Shipping things via train or boat is stupidly stupidly cheap, even across the planet both ways.
Totally agree on shipping. There are other benefits to proximity, from lower geopolitical and supply-chain risk to tighter integration with design and the customer (due to enhanced information flow and lower latency).
Unfortunately, human hands are still much cheaper than machines.
I see a fair bit of manufacturing in Chicago, and I don’t see any of these equations changing in the way that this article purports them to
There's a reason why low-end manufacturing is not heavily automated no matter where it occurs - automation would likely be more expensive than using humans.
Also importantly automation tends to be expensive to reconfigure - for stable product lines where the same general processes are in use for years at a time, and product variability is low (see: cars) automation is highly successful. But for product lines that are more fly-by-night (see: most fast fashion) the reconfiguration cost of automation makes it even less practical.
Retraining a group of humans is vastly cheaper and easier than reconfiguring a fully integrated automated assembly line.
Totally agree. Just pointing out how the trade-off is rebalancing the margin at which reshoring makes sense down, and that this is a trend one can expect to continue as industrial robots get better and cheaper.
The real limitation is still programming and training the robots. I'm just entering this field, and its fun but yah it takes a team of expensive talented engineers to do it. Especially if you're automating to a higher degree. The progress with AI has been huge but I'd guess on the order of a decade before its commonplace.
At a certain point of automation, America’s energy-cost and proximity advantages outweigh its cost of labor and regulation. This tradeoff as a whole occurs against margin, which is why we’re seeing middle manufacturing reshoring.