While the future can be exciting and an adventure, there are unanticipated events that occur that can disrupt normal flows and operations (Maritz, 2019). On the extreme, there have been catastrophes that seemed “acts of god”, events that are not contemplated in this series of blogs yet provide some context (Maritz, 2019; Gibbons, 2018). More predictable and relevant to our lifetimes, the Cascadia Fault off the coasts of Oregon and Washington is predicted to rupture in the next 50 years and could be the worst North American human disaster on record with significant costs in lives lost and property damage. The damage to roads, bridges, airports, transit, railroads, and navigable waterways will significantly reduce the ability to respond and recover. This event is being studied and planned for (Bauer, et al, 2018; Roth and Thompson, 2018; Sounds, 2019; Steele, 2020).

Risk management is the identification, evaluation, and prioritization of risks followed by methodologies to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities. The U. S. transportation industry has enormous risk exposure and among the most risk-prone industries in the world. As such, the federal transportation act—Moving Ahead for Progress in the 21^st Century Act or MAP-21 and signed into law in 2012—established the requirement for states to develop a risk-based asset management plan. Risk management is a dynamic process and used routinely within the public and private sectors. Without such plans, organizations can be surprised by events that have negative financial impacts or missed positive opportunities with improved outcomes. The literature on risk management is rich and evolving. A Black Swan is an unpredictable event that is beyond what is normally expected and has the potential for severe consequences. Risks must be identified at the beginning of a project or program, discussed, and updated regularly. Some typical risks might include scope, schedule, and budget issues; safety issues; liability issues; site condition issues; dispute issues; quality issues; workforce turnover or other staffing issues; weather or other delays; contract interpretation disputes; rework; prompt payment; opportunities for additional work; priorities; owner readiness; and so on. Regardless, it is critical to identify risks, actions to prevent or mitigate new risks, probability of occurrence, and a champion/responsible party to take the lead. Various means of identifying the probability of risks are also important such as Monte Carlo simulation.

The Covid-19 Pandemic is a glaring and recent example of positive and negative impacts and could be categorized as a Black Swan. It could not have been anticipated although pandemics are a certainty. As risks do, it is also having positive and negative impacts. For example, remote work and quarantining are reducing CO² emissions (IEA, 2020;  Figure 9), online shopping continues to increase versus brick and mortar stores (Ali, 2021), costs associated with commuting and office space (Boland, et al, 2020; Ambrose, 2020), and reducing traffic congestion (Ronan, 2021). Some reports are that certain categories of online shopping and delivery increased 50-125 percent in 2020 compared to 2019.  However, already disadvantaged populations are disproportionately negatively affected and transit faces an existential threat in 2021 and beyond due to the reduction of ridership and associated revenues.

As many as 572 airports are also threatened by global warming and associated sea level rise by 2021 (Yesudian and Dawson, 2021). A record number of hurricanes, wildfires and floods cost the world $210 billion in damage in last year, much of it due to global warming. The six most expensive disasters of 2020 occurred in the U.S. (NOAA, 2021; Kann, 2021). There is also the threat of land subsidence that may affect 19 percent of the world population by 2040 (Herrera-Garcia, et al, 2021).

As of this writing, over 30 million U. S. citizens have tested positive for COVID-19 and over 500,000 deaths. That is more than 1 in 9 that have been diagnosed with the disease. Under more normal conditions before the pandemic, there was not a public transit system that was not subsidized. Even with vaccines being fielded, the future of transit ridership and revenues is far from certain. The course for the foreseeable future, without federal help, is to reduce services. Black Swans and other events may be giving us a “pause” to rethink transportation/mobility.

As weather patterns change, commodities and other flows are interrupted and delayed. The recent Texas utility debacle from unusual winter weather is yet another risk that could have been precluded and mitigated. People and companies lost heat, potable water and waste water services, and have and are experiencing injuries, death, and economic hardships—a series of cascading failures (Northey, 2021). During the crisis, unregulated utilities charged a market cap price of $9,000 per mega-watt hour  (McGinty and Patterson, 2021). The lack of preparation was made worse by delaying commodities including food and Covid-19 vaccinations. Moreover, Texas utilities were warned 10 years earlier of the preparation needed but they ignored the risks (Blunt and Gold, 2021). This is a failure of leadership.

