Can North America Use The High Cost Of Oil To Recapture A Smidgeon Of Its Manufacturing Mojo Back?

June 13th, 2008

Great article in today’s WSJ re how Pacific Ocean transport costs are soaring and some firms are bringing factory jobs back from China. Click HERE to read the article. It gives a great inside look at what it costs to ship something from China to the US and from Mexico to the US.

Be sure to take a close look at the article’s graphics and charts, as those pictures tell a powerful story.

My own prediction: Yes, a firm here and there will bring back said factory jobs, but Mexico (in particular), as much as I love the place, in my view, does not have its act together nearly enough, to take full advantage of this global comparative advantage softball it has been thrown. Also remember that many firms don’t go to China only because of cheap production costs — many also set up shop in China because they want to be ready and positioned to hit big in the China domestic market if/when it takes off, as applied to their industry and consumption of their product category.

Time will tell.

Your thoughts? And what business opportunities will this change in the landscape create?

Note: This article should give you boatloads of questions to ask if we are again able to visit a port facility in China. If peope ain’t shippin’, then Chinese ports won’t be as busy as would otherwise be the case.

Entry Filed under: China