Transforming Supply Chains: New Era of Global Trade
In response to ongoing supply chain challenges and shifting trade relations, companies are reshaping their operations. They’re adopting nearshoring, automation, supplier diversification, and sustainability practices, the Wall Street Journal reports.
Despite all this talk about returning to normal, experts say it will be anything but as a new era of global trade emerges.
Diversifying Supply Sourcing
- Companies are decreasing their reliance on Asia, particularly China, and using more automation technology in assembly lines and warehouse operations.
- Apple, Mattel, and Hisense are just a few examples of companies moving production to other countries like India and Mexico.
China’s Shrinking Share: Asian Rivals Rising
- China’s and Hong Kong’s share of imported goods into the US has dropped from 65.6% in 2018 to 50.7% in 2022.
- Meanwhile, Vietnam’s share has grown from 5.8% to 11.8%, and Taiwan’s from 5.3% to 8.7% during the same period.
Reshoring Index Shows a Shift
Kearney’s 2022 Reshoring Index showed that domestic manufacturing growth has outpaced imports from Asian low-cost countries for the first time since 2019. This was done at a time when Asian low-cost imports increased by 11% from last year and topped $1 trillion for the first time in history.
What does this mean for trucking companies?
As companies shift toward regionalization and nearshoring, expect shorter shipping distances and increased demand for local and regional trucking services. Trucking companies may recalibrate their networks, focusing on efficient regional transportation solutions.
A diversified supply chain could also lead to more fragmented shipping routes, further pushing trucking companies to reorganize.
We’ll keep a close eye on how this new era of trade impacts companies.