Fuel costs motivate shipping changes

Shipping containers stacked on docks in the Port of Los Angeles in San Pedro, California.

TEXT OF STORY

Scott Jagow: Oil prices are still holding us hostage though -- $119 a barrel this morning. High fuel costs have companies changing everything around, especially the way they move things from Point A to Point B. Marketplace's Janet Babin reports from North Carolina Public Radio.


Janet Babin: The new strategy for shipping product seems to be this: Get your goods made closer to home. Then, ship them by train instead of by plane.

That according to a new survey of about 1,000 retailers, shippers and manufacturers from research firm Eye For Transport. The company's Rodrigo Canete says this trend has already hit parts of the furniture industry, especially in the Western U.S.

Rodrigo Canete: We're talking about Mexico as new manufacturing centers and California as a new distribution centers that we receive from Mexico through rails and through near-shore shipping.

Some businesses are holding more inventory, so they can make one big shipment as opposed to a bunch of little ones. Others have dropped giant distribution centers in favor of smaller spaces closer to clients. Most say they've tried to eat the extra fuel cost, but end up passing some of it onto customers.

I'm Janet Babin for Marketplace.

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