4 ms·

Trucking Is the Security Crisis You Never Noticed

12 points by molecule 8y ago

HillaryBriss 8y ago
>In the past, the fee per container going from Asia to Europe was often 2,000 euros [$2,300]. Today, it’s 200 euros [$233]. wow. i had no idea a container shipping fee was that low.
2sk21 8y ago
Why not rebuild railroads here in the US? On a trans-country trip by Amtrak, I was struck by the number of abandoned spurs to industries which still seem to be operating. Presumably those industries have switched to road-based transportation.
- slededit 8y ago
  Rail freight in the US is the highest in the world. Europe focuses on passenger rail which is where the misconception comes from. However the vast majority of the freight is travelling cross country from west to east. Last mile rail is incredibly inefficient which is why intermodal has taken over. The shipping container is simply transferred from the train onto a truck bed for the last mile. This eliminates the need for expensive and rarely used spur lines which is why you see them mostly abandoned.
- RobLach 8y ago
  Freight rail in the United States is unmatched. Cheapest ton/$ and on-time. Coal power plants are comfortable scheduling supply intake on a daily granularity as it’s very rare for it to arrive late. It’s also a reason passenger rail is more dismal in the states; the rails are operated by the freight companies and passenger trains have the lowest priority so they pull over to let a 2 mile train of coal pass by at 15 mph. It’s also difficult to expand this capacity as the complexity of handling so many trains isn’t linear. Rail yards are both tough to revamp because they’re near 100% in-use and even just tough to physically expand: http://www.chicagonow.com/dennis-byrnes-barbershop/files/2016/07/rail-yards.jpg http://www.chicagonow.com/dennis-byrnes-barbershop/files/201...
- HissingMachine 8y ago
  If you have 1000 trucks and 10 000 containers to be moved, you have a problem with 100% of the delivery distance. Now if you cover 80% of the delivery distance by rail, you still have the impossible calculation of transporting 10 000 containers with just 1000 trucks for the resto of the 20% of delivery. This has been the problem since beginning of logistics, the bottleneck on the last mile to target.
maxander 8y ago
Lurking behind the article's entire thesis, and yet barely addressed in it, is the issue that despite demand for truckers outstripping supply, their employers aren't willing to significantly raise wages. They instead eat the costs of trucks sitting empty despite loads available to carry. "Higher demand for labor raises wages" is the bread-and-butter of mainstream economical arguments for how to help poorer segments of society and, fundamentally, why economic growth is a good thing- yet cases like these show that it is simply not true. Raising wages for less skilled workers is apparently so absurdly painful for employers in almost any field that they'll pay almost any other cost. This is how wage growth has stagnated for the majority of workers in the U.S., even in the face of a prolonged economic boom [0]. The standard economic models of the labor market do not work, and yet almost no one is willing to acknowledge this. [0] http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-...
- jhayward 8y ago
  They can afford to have trucks sitting idle rather than raise pay because the cost of capital is at historic lows. If the cost of capital were higher, the balance between capex and opex would favor labor more. Much of the middle class hollowing effect could be helped by rather small changes in capital costs.
  - maxander 8y ago
    I’m not an economist, and the following argument is qualitative- “cost of capital” essentially means the cost of things (as opposed to, the cost of services/labor.) Perhaps, indeed, when the cost of things goes up, this will lead to an increase in wages- but humans also require and purchase things, so this will drag their effective earning (their purchasing power) back down, even if their nominal wage has increased. Which leaves peoples’ motivation to be truckers (and the fortunes of the middle class) in roughly the same boat regardless of the cost of capital.
    - jhayward 8y ago

12 points by molecule 8y ago

>In the past, the fee per container going from Asia to Europe was often 2,000 euros [$2,300]. Today, it’s 200 euros [$233]. wow. i had no idea a container shipping fee was that low.

2sk21 8y ago

Why not rebuild railroads here in the US? On a trans-country trip by Amtrak, I was struck by the number of abandoned spurs to industries which still seem to be operating. Presumably those industries have switched to road-based transportation.

slededit 8y ago
Rail freight in the US is the highest in the world. Europe focuses on passenger rail which is where the misconception comes from. However the vast majority of the freight is travelling cross country from west to east. Last mile rail is incredibly inefficient which is why intermodal has taken over. The shipping container is simply transferred from the train onto a truck bed for the last mile. This eliminates the need for expensive and rarely used spur lines which is why you see them mostly abandoned.
RobLach 8y ago
Freight rail in the United States is unmatched. Cheapest ton/$ and on-time. Coal power plants are comfortable scheduling supply intake on a daily granularity as it’s very rare for it to arrive late. It’s also a reason passenger rail is more dismal in the states; the rails are operated by the freight companies and passenger trains have the lowest priority so they pull over to let a 2 mile train of coal pass by at 15 mph. It’s also difficult to expand this capacity as the complexity of handling so many trains isn’t linear. Rail yards are both tough to revamp because they’re near 100% in-use and even just tough to physically expand: http://www.chicagonow.com/dennis-byrnes-barbershop/files/2016/07/rail-yards.jpg http://www.chicagonow.com/dennis-byrnes-barbershop/files/201...
HissingMachine 8y ago
If you have 1000 trucks and 10 000 containers to be moved, you have a problem with 100% of the delivery distance. Now if you cover 80% of the delivery distance by rail, you still have the impossible calculation of transporting 10 000 containers with just 1000 trucks for the resto of the 20% of delivery. This has been the problem since beginning of logistics, the bottleneck on the last mile to target.

maxander 8y ago

Lurking behind the article's entire thesis, and yet barely addressed in it, is the issue that despite demand for truckers outstripping supply, their employers aren't willing to significantly raise wages. They instead eat the costs of trucks sitting empty despite loads available to carry. "Higher demand for labor raises wages" is the bread-and-butter of mainstream economical arguments for how to help poorer segments of society and, fundamentally, why economic growth is a good thing- yet cases like these show that it is simply not true. Raising wages for less skilled workers is apparently so absurdly painful for employers in almost any field that they'll pay almost any other cost. This is how wage growth has stagnated for the majority of workers in the U.S., even in the face of a prolonged economic boom [0]. The standard economic models of the labor market do not work, and yet almost no one is willing to acknowledge this. [0] http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-...

jhayward 8y ago
They can afford to have trucks sitting idle rather than raise pay because the cost of capital is at historic lows. If the cost of capital were higher, the balance between capex and opex would favor labor more. Much of the middle class hollowing effect could be helped by rather small changes in capital costs.
- maxander 8y ago
  I’m not an economist, and the following argument is qualitative- “cost of capital” essentially means the cost of things (as opposed to, the cost of services/labor.) Perhaps, indeed, when the cost of things goes up, this will lead to an increase in wages- but humans also require and purchase things, so this will drag their effective earning (their purchasing power) back down, even if their nominal wage has increased. Which leaves peoples’ motivation to be truckers (and the fortunes of the middle class) in roughly the same boat regardless of the cost of capital.
  - jhayward 8y ago