>I would have thought at least part of that $2.70 labor cost differential
>would be amortized through savings in transportation. But the author
>never mentions shipping costs, just shipping speed. Does that reflect
>reality? That bulk shipping from China is just as cheap as local
>shipping, it just takes longer?
The cost of shipping a pair of shoes from East Asia to, say, Chicago by means of containership and double-stack train is a tiny fraction of the retail price of said item. I don't have the data at hand, but trust me, it's tiny. Economies of scale in intermodal ocean and rail transport and all that. B/c the cost is so low, and b/c New Balance targets the upscale niche markets w/very short product cycles, it's speed from assembler to sales floor that matters. (BTW, at the risk of being pedantic, "bulk" shipping refers to non-containerized primary and intermediate goods, like iron ore, coking coal, steel rods, feed grains, and such -- the stuff that goes into containers is called "general cargo" shipping).
The thing that I find amusing about this article is the fact that trade economists are now "discovering" that you can make stuff as cheap with high c/v ratios as with low c/v ratios. No shit, Sherlock ? The thing that I find infuriating about this article is that our ace reporter (and this should come as no surprise since the source is Biz Week) parrots the economists' analysis that we live in a world of two great world-historical options: Third World "bloody Taylorism" or First World "post-Fordism" (w/the "team concept" and -- gasp !!! -- 14 dollar an hour wages to boot).
John Gulick