After placing an order online, the order is automatically transferred to the e-commerce storage center. All the goods in the storage center are transported from the factories of various brands by driverless trucks. After the truck delivers the goods, the warehousing robot automatically unloads and enters the warehouse.
After receiving the order, the warehousing center sends instructions to the warehousing robot. The latter goes to the corresponding warehouse area to find the shelves. With the cooperation of the intelligent mechanical arm, the goods are picked.
Then, the warehousing robot sends the goods to the packaging robot, packs and pastes the logistics bill, and then delivers the package to the drone or delivery robot, which will directly deliver the package to the consumer’s door.
From consumers placing orders to delivering packages to their doorsteps, the entire process behind them is done intelligently and unmanned. Is this a scene only in science fiction?
Not exactly. In fact, it is coming towards us. Although it will take time to be completely intelligent and unmanned, they have penetrated into the basic links of logistics such as warehousing, transportation, and distribution.
“The development of logistics technology has gone through the stages of mechanization, automation and nowadays has reached intelligence”
In the mechanization stage, logistics machinery and equipment appeared one after another and used in logistics activities, but the application of computers was still very few, the automatic control system was few, and the automatic stereoscopic library was only applied in a limited number of fields.
In the automation stage, automated stereo libraries are gradually popularized, and AGV (Automatic Guided Vehicle) technology and a series of management systems are born.
In the intelligent stage, the production logistics system taking the opportunity of Industry 4.0 was applied on a large scale, robots, drones, and “goods to people” and other technologies emerged one after another, and various traditional technologies and emerging technologies began to integrate. At this stage, modern information technologies such as the Internet, big data, cloud computing, and artificial intelligence have become mainstream.
We also see that logistics companies, e-commerce companies, and solution providers such as UPS, Amazon, Tucson Future, Ignore Iris, etc. are all exploring, testing, and landing the application of these latest technologies in different links in the logistics field .
“The era of unmanned smart logistics is coming soon”
In the future, unmanned warehouses can coordinate systems and equipment through intelligent means. People will participate in warehouse operations as administrators and monitor the normal operation of machines and intelligent equipment in the warehouse.
One day, unmanned driving has completely replaced the role of driver, and the car has become a highly automated means of transportation. The real intelligent matching of the car and the cargo will be a revolution in the whole logistics transportation mode.
At the same time, at the end of the future, we can make our own choice: let the courier deliver it to the door, pick up the package at the courier downstairs, or deliver it to the door by the drone.
With the strong promotion of emerging technologies such as the Internet, big data, cloud computing, artificial intelligence, and robots.
3M company ,acronym for Minnesota Mining and Manufacturing company, the 3M Company is an American multinational conglomerate corporation operating in the fields of industry, worker safety, health care, and consumer goods.
With over 79,000 employees, they produce over 55,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental products, electronic materials, medical products, Car care products(like sun films, polish, wax, car shampoo,treatment for the exterior, interior and the under chassis rust protection) electronic circuits and optical films.
The History of 3M
Five businessmen founded the Minnesota Mining and Manufacturing Company as a mining venture in Two Harbors, Minnesota, in 1902. The goal was to mine corundum, but this failed because the mine’s mineral holdings were anorthosite, which had no commercial value. Co-founder John Dwan solicited funds in exchange for stock and Edgar Ober and Lucius Ordway took over the company in 1905. The company moved to Duluth and began researching and producing sandpaper products. William L. McKnight, later a key executive, joined the company in 1907, and A. G. Bush joined in 1909. 3M finally became financially stable in 1916 and was able to pay dividends.
The company moved to St. Paul in 1910, where it remained for 52 years before outgrowing the campus and moving to its current headquarters at 3M Center in Maplewood, Minnesota in 1962.
Nowadays, 3M has operations in more than 60 countries – 29 international companies with manufacturing operations, and 35 with laboratories. 3M products are available for purchase through distributors and retailers in more than 200 countries, and many 3M products are available online directly from the company.
