pulling out? I mean, it’s interesting that they decided to throw in the towel rather than keep fighting, but I think from the very beginning Amazon miscalculated. Thank you. Have a good day. In fact, almost from the second HQ2 in New York was announced, the backlash began as the dirty details of the secret deal between New York’s Governor, Mayor and Amazon emerged. And the backlash just grew and grew, into a story of how people’s power can take on powerful forces and win, and in this case become the first major defeat for Bezos’ expanding empire. While Amazon claims most New Yorkers supported HQ2’s arrival and it’s decision to pull out of New York was due to opposition from local politicians, we were on the ground in Queens during the climax of the battle against the tech giant. You can consider Amazon a neutron bomb of gentrification. I went through three months working at Amazon; the way they treated the workers as if they’re robots and not human beings. And that’s not something that we want in this community, that’s not something that we want for Queens. We want to empower our own community so that they don’t have to work for these fucking huge ass corporations. To someone like Jeff Bezos, it’s just increasing and further amassing the power of himself and his corporation. This fight is bigger than just Amazon itself. It’s about the future of work. I have a lot of faith in our ability and our smarts to be able to navigate the system and get Amazon out. The rent’s getting higher. Nobody’s getting hired. While big brother’s filming this real life survivor. We’ll be meeting Dannelly, Rashad, Cathy, David, Stuart, Tania, and So Soon as they take us through the issues that made them join the frontline against Amazon. Controversy number one: three billion dollars of taxpayer money offered up to one of the world’s most valuable companies, without consulting the taxpayer. Meanwhile, Mayor Bill de Blasio and Governor Andrew Cuomo who offered the cash in order to win the HQ2 deal over more than 200 other cities, have for years been claiming that there just isn’t enough money for vital public welfare and services. A few blocks down from the land that was being offered to Amazon is the western hemisphere’s biggest public housing complex, Queensbridge Houses, which falls under NYCHA, the New York City Housing Authority. It’s long faced a funding crisis. Thousands of residents have struggled through the winter without heating and sometimes live in deadly conditions, including being exposed to lead in their water. You go into NYCHA buildings, they have mold infestation, asbestos, rodents, all of these things, like literally we’re speaking to residents that are like “yo, my fridge doesn’t work” you know. And they ask for a new fridge, and they’re like no, you know. And you know they could be using this money to create quality housing, public housing, affordable housing, but they’re not doing that. Soon enough, we’re not going to have public housing unless we fight for it. Unless the people unite! Come out! Sign our petition! Come to our rally! Get involved. We could say goodbye to New York City as we know it. I’m a teacher in Corona. Two in ten of my students are homeless. That’s higher than… That’s twice as high as the New York City average. So it’s like, I don’t got to fight only for me but I’ve got to fight for my students because we’ve got to keep Queens affordable. It’s not just soaring rents burdening this community. Almost the entire public infrastructure of New York is crumbling. New York’s expensive and often late trains ride through subways that are literally falling apart. We’re basically paying into the government giving Amazon our money when we still need money for schools here, we still need money for fixing the roads here. These communities, government hasn’t paid attention to all these communities for a long time. We’ve been able to sustain these communities ourselves. But now when we hear that, it really enrages people. While Amazon was offered huge amounts of taxpayer cash, the company itself, which is valued at 800 billion dollars, is set to pay… wait for it… No federal taxes on it’s profits last year. So why weren’t the hardworking people of New York consulted about how their money would be spent? It’s not exactly like they’re hard to find. Meetings like this community assembly in Queensbridge Houses happen on an almost weekly basis, where local people’s views, needs and diverse opinions are openly discussed. I’m sure everybody’s aware that Amazon is coming to Long Island City. May be coming. A lot of so-called leaders are coming out and speaking for you, and saying that those in Queensbridge want Amazon to come. Ok, let’s stop with this Amazon, ok… cause I’m gonna make sure my kids and grandchildren are first in