Shortages and Efficiency

Investment Analysis Clubs Macro Economic Trends and Risks
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I realized I have a vehicle coming up for plate renewal and the associated state inspection. Great. Something to get done. I have time. I’m flexible, I can wait for it, whenever a time slot is open, I can drive by and “git 'er done.”

I called my preferred mechanic shop, inquired about a slot – any slot, no biggie – anytime this week? Nope. First opening is week of September 11, if I can drop it off and let them slip it into the work plan. Well, I want to wait for it. Okay, we can do 8:00am 9/13.

Mentioned this to a friend who said he has a dent repair needed on a vehicle and the same shop said quoted a November 29 start date back in early August. This is a well respected, independent shop that has been around since the early 1970s and is now run by the founder’s son.

In a different but related story, the local news ran a story last week about teenagers turning 16 camping out at a local DMV driver’s test office in order to nab one of the few appointments for a driver’s test, due to a shortage of state troopers available to sit in the passenger side with a clipboard risking their life to administer the in-car drivers test. Most new drivers are waiting between 30-40 DAYS to get tested. A quick google search shows this to be relatively isolated to my side of the state but seems to fit a larger pattern.

I mention these examples cuz they reflect what seems to be a new normal. The number of home projects or routine government administrative tasks one can decide to knock out on a whim shrunk considerably during the peak of the covid pandemic and is not returning to “normal.” There are many areas where this is likely a better optimization of economic resources. For example, most grocery stores that for some reason expanded to 24x7x365 day operation over the last 10-15 years have scaled back to 6am - 11pm type hours. Honestly, that makes sense. The value of paying a shift of cashiers and a manager to hang around at 3am made zero financial sense.

However, these shortages of both labor and materials are likely having HUGE impacts to most businesses every day. If you run a restaurant and your AC or freezer fails, you’re lucky if you can find a repairman to come quickly before your patrons flee and your food spoils. If the repair tech shows up and you need a major part, good luck finding it in stock where the tech can get to it to keep you in business.

If you run a contracting firm and a change on the job site requires an audible at the line and a trip to the hardware store for extra materials and maybe a new specific tool, good luck finding everything you need in stock with the quantities you need. If it isn’t in stock, your job has to defer that work, find another part of the project to work on to keep making progress, and your customer waits longer for completion.

These “hidden taxes” are embedded in plain site through pretty much every layer of the economy. In normal times, business might attempt to solve these problems via “expediting” things in the logistics chain. If local stocks of part A become unavailable, we’ll just overnight ship them from the east coast. Until the east coast doesn’t have any stock either. With manufacturing scattered across the globe, it is NOT economically efficient to shift the entire world cargo market to 747 freighter planes. Supply and demand have to be better balanced to allow slower shipping alternatives to work. And even that aspect is at risk. A story last week described how a lack of rain in Panama is backing up throughput of traditional “Panamax” sized ships through the Panama canal. The canal has locks for the traditional “Panamax” sized ships (895 feet by 105 feet and a 35 foot draft) and the newer, larger “Neopanamax” vessels. Both sets of locks use water from lake Gatun to drive ships up the path then lower it on the other side. However, the new locks on the Neopanamax route re-cycle about eighty percent of that water. The older locks recycle virtually none of it.

The result? Panamanian operators are reducing the number of transits for the older / smaller ship variety and reducing the maximum draft of those ships that do pass through. Total daily transits of the canal have been reduced from 36 to 32 daily, draft depths of ships have been reduced, limiting the amount of cargo per transit and existing ships – especially the smaller Panamax variety – are queueing up on both sides of Panama waiting for a smaller number of transit slots.

Why point out all of these interlocking forces? Cuz they’re all contributing to inefficiency, they’re all driving increases in prices and shortages of materials and goods and there is NO magic bullet any politician can tout that will cure these problems in a few years, much less instantly.

WTH

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How fast can large holding tanks be built (adjacent to each lock)? Pump the water FROM the tank to the lock to raise a ship. Pump the water FROM the lock to the tank to lower a ship. Losses are mostly evaporation and modest amounts lost (or gained?) when the lock is opened and a ship goes in or out of the lock.

It sure ain’t rocket science to figure that out. 10% commission…

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Here in central TX, since a couple years pre COVID, the new license plate is a plastic sticker inside the driver side windshield.

I go to a local “minute/quick oil change” place that does state inspections.

10-15 minutes, and I get the paper that my vehicle passed the inspection.

