Complexity and Risk in Freight; The Butterfly Defect; New Economy Forum; Big Ideas Summit

Complexity and Risk in Freight Transportation

By Kellen Betts in Manifold

Rail transportation is an enigma. It is a throwback to a bygone era, bridging the North American continent after a civil war sparked by tensions that echo loudly today. Many trains in the U.S. appear to have changed little since that time. And yet in some parts of the world they feel like a wonder of modern technology, blasting through the countryside with unrivaled tranquility.

The movement of goods across vast distances is essential to life in the 21st century. Much of this movement happens on land. In the 19th century, most freight in North America moved painstakingly slowly on a rail network built by large private railroad companies. Connection to this expanding network was a key to economic success in the burgeoning industrial power. That changed with advances in internal combustion engines and federal investment in a highway system.

Today, trucks move the majority (64%) of freight in the U.S. [1] There are almost 4 millions miles of roadway, allowing motor carriers to provide near-nationwide door-to-door service. [2] Trucks also contribute the vast majority (almost 80%) of CO2 emissions in the U.S. They are both the most significant proportion of total freight emissions and one of the carbon-intensive modes of freight transportation—especially the growing short-haul and final-mile segments delivering online orders. [1]

Trains, in contrast, are over three times more fuel-efficient than trucks. Freight moved on the least efficient trains emit less CO2 per tonne-kilometer than the most efficient trucks on the road today. [3]

In an era where we expedite critical personal protective equipment from distant lands, and where the global logistics system readies itself for the monumental challenge of distributing the coming coronavirus vaccines, rail transportation seems like a rigid, unreliable artifact of the past, ill-suited to 21st century challenges.

And yet rail may, in fact, be an apt metaphor for the coming decade. It has withstood the test of past global pandemics, natural disasters, and civil and global wars; it has unmatched, transcontinental carbon efficiency; and perhaps most importantly, it has proven, untapped technologies to accelerate humankind to a brighter, greener future.

In a twist of fate, the systemic challenges we face with land-based freight is a microcosm of the challenges we are likely to face as a species in the coming decade.

Note: This post kicks off a new series in Manifold on complexity and risk in freight transportation. Part 1 (Evolution) will be released first, followed by Part 2 (Risks) and Part 3 (Leverage Points). Subscribe to Manifold today!


What We're Reading


Book of the Week

Review by Kellen Betts

It took 16 years for the bubonic plague to spread from China to Italy in the 14th century. It only took a few days for the SARS-CoV-2 coronavirus to spread from Wuhan to Rome, and less than three months for it to reach 140 other countries.

The COVID-19 pandemic highlights the complexity of globalization in the 21st century. The global system for the exchange of goods and services, skills, information, and people creates unprecedented social and economic opportunities. It also amplifies significant systemic risks. We are experiencing the acute impact of one with COVID-19, and there are similar vulnerabilities in financial, supply chain, infrastructure, environment, and social systems.

In The Butterfly Defect (Princeton, 2014), Ian Goldin and Mike Mariathasan explore the system dynamics and interdependencies of globalization in the 21st century. Economists by training, they show how globalization has made it increasingly difficult to account for the consequences of individual actions, a central governance mechanism in many important institutions. This uncertainty coupled with global interconnectedness—both physical and virtual connections—increases the risk of large shocks like COVID-19.

This year kicked off a new decade—a decade of promise and, clearly, peril. And despite the great advances we made in technology and medicine over the last two centuries, we are the same fragile, biological creatures we have always been, and the only way we have any hope of thriving in the 21st century is if we acknowledge the complexity of our connected world.


Upcoming Virtual Conferences

Bloomberg New Economy Forum 2020

November 16-19, 2020 | Virtual | Free | Bloomberg Media

The global economy is at an inflection point.

With a mission to realize the potential of a healthy New Economy by enabling global leaders from East and West to forge common ground, Bloomberg is bringing together some of the world’s most influential leaders including António Guterres, Chris Kempczinski, Ginni Rometty, Henry Kissinger, Laurence Fink, Bill Gates, and other executives, technology innovators, government officials, academics and experts.

With virtual content spaced out over three and a half days, this year we have the unique opportunity to be a part of this influential event. Don’t miss it!

More information and registration

Procurious Big Ideas Summit 2020

November 18, 2020 | Virtual | Free | Procurious

The Big Ideas Summit brings together the best and brightest thought leaders in supply chain from across the globe to share their insights on how you can plan for next year and beyond. Keynote speakers include: Tania Seary (Founder of Procurious), Sally Guyer (Global CEO of World Commerce & Contracting), Joanna Martinez (Founder of Supply Chain Advisors), and Tony Webster Smith (Vice President at Avetta).

More information and registration


By the Numbers

2% YoY

A forecast from CBRE shows expected sales growth of less than 2% YoY for this peak season, but e-commerce sales are expected to rise more than 40% in November and December. [4]


About Us

Kellen Betts is Co-Editor of Supply Chain Weekly. He also writes the newsletter Manifold, exploring the intersection of supply chain, sustainability, and technology. Contact him at kellen@supplychainweekly.com. Follow him on LinkedInTwitter, GitHub, and The StoryGraph.

Miguel Garcia Gonzalez, CPIM is Co-Editor of Supply Chain Weekly. He sources technology at Amazon and leads the Discord Supply Chain server on logistics, procurement, certifications, news, and more. Contact him at miguel@supplychainweekly.com. Follow him on LinkedIn and @mggSCM.


References

[1] US DOT Bureau of Transportation Statistics. Freight Facts and Figures. Retrieved November 5, 2020.

[2] US DOT. DOT Overview. Retrieved November 10, 2020.

[3] Sims R., R. Schaeffer, F. Creutzig, X. Cruz-Núñez, M. D’Agosto, D. Dimitriu, M.J. Figueroa Meza, L. Fulton, S. Kobayashi, O. Lah, A. McKinnon, P. Newman, M. Ouyang, J.J. Schauer, D. Sperling, and G. Tiwari, 2014: Transport. In: Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Edenhofer, O., R. Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlömer, C. von Stechow, T. Zwickel and J.C. Minx (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

[4] Howland, Daphne (2020, October 12). Holiday sales growth won't reach 2% this year, CBRE says. Retail Dive.