That's a lot of news...what's it all mean? The Waring blender.

When it comes to the transportation economy, there are a double handful of drivers. These generally are shared with the rest of the infrastructure world, several are distinct to transportation. Let’s take a run through ‘em.

We’ll start with those common to all infrastructure:

*Legislative and regulatory forces

*Population growth or shifts
*“Crumbling” infrastructure
*Broad and long-term changes in general or regional economic activity On the transportation side, you might add the following:

*Consumer spending, retail sales, inventory buildouts, activity along the supply chain, network optimizations, etc. Goods either ‘push’ their way into the supply chain, or demand “pulls’ them into the supply chain, either way they have to be moved.

*Specific local or regional economic development

*Major shifts in popular or scientific opinion (greenhouse gas emissions management would fall into this category)

*Major shifts in technology

*A growing ‘lean’ towards a mode, providing that the transportation assets are there to employ (High speed rail would fall into this category) Leaving a few strays that apply only to individual sectors:

*Major changes in business structure (this was true in power generation when it deregulated and a new ‘merchant generator’ class of companies emerged)

*Investment opportunities (these, heretofore limited to the private sector, are increasingly found in the overlap between the public and private; these might include privatization in ports, aviation, and roadways

Each of these is worth a page, a chapter or a book, let’s take two examples only and see if we can do them justice. The first will be the differing intensities of drivers and the speed of their final resolution along the built environment, the second will be a major change in scientific and popular opinion.

Intensity.
Water treatment – more people have probably lived that otherwise would have died over the past 150 years due exclusively to clean water than by any other invention of man, including vaccinations – is only obliquely impacted by economic growth and along a very long lag time. Most capital improvement plans for water treatment and watershed management go out twenty years or longer, there’s a lot of capacity built into those systems, so the lag time between growth in the economy and the need for a new installation is significant.

By contrast, water is powerfully driven by regulatory activity, itself, interestingly, driven by advances in measurements. Now that some pollutants can be measured in parts per billion (ppb), and some by parts per trillion, regulatory goals have increased correspondingly. Those changes (almost always of a process nature) are expected to be put in place relatively quickly, so within a single sector you can have both lagging and immediate drivers.

Shifts in Science and Opinion.

One of the largest such shifts has been the increased attention to the carbon footprint associated with a company, an industry, a leg of transportation. Such concerns and their application in the ‘real’ world aren’t merely theoretical. Take Wal-Mart’s announcement late last week that it wants its suppliers to cut greenhouse gas emissions as part of a mega-effort to eliminate 20 million metric tons of greenhouse gas emissions by the end of 2015.

If you don’t travel on that side of the world, you should know that as the world’s largest retailer, what Wal-Mart asks for from its suppliers, Wal-Mart gets. The company has a strong and demonstrated commitment to the environment, but we can also presume that they would like to get out in front of any regulatory activity for the supply chain coming down the pike. You should also be aware that the firm is often in the forefront of innovation in the goods-moving side of the world, it is an old line of theirs that they ‘aren’t really in the retail business, they’re in the transportation business.’

Add these drivers together, along with a contentious but reasonably well-accepted sense we’re going to have to do SOMEthing about greenhouse gas emissions, and you’ve got the makings of a moderate sized industry upheaval.

Say you’re a trusted supplier of goods to Wal-Mart; they like you, you like them; by way of that relationship your goods get visibility in tens of thousands of stores. But now that great client is requiring you and yours to measure and if necessary reduce the greenhouse gas emissions associated with the raw material sourcing, the manufacture, and the shipment and storage of your product.

Your network was no doubt pretty danged well-optimized already to speed the cost-effective movement of goods, but now you’re being asked to consider the carbon footprint associated with that speed and efficiency. With these new considerations in mind is it likely that a network optimized for speed and efficiency might not necessarily be optimized for speed, efficiency AND greenhouse gas emissions reduction? If so, and if that effect is amplified across thousands of suppliers, there can be a real and very quick shakeup in the networks.

At the very highest level of activity it might result in more near-sourcing of manufacture of goods, at a lower level, there is software already in place that measures and tracks carbon emissions; the outputs from those or other devices might become part of the monthly paperwork delivered to Wal-Mart each month.

And since we’re on the topic of technology, check out the story on the new cellphone applications that allows you to point and click at a product – a dress in a store window, say – which optically scans the bar code, orders it, sets in motion the shipping and delivery of the product to your home… or simply provides you with more details about the product and others in that family of goods.

Such advances in technology both disrupt and energize whatever sectors of the world they land in, our neck of the woods will be no different. – Larry McGurn