3M products are sold through numerous distribution channels, including directly to users and through numerous wholesalers, retailers, jobbers, distributors and dealers in a wide variety of trades in many countries around the world. Management believes the confidence of wholesalers, retailers, jobbers, distributors and dealers in 3M and its products — a confidence developed through long association with skilled marketing and sales representatives — has contributed significantly to 3M’s position in the marketplace and to its growth. 3M has 157 sales offices worldwide, with nine in the United States and 148 internationally.
3M has established many overseas subsidiaries, which is responsible for management of local marketing, and procurement of raw material. Take asian market as an example, 3M launched their sub-company in Singapore many years ago, in order to conduct Asia Pacific area business, until now , the Asia Pacific market devoted almost 25-30 % margin profit to 3M sales performance, and approximate 70% in entire overseas sales performance for 3M.
In addition, their factory was established in Jiangxu Province China, where located in a clusters of manufacturing and raw material exporting area.
Consumers, especially young consumers, prefer to purchase the required products in convenience stores and online shopping channels. At the same time, offline shoppers pay more attention to a pleasant shopping experience and promotions. Compared to physical stores, the relatively low prices of online shopping channels, convenient price comparison methods, and the ability to provide home delivery services are the main motivations that drive consumers to choose online shopping.
Public information shows that Carrefour China is also shrinking its stores and has closed some stores in cities such as Kunshan, Hefei, Shaoxing, and Hangzhou. According to relevant statistics, there were more than 15 Carrefour stores in Huaguan in 2015, and the first half of this year Carrefour closed three more stores in China.
Under heavy pressure, Carrefour’s transformation seems imperative.
In Carrefour ’s vision, its O2O business will integrate rich offline product lines and store resources, relying on offline stores to provide consumers with store delivery, mobile payment, app applications, and store return services.
But the reality is:
No matter how beautiful and developed the online platform is, the functions are perfect. Without traffic, it is equivalent to opening a physical store in the old forest in the mountains. Many companies tend to divert from physical stores to self-built platforms, and registered users grow rapidly, but the actual operation cannot be achieved, and the problem is that they do not control the traffic entrance. The e-commerce giants have tightly controlled this and will not give newcomers a chance. You pay a lot of money for users to install your app, which is often easily deleted by the user, or even if the user does not delete it, it is left behind. “
On the other hand, logistics, as one of the most critical elements of O2O business, also determines the stickiness and repurchase rate of users to a certain extent. According to reports, in Beijing, Carrefour chose a professional third-party cold chain logistics company-Vientiane Logistics. At this stage, users in the Beijing area can deliver the next day as soon as possible after ordering, and room temperature products that are ordered after 5pm can only be delivered the next day. This delivery time does not have an advantage in various home-to-home businesses that are fully blooming, such as speed and one hour.
Although they did a lot methods to improve their business, but eventually failed in logistics integration, leading to 19 years of withdrawal from China.
Madrid, March 26,2020. – Correos Express – Group Correos urgent parcel subsidiary, They will collect all the healthcare material donated by the company free of charge and distribute it to reference hospitals throughout Spain.
The objective is to supply urgently, quickly and efficiently to hospital centers due to large influx of those infected with Covid-19, in a week that is highly critical.
“We want to provide all healthcare professionals with all the material so that they can work in complete safety,” defends David Barrero, Operations Director of Correos Express.
Whether a company is worthy of the people to trust it, buy their services, and delivery our truth to them, as to buy their stock, can be seen when the country’s difficult times, what this company did to their “mother”, and what was returned to the country.
Judging by a company’s value and corporate beliefs, whether this company can grow long-term, whether it can become stronger and stronger, and whether it can be worth the investment.
Under the severe situation of the epidemic, what adjustments have the express companies made to the logistics and distribution business and the express staff?
Due to the impact of the epidemic, nearly half of the company’s operations were suspended, resulting in reduced logistics requirement, and the corresponding number of logistics company staff on duty decreased to meet the requirements of normal operations.
Since there are different areas with different situation of epidemic, the company has been cancelled some routine of transportation to some areas, in order to avoid their staff to be infected.