In addition to individual risks typically identified in risk assessments, there can also be risk correlations between work breakdown structure (WBS) elements, events, risks of projects, across projects, and programs. Some of these might include (modified from Prieto, 2020):

• “Money Allocated Is Money Spent”
• Parkinson’s Law – work expands to fill the time allotted
•  Overconfidence in assessing uncertainties
• Complexity with hidden coupling – risk events are likely to affect multiple cost elements with the potential for cascading impacts
• State of technology – common new technologies/materials
• Common management, staff and work processes
• Optimism bias and other biases consistently applied
• Overly simplistic probabilistic cost analysis (PCA)
• Wages, benefits, payroll taxes Productivity
• Raw material costs
• Design development
• Means & methods
• Uncertainty factors/known unknowns
• Budgeting and contingency management strategy and approach
• Packaging and contracting strategy
• Schedule precedences
• Shared/common assumptions
• Failures/delays at interfaces
• Location factors
• Trade actions
• Regulatory changes/actions
• Low frequency high impact events of scale
• Archaeology finds

So risks, associations of risks, and Black Swans can be complicated and reflect the nature of the mobility ecosystem, systems, and systems of systems, in general. Megaprograms and projects (over $1 billion) are particularly prone (Denicol, et al, 2020; Vartabedian, 2021; Garmo, et al, 2015; Irimia-Diéguez, et al, 2014; Zidane, et al, 2013; Flyvbjerg and Bruzelius, 2014).

Dr. “Kevin” Bao also provides an interesting perspective on how leaders should respond to crises and opportunities (Steele, 2021).

Citations

Ali, F. (2021, January 29). US ecommerce grows 44.0% in 2020. Digital Commerce 360. Retrieved February 27, 2021, from https://www.digitalcommerce360.com/article/us-ecommerce-sales/

Ambrose, J. (2020, August 12). BP mulls radical reduction of office space in move to flexible working. The Guardian. Retrieved February 27, 2021, from https://www.theguardian.com/business/2020/aug/12/bp-mulls-radical-reduction-of-office-space-in-move-to-flexible-working

Bauer, J. M., W. U. Burns, I. P. Madin. (2018). Earthquake regional impact analysis for Clackamas, Multnomah, and Washington Counties, Oregon. Oregon Department of Geology and Mineral Industries. Retrieved February 27, 2021, from https://www.oregongeology.org/pubs/ofr/O-18-02/O-18-02_report.pdf

Blunt, K. and R. Gold. (2021, February 19). The Texas freeze: why the power grid failed. The Wall Street Journal. Retrieved February 27, 2021, from https://www.wsj.com/articles/texas-freeze-power-grid-failure-electricity-market-incentives-11613777856

Boland, B., A. D. Smet, R. Palter, A. Sanghvi. (2020, June 8). Reimagining the office and work life after COVID-19. McKinsey & Company. Retrieved February 27, 2021, from https://www.mckinsey.com/business-functions/organization/our-insights/reimagining-the-office-and-work-life-after-covid-19

Denicol, J., A. Davies, I. Krystallis. (2020, February 13). What are the causes and cures of poor megaproject performance? A systematic literature review and research agenda. Project Management Journal. Retrieved February 27, 2021, from https://journals.sagepub.com/doi/10.1177/8756972819896113

Flyvbjerg, B., N. Bruzelius, W. Rothengatter. (2014, July). Megaprojects and risk: an anatomy of ambition. Cambridge University Press. Retrieved February 27, 2021, from https://www.cambridge.org/core/books/megaprojects-and-risk/78B4E0A8FDBEC72919B832D33BECF083

Garemo, N., S Matzinger, R. Palter. (2015, July 1). Megaprojects: the good, the bad, and the better. McKinsey & Company. Retrieved February 27, 2021, from https://www.mckinsey.com/business-functions/operations/our-insights/megaprojects-the-good-the-bad-and-the-better

Gibbons, A. (2018, November 15). Why 536 was ‘the worst year to be alive.’ Science. Retrieved February 27, 2021, from https://www.sciencemag.org/news/2018/11/why-536-was-worst-year-be-alive

Herrera-Garcia, G., P. Ezquerro, R. Tomás, M. Béjar-Pizarro, J. López-Vinielles, M. Rossi, R. M. Mateos, D. Carreón-Freyre, J. Lambert, P. Teatini, E. Cabral-Cano, G. Erkens, D. Galloway, W. Hung, N. Kakar, M. Sneed, L. Tosi, H. Wang, S. Ye. (2021, January 1). Mapping the global threat of land subsidence. Science. Retrieved February 27, 2021, from https://science.sciencemag.org/content/371/6524/34

IEA. (2020, April). Global energy review 2020: the impacts of the Covid-19 crisis on global energy demand and CO² emissions. Institute of Economic Affairs. Retrieved February 27, 2021, from https://www.iea.org/reports/global-energy-review-2020/global-energy-and-co2-emissions-in-2020

Irimia-Diéguez, A. I., A. Sanchez-Cazorla, R. Alfall-Luque. (2014, March 19). Risk management in megaprojects. Procedia – Social and Behavioral Sciences. 119:407-416. Retrieved February 27, 2021, from https://www.sciencedirect.com/science/article/pii/S1877042814021375#!

