Supply Chain in da House!

High fuel prices causing globalization to lose momentum 8

It was unthinkable mere years ago, but globalization is starting to lose momentum. High and holding fuel prices -- shipping a 40-foot container from Shanghai to the U.S. will cost ya $5,000 more today than a decade ago -- are making global supply chains look far less attractive. Goods headed for the maw of the world's largest consumer are now increasingly being made in-house: Swedish manufacturer IKEA just opened its first U.S. factory; Tesla Motors is assembling its luxury roadsters in California; China's steel exports are falling rapidly, while American steel production is rising. Local-economy boosters are delighted, but many economists doubt that regionalization is right around the corner. "It would be a mistake, a misinterpretation, to think that a huge rollback or reversal of fundamental trends is under way," says economist Jeffrey Sachs. "Distance and trade costs do matter, but we are still in a globalized era."

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  1. savee419 Posted 5:27 am
    04 Aug 2008

    The same rules applyMy father-in-law and I were discussing housing prices and it strikes me that the price indicators for housing are partially the same for international business. The most important thing you pay for is location for both.
    It's interesting to see that globalization has slowed down, true, but it's important to remember that globalization is something that a lot of people in the world are used to and in order to become local-focused again businesses needed globalization to succeed.
  2. Delay And Deny's avatar

    Delay And Deny Posted 8:16 am
    04 Aug 2008

    Back To The Factory

    Good, that means instead of idle teens making minimum we can return to the days of high factory pay and middle America.
  3. Jon Rynn's avatar

    Jon Rynn Posted 8:19 am
    04 Aug 2008

    Right on Bailo!
  4. Pangolin's avatar

    Pangolin Posted 6:57 pm
    04 Aug 2008

    Applies to labor supply also.The rule will be that you will train the people in your area or you will spend large sums recruiting people willing to move. The days of hiring somebody who will drive from 30+ miles away for a non-professional job are done.
    Business is suddenly going to be very interested in the quality of the local high schools.
  5. mtvyfan's avatar

    mtvyfan Posted 1:09 am
    06 Aug 2008

    Maybe China is getting what is richly deservesI guess karma is catching up to China for all of their abuses of people's liberty and Tibet's freedom. First they have an earthquake of such severity that hasn't been seen in a while and now we are hitting them in the pocketbook, too.
    They should bow down before the Dalai Lama before it's too late.

    Keep the high gas prices coming, baby!
  6. earlysnows Posted 2:48 am
    06 Aug 2008

    next upnext up for rearrangement is agribusiness. i can hardly wait.
  7. Wolverine Posted 5:22 am
    06 Aug 2008

    U.S. Much To Blame For ChinaMTVfan,
    Keep in mind that 1) China was and is only following the example of the U.S. in its industrialization and modernization and 2) the U.S. has outsourced industries to China and imports megatons of needless crap from there made by those industries.  So when you bash China, remember that Americans are at the root of what its been doing for the past 20 or so years.
  8. djnoll Posted 9:46 pm
    11 Aug 2008

    At last, a sign...I have been working on my doctorate, primarily in the area of civic participation and sustainable government.  I have been looking in all my research for a sign that globalization had finally run its course.  This article may be that sign.  It is apparent that the rising price of fuel was destined to have an impact on goods distribution.  We are beginning to see that now.  What we need now is a move within the US, by people like those who read Grist, to move towards more sustainable, localized production.  There is a video, THE TAKE, that tells of how local citizens in Latin America seized plants that had been shut down, retooled them, and started new businesses to sustain their communities.  It is time for US workers to consider forming alliances with community based groups to do much the same thing, in all areas from manufacturing to agriculture to retail.  And to do it in a sustainable manner.  If uneducated workers in Latin America can rebuild their local economies, there is absolutely no reason now for US workers to fail to do the same.  This article does not say it, but if we do not move to do this now, then what has happened so far in our economy will be only the tip of the iceberg.  I can guarantee it!

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