All the courier wear masks, gloves, and keep a distance of 1 meter from the client to implement non-contact pickup and collection service.
Although the service process may not be as efficient as usual, the safety factor is very high, which reassures customers. This is also the value of a logistics company.
All of this cannot be said to be perfect, but it is necessary. I hope everything passes as soon as possible.
Economic crisis, a familiar and unfamiliar word to all of you, but you know that an economic crisis has come quietly.
Affected by this epidemic, the country ’s economy has stopped advancing, enterprises and factories have ceased production, and many industries have been implicated, losing a lot of money. Although this is only a temporary impact, through this fuse, a series of reactions will be triggered.
First of all, the US stocks experienced three fuses in a short period of time, the stock markets of other countries were also in a downturn, and the relatively value-preserving gold and bitcoin prices continued to fall. Although we cannot predict future trends, this is not a good start.
If the economic crisis comes, how will the supply chain be affected? And how will it develop?
In the economic crisis, people have reduced unnecessary expenditures. Similarly, the expenditure and demand of enterprises will also decrease. Many overseas branches or factories have moved back to the headquarters one after another, because this can improve the flexibility of the supply chain. The definition is to maintain cost-effective delivery capacity in the face of large fluctuations in unplanned demand and is currently considered to be the most critical factor in global supply chain management.
According to the sources of risk in the supply chain, supply chain risks can be divided into two categories, external risks and internal risks.
The external risks of the supply chain include natural disasters, social risks, changes in the economic environment, laws and regulations, and so on. Internal risks within the supply chain include market demand risk, procurement supply risk, order fulfillment and logistics delivery risk, internal operational risk, financial risk, etc.
The way to improve the supply chain can be from the perspective of the supply chain: choosing the right supply chain partners, inventory management under the supply chain, cost management under the supply chain, information technology and customer relationship management.
We all know that many processes are involved in the logistics process, and each process requires the assistance of humans or machines. In these processes, errors will inevitably occur, which will lead to the loss of goods, damage to packages, or long transit times. It will bring a lot of expenses to the logistics company, the cost rises.
However, can we now combine blockchain technology to achieve the decentralization of the logistics industry, so that each link is relatively independent, but stable?
First of all ,What is blackchain ?
Blockchain is a distributed ledger, a technical solution for collectively maintaining a reliable database through a decentralized and de-informative approach.
From a data perspective, the blockchain is a distributed database that is almost impossible to change. The “distributed” here is not only reflected in the distributed storage of data, but also in the distributed records of data (that is, jointly maintained by system participants ).
From a technical perspective, blockchain is not a single technology, but the result of the integration of multiple technologies. These technologies are combined in a new structure to form a new way of data recording, storage and publication.
Features of the blockchain
Openness and consensus
Remove the center and Remove the trust
The transaction is transparent and the two parties are anonymous
Tamper-proof and traceable
What are the benefits of applying blockchain to the logistics industry?
Ensure the safety of the goods and avoid the loss of packages by express delivery. – Relying on blockchain technology, it can truly and reliably record and transfer capital flows, logistics, and information flows. The logistics industry uses the basic blockchain platform to optimize resource utilization, reduce intermediate links, and improve the overall efficiency of the industry.
Optimize cargo transportation routes and schedules
In his 2017 annual shareholder letter, Amazon.com CEO Jeff Bezos lauded “divinely discontent” customers as innovation drivers. This is how he described their impact (emphasis added):
“It may be because customers have such easy access to more information than ever before — in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something is in stock, find out how fast it will ship or be available for pickup and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.”
2018 TOP 100 PRIVATE CARRIERS:
The bolded line is key, explaining why Amazon’s acquisitions have shaken markets — the Whole Foods acquisition prompted a $12 billion drop in grocery shares and the PillPack acquisition triggered a $15 billion pharmaceutical share drop. Consumer retail may have taken the first hit, but customer expectations are upping the ante in every vertical. Not even business-to-business commerce is spared from these changing expectations.
