Prologis, Inc. (PLD) Earnings Call Transcript & Summary

Good morning, good afternoon and good evening, everyone. Welcome, and thank you for joining us live in San Francisco and online. I'm Tracy Ward, and I will serve as your emcee today. Prologis is thrilled to host what we hope to be the first of many thought leadership events. Our focus here is to engage with innovators across the supply chain. And with that, it's my pleasure to turn over to our Cofounder and CEO, Hamid Moghadam.

Thank you, Tracy, and thank you all for joining us today. For those of you who may not be familiar with Prologis, let me give you a quick overview of our company, the logistics sector and why we decided to hold this event here today. In the early '80s, Doug Abbey, Bob Burke and I started the company about 300 yards from where I'm standing. Doug and Bob are here with us today somewhere. We had no funding. We're really young and we -- but we were determined to make a difference. Reflecting on the industry 40 years ago, it was vastly different than it is today. Property ownership was fragmented. Most players were local. Hardly anyone was national, and certainly, no one was global. In those days, a large logistics facility was 250,000 square feet, and it was called a warehouse. Department stores aggregated the must-have merchandise of the season but choices were limited and oftentimes, the right product was unavailable. No one thought about how inventory moved or frankly, what the supply chain even was. The supply chain is like your car. If it runs, you don't give it much thought. But when it breaks down, you sure know the difference. In the early 2000s, e-commerce emerged, but Internet connections were slow and clunky. Early adopters got a taste for buying online and bypassing brick-and-mortar retail. There were flaws to the model then, but we've seen them perfected over the last 20 years. Convenience, choice and rapid delivery are now the expectation. Then in March 2020, the world stopped. The pandemic changed everything. Not only did it accelerate the trends at work, it also exposed the fragility of the global supply chain, which was optimized for efficiency, not resilience. The old ways worked until they didn't. And those weaknesses, combined with the insatiable consumer demand, has made the supply chain headline news today. You can't turn on the TV or look at a newspaper without seeing a story about the supply chain, the congestion at the ports or the labor shortage. Even the New York Times started a logistics beat a few days ago. As the industry evolved, so did our company. Today, we own a portfolio of logistics facilities in major centers of commerce across 19 countries and 4 continents, totaling nearly 1 billion square feet of space. Fully 2.5% of the world's GDP flows through our facilities, and we're fortunate to have the best team in the business. We measure our success by our customers' success. In serving the needs of these customers, we work with a large and talented team of partners and providers, many of whom are here with us today. We also do our best to be responsible citizens in the communities in which we operate. After building this business with unique scale and reach and looking around the major challenges facing the industry, we saw an opportunity to bring together the top leaders in our business by hosting an important and ongoing dialogue. Today, we're having the first of these events. We want to shine light on these leaders and their latest thinking on the direction of the industry as it responds to meet the needs of the modern world. Throughout this series, we'll explore the challenges created by a system built for another era that is now struggling to meet the ever-growing demand of the consumer. The answers are not simple or easy, but the need for thought leadership is clear. The leaders we'll hear from today and in the future are in the cutting edge of this exciting world. It's a challenging time to be in the logistics and supply chain business. I'm looking forward to the dialogue and exchange of ideas that will occur at today's event. Now we'd like to share a short video with you, and thank you again for joining us. [Presentation]

That video encompasses who we are and what we stand for. I hope you enjoyed it. Now let's turn to our opening keynote panel, which will cover innovation, culture and leadership. These leaders will also dig into their groundbreaking efforts to rapidly innovate, invest and manage during massive change. Please welcome Carol Tome, CEO of UPS; Susie Gharib, Anchor and Senior Special Correspondent at Fortune. And welcome back, Hamid Moghadam. [Presentation]

Good morning, Susie.

Thank you so much, Tracy. That was a very interesting way to kick off this program. Hamid, great to see you again. And Carol, nice to meet you, and thank you so much for joining us. Hamid, you really chose the right topic to kick off your series because everybody is talking about the supply chain crisis. And every day, there are headlines of new problems with the crisis. And so it seems like the news cycle has caught up with what both you and Carol have been dealing with for a long time.

Carol, let me begin with you. How is this logjam impacting UPS?

Hello, Susie and Hamid. Hello, everyone. It's great to join you today. And we're in the small package delivery business. So when we get a package, we get it delivered. Our on-time delivery is 95% or higher. So I'm super proud of our team's efforts to deliver around the world 2% of the world's GDP every day; and in the United States, 6% of the U.S. GDP every day. But clearly, with the pandemic, there was a step change in demand. We were flooded with volume that we didn't expect to see until 2023. So a year ago, we had to hire 40,000 people into our network to handle that demand in the face of COVID and keeping everyone safe. And I must say I'm really proud of our team because they've done a really nice job of managing through it. But the supply chain issues are real. If you go upstream, so not downstream, which is where we play, but if you go upstream, from raw materials to manufacturers, so much of that outside the United States than flowing to the United States, you see it really jammed up. And I would make that real for you. In the ports of Los Angeles and Long Beach were 40% of all containers flow, we have hubs. We're ready to take in containers. These containers are drop shipped and delivered to us by a third party. Today, we're only about 70% of capacity of what we could take because there aren't any drivers to drive the containers from the ports to our hubs. So all hands on deck to try to get more people driving those 18-wheelers to get those containers moving off the ports and into the hubs so the packages can be delivered.

So it sounds like you're actually in better shape than we might have expected. You're well prepared for this crisis. How about you, Hamid? What would you say are the pain points at Prologis right now?

Pretty much everywhere, we're in a tough position of trying to meet the demands of our customers. And we're working around the clock to do that. And -- but we need to bring on new capacity because I think this new world is going to require a lot more inventory along the system. Really, Carol talked about the demand coming back very quickly, but there was another thing going on, which is that supply got disrupted at the beginning of COVID. So you had to fill up this hose from the manufacturer to the consumer, and it just takes a long time for the hose to fill up and the water to come out the other end. So that's the challenge. And unfortunately, these kinds of capacities can't come on instantaneously. It takes time. You need to go buy land, buy buildings and all that. We're in a fortunate situation that we have an incredibly large and well-located land bank. So we can build another $20 billion of real estate just based on what we have, but that alone is not going to do the trick. This problem is going to be with us for a while.

Help us understand a little bit more the issues here. Because during the pandemic, just about everyone looked at companies like UPS or FedEx or Amazon as miracle workers because you kept our economy open. You were -- whether you were delivering groceries or vaccines to our doorstep and everything on time, everybody got what they needed. Now people are kind of puzzled, a little bit angry that -- what's happened? They don't know if they're going to get all the presents they want to give to their families for Christmas. How did the system break down, Hamid?

Well, the demand came back much quicker than anybody thought. Remember those charts about 40% unemployment and all that in the first couple of weeks of COVID. So demand just came back with a vengeance but the employees didn't. And that's where the problem is. Carol said it really well. It's tough to get the capacity to handle all the demand. And by the way, people were sitting around at home, not traveling, cash was building up in their bank accounts. And all of a sudden, they're flushed and they want to have a great Christmas after 2 years of being cooped up. So pretty much everything that could go wrong or right happened all at the same time.

Carol, what surprised you the most when this -- the situation just turned on a dime?

Yes. So I'm an old finance person. And if you think about what companies love to do, it's to optimize working capital. So many manufacturers went to just-in-time inventory, and pre pandemic, that worked pretty well. It was very effective. But when the pandemic hit and everything is shut down, including manufacturing, and then the economy started to open and the demand, as Hamid said, jumped, well, that just in-time inventory didn't work anymore. And so I think what companies are doing now is thinking about, "I need just-in-case inventory." So I suspect what we're going to see around the world is working capital models are going to change pretty dramatically, which is great for Prologis because you're going to need the space for all that stocking inventory to make sure companies don't run out of stock again. But I think all of us have had a big wake-up call. All of our companies have risk management programs. And we review our risk management programs with our Boards, and we talk about how we're ready for something that could come our way, be it a cyber attack or even something like the bird flu. But none of us had gone -- I don't think, gone through this table exercise of what would happen if a worldwide pandemic occurs. And we've now changed our whole approach to risk management, really thinking about those black swan events, those events that none of us think could happen, because we've learned that they do and you've got to be ready to act. My biggest takeaway through it all is put your people first. Our #1 job was to make sure that our people were safe. We knew UPSers were essential workers. We wanted to continue to deliver the essential goods and vaccines and everything to keep people alive. But to do so, we had to keep our people safe. And we did just that, I'm proud to say. Because -- it was a mad scramble at the beginning, but we were able to manage through it.

And it sounds like -- and it's still going on, but do you see, Carol, that this is a temporary problem, that there is a quick fix in this? Or is this just the new reality and we're going to have to get used to it and adapt?

The supply chain, to Hamid's point, is not going to clear up for a while and it's just not. There's a demand/capacity imbalance. As we head into the holiday season, here in the United States, as I think about the demand versus the capacity, there will be demand for 5 million packages per day, more than the capacity of all of us in the small package delivery network. So my advice to anyone who's in the holiday shopping mode, shop early. Get your holiday gifts purchased now.

Looking beyond Christmas, Hamid, do you see the acute problems that we're going through right now? When does it come to an end? Are you thinking early 2022, '23, later?

I think it's going to take a while. If I were going to take -- just bet on a date, I would say probably middle of 2023, end of 2023. I think actually, it's going to get worse because a lot of people that already are talking about the logjam over Christmas are going to experience it. And they're going to change their consumer habits, and we don't quite know how. They may go ahead and -- we may have the toilet paper issue like we had. Everybody rushed out and started buying toilet paper. That affects demand in unpredictable ways. So we don't quite really know. But the short-term problem, I think, is going to be with us through 2023 almost. I think the longer-term issue, which is really what our company is focused on, is how do we bring on capacity in places where people are. It's pretty easy to bring on capacity in the middle of the country when there are no consumers. But looking at our window in San Francisco or New York or Chicago or these places, how do you build these facilities that are going to hold all this inventory that's going to insulate us from these shocks? And by the way, these shocks are not COVID. We've had weather events that have happened during this period of time. We've had a ship tip over in the Suez Canal and basically clog up that route. So the world is just getting less and less predictable. And again, these supply chains that were built for perfection -- to perfection, that all works. Engineers are really good at knowing that. If you give them the conditions, they'll make something that works to perfection. But boy, if the input parameters change, then it's a whole new ball game. And what that means is, we guess, we don't really know, that we're going to need 10%, 15% more inventory in the supply chain. Well, that means 10%, 15% more buildings or more efficiency through buildings. It takes a long time to get that delivered.

Right. And the statistics I've seen, Hamid, you probably know better, but that warehouse availability is basically sold out. And you were just talking about adding more capacity. Where are you going to do this? Because a lot of communities don't want to have a big warehouse in their backyard.

That's a really good point. You want to click, you want your stuff there the same day, but you don't want trucks running around. I think there are multiple solutions to this. I think one of the reasons people don't want warehouses in their neighborhood is that there's diesel, there's fume, there's traffic congestion. Well, I think over time, some of those issues will be addressed with autonomous, with electric vehicles, with things that are cleaner, things that can run at off hours of the night. Carol would know more about that. So I think those are really long-term solutions. But at the end of the day, today, what we can do is densify sites, maybe go multistory, take some property types that were maybe former retail, former office and convert them to logistic facilities. We got to do pretty much everything we can. All the parking lots are getting converted, parking structures. So we got a -- there's no one solution. We've got to look at many different places.

Right. Carol, you said a moment ago that this whole thing that's been going on was a wake-up call for your team. As you look at the whole logistics, shipping, that whole paradigm, do you see a redesign? Do you see a paradigm shift? What are you picturing looking ahead?

We're 114 years old as a company. What got us here isn't going to get us to where we need to go principally because our customers are changing, our competitors are changing and the rate of change is accelerating. So it isn't so much the supply chain jam that's influencing our need to shift. It's really the fact that our customers are changing. So we used to be singularly focused on the shipper experience. And we measure our on-time delivery, and that's how we measure customer experience. Now with 60% of our deliveries going to residences, we are focused on the end-to-end experience, shipper to recipient. Because if a package goes awry, the recipient is yelling at UPS, they're not yelling at the shipper, be it Macy's or Kohl's or whoever it may be. So we're really focused on digitizing that experience. We have 16 customer journeys that we kicked off to make it a better experience end to end. And we're also leaning into technology in ways that we never have before because automation is key to remaining competitive from a cost perspective. So I could go on and on about what we're doing from an automation perspective, but it's kind of cool actually because we're bringing robotics into our 114-year-old company, which is pretty fun.

I'm going to follow up a little later in our conversation on that, but I want to also circle back to what you said a moment ago about inventory management. And I just want to -- I know you're talking to your customers constantly. What are you hearing from them about the pros and cons of the current just-in-time inventory management? Do you see them changing that? And how crucial is it to make some kind of change?

Yes. No, customers are talking about just-in-case inventory, they're talking about building safety stock and they're talking about near-shoring, which is pretty exciting, moving their sourcing from Asia to closer to home. Sadly, the restrictions in the United States are still pretty tough to build manufacturing plants in this country. But there are countries that are closer to the United States that could actually be suppliers to many of the sellers here in the U.S.

I'd like to talk also to both of you about another pain point that we're hearing a lot. It's about labor shortages. And I know -- a number that I just saw this week is that in the U.S., there's a shortage of 80,000 truckers, but not at UPS. I understand, Carol, that you've got enough truckers. I don't know, what did you do that you are well stocked with truckers? Tell us the secret to your success.

Well, we've got a really great workforce. In the United States alone, we have 458,000 workers; worldwide, over 540,000 workers. In the U.S., 75% of our workforce are covered by some sort of a collective bargaining agreement. Our people are well paid, and I think that helps. But more...

It sure does, yes.

It helps. The money isn't everything. More importantly is that you can create a career here. You can start as a driver or a part-time person in one of our sorting operations and end up running the company. For the most part, we promote from within, and I'm really, really proud of that. And people who are looking for careers, not just for a job but for careers, know they can come to UPS and those careers are available for them.

Hamid, how about from you? What are you finding that you have to do to keep your best employees? We hear all the time about these talent wars, that you can go down the street and get paid more. Is it bigger paychecks like what they're doing at UPS? Is it flexible hours? Is it something else?

My philosophy is that pay should never be a discussion. You should pay people market and better than market if they perform better than market. So pay should not be -- that's table stakes. That's how you get to the conversation. I think the key is what I said earlier in one of the videos. It's culture. You've got to have a place where people feel good about showing up for work. Now we are in the fortunate position that we only have 2,400 people around the globe. Yes, we have $180 billion of assets, but only 2,400 people. That's a much simpler problem than Carol's problem. She has to deal literally with hundreds of thousands of people. But we care about our customers' problems. So her problems eventually become our problems. And about 4 or 5 years ago, way before all of this, we embarked on a program called the Prologis Community Workforce Initiative. And our goal is to train 25,000 high school grads for logistic jobs, how do you drive a forklift, how do you unload a truck, how do you deal with all this increased technology and automation that's taking place. So those are going to be career jobs. They're going to change from just moving boxes around. And the supply chain for that talent hasn't really been built, and we're doing our part to build that. And we didn't think about this when we designed this program. We were just responding to customer problems. 4 years ago, they were saying problem #1, 2, 3, 4 is labor. This is not news. I thought that problem would go way after COVID happened, but it just got accentuated. So this, again, just like facilities, takes a long time for this to respond, but we're putting a lot of resources into this program.

Let's see what our audience wants to ask you guys, the questions that they've had so far, and then we'll come back and continue this discussion. Tracy, you've been collecting the questions. What do you have for us?

I have and they've been coming in. And we've just put up the QR code here in San Francisco. So if you are interested in asking a question live in San Francisco, you just put up your phone and it will click in and it will come to my iPad. It's pretty snazzy. And so we're getting some from online. I've got a couple here I'd love to share with you. And both Carol and Hamid touched upon these. But maybe if we could dig in just a smidge more, it would be great. What innovations are you seeing to combat the current supply chain challenges today?

Carol, you want to...

Why don't you take that? Because you were talking just a moment ago about robotics and all the tech you're doing. And then Hamid, you chime in, too.

