KM

In order for globalization to be efficient, low pay isn’t necessarily enough, because you have to move products from one location to another. That required a change in the way products are moved — the “logistics revolution.”

The time it takes to deliver a product to the point of sale is an important factor in competition. Like production, transportation now operates on a just-in-time basis. Products move faster.

The speed of trucks, planes, and trains did not change. What did was the way things are processed. Goods don’t stay in warehouses very long. Products arrive on rail and are cross-docked and moved out by truck in a matter of hours. This process has really only taken shape in the twenty-first century.

In order to make it work, the industry has created logistics clusters. These are huge concentrations of warehouses where rail, truck, air, and water transportation meet and can be coordinated, usually electronically.

You might think, “Well, this is all very high-tech.” But it turns out that it still requires thousands and thousands of workers. In the United States there are sixty of these clusters, but three stand out: the Port of New York and New Jersey, the Los Angeles and Long Beach port area, and Chicago. Each of these employs, in a small geographic area, at least one hundred thousand people.

Now, the whole idea of outsourcing back in the 1980s was to break up the concentrations of workers in places like Detroit, Pittsburgh, or Gary. But what these companies have done now, inadvertently, is to recruit incredibly massive concentrations of manual laborers.

It has evolved in a way that might shoot these companies in the foot — because here you have the potential to organize vast numbers of poorly paid workers into unions. And there are attempts to do just that.

The other thing is that these clusters are tied together by just-in-time systems — which means you have hundreds, maybe thousands, of points in the transportation system that are highly vulnerable. If you stop work in one place, you are going to close down huge areas.