line. That’s right. You’re talking jobs. That’s all I’m concerned about, and high rent. I appreciate your concern. So, I want to speak to that. We’re gonna give two billion dollars worth of tax incentives to Amazon, and we’re just gonna ignore the working-class, people of colour, immigrant communities, that’s what’s gonna happen. We can’t be shortsighted with this plan. Bezos’ ability to bag such a huge sum of taxpayer money without public approval is illustrative of the growing power being concentrated in his hands. Over the past five years, Amazon’s spend on lobbying in Washington has increased fivefold, and last year surpassed the spend of finance giants Citigroup, JP Morgan Chase and Wells Fargo combined. In return, Amazon is steadily gaining more and more government contracts and the U.S. government is well on its way to becoming its single biggest customer. But injustice still exists, corruption still exists, the government’s suspicious, affordable housing’s just a myth, my people ain’t tryna resist cos they can’t afford the risk, ain’t no silver spoons for the working class we grinding for all this shit. So Amazon started off the year with a big public relations push. They sent around flyers to residents of Queens talking about how the company was going to deliver 25,000 new jobs to the borough. What do we want to build? Amazon! When do we want to build it? Now! What do we want? Jobs! What do we want? Jobs! What do we want? Jobs! Two unions representing service and construction workers were strongly in favour of Amazon setting up HQ2 in Long Island City. Lots of jobs, we’re expecting about 7,000 jobs from that. Amazon has made a commitment to make sure that those jobs are good union jobs. We appreciate that and we support them coming to Long Island City because they’ve made those commitments, but we also know like our labour partners that are against Amazon, that New York is a union town. This is going to be a massive job generator, with 25 to 40,000 permanent jobs, high paying jobs, that will be career-oriented jobs. The construction of this project will be built by union construction workers. But when I took these two to task about Amazon’s record, which has landed Jeff Bezos with the award of one of the world’s worst bosses by the International Trade Union Confederation, they seemed confident that New Yorkers would be protected by the city’s status as being part of the second most unionised state in the country, after Hawaii. New York City is a union town! New York, this is a union town. You say that New York City is a union town. It certainly is. New York may be a union town but Amazon will only work with unionised workers for jobs which they outsource, who are represented by these two pro-Amazon unions. That same morning, other unions and activists rallied against the Amazon deal. Good morning everybody. It may be cold outside today, but not as cold as Jeff Bezos’ heart. Everywhere Amazon operates, it dehumanises and mistreats its workers. None of Amazon’s employees are union. Inside the City Hall, Amazon reps were confronted on this very question of neutrality, i.e. whether or not Amazon would stand against its workers organising in a union. Mr. Huseman, you mentioned that there are 5,000 employees who are currently working here in New York City for Amazon. Is that correct? Yes. How many of those employees are unionised? None, sir. None? Are any of your workers unionised? No, sir. Since you’re getting potentially over three billion dollars in some level of incentive or direct subsidy from the city and the state indirect or direct, would you agree to neutrality if workers at Amazon wanted to unionise? What we emphasised to them is that union rights are critical to us, and we have very strong laws in the city and the Department of Consumer Affairs, and worker protections. Did you ask for neutrality or not ask for neutrality? We discussed our expectations that they would work with unions. Did you ask for neutrality or not ask for neutrality? It sounds like you didn’t. We asked for union deals. That’s not neutrality, ok. Thank you for answering the question. They’re against unionising the damn facility. Oh my God! You’re against unionising the motherfuckin’ facility. Come on, we can’t take this, Johnson! We can’t take this. Would somebody escort this gentleman out? So basically, you have these devices that track where you are. If you’re in the bathroom for over five minutes, then they’ll penalise you and put points on your record, and if you get over six points then they’ll fire you. They have complete control of you like the time you clock in to the time you come out. Almost everyday, I talked to people there who wanted a union. While employees in the U.S. try to organise to improve pay and conditions in Amazon