| From: | JonSzeto@***.com JonSzeto@***.com |
|---|---|
| Subject: | Decentralization and Trade |
| Date: | Mon, 1 May 2000 19:47:37 EDT |
> Air transport could - could is operative - actually become a more viable
> option in those conditions - you'd only have to guard it on either end. If
> civilian shipping companies start using planes comparable to those huge
> military cargo planes, they could ship a heck of a lot of stuff relatively
> quickly, and only have to guard it on either end. Granted, that would not
> be practical for large machinery or automobiles and the like, but for the
> smaller items - from cyberware to the latest in Armani to Ares' current
> SOTA shock-laser-grenade launcher - it could work. Again, it would depend
> on weighing the costs of the various options, and might differ from company
> to company as they take into account overhead and risk and whatever else
> they talk about - not my field, can you tell?
Three main problems, and a bunch of smaller problems:
(1) Air shipping is expensive, pound for pound and mile for mile (or
kilo for kilo, whichever you prefer). Air freight costs AT LEAST 3 times
as much as ground or sea shipping, more so if it's really heavy.
Depending on what percent G&A (general and administrative) and other
indirect costs factor into a product's cost, this could increase the
retail price anywhere from 30 to 300% of the current market price. And
that's just for finished goods. If you also incorporate subassemblies,
bulk raw materials (petroleum, iron ore, coal, etc.), and production
equipment, that 30-300% price hike will grow exponentially.
(2) There's way too much trade volume to make air shipping even barely
competititive with rail or sea freight. A C-5 Galaxy has a cargo payload
of about 118 metric tons. Your typical container ship has a payload over
100 thousand metric tons. So it would take you a thousand C-5s to equal
the hauling capacity of a single container ship. Similarly, the interior
dimensions of a C-5 could allow it to carry up to 12 40' cargo
containers. Most freight trains can pull way more than that.
(Incidentally, you don't gain all that much by switching from a
commercial bird to one of those military cargo planes. A Boeing 747 has
a payload of about 102 metric tons, which isn't all that far behind the
C-5 --- about a 13% loss in payload. If you want to compare more recent
designs, the C-17 Globemaster has a payload of about 77 metric tons,
while a Boeing 777 has a payload of about 55 metric tons.)
(3) One other thing you're forgetting is the local distribution network.
Even if you do switch to cargo planes, those are big birds that require
a lot of runway space, and there aren't a lot of big airports around.
You still have to distribute the goods locally, so you still have to
rely on the local distribution system (mostly trucks), and that is by
far the weakest link in the transportation system.
I won't go into the smaller problems, but they mostly have to deal with
the particulars of air transportation (for example, stringent
restrictions on flammable, explosive, or otherwise hazardous material).
True, there are exceptions, (computer/electronic components, for
example), but by and large these exceptions generally prove the rule.
-- Jon
