A friend of mine, Bradley, wrote me the following email, which I thought that I would share:
While traveling around the country by Jeep, I spent a little time listening to Trucker Radio. The current diesel costs and the impact on the economy were hot topics of discussion. I had a bit of revelation that there are probably 1000s of business models that are only viable due to cheap fuel. The interesting thing about fuel is that the costs compound for every material/ingredient in a consumer good or manufactured food.
Some questions that are stuck in my head is… How expensive does fuel have to become before locally produced goods become competitive? Will there be a return of the “family farm”? Could local micro-factories inspired by web economics and sustainable practices be profitable?
The tools that I’m missing are ones that help me as a entrepreneur identify niche goods and markets that are ready to be brought home. How do we identify the commonality of goods and services in our everyday lives? Can we use modern concepts of software engineering like DRY and YAGNI to identify potential business ideas?
If we could analyze incoming goods and their contents like data packets, we should be able to perform some interesting compression.
Just some thoughts…
Low cost fuel could be as simple as shutting down the monopoly of OPEC, and the ‘Six Sisters’. That’s a political solution though.
Even simpler would be to build a new refinery, WHICH HAS NOT BEEN DONE IN OVER 30 YEARS. The U.S. federal government condones that lack, justifying it with ‘profit’ margins.
Does anyone reading this think that oil producers, refiners, or their corporate cronies are NOT making enough profit?
Barring those reasonable solutions listed above, all shipping done over interstate or intercity distances should be done via rail, which is between 10 & 40 times cheaper than commercial trucking!
Trains run on diesel too, but the infrastructure has been neglected to the point that current rail capacity is far below what would be needed. Over the years, lack of rail construction has been attributed to ‘cost-effective’ short-term thinking.
We’d still have local trucking, but require less than a tenth of current capacity.
Removing excessive plastic packaging on all processed goods would help also, as that drives up the cost of oil, and the weight of packaged shipments.
Again… all things that should have, and CAN eventually be applied.
In the meantime, short term solutions for locally produced goods may help. In the long view though, we have to improve long distance freight infrastructure to exclude ‘cheap’ petrochemical fuels.
As far as products, I would focus on heavy materials or highly perishable ones. The first is obvious. The second may be key as I would think that many products may have to sit around a bit longer rather than sending out less than completely full trucks.