warehouses, those who even think of unionising risk harsh penalties, as we know from the company’s infamous union busting management training video that was leaked in 2018. Some signs are less obvious than finding the actual union flyer, but they can still indicate associate disengagement, which is itself a warning sign for potential organising. The box scan rate that you’re supposed to have is about three boxes per minute. Now this sounds really easy, but there’s in the facility on each line, there’s about 50 palettes for different zip codes. It’s almost impossible. If your scan rate was below that, they would be liable to terminate you. A British journalist who went undercover in an Amazon warehouse was shocked by what she found. Our reporter was injured twice. Once after rummaging through a box looking for an item her hand was cut by an unsheathed knife. It shouldn’t have been in the box in the first place. Amazon says workplace safety is a top priority, but it’s global notoriety for the dangerous working conditions in its warehouses was even satirised over two South Park episodes. Whenever there’s a workplace accident, you need to fill out a 1081 form. Ok, so the working conditions are horrible, but many of the HQ2 jobs came with a promise of $150,000 dollar salaries – ten times the average income of most Queensbridge residents. Sounds good, right? There’s no guarantee that they have to hire from this community. Two, top tier tech jobs, like, you can ask anybody in Queens, how many top tier tech workers you know, they’re gonna be like, none, and if they do give out these warehouse jobs or whatever, like those we know for a fact that they are not good jobs because Amazon has a long history of union busting and a long history of like, literally, like almost killing people at work because of overworking them. Wow, this shit is huge. I’d be shocked if many, any, of my friends or family that still live in Queens could live here. Amazon is just helping them with technology that we won’t be able to get away with, or away from… That’s a huge concern for us, and we’re not going to accept that. Look, I’m just going to say it. Today was the happiest Valentine’s Day of my life. You know, we broke up with Jeff Bezos. First comes the Starbucks then the stars come now you’re star struck, til you realise rents on the rise, can’t empathise with stardom…

    How Overnight Shipping Works
    Articles, Blog

    How Overnight Shipping Works

    August 11, 2019


    This video was made possible by Squarespace. Build your website for 10% off at
    Squarespace.com/Wendover. Overnight shipping is an absolute masterpiece
    of logistics that happens every single night. It may not be cheap, but you can get a package
    shipped from Miami, Florida on a Monday night to Anchorage, Alaska, by 8:30 AM on
    Tuesday. In fact, you can even ship a package, for
    example, from Edinburgh, Scotland on a Tuesday and have the package arrive in Anchorage,
    Alaska by 9am on Wednesday. The speed and efficiency of these worldwide
    delivery networks is mind-blowing and it all happens while we sleep. The three major consumer courier companies
    are FedEx, DHL, and UPS and each is as impressive as the last. FedEx has more planes than Emirates, Etihad,
    and Qatar Airways combined; DHL delivers to every country in
    the world including North Korea; and UPS flies to
    more than double as many destinations as the largest passenger airline. Each has a global
    network that allows for lightning fast shipping at relatively low prices. Behind all this speed are
    enormous air networks that connect the entire world daily. Each of these three operates hundreds
    of flights nightly, but FedEx is the best example since their operations make them the
    largest cargo airline in the world. They have 650 planes flying to 400 destinations
    carrying 6 million packages every single day and the vast majority
    of these flights operate to or from one of their
    hub airports. FedEx’s hub airports are spread out all
    across the world and serve as sorting points where
    packages are transferred from one plane to another. They has hubs in Singapore, Guangzhou,
    Shanghai, Seoul, Osaka, Anchorage, Oakland, Dallas, Indianapolis, Greensboro, Miami, Newark,
    Toronto, Paris, Cologne, Milan, and Dubai, but the most important hub of all is the one
    in Memphis, Tennessee because that’s their
    SuperHub. Memphis is not a huge city—only about 650,000
    people live there—but the reason FedEx centers their worldwide operations in this
    city is because of it’s location. Memphis is not actually
    in the geographic center of the US as might make sense, but it is central. You see, only about 200
