Source: Adapted from OECD (2005) DSTI/DOT/MTC(2005)5/REV1, The role of changing transport costs and technology in industrial relocation. Note: 2 TEU per 1 FEU. Freight rate of $1,383 per TEU based on average spot freight rates between 2010 and 2019 for Shanghai-Europe and Shanghai-US West Coast trade routes.
The cost relations between the cargo and the value of the cargo help explain the globalization level of segments in the industry. For the shoe and apparel industry, container transport costs have a very low share of the cargo value (often less than 1%). Since it is at the same time a labor-intensive activity, it is not surprising that it is also one of the most globalized. On the other end, appliances and furniture are bulkier, with container transport costs reaching up to 14% of the cargo value. They thus tend to be manufactured closer to places of consumption. The exception is flat packed furniture (e.g. Ikea) that is more prone to be offshored because of better packing density. Significant changes in containerized shipping rates will have different impacts on supply chains because of the differences in the cost structure.