Sharp Price increase at Grizzly

[James Cantwell]

I just got back from the Grizzly outlet in Muncy where I picked up their 2012 catalog. First let me say that I like Grizzly tools and I have spent time drooling over some of their larger items just wishing I could afford them. With that being said I have spent the better part of a year researching various planers, jointers, band saws and dust collectors to upgrade the very antiquated tools I have been using for the last 15 years of build canoes, furniture, and misc items for friends and family. I am by no means a master and just consider myself a hobbyist. Needless to say some of my tools are second and third hand and even a couple are salvage items but they got the job done. (With a few minor curses and mumbles under my breath when the kids were not around.) With some savings I have managed to hide from the wife and kids and decision to get rid of one of my Motorcycles I have been planning on the upgrades I have always dreamed of.
Being that I work internationally in the corporate world I know about cost increases and the necessity of them. But wow. Everything it seems across the board. Some increases over 23%.:eek: A 6 inch jointer (G0452) going from 445 to 550. The spiral cutter head version only went up 4%. Most items went up between 5 and 8%. It seems like quite the jump in these economic times. Their ultimate 14” band saw (G0555) went up 16%, and the 17” (G0513P) went up 12%. Most of the items now say Made in Taiwan. Don’t get me wrong but I thought that going oversees were to reduce manufacturing cost. (I know the company I work for did the same thing in order to keep our prices down. The 2Hp DC unit I was looking to purchase went up 18%.:confused:
I want to state that I have a Grizzly Table saw and find that it has performed better than the operator. I do like grizzly but am curious if any you out there are seeing the same level of price increases for the same tools this year. Did the whole industry go up or is Grizzly just correcting their balance sheet?:confused:

[glenn bradley]

Go pull your 2008 and 2009 catalogs if you want to see some change ;-) I assume there is some wisdom in the madness; the G0691 only went up something like $40. Whereas the oscillating sander I covet but decided not to buy at $1395 is now $1595. That tells me they are having no problem moving them but, those prices are creeping up on high quality American made goods ;).

[Brian Palmer]

Heading down there tomorrow. Want to check out the new G0733 an maybe if they have a G0698 see what kind of discontinue deal they might give, and possible a G0555x band saw.

[Gerald Jensen]

I have heard a couple of warnings over the last couple months about price increases coming in January ... looks like they are arriving. And not just tools ... for example, a flooring company that advertises on a local radio station has been talking about the carpet mills increasing prices this month, and my lanlord just hiked my rent by $100 a month.

-- Gerry

[Lloyd McKinlay]

I visited a drywall wholesaler the day after Christmas where a sign on the counter said prices were increasing 35% Jan 2. Visited my favorite paint store where the owner talked of 15-20% wholesale price increases last year. Purchases some lacquer from a cabinet supply shop and the price has jumped roughly 60% in the last 2 years.

[Rick Cicciarelli]

Overseas marketing strategy: Decrease prices on everything to the point where Americans have no choice but to buy foreign made items, even it it means paying workers in fish heads. Once Americans take the bait, hold out as long as possible on low price manufacturing, driving all American manufacturing out of business. Take over world. Once there is no longer any competition, bring prices back up where they 'should' be.

[Cary Falk]

I think Grizzly resisted as long as they could. I have not seen the 2012 catalog yet but over the last 3 of 4 years their prices haven't increased that much compared to other companies. I got what I think was my last large tool purchase out of the way last year.:rolleyes: If you really want sticker shock take a look at PM or Jet. I think their increases last year alone match what Grizzly has increased over the last 5 years.

[Bruno Frontera dela Cruz]

I am in the coatings business and I can tell you that raw materials continue to rise, even on acrylics. It is usually decoupled from oil, but heck oil is back over $100.


I visited a drywall wholesaler the day after Christmas where a sign on the counter said prices were increasing 35% Jan 2. Visited my favorite paint store where the owner talked of 15-20% wholesale price increases last year. Purchases some lacquer from a cabinet supply shop and the price has jumped roughly 60% in the last 2 years.