    miles away in Wright County, Missouri is the mean population center of the US. This is the
    average location of every resident in the US meaning that the FedEx SuperHub in Memphis
    is the best location to reach the most people
    in the shortest amount of time. For similar reasons,
    UPS has their equivalent global hub, Worldport, nearby in Louisville, Kentucky. The scale of
    FedEx and UPS’ operations in these relatively small cities is staggering. This is the size of the
    commercial terminal at Memphis Airport while this is the size of FedEx’s Superhub. The
    difference at Louisville airport is even more pronounced where this is the commercial terminal
    and this is UPS’ worldport. You can’t even fly to the west coast non-stop
    on a commercial airline from Louisville and yet UPS flies from this
    small city to five different continents. FedEx’s
    operations in Memphis, meanwhile, make this airport the second busiest cargo airport in
    the world above those of enormous cities like
    Tokyo, Paris, Dubai, Shanghai, and falling short only
    to Hong Kong. How the FedEx superhub really works is that
    every night, about 150 planes fly in from all
    around the world between the hours of 10pm and 1am. Immediately upon arrival, the planes are
    unloaded and their packages are put into the hub’s automated sorting system. Within only 15
    minutes, each package arrives at a staging area for its next flight where it’s loaded
    into containers. Planes therefore can start taking off again
    at 2am and continue to until 4am which means that everywhere in the US can have a
    FedEx plane arriving by 6am, but there are some
    destinations that don’t ship enough packages to need a non-stop flight to Memphis. To get to
    small towns fast, FedEx runs flights in small propeller aircraft from the destinations of
    their larger jets. Presque Isle, Maine, for example, is far too
    small of a town at about 10,000 residents to fill a full-size plane so, every morning,
    once the larger planes from Memphis arrive in
    Manchester, New Hampshire and Portland, Maine, packages bound for Presque Isle are sorted
    into smaller prop planes that continue north. With this system, even small towns like Presque
    Isle get their packages by 9am as every spoke in
    the system essentially functions as a mini-hub. Packages are transferred from planes, to smaller
    planes, to trucks to reach their destination as fast
    as possible. Now, it’s important to note that not every
    FedEx package runs through Memphis. That
    would be incredibly inefficient if a customer wanted to, for example, ship a package from
    Phoenix, Arizona to Seattle, Washington. While only 1,100 miles separate Seattle from
    Phoenix, a routing through Memphis would total over
    3,000 miles and six hours in flight. The package
    would still make it overnight, but FedEx would be wasting fuel carrying that package an extra
    1,900 miles, so that’s why they have secondary hubs. In this case, FedEx’s Oakland hub has
    flights to both Phoenix and Seattle so the package would take a relatively efficient
    1,300 mile routing. Memphis essentially serves as the backup hub
    in case there’s not a more efficient routing. The secondary hubs, such as Oakland, in general
    have flights to destinations that are already served by flights to Memphis, but
    the destinations from Oakland are high demand destinations that will ship enough packages
    solely to the west coast to fill entire planes to
    Oakland. Some destinations, such as Albuquerque, New
    Mexico, ship enough packages to fill entire planes to Memphis, but not enough to
    fill flights to Oakland with west coast bound packages so a package shipped from here to
    the west coast would likely take a rather inefficient
    routing backtracking to Memphis. But FedEx’s most ingenious hub is here in
    Anchorage, Alaska. Anchorage, with fewer
    than 300,000 residents, is home to the forth busiest cargo airport in the world. This is, once
    again, thanks to geography. If you draw a straight line from FedEx’s
    Memphis hub to the one in Osaka, taking into account earth’s curvature,
    it goes directly over Anchorage, Alaska. This
    airport is just the perfect stop-over point for flights from the US to Asia. Now, dozens of cargo
    airlines operate in Anchorage but most of them just use the airport as a refueling and
    crew swap spot. Modern airplanes can fly non-stop from the
    contiguous United States to Asia, but doing so
    requires taking more fuel which requires taking less cargo. It’s just cheaper to stop in Anchorage,
    but FedEx and UPS use the stop for something else—sorting. If FedEx wanted to maintain
    current shipping times without the Anchorage hub, they would likely have to run non-stop
