Aircraft refuelling
Fuel prices have just started to correct themselves and are dropping. But not to the original level of, say, a year ago. Oil, which traded around $25 a barrel just five years ago, topped $147 in July. Even after backing off to around $99, it’s double the price of early 2007.
As a result, global businesses are rethinking their options for the sourcing, production and delivery of raw materials and finished goods simply because of the logistics. In a sense this fits in with China’s policy to move up the ladder and produce much higher specified goods where logistics do not form such a large part of the cost.
In research conducted for Accenture by Logistics Management Magazine, 29% of logistics executives said transport costs led their firms to either bring some offshore sourcing or production back on shore, or to cut back on off-shoring plans.
It is not yet clear how much manufacturing will migrate back from China. Noha Tohamy, a supply chain research director with AMR Research said that companies that built a presence there over the last two decades are not about to pull up their stakes because of high fuel costs.
Source: Investors.com
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