Kann, D. (2021, February 22). Flood risk is growing for US homeowners due to climate change. Current insurance rates greatly underestimate the threat, a new report finds. CNN Business. Retrieved February 27, 2021, from https://www.cnn.com/2021/02/22/business/flood-insurance-climate-change-risk-first-street-foundation/index.html

Maritz, W. (2019, July 22). Critical risk areas for public infrastructure projects – Part 1. Oracle Construction and Engineering Blog. Retrieved February 27, 2021, from https://blogs.oracle.com/construction-engineering/critical-risk-areas-for-public-infrastructure-projects?source=:ad:ba:::RC_BUMK200210P00079:SmartBrief_FY20Q4&pcode=BUMK200210P00079&SC=ADV

McGinty, T. and S. Patterson. (2021, February 24). Texas electric bills were $28 billion higher under deregulation. The Wall Street Journal. Retrieved February 27, 2021, from https://www.wsj.com/articles/texas-electric-bills-were-28-billion-higher-under-deregulation-11614162780

München, L. (2020, November 12). Pandemic leads to decrease in global CO² emissions. ETH Zürich. Retrieved February 27, 2021, from https://usys.ethz.ch/en/news-events/news/archive/2020/12/rekord-rueckgang-der-globalen-CO2-Emissionen-wegen-Corona.html

NOAA National Centers for Environmental Information. (2021). Billion-dollar weather and climate disasters: overview. NOAA. Retrieved February 27, 2021, from https://www.ncdc.noaa.gov/billions/

Northey, H. (2021, February 24). ‘Cascading failures’ fueled Texas water disaster. E&E News. Retrieved February 27, 2021, from https://www.eenews.net/stories/1063725903

Prieto, B. (2020, December 3). The impact of correlation on risks in programs and projects. PM World Journal. Vol. IX(XII)):1-11. Retrieved February 27, 2021, from https://pmworldjournal.com/article/the-impact-of-correlation-on-risks-in-programs-and-projects

Ronan, D. (2021, February 24). Top bottlenecks less congested last year, but infrastructure needs persist, ATRI finds. Transport Topics. Retrieved February 27, 2021, from https://www.ttnews.com/articles/top-bottlenecks-less-congested-last-year-infrastructure-needs-persist-atri-finds

Roth, S. and J. Thompson. (2018, March 15). Study projects damage from rare Portland Hills quake, Cascadia earthquake. KGW8. Retrieved February 27, 2021, from https://www.kgw.com/article/weather/earthquakes/study-projects-damage-from-rare-portland-hills-quake-cascadia-earthquake/283-528827359

Sounds, S. (2019, September 8). The mega Cascadia earthquake is overdue and could strike the US West coast at any moment, creating huge 30 meter-high tsunami waves within seconds – please prepare for this apocalyptic event. Strange Sounds. Retrieved February 27, 2021, from https://strangesounds.org/2019/09/the-mega-cascadia-earthquake-is-overdue-and-could-strike-the-west-coast-of-the-us-at-any-moment-creating-huge-30-metre-high-tsunami-waves-within-seconds-prepare-for-this-apocalyptic-event.html

Steele, B. (2020, January 27). Getting ready for the next Great Cascadia Subduction Zone earthquake. Pacific Northwest Seismic Network. Retrieved February 27, 2021, from https://pnsn.org/blog/2020/01/27/getting-ready-for-the-next-great-cascadia-subduction-zone-earthquake

Steele, J. (2021, February 22). CEOs should develop an ambivalent mindset in crises, says UAH professor’s research. University of Alabama in Huntsville. Retrieved February 27, 2021, from https://www.uah.edu/news/items/ceos-should-develop-an-ambivalent-mindset-in-crises-says-uah-professor-s-research

Vartabedian, R. (2021, February 22). A ‘low-cost’ plan for California bullet train brings $800 million in overruns, big delays. Los Angeles Times. Retrieved February 27, 2021, from https://www.latimes.com/california/story/2021-02-22/california-bullet-train-dragados-design-changes

Yesudian, A. N. and R. J. Dawson (2021). Global analysis of sea level rise risk to airports. Climate Risk Management 31, 2021, 100266:1-12. Retrieved February 27, 2021, from https://www.sciencedirect.com/science/article/pii/S2212096320300565

Zidane, Y. J. T., A. Johansen, A. Ekambaram. (2013, March). Megaprojects-challenges and lessons learned. Procedia – Social and Behavioral Sciences. 74:349-357. Retrieved February 27, 2021, from https://www.researchgate.net/publication/257718827_Megaprojects-Challenges_and_Lessons_Learned