October 15, 2021
After years of 'Made in China,' supply chains consider alternatives
Not a Mass Exodus - Just some Diversification - which makes very good sense.
Risk factors in China sourcing
🔹Trade wars and tariffs: Tariffs as high as 25% piled on the total landed costs for importers. So far, the tariffs have remained in place during the Biden administration, and many experts don't foresee a near-term removal of the duties.
🔹Intellectual property: IP theft has been a concern for several years and was one of the reasons for the initiation of the trade war. "A lot of manufacturers are finding that their end products have been reverse engineered or stolen,"
🔹Rising wages in China: The outsourcing of manufacturing to China helped foster the growth of its middle class. As the middle class blossomed, so did worker wages. In 2015, wages in China began to exceed those in Mexico, according to a PwC analysis. The average hourly manufacturing labor wage is $6.50 in China, compared to $4.82 in Mexico. For many businesses, the increased labor cost added another factor to the landed-costs equation.
🔹Forced labor: The U.S. continues to investigate suspected cases of forced labor, including in the Xinjiang region of China.
🔹Climate: Coal is a large component of China's electricity production. The country allows certain manufacturing processes that are banned in the U.S. because they are perceived as polluting. And supply chains must also factor in the environmental costs of shipping via ocean or air. By one estimate, the environmental impact is 25% to 50% higher than manufacturing in the U.S. In addition, the Chinese cities of Guangzhou and Dongguan have some of the greatest exposure to sea-level rise under current forecasts
🔹Lead times: Procurement managers have to account for manufacturing times plus shipping times when importing from China, compared to a location in the U.S. or Latin America, for example.
🔹Transport capacity: Today's freight landscape is one of low capacity and sky-high freight rates for ocean shipping and air cargo. Ports in China, as well as Southern California, are often backlogged, creating even longer lead times for importers.
🔹COVID-19 outbreaks: The virus risk is not unique to China, but outbreaks have closed or limited operations at key transport hubs, such as the Yantian International Container Terminal and Shanghai Pudong International Airport. "China is taking a very, very, very strong stance on COVID. So, one worker can test positive, and it can shut a supply chain down for two weeks,
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November 11, 2021
November 10, 2021
Almost 2 years worth of collecting bits and pieces. Finally put it together in a montage of fraud! During the pandemic, THOUSANDS of people around the globe lost millions of dollars due to scammers claiming to sell nitrile medical gloves. You know the ones your doctor or dentist wears? Yeah, those. Yes, this affects all of us and yes, I'm talking to all of you. Many never received any kind of order at all after their large payments cleared, NOT due to the shipping crisis... Just criminals ran off with their cash. Many that did actually receive their orders - were shocked to find filthy, repacked gloves that had previously been used and washed, just stuffed in a new box. Yes, it's real. These disgusting criminals need to be stopped. We are making progress - Join the PPE Fraud Coalition! Share your dollar amount and your story! Together we can do so much more!
November 08, 2021
Douglas Stein | PPE Advantage
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