Establishing manufacturing facilities overseas as a cost-saving measure for labor and production has been a common practice; however, businesses that want to start manufacturing operations in Asia consistently do not take into account the other costs that must be incurred with an overseas operation: the most important of these is shipping your completed items back to the US. Time to market and keep your supply chains open and running smoothly will be crucial to the success of your manufacturing operation. Often, this is not possible if your business is dependent on shipping times from overseas. For example, CNBC is reporting several factors in shipping from China; shortages of shipping containers, congested ports and new outbreaks of COVID-19 are hampering shipping supply chains and shipping even worse than usual:
“COVID is causing massive shipping delays in major Chinese ports, and jacking up already-high shipping costs as waiting times at berth “skyrocketed,” according to analysts and those in the shipping industry.
“The disruptions in Shenzhen and Guangzhou are absolutely massive. Alone, they would have an unprecedented supply chain impact,” said Brian Glick, founder and CEO at supply chain integration platform Chain.io, told CNBC.
The time delays are not the only problem; according to the New York Times the expense of getting goods out of China has increased dramatically along with supply & Chinese shippers are passing the costs to the manufacturers:
“Shipping rates for containers have continued to rise steeply in the weeks since Yantian Port reopened. The increase is widely expected to keep going as stores in the United States in particular race to restock shelves for returning shoppers and start preparing for the Christmas shopping season.
“Each week these rates go up another few hundred dollars,” said Simon Heaney, the senior manager for container shipping research at Drewry Maritime Research in London. “Nobody seems to have any answers, and the only thing we can hope for is Chinese New Year — and that’s obviously a long way off.”
These problems are not an issue for companies who wish to establish their manufacturing operations in Mexico: shipping is done primarily by rail and trucks, an enormous savings over shopping by fleet, and having your goods ready to be delivered on the same continent will give you a strategic advantage in time to market and supply chain viability over your competitors.
Here are some links for you to research and understand why Mexico is a better choice for getting your manufacturing product to market in a timely manner.
Supported by over 30 years of experience, NovaLink has provided shelter or contract manufacturing services to a variety of industries. The management team has developed the skill and talent required to avoid the 7 mistakes commonly made in new manufacturing projects. Whether it is a product that requires precision and high tolerance, or a product that has been commoditized, NovaLink operates at an advantage. NovaLink would make the perfect secondary manufacturing partner source for many company operations.
Do you need a nearshore manufacturing partner or solution for your business? Contact NovaLink today: 956-621-7362 or visit our website: www.novalinkmx.com