March 1st, 2010
With shipping costs continuing to rise due to fuel costs, I’m find it less likely each year that business is saving money on labor. I use a simple premise of a shipping container (40 ‘ )cost around $3000 to ship from China to the USA in 2000 & now cost $8000 in 2008 due to the spike in fuel costs.
Basically a 40′ metal container is really 39′4″ long 7′6″ tall & 7′8″ wide. You could fill it with 12,384 shoeboxes or 55,511 cartons of cigarettes or 649 kegs of beer. Transit time from Oakland to the UK is around 25 days meaning this is only good for standard shipping & any critical or time sensitive products will have to be shipped by air at significant costs. How often does that happen? Well when I worked at my factory making wheel loaders it happened quite often as we were only stocked with a few days of products which is referred to as running lean. Which means any products that were not to specs, warped or damaged would need to be replaced ASAP.. This happened at least once or twice a month just for our line not counting other lines.
So just doing some simple math on a product like shoes which estimates have us importing 1.2 billion a year I decided to use a lesser number of 800 million. It would take 64,599 containers (40′) at a cost of $516,792,000 per year just in shipping costs. Most of these working in the USA make around $9 /hour & reports have Taiwan workers making about half that. If we paid these workers $10 /hr which would be roughly $20,000 year we could of hired 25,839 new workers in the USA & it would not cost these companies 1c more. As more time goes on, its hard for these companies to keep using this justification as shipping costs will continue to increase & eventually surpass American wages.
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