[David Hostetler]

It's not just Grizzly... There was a discussion in the turners forum here the other day about the same thing. Even lowly Harbor Freight is doing the same thing...

[Ray Newman]

Rick C: BINGO!

But if you really want to see price increases, go grocery shopping and shop for meidcal insurance.....

[David Kumm]

It should not come as a surprise. Food, energy, materials have all increased. Our inflation numbers are understated due to the formula that factors low interest rates and decreasing house values into the results. We have inflation and Asia has even higher inflation. As their wages rise more quickly than ours- due in part to the low starting point, we will all have inflation. Look at the price increases for Euro equipment over the past few years. it's coming from all directions and probably necessary to fund the world's debt repayments.

It is not the fault of the Asian marketing strategy for the loss of manufacturing here. It is our love for cheap prices that comes at a high cost. Dave

[John Coloccia]

Most of the items now say Made in Taiwan.

I think most of them use to say "Made In China" so this isn't necessarily a bad thing. Not sure if it accounts for the increase, though. EVERYTHING has gotten more expensive. Raw materials are through the roof, at least the ones I'm familiar with. That's simply a symptom of Asian inflation and a weak dollar. Inflation overseas is easing if we're to believe reports.

On the other hand, it looks like the Euro may crash and burn sometime soon, so start saving up for those Festools and MiniMax's :)

[Brian Palmer]

I read an article in a the paper the other day about how the Asian countries have figured out the higher wage thing and that in the next 2-5 years a million jobs are going to return to the U.S. because it is cheaper for many things now to just build them here than it is to pay them to build it and ship it over.

[david brum]

I think we'd better get used to it. The minimum wage went up almost 25% in some parts of China this year. Couple that with the ever increasing consumption of raw materials in China and you can see the handwriting on the wall.

It does seem like Grizzly has more Taiwanese product this year. In a morbid but fascinated way, I wonder what they know that we don't (yet).

[keith micinski]

I was not happy the other day when I paid an extra 70 dollars for my new Grizzly planer. That having been said, the bottom line is everyone complains that stuff is made overseas and they want it to be made here. They also want to keep getting paid top dollar in their job and pay bottom dollar for products. If you want cheap things it has to be made overseas for cheap labor. Once labor raises overseas the price goes up. Look at this way maybe now companies will start coming back here someday.

[David Kumm]

I think most of their stuff was always Taiwanese. It is only recently that the bar has been lowered enough that "Made in Taiwan" is positive marketing. Not saying Taiwan manufacturing is bad, but it took China to give them real credibility. Dave

[Van Huskey]

I am not sure they have moved any significant amount of manufacturing from China to Taiwan, all the items that I knew the country of origin of remained the same. They are just advertising the fact that a lot of their stuff is made in Taiwan as the general assumption is that is better than China either in quality or politics.

The prices were coming and I think Grizzly held off as long as they could. Anyone with a catalog can read the letter inside the front cover from Shiraz, I don't think the 2012 catalog is online yet.

[Jim Andrew]

When government spends more than it takes in, and prints money to pay the difference, the result is money that is dropping in value. (Because there is more of it).

[Bruno Frontera dela Cruz]

The consumption of raw materials should not be discounted in this discussion. When I was in china last year, I could not believe how many empty buildings there were, entire city blocks of high-rise condos were built and remain empty, and yet the building continued. If their markets and data were not as manipulated as they are, there would be a housing and real estate crisis of epic proportions there right now, supply is way outpacing demand unless more people are moved from rural areas to the city to fill the buildings.


I think we'd better get used to it. The minimum wage went up almost 25% in some parts of China this year. Couple that with the ever increasing consumption of raw materials in China and you can see the handwriting on the wall.

It does seem like Grizzly has more Taiwanese product this year. In a morbid but fascinated way, I wonder if what they know that we don't (yet).

[Anthony Whitesell]

I have been reading and thinking for some time that we, as an economy/society/country, are about to be in trouble. When the cost of living rises more per annum than pay, how are we supposed to continue? To stay in the black, we have to cut back. But the companies "need more" money so they raise prices, then more people cut back, so they raise prices. This can't continue. Companies have to realize that they are only allowed a percentage of the payroll and when they attempt to take more than their share (as in raising prices more than the average pay increase) they aren't going to get as much as they think.

