Keep an Eye on Your Dipstick
Friday, June 27th, 2008Usually, this column is about a marketing topic. Not today.
We’ve all watched as gas prices rocketed to a national average of $4.00 a gallon. Now we’re beginning to see more people leave their cars for public transportation. In cities like San Francisco it has been reported that these new riders are filling up trains, buses and park-ride lots. So that’s good for transit, right?
At a recent state association meeting I attended, system managers all expressed concern about how they would handle increased ridership. Higher diesel prices, unbudgeted operating costs and limited excess capacity were cited among their concerns.
No doubt these are serious concerns, but mark my words, there’s a larger problem on the horizon for the transit industry and transportation in general. That problem is supply.
Sure there seems to be enough oil to go around…now. While everyone agrees that worldwide demand is driving up prices, what if supply doesn’t grow to meet demand or even diminishes? If you were around in the 1970’s you may have seen waiting lines for gas, limited rationing and lots of people converting to transit.
But that was temporary, and countries like China and India were still years away from being the petroleum consumers they are today…and will grow to be in the future.
How will this potential crisis play out for transit? It is likely that we’ll first see a capacity problem. But with bus and train car orders taking years to process, how do we effectively respond to capacity needs locally and as an industry? More importantly in the long term, how do we assure there will be fuel to run our trains and buses? What rationale can we make as an industry for national, state and local policy that provides funding and other resources to help us respond to both a capacity and a fuel supply crisis?
Just this month, GM announced the closing of four assembly plants that make large trucks and SUV’s, and indicated it would probably dump its Hummer division. In announcing the closings GM officials said they felt consumer desire to move away from large vehicles was permanent. Where is GM going to concentrate its efforts? Look for more fuel efficient vehicles short term, and more hybrids and totally electric vehicles long term.
It seems to me that there’s more to those moves then just the high price of gas. It seems to me that GM officials may be looking at a day when there is little or no gas at any price. They’re thinking strategically and acting accordingly.
I would say it’s time for the transit industry to do the same. In the meantime keep an eye on your system’s fuel tank dipstick. Your worst nightmare may not be how much that fuel costs; it may just be what happens if the tank runs dry.
Joe Caruso is Senior Consultant for Brecon Hill Consulting. He’s the former marketing director for the Milwaukee County Transit System (WI) and has over 33 years of transit marketing experience. He welcomes your comments at jcaruso@breconhill.com.