I take that paper to the local Grocery store whose customer service desk also offers “bill pay”, money order, lottery tickets, etc services.
One service is renew license plate.

Last time (April 2023), no wait. I had the new peel n stick in < 10 minutes.
I had to remove the old and stick the new.

This grocery store service has been available since before COVID.

Alternatively, I can get the inspection done (where ever), then go to the county annex with proof of passed inspection.
Take a number. And wait. And wait. And in about 30-40 minutes, see the clerk person, and 10 minutes later get the peel n stick license.

I took an oldster cousin to renew his plate, about a month ago.
He wanted the county annex experience.
We encountered another relative while there. It was a family reunion!

YMMV
:red_car:
ralph

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AAA also does many of the paperwork type DMV functions (no testing). Usually no line at all.

Mike

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You made a lot of good points.
But I think it is questionable if all these things mean the system, as a whole is inefficient. Having a big stock of rarely used spare parts or a lonely repair guy sitting around with nothing to do (i.e. the Maytag repairman) can also be considered inefficient.
So it might sometimes be inefficient for the end customer ; but maybe more efficient for the suppliers and service companies.

Mike

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Here in “Commiefornia”, every other year you have to get a smog inspection from an independent mechanic, who sends the inspection results directly to the DMV. Then you can pay your renewal fee online and get your sticker in the mail. No waiting in lines at all. Heck, you can pay online before getting the smog check.

I do occasionally go to AAA to pay and get my sticker immediately. But usually only do that when I’ve put things off too close to the deadline.

A terrible inconvenience, just like everything else in CA. At least according to folks who don’t live here.

–Peter

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Best practices (as Peter points out in CA) can make huge improvements all over the place. It is soooooo easy for any organization to get stuck in ruts, some ancient and some almost new, but always thought of as “the way it’s done.”

But that does not cover all of the issues raised in the OP. Oftentimes those setting budget levels or laying out procedures are insulated from the results of their decisions and Do Not Give a Damn. Time wasted on hold on telephones has gone through the roof. E.G, many JC decisionmakes do not care and never get irritated and even do not know about this stuff because they have “staff” to do all that for them.

david fb

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That offer exists in Commiexas too.
For a fee, of course.
I think this fee is also collected via the grocery route.
When I get my sticker at the grocery, I include some shopping. It really is convenient.
And, I go at low demand times, so no standing in line

My commies are redder than your commies.
:sun_with_face:
ralph

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Not sure I understand this - why not just a sticker on the plate itself; it is what we do in NH.

JimA

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TX used to do that.
There was some fraud thing, stealing plates, gluing fake stickers or some such.
IDR exactly.

TX also now keeps the same external license plate longer. License plates used to be made by the TX prison system. Our prisoners make fewer plates, these days. Plastic stickers save TX money?

The L&Ss decided that combining the inspection sticker and yearly license registration sticker into a single sticker, inside the car, protected from “the elements”, and perhaps easier for cops to see, was a win.

Each year has its own color, and a LARGE, easy to see number for month n year.

Screenshot_20230829-181217
Screenshot_20230829-181217864×645 202 KB

I think the switch to plastic windshield stickers was made before 2010.
:red_car:
ralph

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The other reason many states are likely adopting “inside stickers” is to prevent theft / transfer from a valid owner to an illicit plate. In my state, tags are still “outside” on the plate and for 20+ years have been made out of a very resilient metallic foil with very sticky adhesive but they are pre-sliced with cross-hatches to make them EXTREMELY difficult to remove intact once placed on the plate.

It’s been two years since I renewed and many of these things may have also come to my neck of the woods but you still have to get an actual inspection. Even that has been improved by the state waiving safety inspections for the first 10 years or 150,000 miles of a car’s life. They likely saw the percentage of cars failing under those limits was so small, the inspections weren’t worth anyone’s time. Inspections have always been a PITA for mechanics shops because the cost of an inspection is mandated by the state and is barely enough to cover an entry-level mechanic’s hourly rate. That was especially true for special region-specific emissions tests which required equipment that probably cost several hundred thousand dollars but still only generated a state-mandated fee insufficient to cover the cost. Once a passing inspection is registered by your shop of choice, you can have the tags mailed to you after paying for them online with no DMV. If you actually need plates, I think those can only be obtained at a DMV office.

