Post by D.F. MannoI bought a TrailPass from the SEPTA online store. There was a shipping
charge of $1.95 on the order.
I received the pass today. SEPTA mailed it first-class and used a
42-cent stamp. So what's the other $1.53 for?
--
The modern conservative is engaged in one of man¹s oldest exercises in
moral philosophy; that is, the search for a superior moral justification
for selfishness. (John Kenneth Galbraith)
If you break out the entire cost of any kind of shipping and handling
charge, the individual components add up to be significant:
1) Warehousing facility (small slice of pie)
a) Maintenance
b) Rent or taxes
2) Labor cost (probably largest slice of pie)
a) Wage to employee
b) Employer share of taxes (Social Security)
c) Fringe benefits like health insurance (ha)
3) Packaging of item (dependent upon inflation rate)
a) Packaging material
1. Outer enclosure
2. Inner enclosure (personalized message, invoice, etc.)
3. Protective matter (styrofoam peanuts - not for a
transpass, but you get the idea)
b) Warehousing of material
1. Placing material in location pending shipping
2. Retrieving material for shipping
c) Determining "best way" and level of insurance for shipping
and finally
4) Postage or other shipping costs (most fixed cost because of
government regulation holding prices low)
a) Base shipping costs
b) Additional shipping costs (insurance, signature
confirmation, etc.)
That said, think about that when you buy a pack of Doublemint gum at
your neighborhood store versus the same pack at Walmart. The
neighborhood store makes a penny. Walmart makes two cents. Which
owner buys the the painting, "Kindred Spirits", from the New York
Public Library for more than $35 million and which owner decides
whether to buy store-brand or name-brand paper towels? No wonder
Walmart is driving family-owned shops out of business.
Could the same economies of scale be applied to SEPTA? For example,
converting the El, BSS, and streetcars to run on standard gauge track
instead of Philadelphia gauge? Or finding ways of using El or BSS
cars for close-in high-speed service, like continuing some BSS trains
to Jenkintown or some El trains to Norristown or Morrisville?
This is not as pie-in-the-sky thinking as it might seem at first
read. Neither Walmart nor Target suddenly sprung up like mushrooms
after a rainstorm. An article in a copy of a 1992 issue of the
Reading Eagle on financial conditions in Berks County talked about
financial conditions based on three surveys done beginning in 1991 and
completing in mid-1992. It discussed a family doing comparison
shopping between K-mart and Walmart even then. Target wasn't even a
gleam in anyone's eye.
If the private sector can plan incremental expansion in such a way
that a few companies (Starbucks? Coca-Cola? Walmart?) become so
dominant that they can shift the direction of the market over 18
years, why can't we expect SEPTA to begin a similar long-term planning
strategy of its own?
Or have I asked and answered my own rhetorical question?