[Damon Stathatos]

...our inflation numbers are understated due to the formula that factors low interest rates and decreasing house values into the results...

The above is 'spot-on.' Add to the fact that fuel and food prices are not fully factored in and you will begin to understand what a 'crock' the reported rate of inflation really is. Heck, food and fuel are the only things I can afford to buy anymore because there's nothing left over for anything else.

All factors point to us going into a type of hyperinflation. Not exactly a post-war-Germany hyperinflation but an inflation to the magnitude of exactly what you're seeing in the Grizzly catalogue. As others have pointed out, check out the prices of everything around you and you'll realize that Grizzly is not alone, the same is happening with practically all goods (and services). You just can not indiscriminately print money (aka Quantitative Easing, the 'gentler' term for it) and expect other countries to accept the same amount of dollars now as before for the same goods.

Lastly, as other economies around the world (Asia) expand and ours shrinks, the value of our dollar lowers, effectively pushing the prices up even more. I hate to be a 'doomsayer' but this is only the beginning of what's to come. The onset of of this period we're starting and about to go through had been delayed and dampened a bit due to the heretofore global slowdown, but once it 'catches fire' there's not much to stop it other than an renewed expanding domestic economy. And even then it's only offset by higher wages, property values, and the like, and never really truly reversed to previous levels. About the only consolation you can take with all of this is that the stuff you currently own actually rises in value as well but that's of small comfort every time you need to 'shell-out' for something new (like the 'new' food or 'new' gasoline and electricity we all buy everyday).

So hang on folks, we're in for one wild ride...

[Bruno Frontera dela Cruz]

A weak currency can be a good thing too...it will allow US-made products to be more competitive in the global market and like it to not we live in a global economy.

This next point is not meant to offend anyone or make an over generalization, but I think that wood working is a hobby for most (not all) folks on this forum. So in the spirit of keeping things in perspective, we still have it pretty good to be complaining about the cost increase in our hobby when many folks in the world don't even know what a hobby is.

[David Kumm]

A weak currency can be a good thing too...it will allow US-made products to be more competitive in the global market and like it to not we live in a global economy.

This next point is not meant to offend anyone or make an over generalization, but I think that wood working is a hobby for most (not all) folks on this forum. So in the spirit of keeping things in perspective, we still have it pretty good to be complaining about the cost increase in our hobby when many folks in the world don't even know what a hobby is.

Correct. As doom and gloom as I can be, our standard of living is still high. We tend to look back at the "Leave it to Beaver" time in idyllic terms but in the 50s,60s, and even 70s the houses were 1200 sq ft, one car garage, one car, no boats, snowmobiles, ATVs, on and on. Anyone who believes our lifestyles can't revert to that or worse is fooling himself. You may have to be fit to survive in the future just as it was necessary in the past. I digress. Dave

[John TenEyck]

Yes, the price of everything has increased noticably in the past couple of years. But the price of nearly everything is cheaper now, as a percent of our income, than at almost any time in the past. Don't believe it? A couple examples. My mom often told me that her mother would send her to the store with a quarter to buy a pound of hamburger and a loaf of bread - when the average wage was 15 cents an hour. Appliances cost nearly a month's pay in 1960! Imagine paying that much today. The $800 rototiller I bought in 1982 only costs about $1000 today, which means it costs a lot less. Gasoline, jeans, food, nearly anything you can think of, even cars, is cheaper today as a percent of our income than it used to be. But let's talk wood. If you look around you can buy lumber for $1 - 2/BF. That's no more and often less than I paid for it when I started working wood 30 years ago.

No one likes to see prices increase, although we all want/expect our salaries to do so. Manufacturers have rung out most of the cost efficiencies they can get from their processes. Raw material prices have increased substantially, as noted above. Something's got to give to maintain profit and, yes, companies do need to make a profit to stay in business. Add it all up and the increase in prices you're seeing are to be expected now that the economy is improving.

