Union Pacific has a huge drive for constantly increasing efficiency. Their profits are up significantly year over year, but this fall they cut about 500 jobs from their headquarters in Omaha, around 6% of their Nebraska employees, and this isn't even the first time they've done it. To keep the big investors happy they are constantly searching for ways to cut costs.
On the other hand, this might also be a product of the industry. The railroad is necessarily growth constrained. It's unlikely that significantly more products will move to being transported by rail and there is very little room for new lines to be constructed.
Unmanned trucks crossing long distances of rural America sounds like a recipe for hijacking loads.
Raw hourly cost may not even be the primary point under the manpower line of reasoning. It is certainly important, but not necessarily the key issue.
While it's already dubious to hire a driver for an autonomous truck, it's even sillier to pretend that the driver is useful when you're having the truck do the work while the driver sleeps. Extending road time by 3x means running the truck 24 hours a day, and keeping a person awake that long will not improve safety.
The logistics of stopping and looting a truck involves too many parties, and ensuring that each party is following enough security protocols to not be identified via face, vehicle, or gait will ensure that only a few small sophisticated heists will ever be successful.
Has someone actually worked out that tons of sensors will cost far less than people-driven trucks? As it is, fuel is the big cost, followed by driver salary [1]. L5 autonomous driving is not going to come cheap, that gear is going to price as close to 3X driver salary as they can get away with, on the assumption they can run close to around the clock. Whose margin is getting compressed for the additional sensor gear?
This doesn't even touch upon that as soon as L5 is available and if 24x7 L5 operations approved, you suddenly just increased industry transport capacity 3X, leading to a sudden oversupply in certain segments and scenarios, while still requiring a certain baseline to handle peak load demands. That chaos will cause a lot of margin compression, and lots of rosy profit projections from L5 autonomous driving without drivers will turn into a race for finding more customer demand.
I can see some modest sensor gear, but nothing fancy, and not a lot of them. Perhaps high resolution visual and night vision cameras coupled with lots of street camera access, with lots of back-end software processing will deter most theft attempts?
We might ironically get to L5, only to stick lower-paid security guards on a random number of trucks.
[1] https://www.thetruckersreport.com/infographics/cost-of-truck...
Today it doesn't make sense, but in 10-15 years when a full self-driving solution costs maybe $1k? It's a no brainer, especially for long haul trucking.
I'd guess that putting a security guard on a truck will be an exceptional occurrence, probably only used when the truck is hauling an especially valuable cargo or going through a known trouble spot.
... I just don't see how you economically protect a vehicle (vs cargo value).
And more sensors simply mean more things to steal. The minimum law enforcement response time along your entire route is the real issue, and there's no way you decrease that short of drastically increasing police staffing.
Plus, these are thieves we are talking about. Pointing a gun at a human driver and telling them to pull over so they can rob the truck is something that could easily happen today but is extremely rare. The minimum police response time is something that's hard to measure. It might be many minutes 90% of the time, but if you do 10 or 20 of these heists eventually you're going to get unlucky and the cop will happen to be sitting at a speed trap right there are you're busting into the truck.
This is the fundamental problem with crime. You will get away with it most of the time, but when you don't you're fucked. It's a lousy career choice because the upsides are modest relatively speaking, and the downsides are huge. If you're going to be a criminal the trick is to steal enough to retire on and then immediately retire. Knocking over one random truck is not going to do it.
Unload truck at your leisure.
That's not even getting into ways to make an automated system stop by putting up an emergency / stop sign in the middle of the road.
The risk to stealing is directly proportional to the chance of getting caught, which broadly correlates into something unexpected happening, which is drastically diminished by not having a human driver.
I'm just saying that the worry about theft is probably overblown. It's almost certainly going to be rare enough that a regular insurance policy will be sufficient protection. People can be hired for exceptional cargo, but that's true today too.
If not, you'd be surprised how bare it is. Especially if automation kills the truck stops.
We'll see. The means are trivial for any enterprising farmer, and I think the moral calculus drastically changes once you remove risk to a human driver from the equation.
So, how does a single, or even a 2 driver truck prevent this TODAY? The only reason I can think is conspiracy felony murder of 1 or 2 people w/ clubs, guns, cell phones has a higher risk than conspiracy felony larceny?
You've concocted a great hollywood heist scene; but if you're Fast and the Furious driving through South America, it's The Rock and the Swat team hanging out in cargo hold you have to worry about; not whether the truck has an autonomous driver or not.
See my last paragraph.