Well, we've had to change our operating model first in many instances. For example, due to COVID protocols in certain Asian airports, to avoid having our pilots thrown into COVID camps, which you don't want to do, we're double crewing. So these big 747 freighters that we fly around the world, we put 2 crews on so no one ever deplanes, so we can keep the planes just moving and never having to deplane. That's an investment as you can appreciate, but it was the right thing to do to keep the planes moving. We've changed our operating procedures here in the United States to eliminate the need for signature so we could keep our package drivers moving, continuing to deliver all the packages that they deliver every year. So that's a big piece of the way we're dealing with it. But then we're using technology. Think about vaccines. I'm so proud to be delivering vaccines. By the end of this year, we will have delivered over 1 billion vaccine doses. And we use technology to enable those deliveries to be effective; in other words, 99.9% on time. And the technology that we use is a special label that has a battery inside the label so that we can track that package throughout the network. We have a control tower that we stood up to watch that package so that we never lose it because these vaccines are precious. We don't want to lose those vaccines. By the way, many of them have to be temperature controlled. So we manufacture dry ice. It goes along with the package so that it gets to its dosing center safely. That's just an example of a change we've made.

It's a great example. Hamid, what are your thoughts on this question of technology?

So technology is essential. I mean about 4, 5 years ago, we started a group called Prologis Ventures. And we started going around and trying to identify the needs of our customers. And then by virtue of being here in Silicon Valley and close to a lot of innovation, not exclusively here, but a lot of it is here, we've now invested in over 30 companies that are really essentially in the business of helping our customers in a variety of ways, fleet management, load balancing, all kinds of things. So the old ways are not going to work, and we're not going to be able to just replicate what we have. We need to get more out of what we have, and the key to that is technology. This may be a good time to bring on a related topic because Carol touched on it, and that's robotics. The narrative, unfortunately, is that companies are bringing in automation and robots to get rid of people. They're not. They're bringing those on because they can't get the people and they need to get the people that are there more productive. So it's really a way of leveraging your human capital, and we're seeing that all around. In a way, Carol's problem is more difficult because she's got to execute it across a big array of people. But in our way, our problem is pretty difficult too because we don't have 1 customer. We have 5,500 customers, and they do all kinds of things differently in all different parts of the world. And this business was never built for an integrated solution. UPS is actually integrated. But most of the industries, either in the business of ships, trains, boats, trucks, warehouses, all the different pieces and to bring all of this together to solve the problem for the customer, that's where the challenge is.

Tracy, what else do you have from our audience?

Great. Just one more, and then I'll hand it back to you. Today's distribution centers seem to be more centered around consumers and consumption rather than around companies and manufacturing. How has this disrupted and/or changed your supply chain strategy?

Since it's about warehouses, I'll take a stab at it. And then, Carol, maybe you can pitch in. This is not a new thing. I mean manufacturing requires warehouses, but those warehouses are called containers. Nothing sits around at a manufacturing plant. It comes out of the plant, goes in a container, container is the warehouse, gets on a ship, on a train or whatever and gets to a port of entry usually. Then that's where the fun starts. So getting those containers deconsolidated and the right things to the right stores or to the right online channel, that's where the difficulty of the process is. And this process started maybe a decade or 2 ago. So warehousing and logistics is much about consumption than production, and that mind frame would have been very different 50 years ago.

Carol, do you have anything to add to that?

Well, we run a small freight forwarding business, so we are a broker that arranges for the air cargo or the ocean cargo that ships those containers that Hamid mentioned. And one of the dynamics right now is working through the demand-supply equation and it's crazy. We've never seen an environment like this. Pre pandemic, the cost of a 40-foot container -- we would charge maybe $1,200 for a 40-foot container. It's peaking out now over $8,000 per 40-foot container. So those manufacturers who have to pay that money is like -- I'm sure they're wondering how they're going to manage through that dynamic. And we're wondering about that, too, because, yes, we have to manage that next year and the year after and the year after that. So it's interesting.

By the way, you know how efficient she is, Susie, because most people pay $20,000 to $25,000 for what Carol pays $8,000 for. So she's getting a good deal.

Well, we want to know more about what's going on inside UPS. As Hamid said, this whole series is about innovators and leadership. So we'd like to just focus in a little bit on UPS. You became CEO, Carol, 1.5 years ago, and it was right in the middle of the whole pandemic. And I'm sure our audience, they've heard a lot of the things that you've been doing and saying and what have you. But it looks like you're already getting some results. Your earnings that came out yesterday were solid and better than expected, whether we're talking about profits and revenues. All your business segments topped the forecast. UPS stock, up yesterday, but double since you came in 1.5 years ago. So tell us a little bit about where you're taking UPS. What's your vision?

Well, our vision is better, not bigger. And by that, that means optimizing the assets that we have and leaning into the customers that value our end-to-end network. And this means sweating the assets and identifying areas of growth and making sure that we are so sticky, that the experience is so good that no one ever wants to leave that. And I'll make that real for you. So one way that we drove the results -- and thank you for your nice comments there. One way we drove the results yesterday is leaning into small- and medium-sized businesses because they truly do value our end-to-end network, and we've seen tremendous growth in this customer segment, 6 quarters in a row of outpaced growth. We're also leaning into health care logistics. We'll be a $10 billion health care logistics company by 2023, on our way to be a $20 billion health care logistics company. And we're doing it by really thinking about how we allocate capital differently than we did in the past. For example, when we, in the past, needed capacity, we would build square footage and we would buy more planes. I looked at our square footage and I said it's not optimized, it's not optimized. We knew that our customers wanted Saturday delivery as an example. So we said, okay, we can just open up the facilities that we have and deliver from them on Saturday. No additional capital, but we can meet the customer where the customer wants to be met. So we, as of this week, now cover 90% of the U.S. population with Saturday delivery and pickups for commercial and residential customers, and it's working. Last Saturday, we had 6 million packages that we delivered. So it's -- that was a really great example for our team about how you think about capital allocation differently than we would have done so in the past and declaring who you want to be, yes.

You know a lot about capital allocation, all those years of being Chief Financial Officer at Home Depot. In fact, you spent 25 years of your career at Home Depot. Is there anything else that your experience with that company is influencing the decisions and strategy that you're doing now with UPS? Just give us 1 or 2 really good examples.

Oh, I was so fortunate to work with the founders of Home Depot, Bernie Marcus, Arthur Blank and Ken Langone. And they taught me the power of the inverted pyramid, where the leaders are at the bottom of the pyramid because we bear the weight for the actions that we take and the decisions that we make. We bear that weight so that we can free up our people to take care of the customer. And I have been laser-focused on that because we had a different kind of pyramid here at UPS. And I've flipped it this way, and it's really starting to pay huge dividends because, to Hamid's point, it's all about people and culture. And if you put people first, they will do amazing things, and our team is certainly doing that.

Hamid, UPS is one of Prologis' biggest customers. What do you think of the changes so far that you're seeing at UPS and what Carol is doing?

I'm actually just in awe because this is taking a 100-plus year old company that was probably in the business of carriages going around, I don't know, probably something like that or really basic trucks and really bringing it into the most challenging vortex of the global economy and doing it very quickly and delivering really good results at the same time. So I don't want to be a standing IR department for Carol, but she's done a remarkable job. And sometimes it really takes an outside perspective to do that. I mean it's a proud company, a lot of traditions. But I can see it in the way we're interacting with the company, it's much more agile than it used to be and you can see it in the numbers.

Well, Carol, Hamid has already said a couple of times a little bit about your history of the company, 114 years old. We know that change is hard for everybody and especially for people working at a company that's a century old. You're also the first outsider to become CEO of UPS. And I'm sure that's had an impact of a different kind of thinking. What are you doing -- and you said everything has to do with people. So what are you doing to motivate UPS employees and executives to try different things, to experiment more and also to follow your lead?

Well, some things have been more symbolic and some things have been more meaningful. On the symbolic side, we had policies that restricted facial hair for men and natural hair for African-Americans. So if you wanted to wear a fro or a twist or a braid, you weren't allowed to. And we said, no, bring your authentic self to work. So we changed that policy. Our tattoo policy was more restrictive than the U.S. Army. We can change that policy, so we changed that policy so people don't have to cover up their tats. Now they need to be respectful, but they don't have to cover them up. Just imagine trying to cover them up in the summertime when it's so hot. So those are symbolic moves, but people are like, "Really?" And I'm like, "Really." We used to always wear suit and ties, and now we can just dress for the event, whatever the event might be. So that -- I just want people to bring their real, genuine, authentic self to work. On the more meaningful side, I believe in building financial plans that you can make and then paying your people, and we've been paying our people. And I -- money isn't everything, but it does not hurt, it does not hurt. And I'm really committed to that, investing in people so they can do well for their families, I think that's super important; and creating opportunities for people to reach their highest potential, whatever it may be. And it's different for each of us, but I'm spending most of my time on the people development side. I was retired. The only reason I came out of the retirement -- I was on my farm but I came back because I'm like I love to develop people, and there a lot of great people here at UPS. So having some fun doing that.

That's fantastic. We're going to talk more about that and leadership in a moment. But let's go back to Tracy Ward and see what else the audience is asking from our guests.

Great. Lots of questions have been rolling in, and I've got 2 that I'd love to share with you. Just on the topic of the innovation initiatives, I think, perhaps a question for both of you. What are the paths and obstacles you encounter when you initiate change and innovation initiatives?

I can't wait to go first. I think organizations, particularly successful organizations who are leaders in their business and have a financial wherewithal to be, in their minds, bulletproof, that presents a unique challenge for change because there's no burning platform. I mean everything is great. You're leading an industry. You're -- every day, you read in the paper that the company is doing fantastically well. So really, the reasons for change are hard to articulate and to understand. Smart people need to understand why you're doing something before they sort of line up. And it just means that the job of the leader is to communicate, communicate and communicate. The other possibility is to create a burning platform, but I don't recommend that. I think explaining to smart people why you're doing this and how this is going to improve the company and the shareholder and their career growth, I think that's the trick. And we're doing a much better job at that than we were 2 or 3 years ago, when we were just starting to do some of this stuff. In some of these arenas, also there is no playbook. I mean where do you go -- if you were at the leadership edge of your industry, where do you go to figure out how to do things? So you got to be prepared to try different things. Some of them are not going to work. People are going to make mistakes, but that should be okay. You got to have the courage to get up and try different things until you find something that works. But it is -- the challenge has been bigger than I imagined. And we are in a business that arguably is 1 of the 2 oldest businesses in history. So it becomes even more challenging in that case.

Carol, what would you say?

Well, I couldn't agree more, clarity in the message and constant communication. I also think simplification is important. Now I talked about our framework, better, not bigger. We also operationalized that through a customer-first, people-led, innovation-driven framework. And we have 1 metric for each of those pillars, just one, and we measure our progress against those metrics. And simplification is helpful when you're trying to drive change because, otherwise, it's just too much. It's over -- it can over -- be like a tidal wave.

Tracy, you said there were 2 questions. So what's the second one?

Yes. What has been the biggest opportunity to come out of the pandemic for your company?

Hamid?

Sure. I think it crammed many years of transformation in the form of digitalization because you had to do it. There was no choice. So all of a sudden, we got a lot of things done that normally would have taken multiple years. And I think the secondary benefit of that was that the organization developed confidence that it can do pretty impossible things in a short period of time. So the improvements themselves were important, but I think the courage that it gave the organization to set more audacious goals, I think that was really valuable.

Carol, do you want to contribute something to that?

I can't say it any better than Hamid.

Okay. All right. That's good. So let's move on because I want to wrap up our conversation. You sort of got us started. I want to talk a little bit more about leadership. And this whole series wants to deal with leadership issues. Let me start with you, Carol, on this. The saying is a lot of clarity comes out of crisis because you get a road map of what needs to be done, what needs to be changed, what needs to be fixed. And it sounds like that's what you're going through at UPS right now. As you think about all of the lessons that you've learned through the pandemic and also through the supply chain crisis, what would you say is the single most important leadership lesson that you learned? And how is it influencing the way that you're managing and leading UPS today?

Empathy. People have gone through a lot, and their families have gone through a lot. And our customers have gone through a lot. And so I read every single customer letter that comes to me. I read every single UPS e-mail that comes to me, and I read it through the -- through an empathetic point of view, to put myself in their shoes to understand where they're coming from and try to make it a better experience for them.

That's great. That's great. Hamid, can you top that? How has the pandemic and what you've learned or experienced influencing the way you're running Prologis?

I think we -- it's not changing how we're running Prologis that -- in a very significant way. We've always had the hierarchy of people first, I hate to say it, Carol, but customers second and invest was third. Because if you get that order right and you've got people that they know you have their back and you're taking care of them and they don't have to worry about those kinds of things, they'll go to the end of the earth for you. And if they do -- when they do that, the customer will get a good experience and the shareholders will make boatloads of money. So I really want to punctuate what Carol said in that area. The other thing that I want to highlight is this business of better is better, bigger is not better, better is better. This is really, really important. There are a lot of companies that set out size as an aspirational goal, and they usually want to get there no matter what, at whatever cost. I haven't seen those strategies be successful. But if you start from building a great organization from the ground up, and it's not easy and it's not quick, it will pay off in spades in the long term.

Let's get more leadership advice from both of you. Because -- Hamid, you were saying that there is no playbook when you're in these crises like the pandemic and the supply chain case. And so I'm just wondering, as you thought about all of this, what's the best leadership advice you have for the CEOs and executives in the audience on how to lead during the crisis? Carol?

Calmly with humor, find an opportunity to laugh every day.

Have you been in any situation -- let's just talk about UPS right now because you're still a newbie there. Have you been in a crisis situation beyond this macro thing that you're dealing with that you can give us an example of how you handled it?

Oh, I don't think we have enough time for that. Let's -- and in all seriousness, let your values guide your actions. In a crisis, rely on your values, go back to home base. On the very first day that I took the CEO job, it was the day after the weekend where George Floyd was killed. And I had put together a video that I was going to show the UPSers around the world, which was a pumped-up positive. This is what we're going to do. We're going to have some fun. We're going to kick some a**. And I'm like I cannot possibly run this video because George Floyd was just killed. So I sat down on my kitchen table, and I wrote a note about how I felt. And in my note, it was my anger, my shame, my sadness and how, in a time of this emotional turmoil, I was going to turn to my values and turn my anger into action by living our values. So that note that I penned actually ran before the video. And it really was helpful to me to actually mobilize me in how I thought I should act as a leader, by staying really true to my values.

Well, that's a really good example. Hamid, you have been CEO during many crises. I'll just mention 9/11, the financial crisis, what we're going through right now, the pandemic. What would you say is the best leadership advice you can share with the audience on how to lead during a crisis?

2008 was really hard on our industry and on me and the company. And actually, one of the reasons Prologis exists is because of the challenges of 2008, because, my company, AMB, after that, merged with Prologis and changed the name of the combined company to Prologis. So out of that crisis came a lot of -- the need for a lot of preparation. You got to have a bulletproof balance sheet when -- because you never know. We live in a very unpredictable world, and you don't know what's going to happen. So preparation is really important. You already heard about communication. You got to communicate things until you're sick and tired of hearing yourself. One thing I'm really proud of is that internally, during this COVID crisis, we had a SWAT meeting every day. Every single day, the executive team of this company got together wherever they were and we spent half an hour, an hour talking about what do we do for this customer, how do we treat the situation, et cetera, et cetera. So being decisive is really, really important. In a lot of big companies, people just do analysis and paralysis and all that. Sometimes just picking a direction and going, it doesn't have to be perfect. It has to be directionally correct. That's really important. I think in all those discussions -- I'm really proud of the North Star that we use in having those discussions because -- in those discussions, how our employees are being taken care of. That was really important. For example, just one thing we did is that for employees that had lost -- first of all, we didn't fire anybody. We actually hired 25% more people during the crisis. But there were employees certainly that had -- their spouse had lost the job. We made loans available to them that we actually forgave. We offered our facilities for free to relief organizations. By the way, the funny thing is that we would offer them and it would be really hard, because of the bureaucracy, for them to actually take us up on as many offers as we were making to them. But we did all the right things and we put the economics aside of those decisions. And lo and behold, the economics were just fine. So you've heard it before. It's communication, it's preparation, it's putting people first. And this word used to be one of my favorite words, but it's been overused now a lot, but being authentic. What really is important to you and making sure that your messages and your communication is totally aligned with that is really important because people are pretty good at figuring out where the millimeter of daylight is between what you're talking about and what you're doing. And I'm really proud that this team did a fabulous job during COVID. And 2008 taught us a lot of great lessons for this one.

I hope people were taking notes on that. Thank you. That's a good note to end off on. Hamid, thank you so much. Carol, excellent comments from you. Thank you both so much. And I'm going to hand it back to Tracy.

Thank you. Bye.

Thank you so much.

