Complex, tightly networked systems run very efficiently and can work with precision for long periods, until they don't.
Money saved on the front end can be lost in one catastrophic accident. There is no better recent example than the derailment of a Norfolk Southern train carrying copious amounts of toxic vinyl chloride and other toxic chemicals. By now nearly everyone knows the tale of toxic fires and fears of explosion which led officials to drain undamaged tank cars carrying the same toxic chemicals which escaped the initial fires and then burn those chemicals as a precaution. Toxic smoke and residue settled far and wide from the crash site near East Palestine, Ohio, a small town of about 4,700. (You can read a summary of the possible effects of these chemicals on living organisms here. But I think the writer might actually be underplaying the consequences both short- and long-term.)
Who will pay for all the damage to people and the environment is a tricky question. You can be certain that Norfolk Southern won't be embracing its responsibility for the accident financially, at least not in public. Companies that get into such trouble have tried to limit their liability by reorganizing their companies and/or going bankrupt and saying they are unable to pay much. The injured must wait in line with other creditors for their share.
Attempts by Norfolk Southern to avoid liability will almost certainly find their way into the media. (In fact, they already have.) What likely won't be discussed is the consumer love affair with cheap goods which, of course, require cheap transport as part of being cheap. The focus on driving down costs and keeping prices low (not so much lately!) has been a cruel force in world affairs leading to hideous labor conditions and environmental practices. Part of the story was told in a documentary, the title of which has become the shorthand description of the problem, "The High Cost of Low Prices."
The push for squeezing costs out of supply chains is, of course, not exclusively to satisfy the desire of consumers for low-cost goods. It is also a way to increase company profits and therefore the bonuses managers receive and the value of stock and stock options they own.
It turns out that something called Precision Scheduled Railroading (PSR) has become the latest fad in the railroad industry for reducing costs by reducing personnel and inspection times and then increasing train speeds and the number of railroad cars on a train. The downside is that things get missed or worse, ignored. Apparently, a faulty bearing caused the Ohio derailment. Workers used to get 3 minutes to inspect each railcar for safety issues. Now under PSR, they get 90 seconds.
We have just experienced how the hyper-efficient just-in-time worldwide logistics system can get utterly snarled when a pandemic and then a war disrupt supply chains. There is a trade-off between the efficiency and the robustness of any system. Likewise, there is a trade-off between efficiency and safety. Part of increasing efficiency is to run machines and people closer to their maximum speed. For machines that can mean higher pressures, more stress, more wear and tear, and therefore a greater likelihood of breakdown. For humans efficiency can lead to fatigue (more work per person) and, where inspection tasks have been eliminated or speeded up, it can lead to missed safety issues.
The obsession with both profits and cheap prices are part of what led to the Ohio train derailment. There will now be a lot of talk about lax regulations and corporate greed. And, both need to be discussed. But I can confidently predict that almost nothing will be written or spoken about about the role of our obsession with low prices as a concomitant cause of this horrific accident.
By Kurt Cobb
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