>> winner take all procurement will put incumbents out of business
The worst part isn't that companies go out of business, they probably won't, but that after a few rounds of one big state contract only one company will have the capacity to even bid for the contact. That one big company will then subcontract lots of little local delivery contracts. The one big company will have then effectively replaced the government in that it will manage salt delivery across the state.
End of the day, the market is doing that anyway. Remember the private equity folks are buying up the means of production -- contracting out trucking or whatever is meaningless.
It's obviously building an old-school Trust, but under our current legal philosophy, as long the private equity / public companies slowly boil the frog and the commodity doesn't increase in price quickly, there will be no Federal regulatory action.
All of these things are re-treads of what happened between 1880-1920. The cost efficiencies driving profit are about using computer tech to reduce labor and other costs. In the old days, it was spinning machines powered by coal/gas/electricity displacing water or craft work. It's more profitable/lower risk to build a monopoly and slowly implement cost-cutting than to be forced to do so by a competitve marketplace.
That’s silly. A single buyer doesn’t have to buy the entire supply in one shot. They could easily say “We buy the cheapest marginal salt in any quantity until our total capacity is met. You must beat $CANADA_PRICE + $IMPORT_PRICE, as well as $NY_PRICE + $TRANSPORT_PRICE or we’ll have to buy from them instead”.
The worst part isn't that companies go out of business, they probably won't, but that after a few rounds of one big state contract only one company will have the capacity to even bid for the contact. That one big company will then subcontract lots of little local delivery contracts. The one big company will have then effectively replaced the government in that it will manage salt delivery across the state.