Friday, June 30, 2006

Why Not Outsource in West Virginia?

U.S. importers could curtail overseas outsourcing, logistics exec says

U.S. companies need to think carefully about outsourcing to Asia because the complexity of international trade and extended supply chains means that saving money by outsourcing production to countries with low-cost labor is not guaranteed, logistics experts agree.

Now higher fuel prices and transportation rates, as well as concerns that a terrorist incident or natural disaster can disrupt the continuity of far-flung business operations, may begin to tilt the equation in favor of production in Central America, Mexico or even the United States itself, said Michael Stolarczyk, senior director retail business development in the Americas for logistics provider Exel.

"Why not outsource in West Virginia, why not outsource in Ohio and create some jobs and stability in your supply chain that way?" he said.

Retailers could look at switching to domestic or regional suppliers, especially when it comes to finding reliable sources for their own brands, Stolarczyk said during a panel at an "eyefortransport" third-party logistics conference in Atlanta.

"We are closer to that than a lot of people think."

"I've got no problem with globalization. But I also respect the opportunity to create some cash flow and create some opportunity here in the United States as well," he said.


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