Defending an unmanned vehicle is the walls vs guards argument: it's far harder to build an impassible, unguarded wall than it is to build a difficult, guarded one.
When it comes to shooting out an engine block, you're already past difficult. If you're blasting the doors, you're already past difficult.
But most of all, a truck driver is not a guard. Very few guards are guards of things that are insured. Driver, staff, and security guards (even banks) instructions typically include "protect yourself, but if something comes between your safety and the load safety, choose your safety".
To keep up with the Fast and the Furious movie relation; the first movie was about the FBI trying to prevent robberies BEFORE truck drivers took action after the FBI had instructed the truck drivers to not be heros.
>> See my last paragraph.
> The risk to stealing is directly proportional to the chance of getting caught, which broadly correlates into something unexpected happening, which is drastically diminished by not having a human driver.
You're missing the forest for the trees. A human witness is a deterrent because our court system says they are.
"Sir / Madame, could you pick the person you believe robbed your vehicle out of this lineup?"
Shooting out the engine of a vehicle traveling at a constant 55-85 mph down a straight interstate is a turkey shoot if you have the proper caliber.
I thought this was HN? The technical and creative requirements for this theft barely rise to "a bored Tuesday at the dorms."
I once spoke with a highly-paid driver (used to be a programmer, using the gigs in truck driving to decompress because our industry generally has worse work-life balance than truck driving...chew on that for a bit) about the US logistics industry.
The driver was in high demand because they consistently tested drug-free, carried various kinds of specialized certs, was always on-schedule or always in communication about problems, and fixed many problems on their own. As I remember the explanation, there is some kind of trucking industry-wide database that contains every driver's trucking records, and it shows every ping of their record to everyone. Might have the details wrong, but the gist was every single time a competing trucking company pinged their record, they got a raise to stay without even asking. So they were in a good position to watch from the best of what the trucking industry could offer. Their contention after observing from inside the industry for a number of years is that the bulk of the US logistics industry is the train companies' to lose.
Placing enough sensors along the tracks and looking outward to the sides of tracks to detect conditions requiring trains to slow down way ahead of time, but otherwise clearing trains to run at much higher speeds than they are allowed to now, would go a long ways to fixing many of the train industry's delivery speed. Upgrade the tracks themselves and the rolling stock to boost the speed even more to match trucking's coast-to-coast delivery time, and there isn't much incentive to use trucks for those corridors rail serves.
Jitter is toxic to both, and road had a huge amount.
Rail networks are at least in control of most of their own variables!
Also once automated, the trucks can engage in all sorts of hyper-miling shenanigans since they don't have to worry much about traffic during a significant part of their 24/7 operation, especially on more remote roads. That's additional fuel savings.
Another, parked overnight with a load of electronics at the southern boarder. He woke up and discovered the trailer had been broken in to. Yet it didn't seem anything was missing. Maybe something "extra" had been placed on the trailer before it crossed in from Mexico?
In our company we're reminded when we'll travel through high theft areas.
If we're pulling a trailer designated as "high value," wherever we are, we're not allowed to pick it up unless we have the fuel and legal hours to go at least 200 miles before we stop.
My vague point is that every security move in history and to come can be defeated, if it's worth it to someone. And it's always with it, to someone.
[BTW, it "feels" unlikely that a judge or jury would convict based on gait analysis.]
But it does seem plausible that gait analysis could lead to a suspect, who could be convicted (or more likely, plead out) on additional evidence discovered during an investigation.
Right there's your hard cap. Make trains too expensive relative to trucks, and, suddenly, everything goes most of the way by truck.
I think any definition of competition must be relative to the sphere of economic activity. So, when it comes to transportation in general, rail and trucks do compete -- by this I mean they offer services with varying prices and characteristics.
Just because rail and trucking have different sweet spots at a particular point in time does not mean that they don't compete. Both (a) think about how and why customers choose them over the other, (b) seek opportunities (for investment or growth) that lead to a competitive edge, and (c) therefore, influence each other.
Logistics is complex; you'll also need to factor many things into the optimization: * both fixed and marginal costs of each mode (e.g. maintaining track, monitoring safety, wear and tear on vehicles, varying fuel costs) * constraints (due to technology, personnel, regulations, etc) * fluctuations in demand and shipping objectives * lots more
If you want to focus on only one slice of the problem... Sure, for the exact same route (meaning that a particular track has already been built), one would expect that trains are more efficient. The data shows that; e.g. https://en.wikipedia.org/wiki/Energy_efficiency_in_transport...
Not always. If you provide a value proposition that a cheaper offering does not, say speed, you can increase volume.
