Stress tests are designed to replicate periods of extreme difficulty, mimicking real-life situations and complex problems to determine how well a person, place, or thing copes with a traumatic situation in a safe, controlled environment. The pandemic was the crisis that stress tests are designed to prepare for. It exposed the myriad weaknesses supply chains faced when too many relied too heavily on China for too many products.
Snapping under the weight of heroic shipping numbers, suppliers have been loudly calling for alternative procurement methods such as near-, ally-, and re-shoring to diversify their ability to access inventory in times of crisis. This crawling shift away from China has led to speculation regarding whether a split is even possible, let alone feasible, in a global economy.
Problems with the conscious uncoupling between the US and China grow larger when suppliers look to countries offering lower labor costs. Typically, the labor cost is commensurate with the state of the infrastructure available to support the area supply chain. What companies save in labor they spend trying to move manufactured goods to markets.
Despite the pandemic stresses that kicked the decoupling talk into high gear, a proven track record of success keeps China ahead of other emerging supply chain bases. Similar to how the Ports of Los Angeles and Long Beach are still the best-prepared to handle the swells of cargo coming to the US from Asia despite congestion that pushed shippers to divert cargo, for all of its problems, China still is the manufacturing presence that naysayers can only hope other countries will be.
Times are far from perilous, AND we’re still not out of the woods. As we move away from the crisis and panic of the pandemic and start to see the logistics arena settle, we’re more aware of what changes might be permanent and what might be fleeting talk after years of tumult. One thing is certain, you always need a qualified, expert logistics professional in your corner to help you navigate the stormy seas of international shipping. If you want to see how Edward J. Zarach & Associates can help you build a better future for your cargo, contact your representative today.