The Carousel Keeps Turning

As life rushes forward, we often find ourselves caught in a perpetual race—to get somewhere, to achieve something, to simply keep up. In this whirlwind, we instinctively gravitate toward the fastest and most efficient solutions.

In cities plagued by gridlock and journeys that stretch into hours—or even days—air travel is often the quickest option. That is, if you’re not checking a bag.

Baggage, it turns out, is no trivial matter. For those flying in economy class, all the time saved in the air can be quickly undone as they stand around the “baggage carousel” at the arrival terminal, watching others’ bags pass by while wondering: Why hasn’t mine shown up yet? How much longer will I have to wait?

Surely I’m not the only one who has thought, “I was one of the first to drop off my luggage. Next time, I’ll try being the last!”

Yes—strategy matters.

At one airport, management received ongoing complaints from passengers about baggage wait times. To address this, they increased the number of staff managing and loading bags onto the carousel.

The strategy worked. Average wait times dropped to just eight minutes.

But—did the complaints decrease?

In a previous article titled “It’s Wednesday Again,” I mentioned High-Frequency Trading (HFT)—a subset of algorithmic trading involving pre-programmed strategies—but didn’t go into detail.

One of the most well-known HFT strategies is Electronic Liquidity Provision. Many HFT firms act as liquidity providers—much like traditional market makers—but without being formally obligated to do so in every market they participate in.

HFT liquidity providers generally benefit from two primary sources of income:

• Spread Capturing: Profiting from the bid-ask spread.
• Rebate-Driven Strategies: Taking advantage of fee structures that reward liquidity provision.

Spread capturing is closely aligned with market-making. These liquidity providers continuously buy and sell securities, profiting from the small difference between the buying (bid) and selling (ask) prices. With each transaction, they pocket the margin between what buyers are willing to pay and what sellers will accept.

Rebate-driven strategies, on the other hand, arise in countries with multiple competing exchanges. These exchanges often use asymmetric pricing to attract liquidity providers—charging higher fees to takers who remove liquidity, while offering discounts or even incentives to those who provide it.

I’ll continue exploring HFT strategies next week. But let me return to the question I asked earlier:

Did increasing the number of baggage handlers reduce complaints?

It did not.

So airport management tried something else. Instead of reducing wait times, they increased the distance passengers had to walk from the plane to the baggage claim area.

Now, passengers walked six times farther than before—but when they arrived at the carousel, their bags were almost always ready. The total time hadn’t decreased, but the idle waiting time had.

As it turns out, time spent walking feels shorter than time spent waiting. When we’re actively doing something—even if it’s just walking—it feels better than passively standing still.