Wow. Thank you to Susie, Hamid and Carol. What a really incredible and insightful conversation. I'd love -- hi, everyone, thank you so -- that's kind of creepy. I mean who likes the sound of their own voice? But in any event, loved hearing about the simplification, empathy, decisiveness, really good leadership qualities and perspective. And also really encouraging to get a glimpse into the future of our supply chain and knowing it is in such good hands. Up next, we've got 4 innovators live with us here in San Francisco, and they are going to talk about the future of smart transportation. They will cover transportation solutions, including fleet technology and robotics. So please join me in welcoming Jack Kennedy, Cofounder and CEO of Platform Science, also of Hulu. Probably you've all spent some time with that over the last couple of years; Andrew Smith, Founder and CEO of Outrider;Will O’Donnell, Managing Partner of Prologis Ventures. And our moderator for this discussion is future correspondent from Axios, Bryan Walsh. Please give him a hand. [Presentation]

All right. Thank you so much. It's great to be in San Francisco or really anywhere, after the last 1.5 years, that's not my apartment. We have a great panel today. I think the last one really laid out the challenges we're facing in logistics, in the supply chain here. We want to talk about really modern future-facing solutions. So we have our panel right here.

I want to start by way of introduction for each person. Just talk about the role your company plays in transforming transportation for business. And let's start with you, Andrew.

Fantastic. Outrider is redefining key linkages in the supply chain through autonomous yard operations. So picture that there's been billions of dollars invested in automating inside warehouse and production facilities. There's now billions of dollars going to over-the-road autonomous vehicles. Outrider from its founding has been focused on that critical link between the warehouse door and the over-the-road transportation or rail service or port operations. And this is a critical pain point in the supply chain. Inefficiency in these distribution yards ripples inside the warehouse and into that over-the-road transportation. It is the classic dull, dirty, dangerous job. It is hard to recruit people to do this work. It's also incredibly unsafe to have humans around 80,000 pound vehicles operating 24 hours a day, 365 days a year. And it's completely unsustainable. As we're sitting here today, there are 100,000 yard vehicles essentially emitting the equivalent carbon as 2 large coal-fired power plants. So Outrider came together back in 2017 and said what does that new yard of the future look like. And we are now fully autonomously linking that warehouse door to the over-the-road transportation and driving efficiency, safety and sustainability.

Jack, over to you.

Jack Kennedy, Cofounder, Platform Science. What we do is we make it as easy for developers to develop applications for vehicles as it is to develop them for phones. So if you remember a world before your smartphone, your black bar or your flip phone, not much went on. When the smartphone was invented everything changed. So we wanted to bring that dynamic to the vehicle. And as we're talking about these complicated problems that we've just now discovered in the last 24 months, it's going to take a lot more than verticalized telematics companies to address everything. So we make it easy for people to develop. We make it easy for fleets to manage those applications. And that -- those people who make those applications are not only developers, but they're often shippers, they're fleets themselves and a range of folks that you would never think about being in and around a vehicle, including infrastructure providers. We connect it all, make it easy to build an actual linked supply chain by developing things and frameworks that make sense to people that know how to do that. We do that for some of the largest fleets in the United States. And I'm happy to be here. Thanks for having me.

Great. And Will, you're at home team here, so you get last.

So I'm Will O'Donnell, the Managing Partner of Prologis Ventures. I think at this point, people are probably aware of what Prologis does. So my role at Prologis, as Hamid alluded to, is I run our ventures group. And it's really about how do we partner with our customers to understand where there's opportunities and how do we drive trains, so how do we leverage our platform to understand how we can either invest in the start-ups that are transforming the industry like my 2 partners here or incubate and start businesses ourselves.

So back to you, Will, for a second. I mean what kind of broader lessons should we be taking from the crisis we're all in right now, especially thinking about not just what's happening now but how we begin to change that in the future? And everyone else can chime in after.

Yes. I think as Hamid said earlier, one of the things that come out of the crisis is the acceleration of change. So consumer expectations are now that it is my God-given right that I can have things delivered same day, next day. If you think of the implications then on supply chain, where 10, 15 years ago, it just needed to be in a store when I showed up to buy it, now I want things within hours. So the implications -- and this is why transportation is really important for us as a company. We own the nodes, but 50% of the supply chain costs are connecting those nodes together. So if we can understand how to create efficiencies, so how do we get better visibility between the trucks coming to our warehouses, both inbound and outbound, there's huge economic advantages, but there are societal benefits. So the more efficient the trucks become -- to Andrew's point earlier, there's a ton of emissions that are being created, so we have an obligation to really think about how we can drive those efficiencies.

Great. Andrew, do you want to follow up on that?

Sure. We've seen incredible -- I mean, I guess one thing we talked about with supply chain challenges, it is truly amazing what has been accomplished in the supply chain. And what's really allowed that to happen is this massive digitization to allow almost 8 billion people on the planet get this rapid delivery cycle. What we see as the next step is clearly automation, that you start taking the digital world and combining it with the physical world. And these automated systems will really provide the resiliency that's needed to address the problems that we've seen recently. But then on top of it, from our company standpoint, we're extremely mission-driven. And we see this wave of automation being a total failure for the industry if it's not done sustainably as well. So I always use the analogy I have absolutely no interest in getting a same-day package delivery in a 120-degree heat dome as we experienced this summer. So bringing these pieces together is really the opportunity for everyone in this field.

Okay. Jack?

I think the opportunity is, for the first time, we talk about the supply chain. We've discussed this internally. The supply chain has been a bit of an ad hoc outcome rather than something that was built by design. So I think the opportunity, which comes with every problem, is there's sort of a global awareness of what it is and what it means when it doesn't work right. And because of that, whether you're talking about sustainability or simply meeting new consumer habits, we're all keenly aware of what that means. So that's a tremendous opportunity to have people focus on the what's next. And I could -- what's next, we'll talk about. If I think about supply chains, I think of the Internet. We know how a perfectly efficient system works. So if you look at that work backwards, you can kind of get a preview as to how all these systems are going to connect on the way to a better outcome.

Well, how do you -- I mean let's talk about the future though. How do you future-proof the supply chain using some of these technologies, automation, monitoring, in that way, not just against this crisis but crises that are going to come? Thinking about how you put the investment in now to ensure you're not caught offguard -- we're not got offguard as much whenever the next bug, take your pick, happens. Jack, over to you.

Two ways -- there's 2 parts to that question. There's sort of a supply side question and then there's an architectural question. So as I mentioned just a moment ago, now we know that everything matters, right? So shipping without sustainability is not an outcome. That's toothbrushes showing up in a diesel-powered truck and clogging streets up. That doesn't work. But at the same time, building the technologies that are going to -- once this problem is understood by all, and we want to deploy technology for all, whether it's the networks, the chips that go into it, all of those things are now essential parts of everyone's lives, whether you can see them or not. So we have to think about how do we have a strategic supply of inputs and an architecture that let us support outputs that we haven't even thought about yet.

I think one of the also challenges that exist with supply chain is the atoms versus bytes. So with software, it's imminently scalable because I can build a new software, put on the cloud and instant outreach to anyone who wants it. If you think about supply chain, there's physical assets. So Prologis owns 1 billion square feet of warehouses. UPS has over 100,000 trucks. Maersk has thousands of ships. Within trucking industry, there's 600,000 different trucking companies that each have their individual assets. So in order to create the efficiencies, you need to have technology integrated with these atoms, and that is an infinitely more complex problem than just this create a scalable software. And it really requires to bring the ecosystem together. So it's one of the things that we're very proud of, our ability to leverage our platform, sit across our customer base and understand where there's common pain points but also pull the customers together to come up with this ecosystem solutions because if the warehouses are digitized but transportation isn't, it doesn't work, and it really needs to work in concert together.

Yes. In my reporting, I really try to trace how can we move these amazing advances we've had in software in the tech world more broadly into this really hard world of atoms, whether it's supply chain, whether it's housing and construction. And one thing I wonder about that is, look, there's great returns you can get in software. It scales really, really fast. That's very attractive. Let's start with Will. I mean are we getting the investment we need in that hard physical atoms stuff that we now suddenly realize we really, really depend on?

We're starting to. And 5 years ago, when we started Prologis Ventures, it was really in the forefront of thinking about this is what was going to come. As you started having expectations, the delivery time has increased. It also puts pressure throughout the supply chain. I think when people look at a transportation spend in the U.S., which is $800 billion, it's a massive market to invest into. So you're starting to see a lot more really great companies come out. You're seeing a lot more investors and corporates like ourselves taking a perspective that we need to invest ahead of what's coming. And I think that's one of the biggest advantages in this industry, is you have a lot of forward-looking companies saying, "How do I get ahead? How do I put money? There is white space that's here. And how do I bring the right solutions to that? And how do I find the right partners?" So yes, there's -- but it's slower and people are getting there, but it's exciting.

Andrew, you want to chime in? Curious from -- as a founder, and then Jack as well, in this space.

So I'll make a comment. It is so different today than it was from 5 and 10 years ago. I mean it's a completely different landscape. And one of the big things that has been recognized -- and right now, we're working with a group of priority customers that represent about 20% of all the yard trucks operating in the U.S. These customers understand they are no longer trucking companies or packaged goods manufacturers or -- they are technology companies. And so their -- the boxes in which they ship is as important as their differentiated competitive technology platform they're operating. So not only are we seeing the investment community seeing this opportunity, we're also seeing the customers understand that their investments in innovation and competitive advantage through technology is what defines them over the next decade.

Very similar. In the fleet space, if you look at 10 years ago, the newest C-level executive in any fleet is the CIO. That is a new function. It's no longer the IT person with a different name. It's a person whose job it is, is to change the way they operate, whether it's the ESG stuff, customer satisfaction or supply chain visibility. So the big fleets, and that's why we concentrate there, they have an insatiable demand to make what they do work better and work across the supply chain. So that's completely new. I think back at the beginning, Will's comments, when we started, we were raising money in, I don't know, 2016 or so, there was nobody investing in what we do. It was not sexy. It was not interesting. It was software for trucks. It didn't make sense. And ironically, Will was just launching. And my first conversation, they were sitting here during the build-out, was plastic sheets. And there was this guy I've never heard of with no website sitting on the plastic table saying, "I know exactly what you do and we want to invest in it." I thought that can't possibly be right. But sure enough, we're sitting here now and it's a relief. I think the big thing for me, it's a huge relief. I thought this is either the worst idea in the world and I don't want anybody to know about it or it's the best idea and doing a very poor job of explaining it. But today, it's now -- it's sort of a mainstream thing.

Well, I'm curious. I mean what do you actually look for when you're investing in companies like this? I mean you're out there, you're at your desk with no Internet address. So what are you looking for -- sorry, yes.

To be clear, we did have Internet. We're just renovating this building. No. But I think this is where our position is fairly unique. And I think as a company, innovation has been in our DNA. But Hamid also alluded to the fact, we really listen to our customers. So we're able to understand and start connecting the dots on -- well, if we keep on hearing the same thing over and over again, that's a real problem. So how do we ask the right questions and really be thesis driven on what's truly the outcome that this industry is looking for? What's the value proposition that we could potentially play in influencing an outcome? And then how do you bring the right parties together? So I think a lot has come down to listening to our customers and being ahead of what's next but understanding where friction is occurring and actually embracing friction because that's where true change can happen.

Andrew, autonomy is a really exciting part of what could happen in the future. Tell me like how you're seeing companies actually start to incorporate that in their operations and how that's working.

Yes. So what we realized early on is autonomy in a distribution yard is very different than robotaxis or over-the-road trucking. And what we realized is it wasn't just automating the vehicle but all the other manual tasks that take place in the yard and then integrating those tasks with the data flows of the warehouse management systems and the transportation management system. So we brought together a very unique team to specifically hit on all these key pieces that had to be brought together. So that's the upfront management software. That's the autonomy of the vehicle. All of our vehicles have robotic vision-based machine learning systems to identify the fronts of trailers and connect to them and then move them with centimeter accuracy around the yard. We're working with customers right now, moving from proving this technology to now operating thousands of trailer moves a day. But it's really through close -- you asked about how we work with those customers. It's really through those close interactions that we can find the most modular scalable applications to scale these systems throughout these distribution networks. And these systems, again, customers now are dispatching them and moving trailers today. But I will say, well, you have a solution to the labor crisis. We had our youngest child ever, a 2-year-old, move a 40,000-pound trailer with 4-centimeter accuracy recently at our facility. So we do have a solution to a lot of problems now.

That's amazing. Yes. And I have 4-year-old, and I don't think he could pull that off.

Send him over.

Jack, I want to ask you something. You -- this did come up in our prep call, which really grabbed me. You talked about the problem of 3G sunsetting, which sounds like a resort actually. But like what does it actually mean as a real actual pain point going forward?

Sure. I think it's -- we all remember what was supposed to happen in the Y2K world, right? And nothing really happened. But this time around, it's a little different because we weren't so connected back then, right? And things we take for granted, the more you take it for granted, the more likely it's connected to a 3G radio, right, so a trailer, any kind of access or controller alarms. So I brought that up on the call because I thought this is an interesting time when people always debate the role of government and when it could be useful or not. The introduction of 5G driven by government was -- they're playing a role in making things faster but at the expense of 3G before we're ready for it because there's not enough chips or enough radios out there. That's a debate. So suddenly, the government finds themselves in a very unusual spot because they're not sure are they going to move faster by moving faster or move faster by moving slower, in the case of delaying the 3G rollouts. So nobody really knows. It's not something that's well tracked. Even very large sophisticated companies aren't sure what their infrastructure looks like across the board. So I think we're going to find out.

Yes. Go ahead.

The issue is get shut off...

Yes.

Yes. But the worst case is sort of possibility or..

The worst case, well, I'll just give you one -- just recently, Sprint announced they've moved their date back. All the networks do not have the same date. So most people don't even know when their radio is going to get shut off. So it was originally going to be, I believe, at the end of this year for Sprint and then AT&T mid-February and then Verizon at the end of '22. So they're not synced. So it's something that people aren't really thinking about. So as we think about a connected supply chain, as we think about what that critical infrastructure will be, obviously, knowing what you're one is going to be a key part of that. So I think as we go forward, there'll be a little bit of a different view of that sort of thing.

Talking about -- a little bit about the government. I mean what does everyone hope or sees coming out of the ongoing, evolving, mutating infrastructure bill we have in Congress? Maybe, Will, if you want to start, and I'd love to hear everyone else's input.

I think one of the things we're most excited about is the electrification of fleets. So looking across our customer base, a significant -- a number of them are investing really heavily into the electrification. However, that infrastructure does not exist today. So it's a really interesting opportunity on how do you get ahead of what we know is coming, where do you put that infrastructure in and how do you do it in a seamless manner that it makes it easy for our customers to operate. There's huge societal benefits related to it. And then it's a gigantic white space from a business opportunity because you're suddenly going to have to provide fuel, and instead of traditional fuel, it's going to be electrons to run these fleets. So for us, the transportation bill is an area that is addressing that. I think where we have a unique opportunity is rather than a -- 5,000 individual customers trying to aggregate and decide how to convey that information, we can help be a conduit, both with the government on here's how to polish this structure but also from the utilities themselves. So in Southern California, rather than having So Cal Edison individually try to work with 800 different customers, we can help streamline those conversations and help really drive solutions ahead of when they're needed.

Jack?

Yes. I think this -- playing off that -- your previous question. In my view, the best role for that bill and government in general is when can you deliver critical mass to something that needs critical mass or it's never going to happen, right? So whether it is 5G or electrification, these are things we all know is a good idea. But unless you're a very rare individual that can create that by yourself, sometimes it needs a push. So I think broadly speaking, electrification, yes, 5G infrastructure. It's just a question of balancing the when and the how.

Andrew?

And I'll go on top of the fact there's a huge opportunity to direct the supply chain towards this more sustainable platform. So that's great. From my standpoint, when you have all this private sector innovation -- and the one thing that I always hope with any of these large bills is that we don't basically fund the old way of doing things but we think about essentially creating that platform, that playing field -- raising the playing field to continue to drive the innovation on top of it. So we're very focused on making sure that we have the best systems and just educating the world about how advanced the technology is today so that we aren't funding more diesel stations along big highways.

Well, that sort of brings up -- I mean we talked about wanting to get back to normal out of this current crisis, but is that actually where we want to get to? Or do we want to get somewhere else? Yes, go ahead.