Highway transportation will not likely get much faster, but high speed freight via rail seems like it might have some room to grow.
That is surprising, since shipping by water is dramatically cheaper than any other form of surface shipping, even factoring the extra distance to sail down to the Panama Canal. What's the point of adding the land leg?
China -> US is around 2 weeks, US -> EU is around 1 week.
So depending on where it was coming from, might make sense?
I dunno enough about the routes.
> sometimes products are unloaded on one coast, transported by rail, then loaded on a ship on the other coast.
Not sure how Kansas is relevant...
Based on the calculator here:
https://www.wilhelmsen.com/tollcalculators/panama-toll-calcu...
It costs $1,196,397.54 for the largest possible ship to go though.
That's for 13,000 TEUs though (so 6500 standard containers) That's $184 per container. Now think about how much a container holds, and per item for sale it becomes pretty cheap.
It takes real gumption for the upper management to say "screw what the greedy bastards on Wall Street think, we're doing just fine." Especially when their yearly bonuses are tied to what those guys on Wall Street think.
Wall St is known for encouraging short-term thinking.
Are there a large number of activist investors who want certain companies to trim fat? Yes. I wouldn't always say that trimming fat is always synonymous with short term thinking. For all the companies that are underinvesting in the future, there are 5 whose management has given them mission creep to invest in areas that incinerate capital. Especially in the current interest rate environment.
At some point, the phrase "passive management > active management" will become verifiably false.
Is the argument that the vast majority of them could change their funds' charter to allow them to be actively involved with governance? If so, that would be really hard to achieve even if many of them worked at it.
Edit: three people have made the same "it's easier to get a controlling interest" argument. See my reply in the follow-up before making another redundant comment.
Naively (ignoring other dynamics of index funds), sure, compared to 100% investors actively engaged in governance. But I suspect investment in index funds replaces largely hands-off direct investment and so, market wide, has virtually no average effect on that (though it may shift the effect among firms compared to those investors doing so directly.)
In theory an index fund should never own that much of a company, because that means it would own >50% of all publicly traded companies. The whole point is to spread the risk evenly so you can realize the average returns without having to put any thought into it. It shouldn't mean it's buying $100k shares of GE and also $100k shares of Mom&Pop Pickle Fork Inc.
I'm not familiar with these non-intervention clauses, but in the 10/90 scenario haven't you made it much easier to seize control of the company? Now I only need 5%+1 of the shares to do as I wish?
That's a funny contradiction of a sort - then the index fund becomes the agent it's supposed to be observing.
For one, Blackrock is not Berkshire Hathaway - and in reality, obviously Blackrock can't wake up tomorrow and decide to be. They're not built for that.
Another scary thing is that the market is being increasingly turned into a derivative, and the underlying asset becomes more volatile (certainly for many different reasons) as it becomes proportionally smaller .
If that was the case it would have been easy. Handful of people fighting for power.
But from what I can read the problem is exactly the opposite. As someone said below that Blackrock has been known to rubber stamp executive salary and maybe others follow suit. What is then stopping companies from going bigger and bigger on executive salary knowing that they will get rubber stamped from the funds?
What happens if there is a complex governance issue which requires vote and the index fund lack the motivation to ensure that they have weighed all the decisions correctly?
[1] https://www.ft.com/content/4594f554-ba1a-11e7-9bfb-4a9c83ffa...
https://www.pionline.com/article/20170418/ONLINE/170419868/b...
The only large fund i know that regularly gets its hand dirty is the Norwegian sovereign wealth fund.
Race to the bottom or not, competition works.
For example, online help is free but if you need to talk to a human being support, give us $10 a call or something. And while an average consumer might not be affected, people who are actually affected end up a nightmarish situation.
Which allows for them to do things like demand publicly traded recruit women to their boards. Which is a useful talent when you are focused on economic growth, and your holdings are focused on extreme paper-meritocracy that fails to result in actually addressing additional portions of a market because their talent pool can't perceive it.
https://newsroom.statestreet.com/press-release/corporate/sta...
oh no the potential.
Yes, that is exactly what happened, dasil003
https://newsroom.statestreet.com/press-release/corporate/sta...
State Street has 2.7 Trillion AUM
nothing exists in a vacuum
The only real rebuttal would therefore be negative uses of centralized private ownership
I really doubt that he will ever come out and clearly say that they've become a bad investment.
But the insinuation is that going forward index funds might cause harm to public's interest. And law makers need to come up with laws to ensure that doesn't happen.