Freight industry executives likely sighed with relief when an update of Amazon’s logistics.amazon.com page on June 28 turned out to be nothing more than a franchise model for courier delivery services. In other words, last month’s announcement was a stay of execution, not a reprieve, and it’s only a matter of time before Amazon reveals plans for a comprehensive logistics network.
Amazon is at the nexus of e-commerce, data and logistics, with a drive to constantly improve its logistics network. According to its 2017 annual report, more than a quarter of Amazon’s third-party sales (which represent half of Amazon’s sales) are cross border. Fulfillment and global logistics is increasingly a goal in and of itself. The company’s early 2018 competition assessment noted that “companies that provide fulfillment and logistics services for themselves” are competition. In other words, if you’re shipping your own goods, you’re competition.
But two other angles spell out Amazon’s broader logistics play even clearer:
• Amazon’s global logistics footprint.
• Amazon’s logistics hiring plans.
The global logistics footprint
At more than 243.5 million square feet, if all of Amazon’s distribution and fulfillment space were laid out side by side, it would spread across a quarter of Manhattan. That’s 258 operational facilities in the United States and another 486 distributed around the world.
In the United States, this sprawling network is defined by a range of different services, from Prime Now hubs near urban centers to fresh food and Whole Foods delivery goods, and, of course, fulfillment, sortation and delivery stations. Amazon also operates nine inbound cross-dock centers, used to consolidate or break imported shipments and then funnel them to the relevant fulfillment centers. Across 20 additional countries, Amazon’s other centers are predominantly focused on fulfillment and delivery stations, while some countries, such as Italy, the United Kingdom, Germany, France, Spain, Singapore and Japan also have Prime delivery facilities.
Let’s talk about trucks, planes and ships
Amazon’s trucking fleet is expanding rapidly; it launched in 2005 with the purchase of thousands of trailers used to shift goods between fulfillment centers. While industry chatter claims that Amazon may have as few as 300 actual power units, there is talk of aggressive recruitment for fleets with their own power units to move the trailers purchased in the past.
Amazon Air (once called Prime Air) boasts a fleet of 32 Boeing 767-300s, on track to grow to a sizable 40-aircraft fleet. By comparison, that’s almost as large as the 15th largest U.S. passenger fleet. Not huge, but it’s only going to grow. The planned 210-acre Amazon airport in Kentucky will support up to 200 flights daily.
There’s been less progress, though, with ocean freight since Amazon registered as a freight forwarder several years ago. That’s not to say Amazon isn’t staffing up; it recently snagged the former CEO of UTi, once a top-20 global freight forwarder, to run its logistics program. And the career data below spells out a strong ocean slant.
Amazon Fulfillment
Most of the attention so far has been on fulfillment. That’s not surprising, given that Amazon’s shipping costs grew from $11.5 billion to $21.7 billion between 2015 and 2017. Last year, fulfillment accounted for 14.2% of net sales, up from 12.5% in 2015.
Industry estimates still peg Amazon as delivering some 5-10% of its goods itself, complemented by a range of courier partnerships (perhaps, soon to become direct competition) and their now famous (or infamous) relationship with the U.S. Postal Service.
As expected from Amazon, there are a number of other highly innovative (and slightly crazy ideas) in motion too, such as crowdsourced deliveries from external contractors (more on Flex’s development below), delivery to car trunks, remote door access to Amazon couriers, Amazon lockers, apartment hubs and dozens of drone delivery patents. The aforementioned franchise delivery business model recently joined the rank of Amazon delivery, giving Amazon the ability to grow its own courier network without having to shoulder too much of the financial burden. Amazon has also been rolling out more consumer-facing tracking capabilities with an app for U.S. customers to track exactly where their package is every step of the way.
With such an extensive delivery footprint, it’s no surprise Amazon is contemplating productizing its pickup and delivery service in the shape of Shipping With Amazon, a third-party delivery service.
But all of this was already known. What about how Amazon’s logistics plans play out in plain view … on its career site?
Amazon logistics hiring plans
Amazon currently lists about 17,700 full-time vacancies on its website, including about 920 in the logistics and transportation sector. In other words, about 5% of Amazon jobs are in logistics.
