No french fries in Japan

If you go to a McDonald's in Japan, be prepared for no french fries (freedom fries ?). Or, at best, if you smile nicely at the young girl, you might get a small fries. No wolfing down the one tonne abomination called large fries. The end of the world has arrived !! What on earth has happened ?

Well, the problem is not in Japan, but in the US. There is a big mess in the ports on the US West Coast. McDonald's ships frozen fries to Japan through these ports. Shipments are getting massively delayed. McD don't make french fries in Japan at all - all of it is sourced from the US. Hence the problem in Japan.

What is the mess on the US West Coast ports ? Well, almost everything is a mess. They account for more than half of all US maritime trade and the two ports of Los Angeles and Long Beach account for some 40% of US shipping.  There are are a number of problems across all these ports.

Firstly there is a labour dispute going on. The union and the management of these ports have been negotiating for 7 months now and have made no headway. As usual, pay, working hours, etc etc are in dispute. Now the Pacific Maritime Association, the management group, wants President Obama to intervene and appoint a mediator. As if the President has nothing else to do. Solve your problems yourselves, you lot. I thought businesses wanted governments to leave them alone, not intervene. Well, this speaks of the real demands of businesses from governments - leave us alone when the times are good and come in and pick up the pieces when times are bad.

Secondly, as is happening in almost everywhere in the US, infrastructure is not keeping pace. Container ships have doubled in size and yet US ports have made little investments to handle such behemoths. This is a general problem with US infrastructure everywhere - ports, airports, roads, whatever. Everything is slowly going down and there is little money to spend on them. The citizens of the US would rather spend on dropping bombs on others (Defence),  doling themselves out (Social Security) and cossetting the elderly, even if they are comatose (Medicare). The crumbling of infrastructure is slow and therefore incrementally not noticed. It takes an infrequent visitor to see how far the US has slipped. Today, the drive from JFK to Manhattan, is inferior to the drive from Bangalore Airport to Whitefield - and that really says something.

The third problem, of all things, is a shortage of truck chassis to haul containers in and out. I have no idea why this is so. And apparently there are more factors, unique to the region and specific to the industry.

This is a real shame. When economic growth is at a huge premium, surely you cannot afford to lose because of bad planning, poor infrastructure and intransigent unions.

Ah well; Mr Tamaguchi has to simply control his craving for fries. Perhaps the union workers in Long Beach are concerned about his cholesterol levels ! It just goes to show, how in today's interconnected world of business, a completely unrelated problem in one corner of the world might have repercussions in the other corner. And "drastic repercussions" if you are like Mr Tamaguchi looking for his fix.

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How to make a mess of things

Elections have been over in Bangalore for a couple of weeks now and its a long wait for the results due in mid May. As is the wont in India, all government work comes to a standstill when elections are announced as the result of a "model election code" which is supposed to ensure that incumbents don't benefit by doing populist stuff just before elections. Indian love doing nothing and so all this freeze in activity is considered a good thing.

Consequently, when elections are over , it is also the time to do unpopular things.  By the time the next elections come, its all forgotten. In keeping with this tradition, the Karnataka government has been busy raising tariffs , leading to howls of protests. Vatal Nagaraj, a local character known for innovative protests  has remained true to form yesterday.

I want to pick on one such move - raising the toll on the road to airport as a perfect example of everything that is wrong in India about how we go after things.

First the facts. Bangalore airport is some 50 kms out of the city. There is a highway that connects the city to the airport. They have recently upgraded it with flyovers , avoiding all signals , etc etc and it is now a super smooth ride to the airport. All very good. Now comes the question of who will pay for all this and how.

The obvious solution is a toll. That's what the authorities have done. The problem is that in one full sweep , they have implemented a toll of Rs 115 (US $ 2) overnight.

Let's start with the amount itself. It is one of the largest (probably THE largest) single toll anywhere in the country. By Indian standards it is an astronomical toll. Still, that is probably the revenues required to offset the cost of building the roads and flyovers. But as with everything in India, there is little transparency. Nobody has bothered to lay down the facts of the costs and the economics clearly - if they had done it , many would probably consider the toll justified. As it stands, the sniff of somebody profiteering is very high.

