You might have noticed that Bernie Sanders is going to solve this country’s supply chain problems using trains. I bet organized labor was thrilled to hear the king of “free” talk about eliminating the need for over the road drivers.
I love trains. Trains were my first form of commercial transportation. I took a train to Chicago one year with my family. If you’ve never toured America on a train, your bucket list is incomplete.
Every boy in America, at least in my neighborhood in America, had a train set. The first lesson about trains is that they take a lot of space. Whether you’re playing with toys or the real thing, they both need space. Real trains require track which requires land. Whose land is Bernie going to use? Yours maybe?
Trains play an essential role in American commerce. The only way to move low-value high volume material is with a train. When it comes to the long haul, truck transportation is cost prohibitive for handling materials like metallic ore, aggregate, lumber, steel coil, and grain. All of these commodities are essential inputs to the American dream. These products serve as the inputs to finished goods. Finished Goods are items that represent higher value.
The second lesson we learn about real trains is that they take time to get from point A to point B. All modes of transportation require time. We use the term standard transit time to describe how much time is necessary to move between point A and B. For trains transit time is measured in days. Truck transit time is measured in hours. When it comes to deviations in the schedule, a train’s deviation will be measured in days while the truck’s deviation will be measured in hours. When you ship finished goods like washers, dryers, stoves, microwaves, television, Ipads, computers, etc. the amount of safety stock required to cover these schedule deviations runs in the BILLIONS of dollars for the US economy on whole. Those holding costs are a part of the price you pay at the store or on-line.
Trucking offsets the need to keep huge quantities of safety stock because it is a more precise means of delivery. If Bernie had any business acumen, he would already understand the problems that plague our nation’s infrastructure. Congestion is a significant challenge for railroads. Throwing more railcars on the tracks does nothing to address congestion. Pollution occurs when trains idle in switch yards because track congestion inhibits their ability to move. This nation’s infrastructure is buckling under the stress placed on it by an ever expanding economy.
Bernie wants to court his winner to avoid the hard decisions associated with the underlying problems. Bernie is pandering for donations. Bernie is making foolish promises. Bernie is wrong.
This time the pandering is coming from a socialist democrat. The foolish decision making is not limited to any specific brand of politician. Both parties are guilty of it. The problem with politicians these days is that they all think they know more than the free-market. They want to pick the winners and losers instead of letting the free market decide things. This American is fed up with it. So I call it like I see it, when I see it.