Better packaging will definitely reduces the price and by using automated software for scheduling the product deliveries in one time will even reduce the shipping price. Best alternative is to come up with renewable resouces will reduce the transportation cost.
But when will the manufacturers also share some of this surcharge burden? Yes, better packaging and creative delivery logistics will help, I am just tired of the consumers bearing the brunt of every change in oil price and the manufacturers keep all the profits.
But there is very little anybody can do about it. You can't blame your suppliers if they are charging more because their costs have gone up.
Barbara,
I totally agree with you that blaming suppliers is not an option because costs have gone up. I feel rising costs would force the people to come up with some unique solution like "optimal packaging techniques".
Increase in price of crude oil is certainly of concern. I do feel the pinch when i have to fly home. Now, on top of the Europe has decided to collect carbon tax (about 5 Dollars per passenger). Do you guyz see supply chain getting affected if government start to collect taxes for carbon footprint also?
Freight rate is definitely going to increase as long as the crude oil price is not going down. It will affect all areas of supply chains. If a door is not close, a place like Mexico as you have said will not be able to enjoy maximum attention for manufacturers in China. I hope the crude oil issue will be globally addressed because it takes a major role in the world economy.
The points you mention here.Especially the impact that rising Labour costs will make it more prohibitively to produce something in one area and then ship it long distance to markets make perfect sense.
It has today become more Cost effective to manufacture things in Mexico and then drive it across the border in the US.
Too bad most people won't realise this until its too late to make the switch.
We need more honest and trasnparent rules and regulations all across the board to make things happen.
I agree with what Taimoorz said. Ultimately the price difference will be passed on to the end consumers. But then I would like to add that even some/good portion of hike in outsourcing cost also will come from end consumer's pocket.
I do agree that freight costs will not rise to the extent that outsourcing becomes expensive. However, the impact of increase in freight costs will be significant and the impact will ultimately relay to the final consumers in the form of higher prices. Perhaps increase in the number of shippers will increase competition and bring the prices down. Currently the logistics market seems to be dominated by a few key players.
@DennisQ – Amazon as well as a majority of these carriers’ customers, which are mostly contracted customers, should not be affected by the general rate hikes…only non-contracted customers.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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