from Reportonbusiness.com:
"The soaring cost of fuel is whittling away at the cheap-labor advantage enjoyed by Asian exporters, giving Canadian firms a welcome edge in their fight to win back business from Asian competitors.
Two bank economists argue in a report released Tuesday that because of higher fuel costs, shipping a standard 40-foot container from Shanghai to the east coast of North America now costs $8,000 (U.S.), up from $3,000 in 2000 when oil was just $20 a barrel."
Full Story Here
I realize that no one expects Wal-Mart to close up shop and go home, but it may happen sooner than most people realize, ditto for every other chain that relies on a far-flung distribution system. Target, Fred Myers, Costco, Home Depot, just to name a few...
These businesses will lose their competitive advantage as oil becomes more expensive, allowing opportunities for their stores to be purchased by local entrepreneurs or simply shut down. Main street might witness a come back as the massive, wealth-draining businesses shutter their stores. There will still be a need for tools, wood, supplies etc and local businesses will again have to fill this need.
The thing to remember is that technically we haven't hit peak oil, but demand is outstripping supply and causing oil prices to rise. Classic economics, and yet no one seems to be listening or wants to admit what's actually going on, and that we have a really unpleasant reality waiting for us as oil production does peak, and goes into terminal decline....
1 comment:
Regarding the last paragraph, I would say that while the current supply/demand issues that are driving the price of oil may be independent of the true supply left in the ground, we really don't know if we have it peak oil, have passed it, or if it is still in the future. The peak is something that we will only be able to see in hindsight.
However, regardless of the immediate cause of oil prices, there is no doubt that "cheap" goods we have grown accustomed to ("cheap" monetarily - but very costly in terms of energy usage, environmental and human exploitation) will become more expensive as the formerly hidden and insignificant energy costs come to dominate the price.
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