High Speed Rail Between Switzerland and Italy

From time to time we are reminded of the costs of our failure to maintain our public infrastructure. The mass delays on Amtrak and the Long Island Railroad provided another timely reminder. The disaster began on Monday morning when a fire destroyed train switches of the LIRR. The fire was quickly extinguished, but nevertheless crippled the entire commuter train system. One third of the scheduled trains were canceled, but the inconvenience of rebooking and lengthy travel delays is insignificant relative to the risk of passenger or worker injury due to human error. The New York Daily News reports that train workers are manually operating the machinery that keeps the trains on the tracks, working back-t-back shifts until the equipment is fixed. Isn’t that scary? That problem was followed by a major voltage outage affecting the entire Northeast Corridor. Many Long Island commuters had to book hotel rooms to spend the night in the city, as they could not get safely home. As these incidents become more and more frequent, we have to explicitly consider the cost of doing business in major U.S. cities. I took this photograph when I lived in Switzerland. It is the Cisalpino, the high-speed train I used to take between Zurich and Milan. It runs like clockwork.

London Blizzard

This is the time of year when I most miss living in Switzerland. My friend took the attached photograph of blizzard conditions in London for which the city is never prepared. Public transportation and all other essential services grind to a halt with such weather. Businesses need to plan for workers to telecommute from home. This necessarily requires explicit procedures for the use of company-issued laptops. Laptops should be used for business purposes only, as surfing popular consumer sites through the Internet browser expose the business to more risk of malware and other intrusions. Exercise special care for file storage, as you want to discourage saving files to the hard disks of laptops where they can be lost or damaged. The use of a virtual private network will allow secure access to company computing facility and proper backup of files across the network. When the forecast is unclear, encourage telecommuting to keep employees from traveling on unsafe roads. Advance planning will limit the impact weather-related disruptions on your business.

Holiday Travel Woes

This is the time of year when I miss Switzerland the most.  It is not just the beauty of Zurich, decorated with holiday lights for Christmas. It is the efficiency of the Swiss train system.  You can set your watch by the arrivals and departures of the trains. Today an electrical problem outside New York City stopped Amtrak train service for three hours, stranding thousands of holiday travelers. The good news is that during the outage trains en route to New York had on-board power for heat and lighting, which isn’t always the case when the route loses power. The disruption delayed service up and down the East Coast, including commuter traffic on New Jersey Transit, a local rail line.  I now expect such disruptions and plan for them as a routine matter. One tip for train travel, particularly if you take the train to Washington or Boston for business, as I often do: make sure your laptop is fully charged when you board. Keep it charged by choosing a window seat. Then if the power goes out, you have another three or so hours left on your battery.  I also pack snack food as the café car will always run out of food, and the choice isn’t particularly appetizing anyway. Finally, call for your ground transportation on your cell phone as you approach the station. There is generally limited parking space at Amtrak city stations and with long delays, you can’t plan for a timely arrival.

Winter Storm

A winter storm struck the East Coast this weekend, leaving up to two feet of snow, on what is traditionally the busiest shopping weekend of the holiday season. I hope your contingency plans included telecommuting for staff who could do so and e-commerce for your own shopping and for serving your home-bound customers. Airlines are rebooking passengers who were ticketed on canceled flights. According to flight logistics experts, the airlines need three days to rebook passengers and catch up for a single day of cancellations. A storm of this magnitude may require as many as five days. Of course, this bumps the displaced passengers against holiday travelers on one of the most congested travel times of the year. So from travel disruptions to lost sales, a snow storm can have major consequences for your business.

Recovery Effort Viewed from the Ferry on the Commute Home

Nine people were killed Saturday, when a private plane collided with a sightseeing helicopter over the Hudson River. I saw the aftermath of the tragedy from my home office when I was on the phone as a guest on a live talk news program. For the past several days, divers from the New York Police Department and the Army Corps of Engineers have been working to recover the bodies of those who died in the crash as well as the remnants of the aircraft for official inspection by the National Transportation Safety Board. My commute home today was delayed as the ferry boats across the Hudson River were slowed to accommodate the U.S. Coast Guard boats involved in the recovery effort. It was a sobering reminder of a terrible tragedy.

Louisville, Kentucky was flooded when a storm left the area with more than seven inches of rain, resulting in flash flooding, and power outages. Thankfully, no casualties or serious injuries resulted from the storm, but the rainfall overwhelmed the area’s public infrastructure and caused major disruptions to local small businesses. The mayor of Louisville estimates that the main library sustained $1 million in damages when flooding destroyed books. Firemen led water rescue efforts for people stranded as animal shelters evacuated animals to minimize casualties due to drowning.