If you don't want to pay the higher prices for woodworking machines, do what I do. I buy used, mostly American made, equipment that most often only needs a little TLC. But I love that shiny new paint look as much as the next guy - so I give them a new paint job.

[Bruno Frontera dela Cruz]

Correct. As doom and gloom as I can be, our standard of living is still high. We tend to look back at the "Leave it to Beaver" time in idyllic terms but in the 50s,60s, and even 70s the houses were 1200 sq ft, one car garage, one car, no boats, snowmobiles, ATVs, on and on. Anyone who believes our lifestyles can't revert to that or worse is fooling himself. You may have to be fit to survive in the future just as it was necessary in the past. I digress. Dave

And with our skills as woodworkers and obvious lack of tolerance for laziness (or would not have such a hobby) we will be fit to survive!

[David Kumm]

And with our skills as woodworkers and obvious lack of tolerance for laziness (or would not have such a hobby) we will be fit to survive!

Learning to speak Chinese might be as helpful. Dave

[Dave Sepucha]

Yup, I saw the same thing yesterday. I've been on the fence about getting a G055P bandsaw. The price just went from $425 to $495... up over 16% like you mentioned. Ugh. This was enough to nudge me back off the fence and remind me that I've gone this long without one, so I can continue to make due.

[Dave Zellers]

I hope all this isn't a ploy to get me to pull the trigger on the Jet 22-44 oscillating drum sander I've been lusting after...

[Bruno Frontera dela Cruz]

Here is another point from both sides of things...how often do normal people but large tools like table saws, band saws, ect? Every 5 years, 10 years, 15 years....hopefully only once in a long while unless you are unlucky or accident prone. If even if you upgrade often, you still likely have some value left in your old machine.

So yes, equipment prices have gone up 18%, but for the hobbiest when you spread that out over the life of the tool it is almost nothing. That is why I don't mind to spend $95 for a neck tie, b/c I buy them so infrequently my annual neck tie spend is maybe $30 / year vs. $10...who cares?

On the other side is the power we have as discretionary consumers using the low frequency of purchasing logic. Maybe we all decide not to upgrade the 14" band saw to a new 17" saw this year... Maybe we hunt for a good used deal instead from someone getting out of the hobby...wait and see what prices do when these imported tools sit in a warehouse for months not moving.

No, I am not suggesting we boycott Grizzly. In fact I will likely buy a 19" bandsaw from them in the next few months and justify it by the fact that it is likely the last bandsaw that I will ever need. Unless I can find a new 3hp bandsaw made in the USA for $1700 or less...

[Ray Newman]

".... the bottom line is everyone complains that stuff is made overseas and they want it to be made here. They also want to keep getting paid top dollar in their job and pay bottom dollar for products. If you want cheap things it has to be made overseas for cheap labor. Once labor raises overseas the price goes up. Look at this way maybe now companies will start coming back here someday."
--keith micinski

Anmd we have another winner!

[Rick Potter]

Wonder how long it will be till India and Indonesia undercut the Chinese, like the Chinese undercut the Tiawanese, the Tiawanese undercut the Japanese, and the Japanese undercut us.

Rick Potter

[Larry Edgerton]

Correct. As doom and gloom as I can be, our standard of living is still high. We tend to look back at the "Leave it to Beaver" time in idyllic terms but in the 50s,60s, and even 70s the houses were 1200 sq ft, one car garage, one car, no boats, snowmobiles, ATVs, on and on. Anyone who believes our lifestyles can't revert to that or worse is fooling himself. You may have to be fit to survive in the future just as it was necessary in the past. I digress. Dave

I was fortunate in retrospect that in 2003 I got stuck for $57K. At the same time I invested in an industrial park that never took off due to bad timing. It made me look at what I was doing and what is actually necessary. Simply that a relitively small number such as that hurt me that much made me make some changes.

I went from a 4700 sq. ft. house to an 1100 ft. house. My shop was 9000 ft., my new one is just over 2000 and is on the same property as my new house. I got rid of a large boat, 5 cars, 5 motorcycles, and two other houses and some property that was going the wrong way in value.

