By ANDY ANDREWS
Los Alamos World Futures Institute
As an example consider bottled water. Not the fancy kind loaded with non-water molecules or perhaps carbon dioxide (CO2). Just plain water – H2O. At a local grocery price level “ordinary” bottled water can be purchased for $3 to $4 for 24 pints or half-liters (16 oz. or 500 cc. bottles). This equates to $699 to $932 per thousand gallons.
The local price for tap water, which is very drinkable, is about $4.20 per thousand gallons plus a fixed fee of $7.93 per month no matter how many gallons are consumed for a maximum cost of $12.13 per thousand gallons.
There are times when bottled water is essential such as when the water supply is contaminated. Another reason is for needed portion control at a public gathering. And even if you just like it, it is OK. But consider the distribution cost. Allowing a 10 percent profit margin for both the bottler/distributer and the selling store (generous), at $699, this equates to $558.20 in distribution costs (including packaging, handling, overhead, and transportation).
Contrast the distribution of bottled water with the distribution of digital data. VHS and Beta cassette recordings were supplanted by DVDs and CDROMs. Now these devices are being supplanted by digital streaming, reducing the distribution costs if not the price.
Obviously the product being distributed imposes limits on the means of distribution. Physical items must be physically moved, but are there better ways to achieve higher efficiency? This even applies to non-physical things such as electricity. For example, direct current can be propagated further than alternating current with the same energy loss (the cost of propagation).
Return to the water example. Can water be distributed in bulk and packaged locally? In a similar perspective, you can assemble the ingredients for sour dough bread anywhere, but will it taste the same as bread baked in San Francisco? Automobiles are assembled at “central” locations from parts manufactured in distributed locations and then reshipped. Is this dual shipping of parts? Or can assembly be done in a diverse array of “local” locations?
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