Of particular note for container shipping, note: “Firms are now discovering all the disadvantages of distance. The cost of shipping heavy goods halfway around the world by sea has been rising sharply, and goods spend weeks in transit.”
Shipping and transportation costs have caught up. Even WalMart and other East Coast groceries are finding buying local produce and products is cheaper than bringing in from California or even Chile!
This may result of manufacture goods moving back to US TO MEET “just in time shipping” of items to receivers that OTHERWISE would be held up due to long transit times since there can be a next day time requirement ? Note; there is notice that container ships are slowing down to save fuel increasing delivery times of container ships.
I’ve never understood how we lost the fashion industry. By its nature fashion has to respond to trends. Yet most of it is now overseas.
The grass is always greener…
Since it’s from Paris (or London, or Milan, or…) it must be better than anything that anyone could come up with here…
The massive loss of decent-paying jobs as a consequence of the 20+ years of off-shoring is no fashion industry joke.
As other countries like China develop and their workers demand higher wages and a middle class lifestyle there will be less incentive to export jobs to those areas. Let’s face it, alot of the globabization we’ve seen has been nothing more than an attempt to exploit cheap labor and lax environmental laws in other countries. Some products will continue to come from overseas…like fruit that is indigenous to certain areas… but there’s no reason that we need to buy pens that are made in China…or that your nice HO scale SD40 has to come from China other than labor is much cheaper there for now.
That may be why there is significant production of apparel in Central andd South America and the Caribbean rahter than it all being in Asia. Faster turnaround and transit times.
But you are referring to high fashion, everyday clothing doesn’t have quite as rapid a cyle of change.
I do note that clothing was one consumer item that had a very visible “Buy US” movement but it seems consumers voted with their wallets…
Wages and regulation in China will rise, but so will ours. I don’t see any possibility that China’s wage base and regulations will catch up with that of the U.S.
I suspect there is a difference in scale. I have no idea what kind of increases overseas industry is seeing, but I suspect that they are larger than what we’ll see here, percentage-wise.
And, as already been mentioned, when you throw in the cost of transportation, any increase in overseas wage costs will bring businesses closer to the tipping point where it’s cheaper to make it here.
I’m referring to clothing where fashion is an issue, not necessarily high fashion but fashion to some degree.
Your point about Central and South American is very valid. Since they are close to the US shipping time is not nearly as much of an issue.
I do agree that for most purchases consumers look at the price more than any other single factor.
The world is flat…or nearly so. The marine container started it on it’s way and the internet finished it off. Speak English, have good roads/RRs and a port, have good telecommunications and you are in business.
Fortunately, we have those things. [:)]
Over on the model railroad forum is a thread that has a link to a recent Atlantic Magazine article. It reads pretty much the same on how companies are realizing that some advantages to going overseas are lessening and that there are benefits with having some production here.
Even so, I wonder how much production will come back, how much may come back to North America (Mexico) but maybe not the US. I also wonder what effect this will have on rail traffic. I think it was Futuremodal some years back who wrote that the railroads, especially the BNSF, liked seeing production go overseas or to Mexico because it gave them the long hauls from the ports/entry points. That having production in the US near the consumers favored trucks because the railroads couldn’t (or wouldn’t) compete for short or intermediate hauls. While I can’t say I agreed with much of what he usually wrote, I do think there is some truth in this. Not the part about any railroad companies may have encouraged companies to move production, but that if a lot of production moves back fairly close to where the products are sold that some railroads would be adversely affected.
I don’t know about all of them (thinking mostly about the large class one carriers, the smaller regionals/short lines seem to adapt better to customer needs and go after traffic that a class one would turn up it’s nose at) but one I’m familiar with seems to think that if it isn’t a unit train or moving long distances, the freight isn’t worth going after. Maybe that thinking is OK when there’s plenty of long distance freight, but what if a lot of that production does move back. What then?
I must also say, I wonder how much of this in-shoring will be long lasting or just a passing business fad. It may be that just some production, mostly higher end products, comes back, with the majority of produc
With the spread between labor costs shrinking and the transit times being a factor it is possible that jobs will return to North America.
With the upcoming energy boom in the United States, we might be experiencing a very significant increase in manufacturing as costs will be reduced.
Railroads will need to be nibble…coal traffic down, oil traffic on the rise, container traffic might stablize and there will be a need to provide domestic intermodal service on shorter hauls.
Ed
We all need to be nimble. I have heard that the kind of manufacturing that is done here is small companies whose work is carefully tailored to special needs of organizations and people.