[JohnDenver]

Some material on recent transport congestion here:
Article

"Arch Coal Inc. (ACI.N: Quote, Profile, Research) is the latest U.S. coal miner to warn about the pain of transportation delays. Earlier this week, it forecast a weaker first quarter in part due to railroad bottlenecks and barge delays that have hampered deliveries, offsetting the benefits of sky-high coal prices."

This puts a different slant on the discussion of bottlenecks. At the moment, energy prices are high, but that is not what is driving transport costs up. The real cause of transport cost inflation (at the moment) is strong growth combined with overloaded transport infrastructure.

A peak oil investor could get goofed up by this kind of phenomenon. Imagine somebody who knew about the "end of cheap coal", and invested in Arch Coal to capitalize on it. The price of coal rose, as expected, but the investment can't perform due to the "end of excess transport capacity". Focusing too much on energy as the limiting factor can lead you astray.

In fact, a good case could be made that congestion is the typical failure mode of extremely complex systems. Look at computer networks or power grids: they don't crash due to lack of energy. They crash due to congestion related phenomena which cause cascading failures.

Also from the article:

""It depends on whether you believe it's short-term or long- term disruption," Monahan said. "Some are restructuring the supply chain. If I'm using vendors that are more remote, there may be advantages to finding a closer supplier."
Most companies have not hit that "trigger point" yet, but there is evidence of companies that were outsourcing 100 percent offshore now hedging and moving 30 percent back closer to home, he added."

So a certain degree of relocalization is already happening, and it has nothing to do with scarcity of fossil fuels.

[nero]

Good point John,

I've always felt the relocalization idea was a bit tenuous. Where is the hard headed analysis on the subject in these forums? The one thread I did see pointed out that one of the cheepest shipped commodities on a weight or volume basis is oil iteslf. Serious relocalization would have to occur because of some sort of collapse in the world economy, not simply as a logical consequence of high oil prices.

If someone wants to make a stab at the analysis what percentage of the price of (wheat\tomato\beef\milk) is the transportation fuel cost? I don't know the answers (yet)but here are my guesses

wheat : 0.1%
tomato : 1.5%
beef : 1%
milk : 0.5%

[frankthetank]

Googling found this site
http://www.clagettfarm.org/transportation.html

older article, but still some interesting things, like:

$this->bbcode_second_pass_quote('', 'I')n 1997, over 170 billion miles were traveled by tractor-trailers, using 42.5 billion gallons of diesel fuel. Tractor-trailers average 5.9 miles per gallon, which is low fuel efficiency, and diesel fuel is also responsible for a significant portion of air pollution, especially particulate matter. In any case, we enjoy an abundant and year-round supply of fresh produce at a price that is not necessarily reflected in food costs.

[nero]

Taking our figures of 1,685.5 miles on average with 5.9 miles per gallon means 286 gallon of diesel a trip. In the states isn't a gallon of diesel about 2 dollars, meaning that the fuel cost for the trip is only 572 dollars.
A fully loaded tractor trailor can carry about 46000 pounds and tomatoes go for about a dollar a pound retail so the street price of the load of tomatoes is $46000. In other words the cost of the long distance shipping was 1.2% of the total cost of the tomato to the consumer.

[gwmss15]

what would the costs be if you railed them instead as it takes less fuel to run the train and you can have 50 trailers worth in one train

[JohnDenver]

Some calculations from a previous post:

$this->bbcode_second_pass_quote('Vexed', '
')For an easy-to-understand real-world example: My father just bought a 100 lb weight set made in China for my step brother at Wal-Mart. It cost $29.95. What does it cost to ship 100 lbs from China to the US?

[JohnDenver]

Hi nero. I couldn't help but snicker at the following:

$this->bbcode_second_pass_quote('nero', ' ')the street price of the load of tomatoes is $46000

[JohnDenver]

For comparison:

p/w ratio for crude oil: $0.18/lb.
p/w ratio for tomato: $1/lb.
p/w ratio for gold: $6500/lb.
p/w ratio for heroin: $250,000/lb.

[BabyPeanut]

$this->bbcode_second_pass_quote('frankthetank', '
')then there is this...
$this->bbcode_second_pass_quote('', ' ')The US Department of Transportation reports that in 1993, 257 million tons of fresh produce was shipped by truck in the U.S. Traveling over 23 billion-ton miles (BTM) shipped, they concluded that the average distance per shipment was 191 miles.

[RdSnt]

Instead of comparing dollar costs, how about working out the energy costs.
How much energy is expended to manufacture and ship the weightset from China, compared to the same weightset made in the US. Assuming of course it is going to the same consumer.

In our PO world, energy costs is the sensible method for a proper C/B analysis.

[frankthetank]

Baby~yeah ...after rereading it makes more sense....

Doing some rough calculations...i figured an Iranian oil tanker (big big ship!) uses about 70gallons of oil per knot....which isn't that bad considering a friend of mine has a 20ft cruiser type boat in hes @ about 1mpg(WOT).

http://www.ship-technology.com/projects/iran_delvar/

Theres a lot of money in drugs! wow...

[nero]

$this->bbcode_second_pass_quote('frankthetank', ' ')

$this->bbcode_second_pass_quote('', 't')hen there is this...
Quote:
The US Department of Transportation reports that in 1993, 257 million tons of fresh produce was shipped by truck in the U.S. Traveling over 23 billion-ton miles (BTM) shipped, they concluded that the average distance per shipment was 191 miles.


which seems at odds with this
Quote:
An analysis of the 1997 U.S. Department of Agriculture Fruit and Vegetable Market News report for the Jessup, MD Terminal Market found that the average pound of fresh produce that was distributed through the facility in 1997 traveled an average of 1,685.5 miles

[johnmarkos]

$this->bbcode_second_pass_quote('nero', 'T')aking our figures of 1,685.5 miles on average with 5.9 miles per gallon means 286 gallon of diesel a trip. In the states isn't a gallon of diesel about 2 dollars, meaning that the fuel cost for the trip is only 572 dollars.
A fully loaded tractor trailor can carry about 46000 pounds and tomatoes go for about a dollar a pound retail so the street price of the load of tomatoes is $46000. In other words the cost of the long distance shipping was 1.2% of the total cost of the tomato to the consumer.

[ararboin]

Johndenver wrote:

$this->bbcode_second_pass_quote('', ' ')I forgot drugs, like heroin. High oil prices (or even the total elimination of fossil fuels) isn't going to dent that trade.

[pilferage]

$this->bbcode_second_pass_quote('frankthetank', 'I') bought navel oranges (big ones) for 4 for a buck...i am about 2000miles from where they are grown... How can they make money?