Unintended consequences are curious things, and often unpredictable ones as well. As the New York Times reports today (
NY Times: Shipping costs start to crimp globalization ), the rising price of oil is changing the business assumptions inherent in just-in-time deliveries and in offshore manufacturing. The recent model of sending U.S. raw materials to China or other countries for production into finished goods starts to fall apart when cheap oil becomes a memory. Not only is the cost of shipping making it too expensive to produce goods so far away, freighters are also moving up to 20% slower in order to economize on fuel consumption. The net result? Furniture makers who had almost vanished in North Carolina and Virginia are all of a sudden making furniture for American consumers again, instead of idling while the timber goes to China for conversion into tables, sofas, and chairs. Even Ikea opened a furniture manufacturing plant in Virginia in May 2008 in order to offset the challenges of the more costly and now fraying global supply lines. Anti-globalizationists, meanwhile, pop the champagne corks and declare victory.
What does all this have to do with security, you ask? Consider. If manufacturers are passing higher fuel costs to you when shipping your goods (A 40-foot container that cost $3,000 to ship a few years ago is now costing $8,000 thanks to higher fuel prices.), and the shippers themselves are taking as much as 20% longer to bring your goods to market, just how much tolerance will you have left for any added security measures at the port of entry? The sheer business impact of potential loss of market share will increase the attractiveness of any scan-on-the-run technologies that can be implemented to keep from adding delays to the process. This represents an opportunity for security technology companies. On the other hand, labor- and time-intensive delays imposed under the banner of increased security could easily become the straw that breaks the back of the business that has no choice but to keep relying on global supply lines. Never the rose without the thorn.
- Nick Catrantzos
