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Tom: Incisive question. Many people thought that the gross ton-mile growth we're experiencing wouldn't happen, because heavy capital goods and durable consumer goods would achieve market saturation, then become more durable, nearly eliminating new installations and reducing replacement needs. That is, as soon as everyone bought a washing machine, we wouldn't be shipping so much weight across the country -- just a few replacement machines as the old ones wore out. That was pretty naive thinking. In fact, heavy and durable goods did decline, once everyone had one of everything, but in the meantime, transportation capacity had been built to haul all that stuff, and now it had spare capacity. That allowed people to leverage that spare capacity and transportation productivity to source things from a lot farther away that we used to produce locally. So what we've quit shipping in terms of heavy goods we've filled right back up with things like food, clothing, paper goods, and other consumables. To leverage labor costs, the U.S. and Canada will continue to source things from farther and farther away, and transportation GTMs will continue to grow. In the very long run, wages in foreign countries will rise a little, while ours fall off a cliff to meet them at the bottom, and these labor advantages of foreign countries will evaporate. But we'll still have a huge transportation infrastructure in place which can move things very cheaply, so then natural geographic advantages will come into play. While there might be a day in the future when averaged GTMs begin to decline, I don't think it will be in my lifetime. Wages are already on the decline, though. OS
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