The Price of Goods is Up, Thanks to Globalization

Here’s one of those little facts the free traders and globalizationist forgot to mention. Last week, Wal Mart said that its cost for shipping goods to the US had doubled and if oil goes to $200, it will double again.

So last year, it cost about $3,000 to ship a container from China to the US. Today it is about $6,000 – $8,000 and if it oil goes to $200 a barrel it will be estimated to cost $15,000. Of course Wal Mart or anyone else is not going to eat that cost; they will pass it on to you the consumer.

So, lets say a container has 1,000 products that have a cost of $30 before shipping. So last year, the shipping cost was $3 per item. Today it is $6-8 per item, if oil goes to $200, it will be $15 per item. So something that might have cost $33 by the time it hit the shores of the US, now costs $37 and could cost $45, a $12 difference just in the shipping cost alone and that doesn’t include the cost to get it from the port in the US to your local store, that’s an additional cost as well! Now times that, by 80% of the products in Wal Mart or Target and you can just imagine how much bigger your bill is compared to two years ago. Add to it your cost to drive there and your ability to buy goods has gone down.

Then if you really want to have some fun, factor in the weaker dollar that makes everything more expensive that is not sourced from the US. So overall, you pay more for the very same thing, yet get no added value for that extra money you just paid. The globalization people never mentioned this when telling people how great globalization is, because they knew you wouldn’t support such a system if you knew.

There is a way to combat this, a four step buying guide that is very simple to follow. First, source locally as much as possible. Buy from farmer’s markets or local Community Supported Agriculture. Go for local as much as possible and demand those producers source locally as much as possible. This helps to minimize the swings in global commodity pricing as well as gas prices because the transportation factor is less.

Next, go national; again, demand the seller sources locally as much as possible. Where I live garlic doesn’t grow so well, but they do grow garlic in California, so that’s where I buy from. I will pay more but I will not have to pay the extra $3-15 for it to be shipped from China. If that doesn’t work, source from responsible companies that practice on the global scale. Good luck finding them, most do not open themselves up enough to really see how they get their goods to you. Last, buy from retailers that are more focused on supporting the local community than with some global agenda.

Yeah, I can hear it now; people will say that is protectionism. No, it is responsible shopping. When goods from afar cost more and use up our vital resource, that is not being responsible. It is better to buy local, save our gas, spend less on oil and have more money to go further. That’s sensible shopping.

If you don’t want to be impacted by the rise in global energy prices, you need to adjust and force businesses to adjust by spending your money in different ways, being conscious of how you get your resources and how they get theirs. Demand transparency, believe me, most will not want to be transparent because they know you will not do business with them if they are. They got us into this mess so they don’t want you knowing that. But if you prefer paying an extra $20 with no added value, do nothing, it will come. If you like to have your money go further, simple changes can make a huge difference.

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Filed under Business, Consumer Activism, Consumerism, Energy, Gas, Globalization, International Trade

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