No. As I mentioned earlier, there really was no supply chain, right? Nobody thought it out and said this is the way it works. And I mentioned the Internet because that's a very structured, highly efficient thing with atoms -- not atoms, with [ trons ], not atoms. So now is the opportunity to think about that, right? If -- we're not going to talk people out of same-day delivery or 1-hour delivery or any of these things that they learned during a very difficult time. So if that's the status quo for a period of time, how do we want to build around that? And that needs a lot of thought. Electrification, top of the list, right? Connectivity to make those things work autonomously, right there with it, right? So now is the time to think about what it should be, not what it was.

Yes. And the security of those systems and making sure they're redundant, I mean that's the other thing about these incredibly interconnected systems. And we think about this every day as it's all great until it's not great. And so it's all about redundancy and safety and building in the platforms needed underneath the system as well.

And I think with all things in life, there's an evolution. So there are things that are better coming out of this crisis and there's expectations we have. There's also an opportunity to reset and say how can we fix and improve. So to your point, originally, no, we don't ever want to get back to what normal used to be, but how do we make a better tomorrow?

I'll turn to Tracy who has some questions from the audience.

It's a really salient one just based on the conversation that you are all having. Which hits scale first, AV cars or AV trucks, and why? And where will all of the EV trucks charge, at loading docks or during the unloading process or elsewhere, off or on site?

Great. You want to start?

I might have an opinion. So these yard environments in which we're focused are really the perfect application for autonomy. It's repetitive tasks, dull, dirty, dangerous jobs that are hard to find people for. And from an electrification standpoint, it's a complete no-brainer. I mean these yard trucks should have been electric 20 years ago. These vehicles don't have range anxiety. They're working in a confined private property environment where they can be charged easily. In terms of over-the-road transportation, there's a lot of work. And because you're just going -- there's a lot of work in the automation. And because you've got the ability to go point to point, there's huge opportunity in limiting the problem set. And you still just have the safety issue of being 60 miles an hour as a robot as opposed to 5 or 10 or 15 within a yard. And then in terms of electrification and alternate fuel sources for the longer haul trucking, some of the most interesting things just has to do with using different swap techniques essentially. So if you need to go from point A to point B and it's longer than the range of a system, you just have very efficient, fully autonomous transfer hubs along the way to get goods across a longer distance.

I think your question was AV cars versus trucks, part of your question there. I think taking a step further, I look at use cases. And I think there's the convergence of different critical mass drivers. So I think of the ports in L.A. I think of the Inland Empire, right, where you guys live. No-brainer for either EV or autonomous or autonomous EV vehicles going from port to distribution center in the middle of night on the HOV lanes, period, right? So it'll start with these campus-like opportunities, whether they're confined with a fence or confined with guardrails, to places where there's already massive inefficiencies related to transportation. That's a traffic problem. That's a [ smog ] problem. So that solves about 3 different problems. So I think there's enough big problems with multiple winners that will drive the outcomes rather than how cool or interesting it is. I don't have a strong opinion about AV cars. I don't like them. I don't like being in them. I don't like being in the passenger seat when somebody goes, "Look, we're changing lanes." I'm not there yet.

I do that to my wife and children all the time these days. That's a lot of [ fun ].

I know too much.

I think on that, Jack touched on it. Autonomy happens when it's repeatable processes that you can confine in a set. So I think when people talk about AV vehicles, you have to break it down into components that are actually solvable versus how do I come up with the 1 billion-plus possibly use cases or scenarios that happens. So I think if you start with a repeatable process that I can remove constraints around or move variables around yards as a great example, that's where it's going to occur first. I think if you also think the same way with EV infrastructure, where is the repeatable process that's going over and over, that will help you drive to understand where it's going to occur first, which would be, for example, local delivery where you have a warehouse that has fleets going out, running relatively same routes every day and coming back. That's an easier problem to solve than, okay, how do I build out the network where I have millions of trucks going in a variety of different directions and have them be able to touch up and fill up on EV on the way. That will occur, but you've got to get density of vehicles, you've got to figure out the networks in order to get the higher utilization. So I think you break the problem set in the ways that you can simplify it, what's repeatable, where can you get utilization and then frankly, which vehicles are going to come first and you're going to see Sprinter vans and so on come before long-haul vehicles.

Great. Back to you to close it out, Bryan.

Great. Well, I had a question for you actually. I mean what happens at the corporate -- what needs to happen at the corporate level to really break open this kind of innovation around infrastructure, around transportation and shipping?

I think one of the most powerful advantages corporates have especially and something like supply chain logistics is the fact that we do own the atoms. And innovation occurs when constraints are remove and suddenly white space opens. And by that, Uber, for example, became Uber because they could suddenly use AI to match thousands of vehicles and they removed the constraint of I'm willing to get into a vehicle. Now in supply chain, we can look at it and say what new white space is opening up next to our platform that we can invest into. EV infrastructure is one that we've been talking about. I think you need to get corporates to be able to look beyond what our core business is, listen to customers and say there's a pain point and really be innovative and willing to test. And more and more companies are getting the abilities to do that. It's not easy because you've been successful doing it the right way. But if you really ask yourself the question of why and how, you can drive change.

Andrew, you mentioned something earlier about sustainability going beyond just energy and climate but actually health, I think. And you talked about like how difficult it is to do the shipping in 110-degree weather and heat domes. Whether it's your technology or others, how can we begin to address that in the future? Knowing this is -- it's going to get worse. I mean only in the event UN fixes climate change next week, we know it will.

Yes. So we did a recent survey, and it was actually amazing to see a majority of supply chain workers thinking about sustainability and being -- and there was a comment in the earlier panel about pay is one thing but people choosing where to work. So across the board, these large logistics-dependent enterprise customers we're working with -- and again, this transformation has really happened in the last 5, 10 years. But it is -- people want to work for a company that's passionate about doing good things for the world. So we see all of these companies think about their carbon footprint, not want to have idling diesel trucks next to warehouse workers or those -- or any of the drivers coming out of the yard. So it's really -- it's kind of given me a lot of energy to continue with this mission because the world is actually heading in a really great direction when it comes to sustainability right now.

Excellent. Are there any thoughts on sustainability more generally from either of you as well?

I mean, I think it's -- once you connect everything digitally and once you open those systems up where people can creatively develop, first of all, you're going to see creative solutions, entrepreneurial response to it. And then you're going to see some regulatory requirements, and then you're going to see the third order effects when the shipper, the receiver and even the customer is going to start making choices based on what they think the footprint of that particular event has to do with what they just did. So that's all technologically possible now. So I think the transparency of that is going to really change things at an accelerated rate.

As I say, I think that's one of the more exciting opportunities. If -- you think of supply chain as -- in a simplistic way, as a wagon wheel, where it's used to start and emanate out. But really how it's evolved, it's almost a spider web where you have all these nodes that are consistently and constantly reconnecting. And you got to, with the technology, figure out how do you get better connectivity and visibility across all these disparate parties. And we're now starting to have the technology that can form the basis, and that goes back to suddenly constraints are being lifted, where you can have a connected vehicle that has an operating system that you can build apps on to. And with that, what does that open up for us is an industry, an ecosystem to really drive change. And out of it are going to be sustainable benefits. There's going to be economic benefits. There's quality of life benefits. And a lot of this technology is really about enhancing the productivity and experience and the safety of the workers doing it. So the safer the vehicle, it is -- the better the experience of that driver both at the job and even at home. They can spend more time with their families, et cetera.

I want to sort of -- as we close out here, I would love everyone to say -- I know we're not going back to normal, but I do want to know when are we going to get back to this no longer being a thing that's on everyone's mind. Like even just people in the general news are like supply chain, bottlenecks, things like that. So just like what's your sort of guess, each of you, for when this will begin to loosen up in a way? And then we'll check back after that time and figure out who won. Let's start with that, Will.

So the optimistic is probably February, March of next year. I think with supply chain, there's ripple effects, as we clearly have seen, where one thing goes wrong, it impacts over here. I think it's going to -- there's not going to be one lever you pull. I think it's going to gradually improve, and at one point, we'll look around and be like okay. Things are going faster and faster. So I think Christmas is going to be tough for a variety of reasons. You'll start to see improvements coming out at the beginning of the year, and we'll get better and better. And people are going to figure out how to fix this. And the new normal will be more resilient, more thoughtful and actually be more robust to prevent this from happening again.

Okay. Jack?

Yes. I think difficult to say obviously. But I think a lot of what's happening now is people are finding alternative ways of satisfying whatever their needs are, right? So exactly back to normal is impossible or not even desirable, right? So I think I'm more concerned -- not too concerned, but there will be a glut. Like we're forgetting that part. Every scarcity period is followed by a glut, which is going to screw us up again in another way. And then it will start to -- again, we are going into a very, very different place when this is all over. And I can't predict when that's going to be obvious, but we're definitely on our way.

Okay.

I have 2 responses to the question. The first thing is that I see, as we get into the first half of next year, us having kind of the almost overcorrection because of people now overbuying -- or to deal with the current crisis, people are overbuying, and then we're going to have a period where production is going to drop because there'll be less demand. So I think we'll sort of see this turbulent bouncing out and then come to this more resilient, more automated connected system. And the second comment I was going to say is I think this Christmas is going to be great. Because if there is one thing that we learned during the pandemic, it's that having a little bit more time to be disconnected and with family is fantastic. And having a 6-, 8- and 10-year-old, having a little less stuff at Christmas, a little more time with family will be fantastic.

Yes. The gifts are going to be about experiences. Let's cook dinner together versus a new doll.

Well, when Christmas rolls around, my 4-year-old, I'd tell him like, "Sorry, I don't have any gifts." But I'm going to tell him what Andrew said, it's going to be great. And I'll call you and you can explain to him in more detail. But this has been a great panel. Thank you to Andrew, to Jack and to Will and to Prologis, and we'll see you soon.

Yes. Bryan, thank you.

Thanks to Bryan, Jack, Andrew and Will. It's exciting to hear about the role that transportation can play on improving worker safety and operating efficiency. Thanks all for being with us here in San Francisco today. We're going to take a quick 15-minute break. Feel free to stretch your legs, grab some coffee or whatever your pleasure may be. When we come back, we'll hear about the future of energy, so neat that they ended on that note. We've got a stellar lineup of panelists moderated by Prologis' own, Henrik Holland. See you back in 15. Thanks [Break]

[Presentation]

Wow, what a fantastic video and what an energizing event. My name is Henrik Holland. After nearly 2 decades working in global energy, I joined Prologis earlier this year to spearhead Prologis' groundbreaking effort in electric mobility. And it is my pleasure to welcome you to today's energy and sustainability panel. With COP26 around the corner and the effects of climate change ever more visible, there couldn't be a more topical subject. Now I'm a little alone on stage today, but joining me virtually to talk about their passions and priorities for energy and sustainability are 4 formidable speakers. And we're going to dive straight in with a lightning round of introductions. Dear panelists, I would like to ask each of you to briefly introduce yourselves by sharing with us, just in a few words, what you care about most passionately as it comes to energy and sustainability. Congresswoman Barragán, may I start with you, please?

Sure. I'm Congresswoman Nanette Barragán, representing California's 44th District, including the ports of Los Angeles. I believe the biggest sustainability problem our society is facing is that much -- we have much of the technology to address the climate crisis but we need to do a better job to deploy it and to the skills necessary for our economy. This is a policy challenge. It's a business challenge and a challenge of political will. I'm looking forward to our discussion today of how we can work together to bring the clean energy future to the present faster.

Fantastic. Thank you very much. Erik, if I may ask you to introduce yourself and GNA? Looks like Erik is on mute.

There we go. We got this.

There we go. We're all used to it. It happens.

Thanks for having me. My name is Erik Neandross. I'm the CEO of Gladstein, Neandross & Associates, or GNA. We are a consulting firm. We work in the commercial transportation space. So we work with big corporate fleets. We work with the big truck manufacturers. We work with all kinds of other stakeholders; utilities, ports, government agencies, environmental nonprofits and many others. I think, for me, the thing that I'm most passionate about, it's really the core of what we do is trying to help our customers to navigate the inevitable change. This -- what I often talk about is this complete transformation from a petroleum combustion-based transportation economy to one that in 30 years will be zero emission and low carbon fuels. And what we really do and what gets me excited is to be able to realize success in helping our customers not only navigate that but to do that in a way that is economically sustainable as well as the environmental sustainability piece. So it's important in the businesses that we work in that we do it in that order. And when we do it, it's pretty rewarding.

Yes. Thank you so much, Erik. And then we have Huw Phillips joining us out of London. So Huw, thank you. I know it's a little late where you are, but this virtual event, it's great that you're able to join us.

It's a pleasure. Thank you. So I am Huw Phillips, and I'm from Deutsche Post DHL, and I head up the sustainability topic within the Real Estate division. And as an organization, we're committed to reduce the impact our business has on the planet with the goal to becoming carbon neutral by 2050. I think, for me, often it felt like sustainability was treated as a nice to-have, but I think the good news is that's now changing. And I think, going forward, you can't be a profitable business unless you're a sustainable business. And I believe that closer collaboration, we can all be successful. And for me, events like today 100% promotes working more closely together to achieve that common goal.

Absolutely. Thank you so much. And then last, but definitely not least, Dr. Lee Kindberg of Maersk North America.

I am Lee Kindberg, I'm Head of Environment and Sustainability for North America for Maersk, which is a global logistics and shipping company. What an exciting time to be part of the shipping industry and to be dealing with supply chain. We are feeding and supplying the world and dealing with new challenges every day. And at the same time, we're actually starting to make progress on what's really the challenge of the century, and that is climate. We and over half of our biggest customers have set zero carbon goals. And we're actually working together, starting to make progress on that goal, and that's something you really have to be into.

Fantastic. And I can definitely feel the passion of our panelists as we talk about this. Now I'd like to dive a little deeper, and I'm going to start with a question for you, Huw. In March of this year, DHL announced it will invest up to EUR 7 billion in climate-neutral logistics by 2030, which includes the deployment of 80,000 vehicles for last mile delivery, which would mean approximately an electrification of your fleet with 60%. What opportunities and challenges do you see in pursuing and achieving these, if I may say, very bold targets?

Yes. It certainly is a bold target. And the reason why we've come out with that commitment, Henrik, is that we're going to use that EUR 7 billion to keep our -- to reduce our carbon emissions from 33 million tonnes in 2020 to under 29 million tonnes by 2030. And thereby, we're committing to the science-based target initiative. In real estate, we're going to use it to make sure that all our new builds going forward are designed to a carbon-neutral design. And we currently have an aircraft fleet of just over 250 aircraft. We're continuously modernizing that fleet. But going forward, we need to invest more heavily in sustainable aviation fuels. And we've got a target by 2030 that 30% of our aviation fuels are sustainable aviation fuels using blending. And as you quite rightly said, on the vehicle side, we need to make sure that 60% of our last mile fleet are electric. I think purchasing electric vans, that's well on track, and that's really well supported by the investment that's been made by the major car manufacturers. But that kind of brings up the first challenge for us in real estate in that we need to make sure that we've got buildings that have a power infrastructure to charge all of those vehicles. And that's really a big step change up that I don't think a lot of people have kind of woken up to yet. Also, like many other companies, we're investing in solar, but in many areas, we're a nighttime business and we need to bring on board new solutions like battery storage much faster into place so that we can capture solar and utilize it when our operation needs it at night. So yes, the EUR 7 billion is a build commitment, but for me, it sends a strong signal of our intention.

Yes. Fantastic. And I hope that we'll have time to come back to your point on infrastructure because that is so true and so core to what we do here at Prologis as well. Also related to significant investment required in infrastructure, Dr. Kindberg, Maersk recently has been in the news. Several companies, including Amazon, Unilever, IKEA have committed recently to zero emission shipping by 2040. Now that might seem quite a way away, but given the massive investment required in technology and infrastructure, the scale involved in the supply chain, that's not a lot of time. Could you tell us a little bit more about what Maersk, as a global -- one of the global leaders in shipping, is doing to support your customers?

Holland (sic) [ Henrik ], you make a good point. For those of us in capital-intensive businesses, 2040 is not a far distance or fluffy goal. The lifetime of a vessel is 20 to 25 years. So if you do the math, this is the decade of action. Not 2030, not 2040, but this has to be the decade of action. So we've announced that our first 8 vessels powered by green methanol will be on the water in 2023 and 2024. The very first feeder vessel will be during 2023, which, last I checked was 2 years away. That's a stretch goal, but we're pretty excited about it. And again, these vessels will operate on green methanol, either biofuels or e-fuels, so that we're setting a full life cycle perspective on net zero carbon. We've also done a few other things. We've set a goal of zero carbon from all of our operations by 2050, and we're starting with our ocean fleet. We also have done some things internally that have really been effective. We pooled everybody involved in decarbonization, whether it was data or engineers or strategy people, even marketing people, into one team, reporting to one global head of decarbonization, who reports directly to the C-suite. Now that really sends a signal throughout the organization. And it's given us the ability to reach out and partner with customers and other stakeholders in ways that we hadn't been able to before. So it's really been exciting to see how that's enabling us to move forward more quickly.