At the same time, Texas is experiencing a severe drought with 100-degree temperatures in an area that includes Austin, Dallas, Houston and San Antonio.  As a result, mandatory water restrictions have been imposed on 230 Texas public water systems, which prohibit practices such as watering lawns or refilling swimming pools.  It bears repeating; prepare for the more frequent disasters, such as drought and flash flooding, as such measures will yield a more immediate benefit against a more imminent threat at more reasonable cost.

Rainbow Over Geneva, Not New York

Everyday disasters are taking their toll on small businesses in New York City where 21 of the 26 days of the month to date have been rainy and unseasonably cold. Businesses that cater to outdoor pursuits, such as street vendors, outdoor cafés, sports entertainers, beach vendors, Central Park carriage rides, amusement parks and others have seen dramatic declines in seasonally-adjusted revenues for the month of June.
Cumulative rainfall in New York City for the month of June is close to nine inches. I suppose the bright side is that umbrella vendors may be faring well this month. The economic impact of the rainfall is unlikely to make the news; news media prefer more dramatic, and less frequent disasters, such as major hurricanes. But this certainly illustrates how the everyday disasters are often ruinous to small businesses. I photographed this rainbow appearing over Lake Geneva when I lived in Switzerland. Unfortunately, for New York City small business owners, the rainbow has not yet appeared.

No Physical Damage, But No Customers Either

A small bomb exploded outside an apartment building on Manhattan’s Upper East Side over the weekend. Newspapers reported that residents were unnerved by the blast and the nearby Starbucks coffee shop sustained moderate physical damage. Unfortunately, this is not the first small explosive device to detonate in a residential neighborhood in Manhattan. The police are looking for clues before the bomber strikes again. But the lesson that the small businesses in the affected area are likely learning now the hard way concerns the increasing disconnect between physical damage and economic losses and the nature of everyday disasters. The old insurance paradigm correlated economic losses with physical damages and provided commensurate benefits. If your office building became a giant smoking hole in the ground, you would likely have commercial insurance to indemnify the loss. But in a service economy, economic losses are becoming less and less correlated with physical damages. Apart from the Starbucks coffee shop, no other retail business in the neighborhood where the bomb exploded sustained physical damages and thankfully, there were no injuries or loss of life. But all of those businesses will lose revenues as pedestrian access to their storefronts and restaurants will be resticted for some period of time as the cleanup work is done and the police gather evidence.  This is why business interruption insurance is so important; it replaces revenues lost during a period of disruption. But most storekeepers lack this important coverage. Don’t learn this lesson the hard way. Have a conversation with your insurance broker about whether business interruption insurance is appropriate for your business.

Each One Adds Up

I had advised that small business owners should write to each of the publications to which they subscribe advising that your name, address and other contact information should not be shared with third parties. The idea is to reduce the amount of time that telemarketers can waste. This will improve your productivity in normal business operations. It will also help you to focus on critical communications in the event you are disrupted by a disaster. Spam, telemarketing and unwanted solicitations become more than a nuisance when you are operating from a remote location and trying to deal with a serious disruption to your business. I recently had the experience of receiving persistent calls from a telemarketer who played coy in response to my question as to how he obtained my personal information.

Business that seek contracts with the U.S. federal government are required to register with Dun & Bradstreet, which I did for my own small business when I was responding to a Request for Proposals of the U.S. Agency for International Development. As my registration was a matter of some urgency in order to ensure that I would meet USAID’s deadline, I gave my cell phone number to Dun & Bradstreet solely for the purpose of processing  my registration.  Unbeknownst to me, Dun & Bradstreet re-sold this information to third parties. I began to receive telephone calls on my cell phone from Fortune 500 companies seeking to sell products and services that are totally inappropriate for my small business. Ordinarily I would switch off my cell phone in business meetings out of courtesy to the others present. But as I would explain to other participants at the beginning of each meeting, my circumstances were not ordinary. As my mother was recovering from a traumatic brain injury, I needed to ensure that I could be reached at all times. Since that was the only use of my cell phone, you can imagine how my heart would race and my palms would sweat whenever that phone would ring. And you can further imagine my fury that the calls were unwanted solicitations. When I traced the source of the calls, I notified Dun & Bradstreet in writing that my information is not to be sold to third parties and I wish to be placed on their internal “Do Not Call” list. You should do the same. I think it is an appalling practice that D & B would re-sell this information without the consent of the small business owner, facilitating the abuse and waste of our time. It is particularly offensive to me because we are a captive audience, required to register with D&B if we want to bid on government contracts. Stop the abuse; notify them to keep your information private.