Home-Sourcing Trend Could Get You A Green Job: The Upside Of Costly Oil
Not only is the world no longer "flat," greener jobs are coming to the USA as a result - in factories with 'down-home' supply chains. People don't need to lobby or protest to make it happen. By subsidizing it's own oil demand growth, China has effectively added a 9% tariff on its exports.
It is as if there exists an as yet un-named economics version of the Gaia Hypothesis emerging around increased shipping costs. Example:
To avoid having to ship all its products from abroad, the Swedish furniture manufacturer Ikea opened its first factory in the United States in May.Home-sourced products are coming for rich people too.
Tesla planned to manufacture 1,000-pound battery packs in Thailand, ship them to Britain for installation, then bring the mostly assembled cars back to the United States. But when it began production this spring, the company decided to make the batteries and assemble the cars near its home base in California, cutting more than 5,000 miles from the shipping bill for each vehicle.The moral of this story is simple. If the oil prices stay high, fuel-intensive product life cycles must change, or companies that depend on them go bust. Anything made with a lot of steel is going to undergo some business model revisions (as opposed to design changes), sooner than later.
NYT tells us how serious it is:
The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costsGreen oxymoron coming: a fair amount of the "just-in-time" deliveries are destined to become "not-in-time," as shipments have to slow down to save fuel. Olympic swimmers: faster; cargo containers, not so much.
Could this be the demise of the black belt in Six Sigma, or whatever it's now being called?
The Times has a terrific article here, and we highly recommend it if you are in need of a boost of optimism.
The only thing they overlooked is the positive impact on climate, which TreeHugger has addressed previously (see listings below).
Via:NYT, Shipping Costs Start to Crimp Globalization
Image credit::TradeAsia.net, cargo containers in port