Fantastic. And working closely with customers is so essential to making these larger complex infrastructure projects work, of course. Another thing that's really essential to getting us to where we need to be, I think, are public -- strong public-private partnerships. So Congresswoman Barragán, I have 2 questions for you, the first one being massive -- the need for massive infrastructure investments have recently been in the news globally. Could you tell us a little bit about what we're doing in the U.S., what Congress is working on to promote the adoption of clean technologies in the logistics sector?

Well, you're probably hearing a lot about the Build Back Better agenda, which is what Congress is working on. Now 2 major steps we're taking in the Build Back Better Act is to invest in the charging infrastructure for medium and heavy-duty vehicles and in zero emissions technology at our ports. An important part of encouraging faster electric vehicle adoption in our goods movement sector is to increase access to charging infrastructure for medium- and heavy-duty electric vehicles. Now the Build Back Better Act makes $6 billion available for the installation of electric medium- and heavy-duty vehicle charging equipment and is also available for electrification of equipment at ports. It can help to accelerate electrification of larger vehicles, including delivery vans, port and airport vehicle fleets and including trucking fleet that take cargo from ports to warehouses. Many of the fleets can operate a single battery charge during the day and then charge -- recharge at one location overnight with their store such as a truck yard, and this can have a real impact. While medium and heavy-duty vehicles make up only 5% of the vehicles on the road, they emit 23% of all transportation emissions. So the Build Back Better Act also has a $3.5 billion grant and rebate program at the EPA to help ports be able to invest in and get a rebate program for zero emissions technologies such as electric cargo handling equipment and trucks and shore power for ships. So combined with the charging equipment investments, the Build Back Better Act's investments can help our government partner with the private sector to reduce emissions in the goods movement industry at our ports, our warehouses and in between.

Fantastic. And I'm definitely happy to see the focus not just on passenger vehicle, consumer infrastructure but also into the medium and heavier duty logistics space because in order for us to get to where we need to be from an emissions perspective, as you rightly point out, that's where a lot of the impact is. Do you see -- what opportunities do you see for us as corporations to partner closely with legislative organizations, with public organizations to build those strong public-private partnerships?

Well, we need government and private sector companies to work together to develop the low- and zero-emission solutions to large cargo ships. Now this is one area where the technology isn't yet close to economically available to move large ships away from burning bunker fuel and diesel, which are increasing source of emissions as trade takes place. Now there are different possible solutions out there that haven't been fully developed at scale for cargo ships such as batteries, hydrogen, advanced biofuels, green methanol, ammonia. All have potential, but they also have drawbacks that need to be addressed to be sustainable, economically and environmentally. But we must get there and we can't afford to wait until 2040 or 2050. We're going to need a partnership between the Department of Energy and Industry to do research and development as well as demonstration projects. Now one idea my staff and I are looking at is the support and creation of an advanced technologies loan program for zero-emission shipping to support manufacturers of zero-emission shipping vessels as well as manufacturers of the materials that would support them. So we need more companies to work on all aspects of zero-emission diesel development and fuels across the maritime supply chain. And I think this kind of public-private partnership is an effort that could help.

Fantastic. Thank you so much. And building on that, Erik, your firm -- you and your firm are kind of in the middle of all of this. And as you're advising your clients on sustainable mobility and energy, you're kind of in the middle of that regulatory dynamic space and working with companies to figure out how they can achieve their sustainability objectives. How do you see companies and regulators have -- like balance the near-term desires and investor drive for quarterly results and earnings with sustainable outcomes? That's been a real challenge over the past decade. Is that different now? Have they become more compatible? What do you think?

We're getting there. But as many of the others said, we're not getting there fast enough, right? That's the world that we work in, is to try to balance the very aggressive bold goals that need to be implemented in relatively short periods of time. As I think Lee mentioned, 2040 in a capital-intensive business, that's tomorrow, and that's pretty much the case with a lot of companies that we work with that have thousands and thousands of trucks, dozens or hundreds of yards, a lot of people that are critical to this transformation, right? So finding that balance is really key. And I think that that's the case along the lines of the question you asked between the regulators who are pushing hard. And certainly, we see that very, very clearly here in California, where we have a very aggressive regulatory environment at the local and state levels to try to push businesses to do more to get there faster. But I think it's really critical that the regulators, even though they want to get there and set bold policy agendas, that we also pay attention to the business and what they have to lend to the conversation about how real is this, how sustainable is it from an economic perspective. I know the environmental piece is great but there needs to be all parties paying attention to that balance so that these companies can thrive and continue to be successful, participating in the economy, employing the labor and, obviously, doing their part environmentally as well.

Yes. That makes a lot of sense. I'm curious, Dr. Kindberg, Huw, as Erik's talking there about that balance, you've been working in sustainability, both of you, for quite a while. How do you reflect on how those dynamics have changed?

I think Huw mentioned earlier that sustainability or environmental compliance or all of the safety issues used to be an extra box that had to be checked. And what you see today, it is much more integrated into your main business strategies, and it's become a C-suite issue. It's no longer some little staff department that, yes, you have to fill out the survey once a year or something like that. It is actually becoming integrated into the business strategies, and I can barely keep up with some of our business units that are investing in electric vehicles, working with Prologis, as a matter of fact, to how do we get these chargers installed quickly. The marine terminals that are going to hybrid and then fully electric cargo handling equipment, and then what we're doing with our vessels, it's a lot going on. And it's because there are so many people now who have ownership for this and integrating it into the business and into the strategy.

I think Huw is on mute.

I absolutely support what Lee said there. It's -- we've seen a step change, and it really is picking up momentum. And now the big challenge we've got to do is make sure that we have the capability, the resources. We bring on people so that we can deliver on our commitments and make sure we keep that momentum going and grow on that momentum.

Henrik, I might add. GNA, we've been around for 28 years at this point, working in sort of this spider web of technology and corporate fleet, regulatory policy, incentives, all these sorts of things. And I think, from my perspective, and we've seen this in the last couple of years, there's been a real foundational change. Not only do we have increased regulatory pressure, which I think is 1 of the 3 key pillars of the energy transformation that we're starting to see, but the other 2, I think, are absolutely critical, and they've been touched on here. One is this corporate commitment around sustainability, right? This is no longer a nice page on the website for marketing, right? These are real commitments to get to net zero by 2035, 2040, 2050, right? It's -- they're all in that sort of general time frame over the next 2 to 3 decades. And that will, I think, only increase. Certainly, we'll see starting on Sunday and for the next week, I'm sure we'll see a lot of, coming out of the COP26 conference and more and more commitments. But these are very big and bold and clear commitments to say I'm going to get to zero emission by 2035. Every single truck I have will be zero emission, right? And there's sort of no going back when you make big statements and press releases like that. So that's one. And then the other one, which I think really gives me a lot of hope is the investments that we're seeing these days in zero-emission technologies of all shapes and sizes, is like nothing we have ever seen. There are billions and probably trillions of dollars of capital being pushed in this direction. If you look at just Ford as one example, in the last couple of months, they've publicly committed $53 billion to their electrification strategy. GM, Freightliner, all the rest have done the same, right? You're seeing massive amounts of private equity and venture capital and SPACs and big funds like BlackRock and others that are saying, we're going to invest in this path. And you see a lot of these start-up companies out there, whether it's Arrival or Rivian or a number of these new electric vehicle companies that are starting up. And then back to the corporate sustainability, you're seeing the customer saying, we're going to commit money to this, right? So you have the buyer and the seller both committing billions of dollars to say this is what I want. And that marriage is really, really critical and something that we maybe haven't seen in the past or maybe you have an interesting, innovative technology that might get a policymaker excited, and you see a little bit of investment to develop it. But unless you have that customer to say, "I'm going to go buy this at scale and convert my fleet of 15,000 delivery trucks" or whatever that is, it's hard to make it work at scale. And so those things all sort of coming together, to me, I think, is sort of the perfect storm that will really help to ensure we get through this transformation to a zero-emission future in the next couple of decades.

Yes. That definitely resonates with me.

Henrik, do we have time for a quick example?

I think we have time for one. Yes, absolutely, we do. Please go ahead.

I mentioned the 8 new vessels that we'll be launching in 2024. Those are the vessels that are the big size that calls port of Los Angeles, the Congresswoman's district. Those 8 vessels are going to cost us $1.4 billion. But when fully operated on green methanol, they'll cut our carbon footprint, which is also about 33 million tonnes, they'll cut it by 1 million tonnes a year. So it's a big investment, but it's the start of the fleet turnover. So the numbers are big, but the payback is big, too.

And we got a similar thing in DHL that we're now enabled. We've just recently placed our first order for 12 fully electric aircraft, and we'll take delivery of the first one in 2024. Of course, the early adopter, these won't be -- the payload of these aircraft is relatively small, but it's moving us into technologies that we weren't in and didn't have anywhere on the horizon in the past, and that's the really exciting thing moving forward.

Yes, fantastic. We're really seeing that marriage now between technological advancement, the economics working out and a much greater societal push for cleaner technology. So absolutely not business as usual. Looking at the clock, I'm going to hand over to Tracy and see if we have any questions from the audience.

Well, building on what the panel has been talking about, climate change and cybersecurity threaten an already vulnerable power grid. What can organizations do to mitigate the risks of relying more heavily on electricity in their sustainability initiatives?

That's a wonderful question. Would any of our panelists like to try and tackle that?

I'll be happy to jump in to start. And as we help these big corporate fleets move increasingly to electric vehicles, the question, especially in California, is, well, what happens when the power goes out? How do I make sure I can go out and run my routes, right? And so our strategy there is to say, number one, let's be smart about the sites that we choose. A lot of the companies that we work with, they have maybe a dozen, 2 dozen sites or whatever it is in California. Let's not pick the one that's out up against the foothills where the wind blows and you have these power safety shutoffs, right? Let's pick the ones that are more in the urban areas where you're less likely to have these sort of brownout events or shutoff events. That's number one. Number two, the power does go off every now and then. That's just the nature of the beast and the world that we live in. And so we then sort of say, "Well, what can we do to have maybe some on-site generation," right? And a lot of projects that we're working on now, maybe we'll put in 1 megawatt, 1.5 megawatt of solar generation on site. Even in big fleet yards, you can't seem to get much more than that, just real estate and -- California real estate prices, particularly in urban areas, right? And then package that up with some energy storage on site. That's not going to give you 24/7, 100% reliability and redundancy and generation, but it buys you time to get through an event, which we can look at and work with the utility partners and say, "Hey, look, at this site, historically over the last decade or whatever that time frame is, how often does the power go out and how long does it go out for?" Because that's what I need to then plan for. I don't need to be planning for a week shutdown, right? That's just not reasonable or realistic. But let's think about it in a logical and smart way and sort of design for that. So that's sort of our approach and how we've been working with customers at this point.

I think you've also got to look at -- sorry.

Great. If I can -- go ahead. Go ahead, Huw.

I think you've also got to look at potentially new technologies that are coming over the horizon. Recently, we're seeing in the news Toyota are exploring hydrogen as a way of powering their vehicles. So maybe it won't all be kind of where we see it going currently. There could be some further advancements in technologies that kind of take us down and can even out and balance out that risk.

Yes. A lot of really great points there. I think to your point, Erik, the sizing of energy infrastructure on site is really critical -- with space being at such a premium, really critical area for innovation, as is resiliency as a whole. I think we might have time for one more question.

Yes, I've just got one more. I think I already know the answer to this, but the panelists might have an opportunity to put a finer point on the question. Can we have smart cars and trucks without smart roads and ports?

That's a great question.

Yes. But it's better if everything is smart.

Yes. Yes. Absolutely. And I think our panel before this touched on a number of those concepts as well. And I think that we'll see an increasing degree of autonomy and -- autonomous vehicles working into our infrastructure. I think over the next few years, we'll see a lot of different pilot developments in this particular space, and that will give us a lot of learning in terms of how we're going to build the networks and the infrastructure that we can then scale up. Any further comments on this point?

I would just add, we're in an age where there is no more going it alone, right? And partnerships are so critical to absolutely all of this, whether it's the connectivity, where you need to have coordination and cooperation between a port and the tenants or the truckers or a city or even on the last topic we're talking about, right, sort of resiliency. Huw might have a fleet and down the street might be a UPS facility. And one of the things that we do a lot of is say, "Look, power goes out for you? Come on over, charge up," right? Because we're all in this together. And as I'm sure Lee would agree, high tide floats all boats, right? And that's -- we have to be thinking like that these days around cooperation and doing this together because doing it alone is just not going to get us there fast enough.

Yes, absolutely. And on that point of partnerships, we're all in this together. These are -- supply chains, energy infrastructure are very, very interdependent complex systems. And to your point, we cannot do this alone. So thank you so much for joining us. And I want to close us off with a final lightning round. The 4 of you have so much experience and knowledge in this space. Others might just be getting started with their sustainability journey. Could you, in just a few words, provide a bit of advice for those who are just setting out to set their priorities, thinking about their challenges? What would you like to leave the audience with? And if I can start again with Congresswoman Barragán?

Well, thank you. I would say to the audience, make sure you have an honest and transparent accounting of how you're reaching your sustainability goals so that you're achieving real measurable reductions in emissions and also maybe set the goals for 2030, not just 2050.

Great. Thank you. Erik?

Easy. Hire a good consultant, of course.

I happen to know one.

In all seriousness, I think my advice is dive in, get started. Start doing something. Don't analyze it to death, just start making investments and learn by doing.

Fantastic. Thank you so much. Huw?

I think as well, yes, you have a long-term goal, but you need to cut that into pieces and you need to kind of have stages to get there. And the great thing is there's so much -- there's so many other companies in the same boat. So you just need to reach out to other organizations, to other industries, and you can really find a lot of inspiration and work together. Collaboration is the key.

Super. Dr. Kindberg?

There's a common theme here. First of all, manage for the best total result. You don't want to just push the emissions upstream or downstream or to other parts of the supply chain. You've got to look at the total impact of what you're doing. Measure what matters. And then as we've all been saying, we can't do this alone. We've got to partner. We've got to work with new stakeholders, but there are opportunities out there to work in ways both public, private and across business and even with researchers and academics to lead us to this new tomorrow. And the first steps are already taken, so we can do this together.

Well, thank you so much. Definitely, recurring theme around partnerships. We're going to do this together. There is no time like today. And definitely, there is an urgency today that it's even greater than it was 10, 20 years ago. And the economics and the regulatory drivers are real. These objectives is 2040, 2045, due to the long-term nature of energy infrastructure, deep investments required, today is the time to get started. And I'd like to comment as well as just get going with the project. So thank you so much. So with that, I'm going to hand it back over to Tracy.

Thanks to Henrik and all of our energy panelists joining us remotely and especially Huw for staying up well past my bedtime remotely. I loved the advice at the end. I think that that's something that we can -- their collective advice is all what we can use in our own daily lives. So switching gears. Did you know that in the next 8 years, more than 0.5 million new logistics related jobs are expected to be created? Companies today are rightly concerned about their ability to find qualified candidates for those jobs. So I'm excited to hear about ways to address the challenges of today's and tomorrow's logistics workforce. Please join me in welcoming Maria Flynn, CEO of JFF, Jobs For the Future; Andy Van Kleunen, CEO of National Skills Coalition; and our moderator, Tyler Gray, EVP and Global Editor for Edelman and previously Fast company. [Presentation]

Great stuff. Thanks. Listen, today, we're going to talk about a topic that's probably on the top of mind for a lot of you right now, and it's really important: the labor force and the modern skills needed for future-facing businesses. We're joined by 2 people with unique insights into this topic, who I imagine are pretty in demand right now. Maria Flynn and Andy Van Kleunen, thanks for being with us. Maria spent her entire career fighting to get justice for the American worker, first at the U.S. Department of Labor and now as CEO of the Boston-based nonprofit, Jobs For the Future or JFF. She helps underserved populations in particular, improve their employment prospects through education and training so that everyone can advance economically regardless of the ZIP code in which they were born. And Andy Van Kleunen is the CEO of National Skills Coalition, which he founded in 2000. He's a trusted nonpartisan resource to state governors, members of Congress, White House officials and state and federal agencies. He helps with policies that they develop and implement for workforce solutions so that people can expand economic opportunity for every worker, every business and every industry. Thank you both for being with us.

