When Oil Goes Above $100, the China Price Emerges — Again!

By September 8, 2008Energy, Trade

The Washington Post is the latest media outlet to report on manufacturing capacity returning to the United States because high energy prices equal high shipping costs. From, “China’s Outsourcing Appeal Dimming — Fuel Prices Squeeze Profit Margins for U.S. Manufacturers”:

SHANGHAI — Harry Kazazian built his business on sleeping bags that are made in China and shipped across the ocean to the United States, but he realized recently that the math doesn’t work anymore.

With fuel prices at record highs, the cost of sending a standard 40-foot container of goods has gone from $3,000 in 2000 to about $8,000 today, squeezing profit.

So this summer Kazazian, chief executive of Exxel Outdoors, a Los Angeles-based maker of recreational equipment, did something radical: He moved the manufacturing back to Haleyville, Ala.

We had missed this Eureka (Calif.) Reporter editorial on the same topic, also citing Exxel, “Bringing manufacturing home.”

Incidently, Post reporter Ariana Eunjung Cha is based in China, and in doing background for the story called the NAM here in D.C. “Just like she was calling from next door,” comments our communications VP. Not so noticeable today, but 10, 15, 20 years ago?

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