An unprecedented escalation mn oll prices 1s threatening the hegemony of long-distance global supply chains. The cost of shipping goods from overseas has rtsen by 40 per cent, thus eroding the competitive advantage of lower Asian wage costs. Companies that ship bulky, low-added- value goods are seeking alternative logistical solutions to reduce transport costs. One major manufacturer of paper products saved 500,000 gallons of fuel per year by relocating its distribution centres to facilitate shipping by rail. A switch to transportmg wine by barge has enabled one supermarket chan to reduce tts fleet of trucks by 5 per cent. Traditionally, American timber was shipped to China where it was made into furniture and then shipped back to the USA. But m the wake of rising energy costs, moribund domestic furniture-making centres are experiencing resurgence. Likewise, the American steel mdustry has seen production rise by 12 per cent while Chinas steel exports are down by a quarter.
Question: Companies that ship light-weight, high- value products from overseas are immune to rising oil costs.
Options:
A. true, B. false, C. uncertain
Answer: C