December 22, 2020

"Getting There" - There Is No 'Free Pony'

 Early in our parenting my wife and I taught our daughter about the difference between wanting something and needing something.  She might want a pony but did she need one?  And most importantly, what was she willing to do to get that pony.  “Ponies aren’t free,” we would remind her.

The same things are true for transportation, our climate and our health.

A recent poll was released, commissioned by the Transportation Climate Initiative.  The name explains their mission: saving our climate by encouraging increased use of mass transit, electric vehicles and less use of fossil fuels.

We all know that air pollution affects our health, right?  According to TCI, auto emissions now surpass pollution from power plants.  That exhaust is especially dangerous to minority populations in dense urban areas, the same folks being hit the hardest by COVID.  So air pollution’s health effects and longer-term damage to our climate now have a social justice component.

The TCI poll of 3800 voters in eight northeast states and the District of Columbia asked the usual questions and obtained the usual results.  It was as if they’d asked “wouldn’t you like a pony?”

Yes, said respondents, we want cleaner air, more money spent on fixing our transportation system and we want more trains and buses running faster and at greater frequencies.  We all want a pony.  Lots of ponies!

But who’s going to feed them and clean their stalls?

The TCI proposal is to make driving more expensive by raising the gasoline tax 5 to 17 cents a gallon at the pump as well as taxing the oil companies for the pollution their products create.  It’s simply known in the climate biz as “cap and trade”.

For almost a year TCI has floated their detailed plan to various New England governors, including Connecticut’s Ned Lamont, a year ago.  But Lamont initially rejected it, as did several others.  But now the governor seems to have changed his mind, signing on to the plan with other states.  But again, who will pay for all this?

After shirking their legislative duties for the past ten months, lawmakers will skulk back into the Capitol in January, hopefully well masked.  Among the initiatives they will have to address is finding new revenue for the Special Transportation Fund, which is teetering on the brink of a deficit by mid-2021. 

Given that tolls are off the table and nobody wants to raise sales taxes, it looks like a modest bump in the gasoline tax is the least unattractive alternative.  After all, the gasoline tax hasn’t changed a penny since 1997 and with fuel prices so low, who’d notice?

Patrick Sasser has noticed.  As leader of the successful No Tolls CT movement he’s already pushing back.  Sasser says no to any kind of tax increase, claiming the state is fiscally irresponsible in the way it spends our tax money.  He actually suggests lowering the gasoline tax.

But the TCI poll showed that 67% of Connecticut responders supported the idea of cap and trade… at least as it was explained to them in the phone survey.  But I doubt those polled truly understood the question, nor were they told what it might really cost them.

We all want those mythical ponies of better transportation, cleaner air and improved health.  But are we ready to pay for them?


Posted with permission of Hearst CT Media

December 13, 2020

"Getting There" - When Just In Time Isn't

 Notice anything missing on your store shelves?  Maybe paper products or your favorite canned soup?  Given that the pandemic has been raging for over nine months, why aren’t the shelves full again?  Why isn’t the stuff we want “getting there”?

Well one of the reasons is because a Japanese engineer visited an American supermarket in the 1950’s and noticed something he thought was wrong… and we’re still paying for his astute observations.

It was Taiichi Ohno, industrial engineer at Toyota, who noticed the American stores had weeks of inventory in a back room, waiting for customers purchases to allow quick restocking.  That was great for supply as long as demand remained steady… but very costly to the store.

Unsold inventory is expensive, so Ohno suggested that needed parts (or in our case, store products) could better be delivered JIT, Just In Time.  That way the production could flow smoothly with the added cost of inventory being carried by the manufacturer, not the store or, in Toyota’s case, production plant.

Sounds great as long as production, demand and the transportation network continue running smoothly. Change one of those and things go bad, quickly.

Of course, that’s what happened in March when there was a sudden run on stores as worried shoppers loaded up on canned foods and, yes, toilet paper.  The producers of those goods couldn’t gear up production fast enough to fill the supply chain and many of the trucking companies that delivered them had their drivers go AWOL.

Pre-pandemic, Wal-Mart would tell suppliers they had a two-day window for their trucks to deliver to their distribution warehouses or they’d face financial penalties. But when the panic buying began, the trucks would off-load their goods and opt for return-jobs on the “spot market” instead of going back to the factories empty, on “dead heads”, to get the next load.  That meant the supply chain was broken.

When the trucks did deliver, traffic could switch from a trickle to tsunami.  At one typical Costco mega-warehouse in Utah where they’d usually handle 350 trucks, the volume doubled. They didn’t have enough loading docks or personnel to handle them all.

Now all the big-box stores and companies that supply them with goods are rethinking their lean-and-mean JIT philosophy.  Warehouses may be expanded to accommodate more inventory as automated robots load and off-load trucks faster (and cheaper) than humans.

But even adding a 5% buffer of “safety stock” to warehouses will mean building 750 million square feet of industrial space.  Guess who’ll be paying for that.

And that doesn’t even include Amazon which is so hungry to expand they’re buying up old shopping malls to turn them into warehouses… repurposing the old retail space they already killed off with their home-delivery model.

Manufacturing of essentials (think pharmaceutical base-chemicals, PPE, etc) may be “re-shored” to US soil if companies like China can’t be depended upon to deliver in time.  Or the production plants just move to Vietnam where labor is 20 – 30% cheaper than in the People’s Republic.

So if you’re looking for a career with a future, consider logistics: the science of managing supply to demand and delivering on time at a profitable price.  It’s estimated there will be 600,000 new jobs in logistics created by 2026.

According to Stamford-based job placement company, there are hundreds of logistics-related jobs available in Connecticut right now, some paying up to $80,000.

Posted with permission of Hearst CT Media


Enjoying the heatwave this summer?  The electric utilities sure are.  And just wait ‘til you get your next bill.   They’ve been warning us...