My rates, set in 1992 when I started this business, $30 an hr. site, $45 an hr. shop, have not been able to be raised since I started. I was a little on the high side in 92, and I am a little on the high side in this area still today. Problem is that my costs have skyrocketed. If I had not seen this coming and liquidated all exess I would be out of business now. The money I do make does not go near as far as it did twenty short years ago and the circumstances that made this happen seem to be accelerating. I am scrambling to have my new house/shop complex completed, and paid for, before it gets even worse. I can't sell the house I live in now for any more than I owe, value has dropped 60%, so I may just walk away. I had 60% equity in this house just 4 years ago.

I think most of us need to be figuring out ways to live on less before we do not have a choice. Even if I am wrong and things do not continue to be worse, I will be in a better position and will have to work less hours to survive, so it is a win/win.

As far as the OP, I guess I don't really care, I don't own any Chinese tools and will not in the future. But I do have to deal with the world that has created this situation.

Larry

[Kent A Bathurst]

Wonder how long it will be till India and Indonesia undercut the Chinese, like the Chinese undercut the Tiawanese, the Tiawanese undercut the Japanese, and the Japanese undercut us.

Rick Potter

Nah....I think those two have economies too advanced........Vietnam - Cambodia - Burma [if the ruling junta follows the Chinese semi-capitalism model]. Or - for those that like bets with high odds - N. Korea: reform that economy/market, and ka-boom! goes the development. There are plenty of African countries as well, if they ever find a way out of their never-ending political struggles that make investment too dicey.

[Gary Kman]

Bruno,
Good way to think about it. It looked like my G4003 metal lathe is as few hundred more than I gave for it a few years ago. All my other tools - ditto. Not surprising, inflation is older than I am. Will their replacements be higher in the future? Yes. The only question for me today, "Is it worth it today?" When I'm using it, it's price history or future is meaningless.

[Rick Fisher]

Someone mentioned the Drywall price increase of 35% .. USG, the largest manufacturer in the world will likely fail if that increase does not go through. Prices in North America have actually been artificially repressed due to low consumption over the past 4 years. The loss of profit has taken an ugly toll on many, many companies. So its logical that the same thing could have happened to Grizzly or the suppliers in Taiwan who make the machinery.

Grizzly is a great company, a true success story. They need a certain margin to keep the doors open each year and its very likely the last 3-4 years have been really ugly..

In other industries, like Drywall, the manufacturers are in trouble. When you buy hardwood lumber for $1 - $2 compared to 5 years ago.. think of the result.. how much more does it cost to ship it to the retailer today ? How much does the mill really get of that retail price ?

Sawmills, drywall companies, insulation mfg, carpet mills, door mfg, its an endless list of companies that are actually dying on the vine in the USA and Canada.. Sounds alarmist but its dead true. USG has decided they have no choice but to implement a 35% increase or become one of the Nation's huge bankruptcies. The reason was too many suppliers for too small a market .. prices hit rock bottom and this has gone on too long ..

The Inflation number in the USA is of course rubbish.. Its based on a basket of goods to use as an example ( not a real basket) .. The products in the basket are juggled to keep the results reasonable.. Imagine if the cost of housing had not fallen in so bad in the past 5 years, what would the real inflation number be ? Imagine if gasoline or food was allowed to be included in the inflation number ? There would be outright panic.

I expect to see big price increases in the price of framing lumber and sheet goods in 2012. Drywall, insulation.. all of it .. The MFG are fed up with losing money.. the weak are on the ropes, heck even the strong are on the ropes in some industries.. 2012 will have some spectacular failures if things don't improve.

[Gregory King]

This sure gives the idea of buying used machinery, a lot more attention. For me, I never felt that comfortable with a used one. Not lucky ,I guess. Bound to break in my hands. Can't blame Grizzly for the increases. Everything else does.

[Kirk Poore]

This sure gives the idea of buying used machinery, a lot more attention. For me, I never felt that comfortable with a used one. Not lucky ,I guess. Bound to break in my hands. Can't blame Grizzly for the increases. Everything else does.

Gregory, I used to feel the same way. Once I learned how to change bearings and figured out how to wire motor starters, my opinion changed. Woodworking machinery is really very simple compared to, say, cars.

