The Disruption Proceeds

[Valin]

Via Meadia:

Walter Russell Meas

Oct. 27 2015

 

The wave of creative destruction unleashed by twenty-first century information technology has left no industry untouched, and the latest beneficiary (or victim, depending on your perspective) is the trucking industry. The Wall Street Journal reports on a handful of Silicon Valley backed startups looking to cut costs in the industry by reducing the need for intermediaries between truckers and customers:

 

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Trucking was once a pillar of the blue model economy. Before a series of deregulation bills passed in the 1980s and 1990s, routes and prices were controlled by federal regulators. Trucking was also heavily unionized by the Teamsters, an organization whose Mafia ties were an open secret for much of the last century. Trucking was a vital link in the U.S. economy, and was under heavy pressure to cut costs. NAFTA opened U.S. border states to Mexican truckers, something the Teamsters fought bitterly for years. And now Silicon Valley is trying to work its own magic.

 

This is a classic case of blue model disruption. On the one hand, it chips away at embedded costs—high prices for trucking are like a tax on the economy, making everything more expensive. On the other hand, the beneficiaries of the old system, included truckers who benefitted from fixed rates and union wages, are in the crosshairs. Global competition and technological innovation made the old system harder and harder to maintain, and now technological innovation could be poised to kick out the last leg of an already tottering stool.

 

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The turmoil in the trucking industry is a window into the social and economic changes sweeping the country; expect to see more industries faced with similar challenges as the blue economy fades away.Of course, the new trucking economy—if in fact Silicon Valley succeeds in making one—won’t be the end of the story. Next up: self driving trucks…