Wednesday, September 24, 2014

Shifting landscapes and the limits of promises

I was amazed by this week's articles. The shift in the last 5 years to manufacturing and supply chains has been notable. The US is seeing industry come back from oversees and foreign firms setting up manufacturing within its borders. Shippers are transforming their distribution networks (as discussed in this week's articles. Amazon is expanding its reach in local communities that have profound impacts to the local economy. Positive social impact and sustainability are winners for producers and consumers, and yet, through it all, the distances traveled are NOT driving these shifts. Shipping prices are still cheap, and the environmental costs of such shipping belongs to no nation. It will be interesting to see if this week's UN Summit on Climate Change brings about any attempts for changes or solutions to a situation that creates the following:

""In 2009, the largest 15 ships emitted as much greenhouse gases as 760 million cars--or about two cars for every American."

Below is a map of the promises from each state at the summit. Shipping and environmental costs are not to be found in the nations' pledges. 

The folks over at McKinsey put a hopeful, yet somewhat Orwellian spin on the situation and encourage "next shoring" to encompass all of the evolving innovations including advanced robots (future overlords?), 3D Printing, and optimizing locations. There will be winners and losers, but McKinsey is hedging its bets:

"Next-shoring will look different in different locales, of course. Europe and the United States have impressive advantages in areas such as biopharmaceuticals, automotive engineering, and advanced materials. China, meanwhile, is quickly climbing the expertise curve, with increasingly sophisticated corporate and university research facilities and growing experience in advanced processes and emerging industries."(McKinsey's Source: See Gordon Orr and Erik Roth, “The CEO’s guide to innovation in China,” McKinsey Quarterly, February 2012; and “China’s innovation engine picks up speed,” McKinsey Quarterly, June 2013.)

Clearly it appears that efforts to combat massive overseas shipping would go far in combating climate change, and yet, the impact of shipping is not at the forefront of the conversation. Clearly, shipping reforms are needed, but in the open seas, its very hard to bring order to the chaos on its own and with no specific nation at the helm. 

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