Kirk

[Kent A Bathurst]

I expect to see big price increases in the price of framing lumber and sheet goods in 2012......The MFG are fed up with losing money......

I hope you are right on this one, but I'm afraid won't turn out that way. Lumber and - almost but not quite to the same extent sheet goods - is a pure commodity. The producers cannot influence the price any more than a farmer can influence the price of wheat - the price is what the market says it is. Price increases can only come from the demand side - as the demand goes up, the price will also. However, I suspect that even this will be mitigated a bit, due to the widespread number of sawmills that are idle - they are pretty easy to restart, if there has been basic maintenance performed, which increases capacity. The prices have not fallen even further because less efficient mills have been shut down right and left over the past few years, reducing capacity dramatically.

So - framing lumber prices will go up as more framing lumber is consumed - which means a rebound in housing, which is why I hope you are right. I would love nothing more than to see a rebound in framing lumber prices.

[Mike Archambeau]

I just got back from the Grizzly outlet in Muncy where I picked up their 2012 catalog. First let me say that I like Grizzly tools and I have spent time drooling over some of their larger items just wishing I could afford them. With that being said I have spent the better part of a year researching various planers, jointers, band saws and dust collectors to upgrade the very antiquated tools I have been using for the last 15 years of build canoes, furniture, and misc items for friends and family. I am by no means a master and just consider myself a hobbyist. Needless to say some of my tools are second and third hand and even a couple are salvage items but they got the job done. (With a few minor curses and mumbles under my breath when the kids were not around.) With some savings I have managed to hide from the wife and kids and decision to get rid of one of my Motorcycles I have been planning on the upgrades I have always dreamed of.
Being that I work internationally in the corporate world I know about cost increases and the necessity of them. But wow. Everything it seems across the board. Some increases over 23%.:eek: A 6 inch jointer (G0452) going from 445 to 550. The spiral cutter head version only went up 4%. Most items went up between 5 and 8%. It seems like quite the jump in these economic times. Their ultimate 14” band saw (G0555) went up 16%, and the 17” (G0513P) went up 12%. Most of the items now say Made in Taiwan. Don’t get me wrong but I thought that going oversees were to reduce manufacturing cost. (I know the company I work for did the same thing in order to keep our prices down. The 2Hp DC unit I was looking to purchase went up 18%.:confused:
I want to state that I have a Grizzly Table saw and find that it has performed better than the operator. I do like grizzly but am curious if any you out there are seeing the same level of price increases for the same tools this year. Did the whole industry go up or is Grizzly just correcting their balance sheet?:confused:

And every price increase moves the world one step closer to being able to make them in the USA again.......wonder how much of that increase is the cost of fuel to ship them half way around the world.....and how much is the rising cost of materials and labor?

[Van Huskey]

I hope you are right on this one, but I'm afraid won't turn out that way. Lumber and - almost but not quite to the same extent sheet goods - is a pure commodity. The producers cannot influence the price any more than a farmer can influence the price of wheat - the price is what the market says it is. Price increases can only come from the demand side - as the demand goes up, the price will also. However, I suspect that even this will be mitigated a bit, due to the widespread number of sawmills that are idle - they are pretty easy to restart, if there has been basic maintenance performed, which increases capacity. The prices have not fallen even further because less efficient mills have been shut down right and left over the past few years, reducing capacity dramatically.

So - framing lumber prices will go up as more framing lumber is consumed - which means a rebound in housing, which is why I hope you are right. I would love nothing more than to see a rebound in framing lumber prices.

Shut your mouth... well at least until after I get my shop built.

[Rick Fisher]

We are already seeing lumber price increases in the BC market. Specific items so far but its coming.. The forecast is higher prices by summer. BC is kinda a forestry hub and we are seeing lots of Japanese and Chinese buyers.. Japan is getting ready to so some rebuilding and China is starting to buy more and more .. its great.

On the drywall.. if the increase fails, the problem will look after itself.. It doesn't really matter weather demand goes up or supply goes down, eventually the price must stabilize to make producing a product profitable, or it wont be produced.

