China's Winning Warehouses

The next battle in the economic war called globalization? Warehouses.

Yep. Warehouses.

China and the rest of developing Asia are showing it's possible to cut costs even in the warehousing of goods intended for retail customers in the U.S., Japan and Europe by shipping jobs to China. So of course, that's what retailers from London to Tokyo are doing.

There's still a global logistics crisis. It's not easy -- and it is in many cases beyond the capacity of physical and electronic infrastructure -- to make sure that customers in Ohio and Osaka can tell designers in Taipei and Los Angeles what they want in a product in time for manufacturers in South Carolina and Shanghai to get parts to assemblers in Singapore and Austin in a way that lets retailers in Paris and Hong Kong have enough of the right stuff and none of the wrong stuff on their shelves.

But increasingly, the solutions for moving vast amounts of goods from coast to consumers are coming from China, Singapore, South Korea and Japan. And it's the aging ports and other infrastructure of the U.S. and Europe that are failing the challenge.

The price of the failure of the countries of the developed world to meet this challenge will be paid -- once again -- in the jobs of workers in the U.S. and other advanced economies. So much for warehouse jobs as a safe, if often low-paying, haven from relentless globalization.

The U.S. Won't Roll Over

It looks, however, like the developed world, especially the U.S., is fighting back on this front. New ports under construction should help close the efficiency gap. And the U.S. still has a major edge on China in inland infrastructure -- roads, railroads, etc. China is determined to catch up there, however, and that part of the battle has barely begun.