Good to be here.

Good to be here, Tyler.

Maria, we'll start with you. When we look back at the last 18 months, this has been a really hard road for frontline workers across all sectors. What needs to happen to not only help these people recover what they might have lost but come back to a better situation?

Yes. Thanks, Tyler. It's true. This has been an incredibly hard period for millions of workers. And so I believe that core to driving an equitable economic recovery is really centering the assets, the aspirations and the needs of workers. And for many years now, there's been a lot of discussion across the country about the future of work. And a lot of that has been a very kind of theoretical conversation at times. And so at JFF, we really think the conversation should be helping workers think about what's the future of me and really the importance of this idea of find, finance and flourish. How do you help a worker find their best career path? How do you help them finance that journey? And how do you help them flourish throughout their career? And I think that both the public and the private sector have really critical roles to play in this work. Key among them is investment. So it's important for federal, state, local government to invest in workforce development programs. It's also critically important for the private sector to be investing in their workers, particularly their frontline workers, which often kind of get left behind in investment strategies. So I really think of this as the need for a dual transformation approach where we both invest and improve like our core kind of legacy systems and providers in the country but also really actively look at what's around the corner and what's ahead and what is that kind of innovation that we can be harnessing. And I heard in the opening that Hamid, the CEO of Prologis, he talked about how the logistics system is one that was built for a different era. And the system that Andy and I have spent our careers working on, the workforce system, is also a system that was really built for a different era. And so I think now is the time for both the public and the private sector to be really asking those like hard fundamental questions of what is the system that we want for the workers of today and the future.

Yes, you really beat me to referencing that line. I think it was such a really great one. And it's not theoretical anymore, is it? It's real and it's been really thrusted at the forefront in the last 1.5 years or so. Andy, you've committed a lot of time and energy into the idea of investing in people. It's a big theme, whether you're supporting the American jobs plan in front of Congress or just every day on your Twitter account that we see. But how do you invest in the American workforce when 4.3 million workers voluntarily left their jobs in August, according to the latest Department of Labor numbers?

Yes. Tyler, that's a great question. I think there's really 2 different parts of that question, right? So one is when you have a labor market where so many folks are currently on the sidelines, right? So it's not just the folks who quit their jobs recently, but we have over 4 million folks who've left the workforce permanently or at least for the long term. They're not even considered to be in the labor market anymore. And so we have millions of folks sitting on the sideline, and we're trying to figure out like how is it that we can get them back into an economy that has changed pretty dramatically even over the past 18 months. But then I think there's a second investment question. I think it goes to some of the things that Maria was mentioning, which is if you're an individual company, and you know that people are quitting their jobs at a pretty regular pace, like what's the incentive for you to be investing in training your folks with this outside chance that they might be leaving your company within a few months after you make that investment. So I think there's 2 different parts to that. On the sidelines question, look, the folks the most impacted by this pandemic were disproportionately women, workers of color, lower wage workers, folks without a BA or -- and in many cases, even a GED. We're going to need some kind of significant public workforce investment strategy to kind of help them get back into the workforce. There's a lot of other things that are going to need besides skills, too. I mean the fact that women are so disproportionately impacted by this pandemic has a lot to do with child care. It has to do with the on and off aspects of schooling right now. Thank goodness for the child vaccine that we think is going to be approved because I think that's going to be a game changer in terms of making it easier for many of those caregivers to now think about actually getting back into the workforce without their schools opening and closing on a regular basis. But we have a lot of folks who are going to be looking for new jobs and new careers in a completely different industry than the one in which they were working. Think of all those retail and hospitality and restaurant workers, whose employers, their businesses have shut down. And that industry is downsizing. There's no question about it. And there are other industries like those and logistics that are desperate for people. But how is it that we're going to help folks make that particular shift? And I think, as Maria said, the strategies that we used in the past need to take this new context into account. So for instance, JFF has done a tremendous amount of work on things like apprenticeship. How is it that we pay people essentially to come on to the job and train, even we know they're not fully qualified. But we're kind of saying we're going to invest in you over time, train here on the job itself. There's a lot of folks that want to enter into an apprenticeship but are not ready to do that. And so let's think of all of those mothers who it's not just an issue about whether or not they can show up with the job, but how are they going to have that child care problem solve. All those folks who have never taken any kind of postsecondary training who might need to raise some of their digital or foundational skills before they could walk on to that job site. And so this idea of free apprenticeship, which is something that we've kind of talked about but really needs to be scaled up significantly that we're going to make apprenticeships available to the greatest diversity of folks as necessary. And then the thing that I hear from employers all the time is we don't just want folks to be ready the day they walk on to a job site, but we want to make sure that they're stable in other parts of their lives that are currently disrupted and can be stabilized as well. And transportation and child care and support services like that, that's not typically something that an employer is going to take responsibility for. But having partnerships with other folks in the community who can help those workers succeed and stay on the job, that's a win-win for the person who's been hired and for the company as well. And now I'll just say real briefly on the other issue about, so then why would a company invest their own resources? This is where I think we just need to fundamentally change how it is that we engage the business community on workforce investment. We need to stop working with individual firms, and we need to start working with industries. Groups of companies are willing to kind of come together so that collectively, we're sharing the cost of how it is that we're going to build a pipeline of new workers that we want to bring into this industry and then give those folks a chance to advance, whether it's advancing with my company or it's advancing with your company, because I know that there's a pool of workers that we all collectively have developed together with our local colleges and high schools and labor unions and others to make sure that this industry is going to be able to not suffer the kind of labor shortages that they're currently suffering in this current context.

Yes. And you brought something up, Andy, as well, that I want to put a pin on and come back to Maria on later, and that is apprenticeships. But before we get there, I wanted to ask and point out, look, we know different industries have their own labor challenges. But e-commerce, in particular, is one that really stands out. There's at least 5x the number of workers are needed in e-commerce than for brick-and-mortar businesses. And we know that robotics and automation alone won't solve this challenge. So to people in the logistics industry listening to this today, what can we do to encourage more people to find a career in logistics? Maybe Maria, if you want to take that one?

Sure. So I think now more than ever, we're at a moment where workers are really in the driver's seat, right? Like workers are demanding more from their employers. They are making decisions about how they want to kind of earn their living and spend their time in ways that we didn't necessarily see pre-pandemic. And I think, particularly in the logistics sector, I think we need to think about how to create a narrative around these jobs and around the career paths that are available in new ways. Like I read an article in the Boston Globe just 2 days ago that listed logistics jobs as 1 of the 7 jobs that had most decline in popularity since the beginning of the pandemic, right? So I think it's putting more pressure and more of an imperative on employers, on the companies to really show how this can be a very like solid career path that can lead to economic advancement for workers. And in the beginning, I thought it was really great how Carol, the CEO of UPS, was talking about how -- that's really how they think about kind of jobs at UPS, is they see it kind of as an entry point to a broader career. And so I think that's a great model that can be followed. And then just the work that Prologis has been doing around the Community Workforce Initiative, I think, is another great, very tangible example of how corporations can be playing a role in local communities with workers and building those diverse talent pipelines that we really need to fill the jobs that are in demand.

Yes. Andy, any thoughts on logistics, in particular, and the jobs needed?

Well, I certainly think that this issue about automation, Maria mentioned the future work conversations, and it's hard to think about it now. Four years ago, like the conversation was automation, AI, digitalization. It was basically going to take away all the jobs. Robots were coming for our jobs. And so folks thought we were going to have like a workless future. Clearly, that's not happening. I think that more what we've come to understand and the acceleration of this trend over the past 1.5 years has kind of demonstrated is like we're creating jobs at the same time that we are eliminating jobs, but at a much higher scale, we're changing jobs. 60-some percent of the jobs are going to have some significant change where somebody is going to have to be retrained to now work alongside technology. It's not going to be replacing them. But if they don't have the digital skills in order to be able to be part of that technology's deployment, they eventually are just not going to have a role in that company. I think for logistics, that's going to be a particularly big lift. And this is a structural issue. Like this is something -- we're not just talking about small percentages of the workforce, like we've done analysis, whether you look in health care or manufacturing or transportation or retail and hospitality. And you've got anywhere from 30% to 50% of the current workforce, these are skilled folks who have been working in these industries for years, who do not have adequate levels of digital skills to be able to retrain for a higher paying, higher skilled job within that industry. And that means that those folks are at threat of being left behind unless industry and government kind of take that at scale and try to figure out how to raise the digital skills of all the folks in our workforce because that's what's going to keep them on the job as well as building the new pipeline of folks that we need to bring into some of those new jobs.

Yes. And this is a topic that came up earlier in the conversation, too, but there's so many jobs and culture, though, as a workplace culture is something that really was challenged during the last 18 months or so. And it's one thing if you're just looking for a job and it comes down to pay and benefits and perks. But it's another way, there's workplace culture that actually binds you to a place and lets you see a career in it and -- maybe it's a calling, maybe it's a passion, it's something you do. What do you think the role of workplace culture is now as we come out of shutdowns and lockdowns and for some remote work? Maria, you want to take that one first?

Sure. I think that the issue of culture is just more important than ever. Like just in the kind of backstage, Andy and I were talking about what it's like to run organizations in this kind of virtual environment and recruiting and retaining employees. And that's true. I think across size of employer, across sector, being a diverse, inclusive and equitable employer is, it's a nonnegotiable. And so putting kind of those corporate statements into action is critical and how to kind of foster belonging and meaning in the workplace is going to be like just increasingly important as we move forward. JFF, a couple of months ago, we released our Recover Stronger playbook, which includes examples of specific things that corporations have done kind of in order to put the workers at the center of their recovery efforts. So I encourage folks to check that out for some specific examples. But in order to be a competitive employer and to have that competitive advantage in today's market, culture and DEI efforts and belonging is going to be critical.

Yes. Belonging is a really good way to put it. Andy, anything to add there on the culture point?

I would just echo most everything that Maria just said. I think just to reiterate the point also is that when somebody wants to come -- when you ask folks kind of like what would you consider to be a quality job or a quality employer, and we're having conversations here in Washington, even the commerce department has now started to convene folks. They want to be able to give some advice to members of the business community about like what are the kinds of principles that you should incorporate? And I think the ones that Maria just shared would be really valuable as part of that conversation. But once you get past compensation, typically, what a lot of folks kind of see across a range of different perspectives, is just I want a career, right? I'm not just looking for a job, I'm looking for some opportunities for advancement. I want an employer who is willing to invest in me. And sometimes that investment in that worker means that, that person is going to be able to advance within your company. But sometimes it might be like I'm in a smaller organization, like I'm investing in people all the time, but they may have to go -- as with many smaller employers, they have to find their next job in another place within my industry, right? And I think that us working together collectively is saying that's a good thing. It's a good thing for the worker and it's a good thing for the industry that folks feel that all the firms that are working together here within this industry, they all want to see people kind of entering and moving up, whether that's at one company or another. And we just need to figure how to share some of those costs. That's going to be better for the industry overall.

Great. I want to shift also to some more even longer-term future considerations. And Maria, I know JFF has had such a long history and track record of impact. And along the way, you have innovated at every step. And a big part of what you're doing now is JFFLabs, which includes a venture investment arm. I wonder if you could talk a little bit about that work and what it means.

Of course. So it kind of comes back to what I mentioned before about this idea of dual transformation. And in this sense, the core of JFF, which was originally founded back in 1983 where we were working with governors like Bill Clinton back then as Governor of Arkansas, to really help to think about how do we get workers the skills they need for the jobs for the future, right? So that was a conversation that was happening at JFF back in the 1980s. And since then, we have -- really, the core of our work is around helping to transform the core education and workforce systems in this country by working with community colleges and workforce Boards and community-based organizations. But a few years ago, we really came to realize that, that work is going to remain critically important. But in order to drive true impact, we needed to start directly engaging with some of the new entrants or kind of the innovators that are coming on the scene. So meaning tech-driven solutions and the entrepreneurs and the investors that were involved in those companies. And so we launched JFFLabs in early 2018. And about a year later, we brought in the Employment Technology Fund, which we now refer to as ETF at JFFLabs, because we felt that we wanted to also be able to pull on this lever of directly investing in start-ups -- early-stage startups that are really mission aligned with JFF, that are putting workers at the center, that have a strong equity focus and that are bringing scalable solutions to the market because I think that's one thing that the public systems have struggled with over decades, is how do you take effective strategies to scale quickly? And I think technology, obviously, is going to be a key piece of that. So we have about a $20 million fund. We have about 23 companies in our portfolio right now, ranging from innovative finance companies to assessment companies, to platforms where you can access internships and high-quality work-based learning opportunities. But aside from the fund, we also really work to bring some signal to the noise in the market. And so we produce market scans on things like Career Navigation Technology, pre-hire assessment tools. We also did one on virtual reality and augmented reality schools. And then we help to bring kind of the innovators to watch, so to speak, in partnership with the community-based organizations, the employers and others that we are working with. And so for example, right before the shutdown in 2020, we had an event where our corporate partners could come and really get demos and kind of hands-on experience with some of the leading VR companies that we showcased in our market scan. So having this very practical application between what are the trends in the market and how can it help drive equitable impact through these traditional systems.

That's great. On the subject of technology, I know to both of you, advanced automation, and we talked about this -- touched on it a moment earlier, where whether it's AI or advanced automation, it's really changing the way that people work. It isn't. So you're right. I think Andy said earlier, the robots aren't coming for us anymore. I think that's come up every time some new technology has swept through industry as a whole, and we've seen it happen. But it does mean that the nature of work is changing. What does it mean for workers when automation and AI are coming into the mix? And what does it mean for companies? Andy?

Well, I think for one, how that technology is introduced is really key, right? And I think if you want employees, if you want workers to feel like the technology is something that's enhancing the competitiveness and the viability of this company, and it's not there to replace them, then you need to make them part of how it is that it's being introduced, not just how it is that you're training them. But they may have some ideas about its introduction in a way that actually is going to make their jobs more effective, make their work better in addition to making the company more profitable. And I do think that, that's where mistakes that were probably made -- back in manufacturing, this automation in manufacturing goes back decades, right? And I think that what -- I think what both the business community and the labor community learned is that when they work together on introducing automation in manufacturing, it made U.S. manufacturing more competitive, it made manufacturing jobs safer for U.S. manufacturers and for manufacturing workers. And overall, it kept those jobs. It did not eliminate jobs. It kept jobs that otherwise would have gone overseas or would have gone to other competitor nations. So I do think how it's introduced is just as important as its deployment. And I think involving working folks and thinking about how to do that in a way that is making their working life better, we're not asking them to kind of work alongside the machines. We don't want to increase their stress of their job because of how it is the technology has been used. It should be enhancing their work as well as enhancing the firm's profitability.

Well, that's a tough one, right, because is it just a messaging challenge? Is it because -- this is often an emotional reaction that folks have to something like this coming into play versus the rational argument of history, and this has happened before. I don't know, do either one of you kind of have some thoughts about how to compete with that sort of immediate emotional reaction to thinking that machines are kind of coming for or making your job more difficult?

I think transparency is obviously key. I think having clear guidance on reskilling opportunities on kind of what career advancement might look like. And so I think it's helping -- leadership, I think, has a critical role to play in helping workers kind of see the future and how they fit into that future. And I think that can be done well. It can also be done poorly. But I think that transparency and leadership and messaging and not just looking at the changes today, what that means for 12, 18 months down the road is really critical. And also, as I think AI also has a critical role to play around helping to move towards more skill-based hiring and helping to really kind of automate and innovate on kind of the front end of the employee experience. And so I think that's where there's a lot of opportunity for kind of piloting and innovation as well so not just in terms of the actual work being done but on kind of the HR side of the company and how to enhance some of those practices.

I wonder if either of you think, too, that, that could be something that could come out of the higher education system. I know the current higher education system folks are concerned about its structure, its ability to meet the needs of students and companies together. I know you're both passionate about this, but students are often leaving higher education with a high amount of debt and maybe not even all the skills that they need to do these sort of jobs of the future, marketable skills. So what do you think the future of higher education looks like? And how would it play into this equation?

