Sunday, June 18, 2017

You Can’t Get From Here to There

In a moment of rare optimism I attempted to drive from Sherman Texas to Fort Worth during the Friday rush hour. If you’ve read previous blog entries, you understand that I am pessimistic about most things, knowing that Murphy’s Law, “Anything that can go wrong, will go wrong” applies to all human endeavor . But, for some reason, I actually thought I could drive across the northern half of the DFW Metroplex during peak rush hour late on a Friday and only suffer a few minor delays and slowdowns.

I even had a plan. I used to go the round-about way over to Gainesville and then down I-35. But due to construction (which, oh by the way, will never end), 35 essentially comes to a standstill just north of Fort Worth. I hear that people have died of thirst or exploding bladders while stuck there. Instead of highway signs warning of heavy traffic and delays they should simply say “Abandon all hope ye who enter here”. It’s that bad…all the time. So no way, I’m going that route. I’ve made it across the Metroplex on weekends or non-rush periods by simply heading down 75 and taking 121 either to DFW Airport or all the way into Fort Worth. How much worse could Friday rush hour be?

The answer is: As bad as it could possibly be. Compounded by a multi-vehicle accident that essentially shutdown 121 just north of the airport (I guarantee you that a lot of people missed flights), there was no good way to get where I wanted to go. To make matters even more stressful, my wife is over in the passenger seat with her I-phone giving me all kinds of instructions. I decided to give it a try and we only went from gridlock to almost gridlock. Little did I know that “almost gridlock” was as good as it gets during Friday rush hour in that part of the Metroplex.

But having vast local knowledge and minimal patience, I concluded that I could do better than Mr. Know-it-all GPS/real-time traffic conditions/I-Phone Cloud Navigator. Turns out I was wrong. I didn’t find a better way, but I did find out that most every major route that goes anywhere in the Northern half of the Metroplex is under-construction. I eventually ended up out by the Texas Motor Speed Way north of Fort Worth. And even there, running into construction, detours and delays.

Eventually I had to surrender and listen to Mr. I-Phone Cloud Navigator, and he routed me back to I-35. Against my wishes and better judgment, I followed his instructions and ended up stuck in the very same jam I wanted to stay out of in the first place. I could have avoided a lot of frustration and anxiety by just going the old route (82 to Gainesville and 35 to Fort Worth) and ended up in the same mess. But apparently, given where I had traveled in my search for alternative routes into Fort Worth, this was the best option.

We were eventually directed to exit I35 and after a few dubious routings through neighborhoods where I swear I heard gunshots, we ended up at our destination. Missing dinner, but making it just in time for the main event, an outdoor concert. The Fort Worth symphony was doing the music of Pink Floyd. By the time we got to our seats I was numb, but not “comfortably numb”. The drive back, late at night, took less than half the time spent trying to get there during peak rush hour. So in the end, was it all worth the trouble? Of course, the music was great, we got to spend time with old friends and I have another story to tell.

While I can only laugh about the craziness of that rush hour trip, I do wonder what we’re going to do about the gridlock that is crippling our major metropolitan areas. It’s costing truckers billions of dollars. And what is it doing to the poor souls who have to commute every day in the middle of this mess? People either fight the rush hour beast or they go in very early and come home very late, effectively putting in 14+ hour days. It’s insane and no way to live. We have to figure out a better way to transport people and products around this country, especially through our major metro areas. Want to Make America Great Again? Just figure out a way to get from here to there in a reasonable amount of time and in one piece.

Friday, June 16, 2017

So Far...Not So Good

“Trump gets a lot done in his first year and drives the mainstream media crazy.”- Neal Click 12/26/16

2017 is nearing the half-way mark and again my annual predictions turn out to be only half-right: “GDP growth at 3%” and “Trump gets a lot done in his first year and drives the mainstream media crazy.” At this point, we’re probably looking at GDP under 2%. And Trump isn’t getting much done, but he is driving the mainstream media (and everyone else) crazy.
I think a lot of us expected better things in 2017. If not from the new administration, at least from the economy. It felt like we might be on the cusp of a breakout from the anemic pattern of 1-2% growth. Apparently not.

I talk to people in all segments of the transportation and logistics industry. This is the most confusing economy I’ve seen in my lifetime. Reports from the transportation/logistics world are all over the map. Some segments are doing well, others are not. Within segments, some companies are doing well and other are not. It really depends on what industries and markets are being served. If you’re closely tied to automotive or “big retail” you’re probably not having a great year. If you’re closer to construction or other types of manufacturing you may be doing ok. If you’re disciplined and not adding too much capacity, too quickly; you’re being smart. If you’re finding ways to play in the e-commerce explosion… profitable ways to play… you’re being smart or perhaps you’re just lucky.

A lot of what’s going on doesn’t seem to make sense. Many large shippers are aggressively going after rate reductions at a time when the long-term capacity forecast would say that rates have probably bottomed out and are very likely to go up. I talk to companies on a regular basis that need to fill key positions, but aren’t willing or able to offer the level of compensation necessary to attract qualified people. At the same time, I see candidates who are unemployed or under-employed, but unable to find new employment because of location or experience or frequent job changes or any number of other random factors.