To jerryab2’s point about improving water re-use at the Panama canal, I presume the current water shortage is triggering engineers to consider major upgrades to the older “plain Panamax” lane. There’s certainly an upper physical bound to how many ships can transit the canals per day but shipping volumes are only going up so anything that requires operating short of those limits will probably drive enough economic incentive to trigger an upgrade if it continues.

My larger point was that there are very few segments of commerce or administrivia operating with staff levels and inventory that allow things to get done on a whim. Everything requires planning and a wait. And stores seem completely unfit for their evolved use. Walking into Best Buy is a great example. Best Buy built giant 38,000 square foot stores with 40-foot tall roofs so the storefront could be seen from a mile away and stuffed them with inventory. The original goal was to wow the customer and give them the illusion of “choice” and “efficiency” (“They must be cheaper than the competition, how could they operate at this size unless they had MASSIVE buying power?..”) You don’t get that impression walking into a Best Buy in 2023. Now the shelves are maybe 40% full, the stock that is there has less selection of models to compare in person and there is very little foot traffic. If I’m not getting the in-person cross-shopping benefit of a big box store, why OPERATE as a big box store?

Just rambling… Nothing scientific here.

WTH

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Having parts and personnel available to provide a service to customers, comes under “customer service”. As offered from time to time, for a long time: when a company wants to cut costs, the first things to go are quality control and customer service, because you can’t completely prove to a beancounter that satisfying customers will immediately add to the bottom line. Consider, for one, Ford’s soaring warranty repair costs. The CEO swears they will address that issue. Any bets the means of “addressing” the issue will be new strategies to deny warranty claims? I stopped to chat with a guy on my walking route the other day. He was washing his F-150. Without any prompting from me, he offered that the truck is “a piece of junk”. With 95k on the clock, the engine is shot. He said Ford is providing a new engine, but he says he is done with Ford, even though he gets A Plan. You can never convince a beancounter of the cost of customers lost due to poor products or poor service either.

Steve

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Aha!! There’s no fee in Commiefornia. Well, no fee as long as you pay by EFT. You can use a credit card, but you pay a couple of percent to the card processor for the privilege. Our L&S want all of their taxes. Can’t be paying no fee out of their own … ummm … taxpayer’s pockets.

–Peter <== likes living in CA, but it’s not perfect. Just like everywhere else.

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Registration fee here also charges processing fees:

  1. $3.50 fee + 2.75% credit card fee to use Kiosk at supermarket
  2. 2.75% to use a credit card
  3. $0.70 to use a debit card
  4. $0 to use a check

I use one check a year nowadays, can you guess for what?

I wouldn’t be surprised if the cost to the state for processing a registration with checks is the most costly option of all (because it’s the only one that requires human intervention).

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That would be my bet as well. Michigan also charges a processing fee, but does not disclose how much the credit card fee is, so I send them a check.

Steve

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When they started, I didn’t trust them with my bank account info and I wasn’t going to pay the credit card fee. So I mailed checks (or often went to AAA and gave them a check made out to the DMV and got my sticker immediately).

As I learned that giving them a check was basically the same as giving them the EFT info (it’s on the bottom of the check), I finally switched to EFT payment.

I am fairly certain that processing checks costs more in payroll (or lock box fees at a bank) than just eating the credit card fee. At least they give us the EFT option - which is really the smartest way for both parties.

–Peter

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Your “bank account info” is literally PRINTED at the bottom of each of your checks. Always has been! Not only that, but as you mention, nowadays, checks aren’t processed through a clearinghouse, instead they are converted into an e-check by scanning that “bank account info” on the check and converting it into an e-check (same as if you entered it yourself that way).

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For the halibut, I tried to see when the Michigan Secretary of State started charging a CC processing fee. Prior to the fee, I had renewed my car registration on line, with a card. Click, click, and it’s done. Then they started charging a fee, that they would not disclose up front.

Did not find a date for the SoS office, but Michigan did start allowing merchants to charge a processing fee in 2013, so it was probably that year, or shortly after, that the SoS started charging the fee. I could point out that 2013 was during the administration of a particularly Shiny Gov, so it makes sense he would ding proles with a surcharge, while, at the same time, ushering two rounds of tax cuts for the “JCs” through the legislature.

Steve

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Ummm - did you read the rest of my post before responding? As in the next sentence after the one you quoted?

–Peter

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Yes! After I started replying, of course. That’s an Internet tradition. :sweat_smile:

The point is that even 10 (or 50) years ago, your bank account info was printed on the checks you handed to everyone.

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