Absolutely. We need to make higher ed work. We need to make college work for working people and for local businesses. And Maria is absolutely right. As industry has kind of started to look at skills-based hiring as a way to not just using the bachelor's degree as kind of like the marker about whether or not they think somebody is going to work out or not in their job, they're out of a company, but kind of really like what is it you actually need to be able to do, to do this job well, I think that's a really important move that industry has made. Unfortunately, higher education policy does not reward skills-based training in our higher education system. I mean we spend, between the private sector and the public sector, over $1 trillion a year in some form of postsecondary education and training. About 2/3 of that is in formal college and university settings. But we basically reimburse those programs for 4 credit programs, at least half time, more often full-time students. And if you had a particular set of skills that you needed to develop either to get a job or to advance within your job, shorter-term program, something that was going to take less than 16 weeks or 600 hours sitting in a classroom desk, you cannot get a federal tuition aid for that. And in most states, you can't get that either. So that's why things like reforming the Pell Grant so that short-term programs that you have a group of firms within an industry who said, "If somebody gets these skills, we're going to promote them or hire them." So we know there's a good chance of outcomes and success. It's just a matter of changing how we think about investing in higher education. It means the institutions need to change to catch up to where workers in the industry are. And I think that, that's one of any of a number of different things. It's unfortunate. Obviously, folks have been watching what's happening here in Washington with Build Back Better package and what Washington is going to pass and put to the President's desk. I think everyone probably have heard that free community college is not going to be part of that final package. But I will say that even when the negotiations were happening about how to bring down the cost of the free community college proposal, the first thing that they want to cut was the workforce programs, right? And in a situation where you have millions of folks who are looking to get back into the labor market, that's the first place we should be putting some of our investments. So I'm hoping that we will continue to have some conversations here in Washington and state capitals around the country about changing our higher education systems, including investing in industry-tested programs, building partnerships between colleges and local industry because I think, ultimately, that's going to be the best thing for those local communities, for workers and industry, if we're willing to change some of the institutional ways that we support those higher ed systems.

Yes, I think it probably rings true to a lot of folks. And speaking of a lot of folks, I think Tracy probably has some questions from some of the folks in the audience.

I did. But in the interest of time, we might have -- and a lot of the questions that came through really related to technology, robotics and the interplay of those 2. And I think you've done a stellar job with the panelists today on that topic.

That's -- the 2 of them are always thinking around corners and now they've thought around the corners of the questions that anticipated them. So maybe we'll just quickly wrap and I think -- ask you both to think optimistically about the next 5 years. What are you excited about in terms of changes that you see coming in the next 5 years? And where do you think you can help have the most impact around those changes? Do you want to start, Maria?

Of course, I'm excited about a lot. I think we really have a unique window here in the next 5 years to drive a great deal of impact. Excited about just how to step back and have this broader conversation around what is the public system that we want to see for workforce moving forward and what is the right role of the public sector versus the private sector in that. I think we have a moment in time to really have a deep conversation on that. And then I would also say continuing to really be the bridge around these pieces of dual transformation, really helping to bridge the traditional systems that are driving their own transformation and bridging them to some of the tech-driven solutions and innovations that are coming on the market.

Great. Andy, anything you're optimistic about in the next 5 years?

Yes. Listen, this has been a really hard 18 months. But I think the one thing we can take from it is this proved to us things that I think a lot of us knew intellectually, which is like, to where Maria started, we have a lot of 20th century systems that need to be catching up to a 21st century economy, right? Our workforce systems, our unemployment systems, our retraining systems, how it is that we support small businesses so they can retain their workers instead of having to lay them off during a downturn, they were stress tested and they failed. So I take some real optimism from the fact that folks have kind of come to that realization and realized that we need to do some wholesale changing about how we think about investing in workers, not just to get them into a job but how we can keep them on a job, how we can keep them with their current employer, how we can keep them with their current industry. The future work turned out to be right now. It wasn't like robots came and took everybody's job. But I don't think anybody anticipated how quickly the change was going to happen. We basically compressed 10 years' worth of projected change into the space of about 10 months. So I think that that's a wake-up call that all of us now recognize that we need to start working together and accelerating what we are doing to put the kinds of changes into place that are going to keep workers and businesses ahead of the technological curve moving into the future.

Great. Well, Andy and Maria, I can't think of 2 people whose opinions are needed more right now and on the forefront of people's minds. Thank you for your time with us. We really appreciate it. And back to you, Tracy.

Thank you to Tyler, Andy and Maria. What a great discussion. Vocational training and lifelong learnings certainly seem to be the key imperative to a vibrant workforce. To close out today's program, I have the distinct pleasure of speaking with one of today's most thought-provoking minds. He is financial journalist and New York Times' best-selling author of such titles as Moneyball, The Blind Side, The Big Short and most recently, Premonition: A Pandemic Story. Please help me to welcome Michael Lewis. [Presentation]

Good afternoon, Michael. Thanks so much for joining us from New York while you're out on tour.

Sorry, I'm not there, but yes.

We are, too. Well, let's dive into my first question. It's fascinating to know how you're able to find and tell the stories about the few who see things coming while the rest don't. How do you find these stories and people? What piques your interest?

It's always -- for me, it always starts with a question. And sometimes, it's like a really simple question. I think back to like Moneyball. When you realize that you've got one team that's got $40 million of spend on players and another team that's got $200 million of spend on players but the team with the $40 million is winning more games than the $200 million, it's a natural question, like how? And that simple question, when a question gets you places, that gets more and more interesting, that's what keeps me going. And I could -- I'd argue that I think probably with every book I've written, I could identify the question that got it going in the first place. And once you kind of grab on to the interesting question and start pulling, it's like the thread on a sweater and it starts to unravel. So that's what gets me to the people. And then I end up with people, it's not that surprising, because you start with a question that seems like it might be an interesting question. Inevitably, you find some person who's been asking that question themselves in a different way. And when you find someone who has been asking it sort of with a certain obsession, you've got a character. Like all the best characters are obsessives. They're -- all the best characters go too far. And the very best characters go too far and they don't realize they're going too far. That -- they don't think of themselves as characters. They're just naturally going too far because they've got themselves absorbed with this particular question.

That's great. You have also famously said there are no points for hesitation. And you've said that waiting for more data can actually be harmful. And this brings to mind the phrase, perfect is the enemy of good. How do you know if something is good enough?

It's a funny question to put to me because I myself -- and I have 2 minds about this. There's a really strong argument, especially in certain spheres of human life, to be really wary of intuition. Like there's almost nothing that people won't think that they have some meaningful intuition about. Like I promise you that if we took everybody in that room and gave them a coin to flip and said everybody is going to flip a coin and try to flip heads. And after one flip, half of them are gone. After 2 flips, another half of them are gone until we get down to a handful of people. And there'll be people who think they have an intuition for knowing their coin -- how their coin is going to go. There will be -- people will take a random process and think that they know something about it. The stock market is the best example. Like you can't predict like the movement of stock prices. You just can't. And -- but the whole industry is premised on the idea that you can. And it's in some ways a dwindling industry, but nevertheless, those -- so there are places where you've got to be very careful about intuition. But I do think there are places where -- they're patterns that can be detected that are actual patterns where intuition can play a role. And I'll give you an example, and the example is -- I mean, this most recent book ever, the Premonition. And it's about -- it's not exactly about people who saw it coming. It's not as simple as that. They didn't see it coming. They knew that it was -- they thought of it as -- a pandemic is a more serious risk than most everybody else did and they prepared themselves for it. And then -- but they didn't see it coming exactly, but they were alive to the possibility. And they were all people who had spent their careers, one way or another, managing communicable diseases. And so it's kind of incredible to me actually that you have a handful of people, these people, who last January have actually put their finger on what's going on in China before like the centers for disease -- weeks -- actually months before the Centers for Disease Control does. And they do it partly because they're looking for it, but they do it because they have the understanding. And in some cases, this may not be true of like evaluating baseball players. But when you're evaluating a pathogen in the beginning of a pandemic, if you wait until you have the data to write a scientific peer-reviewed paper about what's going on, the war is over, right? If you wait until you have deaths, you're looking at a process that's growing exponentially. It ends in death a month after someone has contracted the virus. So by the time you start to kind of be able to count the bodies, you're overrun by the virus. So these people, not only kind of were they in an environment where there were patterns they could detect. But they were in an environment where they knew they had to exercise their intuition because there was no substitute. By the time they got good enough data to say for sure that I don't know, the death rate is -- the fatality rate is 0.5% and the reproductive rate is 3%, all the things you need to know to have kind of craft precise public policy, by that time, it would be too late. So it's sort of a combination of things. Are you in an environment where there's genuine patterns to be recognized so that -- where you might -- your hunches may actually be meaningful? And -- but the second thing is, are you in a situation where you need to do that? I mean if you're a general manager of a baseball team, you don't really need to do that. You can wait to get the data you need to evaluate the player. But you're in the beginning of a pandemic. You don't really have much choice. So I would say be very wary of intuition because you're going to think you know things you don't. But there are times and places where it pays off.

And that's really interesting. As you think of your most recent book and you were talking about the thread at the beginning and pulling of that thread, what was the thread for you in this particular story?

So there are 2 things. And one of the -- I mean, the theme of your conference is like groundbreakers, right? And it was actually stumbling upon the oddest kind of groundbreakers. And I think that's a good way to describe a lot of the characters in my books, right? The -- at the beginning of the pandemic, I had 2 questions. The first was, how was it that we, as a society, were performing so badly? Like -- that we as a society who -- judged by experts to be the best prepared for a pandemic before what happened of all countries in the world, how did we have 5% of the -- or less than 5% of the world's population and more than 20% of the deaths? I didn't understand how that had happened. So I started to kick around and asking like what was the plan and why -- if there was a plan and why has it not worked out so well. And it turned out there were these groundbreaking characters who had created a plan for this country that we basically didn't use but that other countries used. And I'm going to briefly describe these. I'm going to briefly describe these characters because they're so unexpected. The story dates back to 2006 -- '05 or '06 when George Bush -- President George Bush, who's been traumatized at least twice in his Presidency, first by 9/11 and the second by Hurricane Katrina, and he's sitting there thinking all these things that are -- seem like remote risks. Maybe they aren't so remote after all. And some really cruel person hands him a copy of John Barry's history of the 1918 pandemic called The Great Influenza. Bush reads this book on a vacation and goes, "Oh, my God, 50 million people died worldwide like from the flu." And he comes back to work and he says, "I want to know like what the plan is for this thing if it happens." Comes the answer from inside the White House, "We don't have one." So Bush flips and gets very angry. Then he just gets Congress to authorize $7 billion to create and implement a plan. And then they go about trying to figure out what you do. And what they did, which -- is it's actually a very encouraging story about the United States government. That rather than kind of go about it in a bureaucratic and slow way, from the White House, they said, "Let's find the 7 agencies in the government -- the agencies have to be 7, the agencies in the government that are going to be involved in any kind of pandemic response." They called up the leaders of the agencies and they said, "Send us the most original thinker you have in your whole place." In this group of people, it ended up being 7 people, were 2 doctors, and these are the groundbreakers, Richard Hatchett and Carter Mecher. One from the Department of Veterans Affairs and one is from Human -- Health & Human Services. But what they really were was just doctors. Like one was a cancer doctor and one was a critical care doctor who had a gift for saving lives in critical situations. And they weren't really like government people. They're just doctors. And they're tasked with -- they were given a piece of the problem that we all live with. And it was, what do you do between the time that the bad thing infects -- starts infecting people, and they were thinking flu, but it could be anything, and the time you have some pharmaceutical response, some vaccine. So what do you do to save lives? Because presumably, it's going to take a lot of months to like get a vaccine and get it into people. So what do you do to preserve lives? And the conventional wisdom -- and here's what's was the amazing thing. I think it's kind of like an untold story. The conventional wisdom 20 years ago was that there was nothing you could do. And the conventional wisdom was that because people took this lesson out of 1918. They saw that like in America, every city did something in response to this pandemic flu. And they shut down churches and closed schools and what we call social distancing. They did this. And there was kind of death everywhere, and people didn't make any kind of distinctions between what happened in one place and what happened in another. So these 2 doctors, they pick up this history of the 1918 flu. And they noticed that yes, yes, yes, people are dying everywhere, but the rates of death are clearly pretty different. And then they go on this like 9-month jag, again, from their jobs in the White House, no one's really asking to do this, where they go and rewrite the history of 1918. They go into the newspaper archives. They go to figure out what -- like what happened in San Francisco, what happened in St. Louis and what happened in Philadelphia. And they find that the cities that time their interventions earlier in relation to the arrival of the virus in the city experienced much lower death tolls. So like St. Louis had a fraction of the deaths of Philadelphia because St. Louis had implemented these interventions earlier before the virus got going and started multiplying exponentially. And it had -- just hadn't been fully appreciated at the time, not good enough data. Nobody is really making the distinctions. They then proceeded to write with the help of like a genuine academic, Marc Lipsitch, who's an epidemiologist at Harvard, the history of what happened in these cities. And they essentially completely turn on its head, the conventional wisdom of what can be done with public health and what can be done with these interventions and sell not just like American public health authorities, meaning, starting with the CDC, but also local public health people. But through the CDC, the entire world on the idea that social distancing works, that you can actually save a lot of lives. Now you have to make judgments about like what are the economic costs of these measures and so on and what's the value of human life. You make those trade-off costs, those trade-off evaluations. But if you look at what's happened in the world, I mean, these guys' work led to some consensus in some places about what you should do. Now clearly, it was uneven, not only in this country. I mean -- but clearly, you can see the results. I mean if you go -- you want to pick a non-American political -- something -- we don't have to get involved in American politics. Look at what's happened in the Nordic countries. Denmark and Norway basically swallowed, hook, line and sinker, these guys' argument about social distancing and its value. Sweden decided, no, we're going to let this virus run. Flash forward 1.5 years later, Sweden has 5x the death rate and actually with no economic benefit. And I think you can go country to country. The only one I've actually dug into a little bit is Australia. But you will find -- and you'll find there are people there when you ask them, like how did you know to -- where did you get your plan? Where did this come from? This like -- how did you contain -- unlike us, how did you contain the virus and save all these lives? They say, "We just used this plan. The basis of it is this plan the CDC told us about 15 years ago that these 2 guys wrote." And so it's a really good example of like what I was talking about before of these people's -- like starting with a curiosity or a question and like pursuing it to the ends of the earth. These 2 doctors unknown to anybody outside the White House go rethink this incredibly large event in human history, come up with a completely original take on it, based a plan and a policy on it, sell it to the world, and it saves God knows how many lives. That creates an awful lot of conflict, too, but it saves a lot of lives.

That's great. As you think about your journey over the past 10 years or so, who would you say are the most notable groundbreakers that you've had the opportunity to interact with? And what made them groundbreaking to you?