I think businesses and employees are uncomfortable and uncertain. There’s not a lot of confidence out there. And, that’s not good for the economy. Even where I live in North Texas, as things are about as good as they can be, there is a sense that the most likely direction is downward or at best sideways. In regions of the country where things have not been so good, the mood is even more negative. The anger and frustration that fueled Trump’s run to the White House has turned to malaise. And those who did not support him in the first place have essentially become a lynch mob. Not a good recipe for “Making America Great Again”.

Then there are the fundamentals. Government debt continues to climb and consumer debt is back up to Pre-Great Recession levels. The ‘juice’ created by low interest rates and Fed policy decisions has just about run its course. At some point, one has to pick-up the check. One cannot buy more stuff without cash or credit. And my sense is that we are feeling the effects of this reality. Add in the demographic shift as Baby-Boomers go from consuming to downsizing to retirement, and those generations coming up are unwilling or unable to follow in their predecessors “go big or go home” footsteps; and you end up with low-growth, limited opportunities for marginally qualified workers and an economy that will punish those companies that are poorly positioned or poorly run.

In other words, it’s tough out there. And this may just be the way it’s going to be. Slow or no growth. Changing markets. A nation too divided to move the needle on pro-growth legislation. A workforce unprepared for the new economy yet unwilling or unable to take on “old economy” jobs. But success awaits those willing to adapt, willing to learn and; most of all, willing to work hard. And that’s pretty much how it’s always been.

Some will win
Some will lose
Some were born to sing the blues
Oh, the movie never ends
It goes on and on, and on, and on
Don’t Stop Believin’- Journey

Saturday, June 3, 2017

Paris Is Burning...Again

“Just because a country signs a UNFCCC agreement does not mean the agreement has any legal effect in the country. The Clinton Administration signed the Kyoto Protocol in November 1998, more than six months after the agreement opened for signature. President Clinton never submitted it to U.S. Senate for ratification. In March 2001, President George W. Bush rejected Kyoto and the U.S. never became a party….”

“…Kyoto was legally binding and countries still failed to comply. Non-binding targets in the Paris Agreement will not produce any greater confidence that countries will comply.”

“…from the year Kyoto entered into force until the first commitment period ended in 2012, the U.S. was leading the top twenty economies in the world in reducing emissions without being a part of the Kyoto Protocol or embracing stringent EU style carbon policies.”

From the Senate Majority White Paper presented to the Committee on Environment and Public Works, April 16 2016

OK, so President Trump did what he said he would do and rejected the Paris Agreement. My sense is that the UNFCCC agreement is ill-conceived and not enforceable. That it would do little or no good; and to the extent that it might be followed would likely harm the very economies that are doing the most to support and feed the world. BUT, these days, any agreement that proposes to reduce carbon emissions and greenhouse gases is, de facto, an agreement that must be supported. It doesn’t matter if it’s right or well thought out or enforceable. If its goal is to reduce the world’s carbon emissions, it is something one is expected to support.

All of these CEO’s who are coming out in support of “The Agreement” and condemning Trump for rejecting it, are doing the smart thing. People who support “The Agreement” are much more passionate about climate change than those who do NOT support “The Agreement”. If I am leading a global company or a company that relies heavily on an educated workforce under 40 years of age, it makes a lot of sense for me to support any high profile initiative that “is good for the planet”. It’s a winning position with most of my employees and customers.

And as for all of the other countries supporting The Agreement, they breakdown into three groups. The liberals (mostly Europeans) who know that they have no choice other than to support any climate change program; the poor nations who stand to lose nothing and perhaps gain a great deal if by some miracle The Agreement actually did what it’s designed to do; and, lastly, the big players like China and India who have no intention of making any changes unless someone else pays for it. In the meantime, they will exploit their competitive advantage and keep on pumping out more carbon emissions.

And the media is totally in the bag for any program that addresses climate change. Add in that most of them are anti-Trump, no matter what; and rejecting The Agreement, becomes just another blood in the water feeding frenzy for them.

I’ve written before that I do believe the climate is changing. And it may be changing in ways that will be catastrophic for some parts of the world. What remains unclear to me is how much of the change is man-made. Some of it, no question. And efforts to reduce carbon emissions are a good thing. I’m all for it. But crippling the economies of the most developed countries, transferring wealth to third world nations where corruption and mismanagement will piss most of it away and allowing our largest global competitors to pretty much conduct business as usual seems like a bad deal. And what if we really do reduce carbon emissions significantly and it turns out that it has less to do with climate change that we thought? Probably time to move to higher ground. In the meantime, we should continue to work toward reducing carbon emissions and developing alternative energy sources. But let’s not kid ourselves that something like the UNFCC agreement is going to be the game changer.

My advice to President Trump would have been to just go with the flow. Express your concerns, sign The Agreement and then just ignore it like everyone else will. Your core constituents might howl, but they will still support you. Your opponents would have been caught totally off-guard and forced to consider that perhaps you’re not just a crazy old man with a long red tie and an orange complexion. Remember this…taking care of Mother Earth, even if it's only a symbolic gesture, wins every time.