Secondly, it would have been far better to prepare the public. Instead on one midnight it was just enforced. People catching the early morning flights suddenly found a demand for Rs 115. It is inevitable that there would be anger.

Everybody and anybody is protesting, irrespective of the logic.

The most galling protest comes from the cab drivers ferrying people to the airport. Their grouse is that it will eat into profits. Complete rubbish. It is the passenger that pays the toll. No cabbie returns from the airport empty.  Its a ridiculous protest.

The next constituency that is protesting is the lot going to the airport. The rich and pampered 0.001% who travel by air. They don't want to pay Rs 100 for the super smooth road to the airport to catch a flight that will cost Rs 5000. This is the same lot who were moaning about poor infrastructure and roads to the airport. Their solution is to abolish the toll and let the cost be borne by the government (read the poor non airport user). Fantastic.

The next lot who are protesting are the opposition politicians. I am not sure what they are seeking to gain from this - the rich using the airport road is a miniscule constituency and why defend them ?? On the contrary I would have expected them to protest saying the toll should be doubled.

The next step is very predictable. A few toll booths will be vandalised. Some old foggy with nothing better to do will launch a public interest litigation in the courts. Thee wise courts will immediately issue a stay on the toll and take the next 74.63 years to issue a ruling. Meanwhile the idiot who invested in the road will go bankrupt.

And then we wonder why infrastructure is so poor in India.

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The fastest train in the world

China is a very competitive country. It likes to make a competition of everything it can win ! So its not surprising that last week it unveiled the “fastest train in the world”.

The train in question is the bullet train between Guangzhou and Wuhan. Guangzhou is where I live – the southern China city, known earlier as Canton and close to Hong Kong. You can be forgiven for not knowing anything about Wuhan. It’s a city in central China, mostly unknown to the rest of the world. Why is the fastest train in the world going there ? Well, its not going just there; the train is meant to be between Guangzhou and Beijing – Wuhan is about the midway point and this is the first phase of the line.

The train claims an average speed of 350 kmph. The earlier train journey between Guangzhou and Wuhan took some 10 hours. Now it takes 3.

This is all part of the massive investments in infrastructure that China is making. I had argued here that one of the obvious things India has to learn from China is the importance of infrastructure. China has further stepped up the infrastructure investment as part of the stimulus package. While most other countries have focused their stimulus on the short term – tax breaks, cash for clunkers, doles, etc, China has mostly focused on even more spending in infrastructure. Trains like the Guangzhou Wuhan link are going to spring up all over China over the next 5 years.

The Indian railways was, and is, one of the great organizations of the country. For a long time, it was the biggest railway network in the world. No longer. It has been rapidly overtaken by China and is going to be left far behind. For decades, Indian Railways has been starved of investments in tracks, high speed links, new trains. Instead the money has been wasted on subsidies, bloated lower level staff, and the like. Laloo Prasad brought efficiency and profitability back to the Railways and was sacked for his efforts as he had the temerity to stand against the Congress in the Lok Sabha elections.

Imagine if India replicated the Chinese achievements in the Railways. Madras to Bangalore would be an hour’s journey. Bombay to Delhi would be a 4 hour journey. Madras to Delhi, 6 hours. Bangalore to Bombay three and a half hours. The Bhopal Shatabdi, the fastest train in India has an average speed of 90 kmph. The Guangzhou Wuhan train’s average speed is 350 kmph.

I'm not able to post a photo of the Wuhan station, thanks to my Net Nanny, but just gaze at the photo here. Jaw dropping. We should bring Mamta and the entire Railway Ministry to China and make them travel on this train. Not the Railway Board – they know all this and in any case, they are one of the most efficient company Boards in the country. Maybe, just maybe, our netas and babus will realize the art of the possible, even in a poor country. Just let the top class Railway Board run it without interference. In 10 years, you and I will also have the privilege of commuting from Madras to Bangalore in an hour.

That will be the day.

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