This is a time when the supply side is adjusting to the lower consumption.. its reached a point where its " do or die " for some pretty big suppliers in North America.

[Gary Kman]

And every price increase moves the world one step closer to being able to make them in the USA again.......wonder how much of that increase is the cost of fuel to ship them half way around the world.....and how much is the rising cost of materials and labor?

Just saw something about shipping costs. Can't remember exactly but it costs something like $130 to ship a container from China to the US west coast and another $130 will only move the same container 80 miles on land.

[Neil Brooks]

Just saw something about shipping costs. Can't remember exactly but it costs something like $130 to ship a container from China to the US west coast and another $130 will only move the same container 80 miles on land.

I think it's actually a lot more than that .....

http://www.universalcargo.com/blog/bid/46390/Freight-Rates-and-Container-Shipping-Costs-up-350-from-China

But ... depending on its final destination, the stuff may, indeed, have to travel by land (intermodal), too -- including to those companies' DCs that don't have to transport it TO their DC's, and then distribute the stuff back TO their retailers.

Former logistics guy. Getting a headache, just thinking about it ;)

The good news (?) is ... all these manufacturers have comprehensive models, on every cost element in this manufacturing and supply chain. It would take any of them about 15 minutes to tell us what would have to happen to the price of oil, labor, raw materials, insurance, etc., to make production in the US cost-effective (, again).

[Jerome Hanby]

I think much of the cost to ship material overland in the US is the stupid way we go about it. It's silly to have the interstates clogged with tractor trailers while we let our railways rot away...

[Kevin Presutti]

I've been saying that for 25 years Jerome.

[Neil Brooks]

It gets ridiculously complex, though.

Aside from the most obvious issue -- that trains don't go everywhere (think airplane travel, where you still need to rent a car, but without the massive difference in speeds), meaning ... you still have to transfer materials/containers, putting trucks on the road, anyway .....

It's about Finance, and their willingness to carry X level of inventory, Planning, and the production and planning cycle, replenishing depleted inventories, and how close to JIT (Just In Time) you want to be, to satisfy consumer demand, tolerance for "stock-outs" (store is out of a given widget), extrinsic and intrinsic factors that affect the cost of goods (do you save money by buying more, now, or by waiting), and about 3,000,000 other factors.

Two interesting links, for the TRULY bored:

LINK_1 (http://www.fra.dot.gov/downloads/Policy/ITIC-IM documentation v1_0.pdf)

LINK_2 (http://nationalatlas.gov/articles/transportation/a_freightrr.html)

[Dan Hintz]

I think much of the cost to ship material overland in the US is the stupid way we go about it. It's silly to have the interstates clogged with tractor trailers while we let our railways rot away...
I'll second the comment about railways not being everywhere, and add people would often rather have a freeway in their backyard (because they can use it themselves) than a railway (which they can't).

[Jerome Hanby]

Railways don't have to be everywhere, but they are pretty much omnipresent in or near all large cities.

[Neil Brooks]

True, Jerome, and ... here they are :)

http://www.mapsofworld.com/usa/usa-maps/usa-rail-map.jpg

The issue though is routing. Getting off a plane, running to the next concourse, and getting on another plane, relatively, is quick and easy, compared to how containers have to transfer, at railroad terminals.

So ... where the routes aren't direct, it's complicated. Where they ARE direct, it can easily involve numerous stops, along the way (like passenger train and bus travel), adding time to the route.

Those are some of the clear downsides to intermodal logistics. The inbound/outbound linehaul (getting stuff TO the trains, and FROM the trains) is another, and doesn't really take trucks off the roads, though it does tend to shorten their trips.

As I say ... there are a million moving pieces to ... moving pieces ;)

[Harry Hagan]

Yup. My generic BP medicine went up 600% in the last year.

[whit richardson]

I'll nominate you guys to run our commerce and labor departments! China is hiding it's phantom recession and real wages* for the US have been falling for years, the predicted failure of the Euro from it's inception is almost reality and next...? Hand tools can be used on that 15 acres in the stix. Maybe we should be investing in good hunting rifles and ammo along with hand planes and chisels?