    flights from each of their Asian hubs to each of their
    American hubs, but they just don’t have the
    demand to fill this many planes. Instead, they run flights from their Asian
    hubs to Anchorage then flights from Anchorage many of their
    American hubs. While stopped in Anchorage,
    packages from Asia are processed through customs and sorted to be put on the plane bound
    closest to their destination. This helps cuts down on shipping time and
    cost. Shipping is an incredibly price-sensitive
    business. These courier companies rely on
    enormous contracts with retailers and, when some of these retailers are shipping millions
    of packages per day, every cent matters. In a lot of ways, however, the express shipping
    model is inherently expensive largely because of how
    couriers use their most expensive assets—planes. So much is centered around those few sorting
    hours at the big hubs so FedEx’s planes all have to
    wait around to arrive at the exact right moment. Some FedEx hubs, such as Memphis, do sort
    packages during the day, but the overwhelming majority of their business happens overnight. FedEx’s flight from Memphis to Oklahoma
    City, for example, leaves at 4am and arrives at
    5:20am, but then the plane waits around until 10:10pm to fly back to Memphis. That’s over 17
    hours sitting in Oklahoma City and, on that route, the plane is only flying for about
    two hours per day. Meanwhile, commercial airlines regularly fly
    their planes for more than 12 hours per day meaning they have six times higher aircraft
    utilization. FedEx would never be profitable if they
    bought all new multi-hundred million dollar aircraft to use for mere hours per day, so
    they don’t. Overwhelmingly, FedEx and other cargo airlines
    use old aircraft at the end of their lives. You’ll
    almost never see Airbus a300’s flying for passenger airlines anymore, yet FedEx, UPS,
    and DHL collectively own hundreds of them because
    they’re cheap. They didn’t spend much purchasing
    these aircraft, so they don’t have to worry about using them enough to offset their cost. UPS does
    have some brand new 747-800 aircraft, which are highly efficient, but they specifically
    schedule these planes on their longest routes so that
    they can recuperate their high purchase price through
    lower fuel costs. With older aircraft, fuel costs might be higher
    since the planes are less efficient, but overall it’s worth it since it allows
    FedEx to profitably leave their planes sitting for all but a
    few hours each day. Some passenger airlines, such as Allegiant
    Airlines in the US, uses the same strategy purchasing cheaper planes to allow
    them to fly fewer hours per day profitably and its
    now a tested and proven business strategy. Express shipping is one of those businesses
    that requires enormous networks to make work which is why you don’t see small shipping
    companies. It’s almost impossible to get started
    in this business unless, of course, you can make your own demand. Amazon, which ships more
    than a million packages per day, is getting into the delivery business. They’ve established a fleet
    of 32 aircraft and are building out their logistics network. When shipping so many packages,
    Amazon is operating at a scale where they can profit by taking the shipping companies
    out of the equation. FedEx, UPS, and DHL, meanwhile, are continuously
    focusing on further increasing the efficiency of their networks since in this
    business more than any, time is money. As you may have noticed, Wendover Productions
    has a new logo and with that I’ve redesigned the website with Squarespace. To be honest, I hadn’t used the website
    builder in a while but this process reminded me of why
    I’m such a fan of Squarespace. It was super simple to
    completely overhaul the site and, in my opinion, it looks great. I didn’t have any issues, but if
    you ever do they have award winning 24/7 customer support that I have used in the past and can
    vouch for. If you run a business, a youtube channel,
    a podcast, or anything else, you want to have a professional web presence like I do with
    my site since that’s how people find you, and you can
    get started building your website with Squarespace for 10% off at squarespace.com/wendover. Squarespace is a great supporter of the show
    so make sure to show them your appreciation by at
    least checking them out at squarespace.com/Wendover. And just one more thing, if you’re like
    me and the first reaction you had to seeing this new logo is wanting a t-shirt of it,
    you’re in luck because they’re now available for pre-order
    at DFTBA. The link is in the description.