Reading Nicholas Taleb’s bestselling book The Black Swan: The Impact of The Highly Improbable was pause for reflection about what’s happening in the transportation industry these days. A Black Swan, according to Taleb, is a highly improbable event that occurs consistent with the following variables: it is unpredictable; it carries with it a massive impact; it leads to explanations after the fact that attempt to make it appear less random, and more predictable than it actually was. Taleb goes on to imply that errors in planning and strategy often occur as a result of focusing too heavily on those things that are predictable while underestimating the power of the less obvious. Taleb’s point by analogy is that no matter how many White Swans exist in the world, there are always “Black” ones that can create a seismic shift in our worldview.

This is the scenario that appears to be playing out in the transportation sector as fuel prices continue their unprecedented upward trajectory. So, you ask, what is the the Black Swan? Can you say “soaring fuel costs.” The result? Commuters are switching from cars to public transportation in record numbers; domestic airline carriers are reducing flights as well as raising fares and fees; fuel efficient vehicles are flying off of car lots.

So what does all of this mean? I believe we are beginning to see a fundamental shift in how American’s view and use transportation in this country. Case in point–Public transportation which had been perceived in some circles as primarily an option of choice for blue collar, working class populations is now becoming the means-to-an-end for many middle and upper class Americans. The American Public Transportation Association, in fact, estimates that Americans took 2.6 billion trips on public transportation during the first three months of this year, an uptick of 85 million more trips compared with the same period last year. In the meantime, American’s drove 1.4 billion fewer highway miles from April 2007 to April 2008 according to recent figures from the U.S. Department of Transportation.

Another profound shift that we are seeing is that American’s are moving back into central cities in large numbers– a reversal from the suburban sprawl trend that we have been seeing for decades. Much of this is tied to the desire, on the part of many, to reduce commute times, by bringing their work and home into closer proximity. This shift opens up many options in terms of alternative forms for commuting, such as bicycling, walking, and light-rail–all positive steps in terms of reducing our carbon footprint as well as creating healthier communities.

I believe that the most significant “Black Swan” that we are likely to see in terms of transportation is the end of the airline industry as we know it. Rapidly rising airfares and add- on-fees are making it virtually impossible for the average middle income American to afford to book a flight. This trend is likely to worsen in light of flight industry estimates that domestic carriers will reduce their number of flights by at least 10% before year end.

As an aside, it is interesting to note that in the midst of plummeting airline fortunes Sacramento International Airport is embarking on the largest capital improvement project in Sacramento County history, a $1.27 billion renovation of its terminal B, including a new parking lot, hotel, restaurants, and light-rail service. In the promotional brochure for this project it says that the primary purpose of the “Terminal Modernization Program” is to “meet the facility needs necessary to support airline passenger growth.” Can you say “Black Swan.”

Advertisements