I like the way you ignored whatever that distraction was. It was very distracting. So whenever -- I'm going to be throwing things at you there. That's -- so let me take -- let me answer that with 2 -- let me give you 2 answers to that. Let's just stick -- I mean, to stick for one moment with the most recent book just to establish like a connection. There's something that's -- there's been some rhyming in my own work that made me wonder about if there are patterns not just to the groundbreakers but to the way -- their relationship to the society. So one answer -- one thing that I've been struck by, the book I've just written, the one it's most like is the book I wrote about the financial crisis, The Big Short. And it's most like that because the world I was describing was the most like this world in this way. Michael Lewis goes trying to -- goes out trying to answer a question. The question in one case is, why is the U.S. response so awful when we had such resources? Why are so many Americans dying? A question in the other case is, how did all these big Wall Street firms that supposedly have like first call on all the talent and they know more than anybody about what's going on in the financial markets, et cetera, et cetera, how did they get stuck holding hundreds of billions of dollars of bad subprime mortgage debts? Like why was it -- how did the inside of the system fail there? In both cases, the people who have -- who I find who can answer the question are not inside the system. They're not deep in the system. They aren't inside Merrill Lynch or Citigroup or they're not inside the Centers for Disease Control. They're fringy characters now -- more or less fringy characters. But nevertheless, Carter Mecher, who knows -- who is -- put his finger on exactly what's going on in China and exactly what it means to the United States by January '20 of last year, is doing it basically from his underpants in his bedroom in his spare time and nobody is interested in hearing about it. That the wisdom is somehow not in the system. And similarly, the kind of people who are diagnosing what's going on in the American financial system in circa 2007, they aren't inside Citigroup and Merrill Lynch. Those aren't -- those aren't even -- 2008 or '09, those aren't people who can best describe to me what's happened. It's these kind of fringy money managers, hedge fund guys sort of, different characters, but who are kind of on the outside looking in, almost like the kid looking at the emperor with no clothes and seeing things that the people in the Imperial Palace, just for whatever reason, they can't see. So this is by the way I'm saying there's actually -- there's a theme to the -- all the characters I keep running up -- the situations I keep running into. And the theme is something like this, that to see the interesting truths, sometimes you have to be coming at of it from an odd angle. And in these 2 big system failures or stories, it was extremely hard to see the truth from the place where you think -- you might think it was the easiest to see the truth, right inside of it. And in some way, what happened inside the systems was people were incentivized not to see things that they needed to see. That's like a big -- that's a big point about the last 10 years of my work that -- I think I've seen that happen over and over and over. I would say the single most interesting sort of groundbreaking situation, it's more than 10 years -- it's more than the last 10 years. It's the Moneyball story. And what's interesting about that, the story is simply that you've got a poor baseball team. They're desperate. They know that if they kind of do with their money what everybody else does, they're down to lose. They're going to be chasing the same players, the same strategies. You do it with less money, you're going to lose. So you got to find some other way to come at the problem. Now that sounds like a standard business story. But think about where they're doing it. This is what blew me away. They're doing it -- they're making -- they're trying to find better ways to find -- to value baseball players and to evaluate baseball strategies. Now think of it -- it's a business, baseball. It's a business where the employees have been doing exactly the same job for like a century. And they have had -- they've been evaluated every day on the job since they've been doing the job. It's not like there's no data. There's statistics attached to everything they do. It's not like they're not people who think they know the answers to the questions already. Every American baseball fan thinks they know the answer to the question. And so what blew me away was the idea you could walk into something seemingly so understood and seemingly so simple as professional baseball and using better data and asking different questions of the data. You could come to a completely different understanding of what a good baseball player was or what a smart baseball strategy was. And to take it further, once you realize that like this could happen here, your mind starts to spin and you realize that this is not like a sports story. And where my mind started to spin and where I realized that like this might be the -- maybe put it in your terms, the best groundbreaking story I've run across, was when I first encountered -- when I started to like get to know the story. I was interviewing the players and I had the misfortune of watching after a baseball game all the Oakland As coming out of the showers and they're all naked. And I thought those were the most unattractive professional athletes I've ever seen. They were like [indiscernible]. They were fat. They had bad ankles. They had -- they're all . One of them had 2 clubfeet, which was an amazing thing. I went to the front office and I said, "If you line your players up against the wall naked and asked any innocent outsider to ask what they did for a living, no one would guess they were professional baseball players, much less like a really successful professional baseball players." And what they said was, "That's kind of part of the point here. That what we have been able to do is see past appearances." And what distracts the market is -- one of the things that distracts the market and causes distorted values of human beings is appearances. And if a guy looks like some other famous baseball player or looks kind of the way a baseball player should, he's likely to be overvalued or at least properly valued if he's any good. It's the ones that don't look right that end up surfacing for us because people don't see it. They look at them and they just -- they can't see the performance. They see the body. And if you think about this, stop thinking of the sports. Stop thinking of baseball. If this can't happen there, where can it happen? And the idea that -- so the idea that you could walk into almost any arena with this frame of mind, with a respect for and ability to deal with data, looking for better measurements of what people do and completely overturn how the people in that environment are valued and find completely the same inefficiencies that exist on a baseball field, in a law firm, in a warehouse, in almost -- in a school, you just knew that this was true in any environment. So that -- the reason that story was so -- sort of had such an effect on me is I thought it goes everywhere. There's nowhere it doesn't go. And it all starts with someone with a problem asking a question. Like how do we find cheap baseball players? And it's a really simple question with a really complicated answer that you only get to if you were completely obsessed with finding the answer and completely willing to be mocked by everybody around you. But it's -- so I think that's sort of the, to me, the coolest groundbreaking story I ever kind of ran across.

I like it. So you had a quick question from the audience. I'm not sure what your opinion is, but the Astros or the Braves, who's going to win the World Series?

I don't want to offend anybody in the audience with my answer. But everybody in the audience must know the feeling of so many of the teams you sort of care for got knocked out early and you're left with 2 things you could care less about. And if you watch long enough, right, if you -- I can make this point, you quickly form an allegiance. Like you start to think you will eventually find someone to root for. But I have a real problem with the Astros. I'm not over the cheating scandal. I'm not over the cheating scandal. I'm not ready to just let that be bygones be bygones. I feel like -- that there was something -- there was a deep rot there. It just wasn't a handful of people who kind of went off and did something bad. I think that the organization took a very cynical view of the game. So now the Braves, they have their own problems. So -- and so the honest answer is I don't care. But if you put a gun to my head, I'd take the Braves. And the truth, the bigger truth, is that -- here is a case of like intuition being a bad guide. Whenever you're in a baseball series, even a 7-game series, there is so much randomness. There's so much luck in a baseball game. You don't want to believe that, but it's true. Where the ball lands when it leaves the bat, there's a lot of luck. The individual performances from game to game, there's a lot of randomness. There's a lot of noise. These are essentially unpredictable things, much less predictable than a lot of other sporting events. And in fact, the luck ends up deceiving people in the way they evaluate the game. They think they've seen a pattern that doesn't exist. And this is why like Billy Beane, the hero of Moneyball, says, my s*** doesn't work in the playoffs because in very small samples, in a process with a lot of randomness, it's very hard to predict. So the predicting of it, I'll leave to others. If I had to pick a team, I'd pick the Braves. And sorry I went on so long about that.

No, no, no. That was great. That was probably more insight than the audience ever thought that they might get. So it's awesome. So you do -- so it's actually interesting. You talk a lot about intuition and maybe even trained intuition. So can you share your insights with this group and the numerous people that are dialed in online? How do you go about developing that muscle?

It's a really good question because when you say -- what is intuition? I mean another way to put it is you don't know why you know something. You think you know something and you don't know why. That's not a bad definition of it, right? Now as I said before, there's a real problem as people think they know all kinds of things they don't actually know or worse, that actually, they're unknowable, right? It's unknowable whether the coin is going to land on heads or tails. It's unknowable what the stock price of IBM is going to do tomorrow or a year from now. It's unknowable who's going to be the next President of the United States. These are essentially unknowable things. And people who get on television and say they know, the first thing you do is turn them off. That -- I think it's like a really useful rule, is identifying people who are really happy to make predictions about things that are unpredictable. I mean corporate conferences are like built on these people. And you got to be incredibly careful about -- and you get a lot of useful negative information about people who predict the future. And so you got to be really careful about that. But -- so how do you -- what's the positive answer? And let me talk about my own experience. Like I'm totally a creature of intuition. And then I don't have an algorithm to find a story. There's nothing scientific or intellectually respectable about how I go about figuring out what will be a good story or whether this character is worth following or whether this book is something anybody is going to want to read, right? But I seem to be able to do it. I mean they all seem to more or less work out. And so -- I mean, I don't want to go too far with this. I'm sure that there are going to be clunkers here and there and not everybody will like all my books. But just generally, that -- I think I've actually built a muscle. And I think it's just -- and it's a muscle that did not really exist in the beginning of my career, like really didn't exist. And I'll give you an example of like the beginning of my career when I was first trying to get things published. The first thing I tried to get published that I thought everybody would be fascinated about was -- I was volunteering. I was just out of college and I was volunteering as a soup ladler at the Bowery Mission and Young Men's Home, a homeless shelter. And I took an interest in how many different -- the different kinds of people who are homeless on the street. Now that's not necessarily a bad subject, right? It could be -- in some hands, it could be a good subject. But I wrote it up and I tried to send it out to people who would publish it. And I decided that the place that would be most interested in my work was in-flight magazines. I don't know why. I don't know why I thought that. So I sent it to Delta Airlines and American Airlines and I got these letters back that said, it's really curious that you think we would want this because [indiscernible], right? We're trying to -- so I mean, I had -- I didn't have any sense of like really what people were going to be interested in or how to interact with them. And -- but I've done it now for so long. There is -- this is like a muscle memory. You do start it. So repetition is one. When you go -- I'd tell you an academically respectable story. One of the characters of one of my books, The Undoing Project, is the psychologist Danny Kahneman. Danny is famous -- most famous for winning the Nobel Prize in economics so he knows economics, but he turned economics on its head with his work in psychology in a book called Thinking Fast and Slow. And Danny Kahneman is an incredible skeptic of intuition. Most of his career is devoted to showing how expert intuition is flawed. Like you're better off with a simple algorithm than like -- even like a doctor's expert judgment. His whole career is dedicated to this. But he did something really interesting. He acknowledged that there was a passionate hostility to his work. There's a school of thinking basically hostile to the whole Kahneman diversity -- whoever. I think it's called natural decision-making. And the idea is that a lot of people who do things great, experts, do things very well not knowing why they did them. And they can -- and there's a place for intuition. The leader of the school is a guy very interesting, actually named Gary Klein. Kahneman and Klein got together to see where they could find agreement. And like where does into -- okay, maybe you're right, maybe intuition works. Where does it work? They quickly agreed that like it doesn't work in the stock market. There are places it didn't work, but they had really interesting examples where they agreed. And one of them was a firefighter and -- that they noticed that like people who led firefighting crews, who are well-known successful firefighters, were capable of extraordinary judgments under intense pressure, like life or death moments, where they could not explain until really thought about it later why they made a call. And I think one of the examples, when they hear a firefighter and moments before the house collapses, he screams at his whole crew, "Get out of the house." And when he gets out, he doesn't know exactly why he thought that. Now later, he realized that they thought they were fighting a fire that was above them. They were. But his feet were hot and he realized that he didn't really -- he didn't think about it. He didn't process it in a conscious level, but his feet were hot because there was actually a fire beneath them and the fire was in the basement and the floor was about to collapse and he picked up on that like that. So how do you pick up on that? You pick up on that by being in the situation over and over and over again. How do you pick up on like how to tell a story that people are going to want to read? I mean I think it's what's -- or the intuition is, what story is going to be interesting to people? And I think you just do -- it's -- I can't think of a substitute other than, well, repetition but repetition with feedback. So if you don't get feedback, you're never going to build intuition. You're never going to know what worked and what didn't work. So having feedback would be the other part of the equation.

May I ask who has given you the best feedback in your career?

Well, that's -- when I think of the feedback I get, I feel like there's buckets of feedback. The most valuable person in my book writing career, I've had the same book editor since I was 27 years old, Star Lawrence at W.W. Norton. And I can now tell by the -- if we were in the same room by the expression on his face, if he's on the phone, I could tell within 15 seconds not only whether the chapter I just sent him worked but why it worked or didn't work just from his tone of voice now. But that's been -- that's something -- that's a relationship that's been honed over a long time. His judgment about whether what I'm doing makes any sense has been -- that's been just like irreplaceable. So there's that kind of feedback. There's another kind of feedback altogether that I value immensely, and it's the feedback of readers I don't know. And when a book -- and the feedback -- what's interesting to me is this. A writer writes a book. The writer usually thinks he knows what the book is about. In fact, the writer in his own mind is -- the storyteller is absolutely -- is kind of sure of how all the reader or the listener, whoever it is, is going to not only respond but decipher, interpret the story that he's written. But if you write a story -- this is all interesting. And it has like -- it has -- that can be -- it can be interpreted in different ways. And it is shocking to me every time I write a book how people see the book, the range of responses, the different -- and I don't know what they are until I've heard them. I'll give you the first -- and I realized this when I published -- my first book was Liar's Poker, and it was the story of me on Wall Street. And if you'd ask me what I was going to achieve with this book apart from entertaining my friends, which is basically what I had in mind, but if you said, what moral purpose, like what higher purpose does the author have here, it was pretty simple. I was really irritated when Wall Street started to boom back then and kind of what Wall Street could pay a recent college graduate, which became so much greater than everybody else that all this talent was being siphoned off into finance, which is fine up to a point, but only up to a point. It seemed like a huge waste. And where it really bothered me was where I saw classmates of mine in college who had actual kind of callings. Like they love something and they were going to go do this something. But then Goldman Sachs dangles a big stack of cash and their whole lives go off on this. And so I thought if you asked me what this book was going to do, it was going to be for those kids to read. And they'd say, "Oh, it's all kind of silly. I know what it is now. It's demystified for me. I don't -- I'm not going to waste my time and go and do that. I'm going to go be an oceanographer. I'm going to do whatever it is I was put on earth to do." So that's what I think I've written. I swear to you, within a month, I had 1,000 letters from young college students saying, Dear Mr. Lewis, I read your book about how to get ahead on Wall Street. And now I'm even more interested than I've ever been in a career on Wall Street. What tips did you leave out? So this happens, but this happens over and over and over. And that feedback is really valuable. And the nuance -- and it's valuable because I came to realize that allowing the reader or the listener to interpret it however they want to interpret it is the success -- that's the key to like a successful interaction. They have to be able to make the thing their own. So what I learned from that is kind of how to build in holes to the work, where people can come in and sort of -- and maybe even misinterpret it but come in and have their own thing. Leave enough space in the story that the reader can insert themselves and have some discretion over what this all means. And so -- and I've learned how to do that from the feedback. It's really helped.

That's good stuff. As you think about all of the subject matter that you write about and probably think about every day, what gives you the most hope for the future?

It's a good time to ask that question, right? I'll give you a couple of answers that pop to mind. The progress that science is capable of, it's unbelievable. I mean one form this takes is my guy is in the White House who'd dream up a strategy for dealing with a pandemic before you have a vaccine that probably saved millions of lives. I mean that may be an exaggeration, but maybe not. An incredible -- I mean, and that is -- it was a work of science. But the vaccines are -- I mean, these vaccines are miracles. I mean if you look at this, they're -- and they're the by-product or the product of a conscious government effort. It starts with this pandemic plan 15 years ago to fund this sort of research into a different kind of vaccine production that yields just in time, more or less, a vaccine that's more successful than any vaccine has ever been. It's incredible, right? You look at that and you think, science can save us. Like knowledge creation can save us. We were creating knowledge at a breathtaking pace. At the same time, this society that is so great at creating knowledge has an unbelievable talent for not using it, an unbelievable talent for like, "Yes, we do know that, but we're going to pretend we don't." And it's -- so there's an asterisk next to this. Like, yes, science can tell you what's going to happen to the planet in 50 years and science may even be able to solve the problem. But you have to care enough about and believe it and care enough about it. I would say the other thing, and this is just a weird by-product of what I've been writing about the last few years. I wrote a book before the Premonition called The Fifth Risk. And it was a quirky view of the federal government. It looked at the federal government as a manager of a portfolio of risks, many of them existential risks, like climate change, but food security and energy security. And this like one thing after another that essentially, if the government doesn't do it, nobody is going to do it. And they're public goods, this management of the risk. And I thought I was wandering into an infrastructure that had been allowed to degrade and that had been kind of under assault for almost a couple of generations now. That there was -- the relationship between the American people and the federal government is a bizarre relationship. It's a democracy in which many of the people regard their government as a hostile invader. And it's -- no other society on earth has this problem -- the same problem. And in spite of this, in spite of the bad period we've gone through in the relationship of the people to the government, it was incredible the caliber of the person who is still willing to devote their careers to managing the risk, that just first-rate minds and first-rate characters who made wonderful literary characters. And the fact that people are willing to do that in spite of those obstacles gives me a lot of hope. Like what happens if you actually put the wind at their backs instead of in their faces? Like we'd solve a lot of problems.

Yes. Well, great. Thank you so much for joining us today. We really appreciate you taking the time out of your busy book tour schedule, and we wish you all the best of luck with that. And maybe we'll get the opportunity to have you swing by the office one of the days when you're in San Francisco.

I would love it. I live there. So we'll do that. All right.

All right. Well, thank you so much.

Bye-bye.

Thank you. Okay. Wow, what an exceptional day. And I want to thank each and every one of our exceptional speakers today. I think they've enlightened us in extraordinary conversations, and we got insider looks into the innovation and transformation that is awaiting tomorrow's supply chain. So to continue the conversation, we are delighted to unveil our new digital publication, GROUNDBREAKERS. And our magazine will release twice a year. And our vision was to create a publication that provides a unique perspective into the trends and the trendsetters in our industry. And so in our first issue, we highlight 14 visionaries who are breaking new ground in every area of logistics. So I want to thank the thousands of you who joined in for our inaugural thought leadership event. Really amazing response. We look forward to adding your voice to the conversation. And then for those of you here in San Francisco, we invite you to enjoy a post-event reception. And so, okay, we'll end just like we started with a nod to some of history's most notable groundbreakers. Thank you for joining us today.