Interestingly enough, some past Freightos research found that a similar 5% of jobs at enterprise logistics providers are in the information technology sector.
About half of these jobs are in the United States, and half of them based out of Amazon’s Seattle headquarters.
With Amazon’s global footprint, it wasn’t surprising to find out that it has logistics positions open in 23 countries.
Going more senior
More than half (60%) of the advertised senior vacancies require at least four years of experience. That’s not to say that experienced logistics services aren’t in demand — more than 10% stipulate at least seven years of experience. Diving into the senior positions a little further, it became clear exactly where the company is moving — cross-border trade and international logistics, while improving courier delivery.
The lion’s share of the 14 jobs requiring more than 10 years of experience are either technology related, like a principal machine learning scientist, or long-distance freight, whether it’s a European Union supply chain program manager, a senior intermodal manager or a principal for Amazon Global Logistics’ cross-border unit.
There are also four non-assistant logistics roles in Amazon’s secretive Lab126, responsible for Amazon’s in-house devices such as Kindle and Echo. These positions are focused on operational roles for rapid manufacturing, inventive packaging and fulfillment. However, logistics positions at Lab126 are few and far between, at just 1% of the open jobs there (compared with a baseline company rate of 5%).
There are also a number of positions open on the Flex team, mostly in software and operations roles. The open positions indicate a growing importance in Flex’s deliveries, across new geographies, larger package sizes and rush shipments, whether Prime Now or restaurant deliveries. There’s also a growing emphasis on communication for both delivery teams and consumers with Flex, as well as onboarding of new Flex delivery staff, delivery scheduling and more.
Global freight
Air freight figures prominently in job descriptions, with 105 mentioning air shipping. This stands to reason, as Amazon’s air freight business is very much operations-focused — shift manager, area managers, etc.
Only three logistics job descriptions explicitly mention ocean freight, backed by 10 research and development jobs related to inbound ocean freight, as well as a customer service role. However, the three ocean freight roles are all pivotal and have all been posted in the last couple of months.
With nearly 1,500 job roles across all departments for the keyword of “import” (8% of the total jobs on the website), 110 for cross-border and about 70 for cargo or freight, Amazon’s evolution into a comprehensive global supply chain is now an inevitability. Bezos has repeatedly demonstrated that providing a stellar customer experience means taking full control.
So where does that leave logistics companies? Few operate at the same scope as Amazon’s level of business. But most do already have expertise, physical networks and internal technological capabilities to differentiate. Doubling down on improving user experience had recently become the way to stay ahead. But now, it’s looking like the way not to fall behind.
If you’ve made it through the first 20 years of this century without having your industry turned upside down, that doesn’t mean it’s safe to rest on your laurels. 5G will usher in the next wave of business disruption.
Consider self-driving cars—just one example of 5G-enabled technology. Munu Gandhi, vice president of core infrastructure services at Aon, a global professional services firm focusing on risk, retirement and health solutions, expects autonomous vehicles to force insurance companies, automakers, taxi services, construction businesses and the trucking industry to rethink the way they operate.
“Think about cybersecurity, which is now a huge part of what every organization spends significant resources and focus on. It’s a board-level conversation,” says Gandhi. “5G is going to be that.”
The obstacles—as well as opportunities—differ from industry to industry, and even from business to business. But there are universal things every organization should consider to determine how 5G might affect it.
Understand The Transformative Potential Of 5G
Consider how technologically ancient it now seems to have waited patiently as your desktop’s modem slowly screeched its way onto the internet. 5G could make many things we do today seem just as quaint—and that also applies to the services we offer as businesses. For instance, consumers may never have to ask for a business’s Wi-Fi password. They’ll use 5G for every device, wherever they are.
The same is expected for connectivity inside each business: There will be less local networking inside offices and fewer closets full of servers. The question of “Why Wi-Fi?” will become commonplace.
“This is an existential question for a networking company,” says Gandhi. “[At Aon], we have a road map that says we will, in five years or less, not have networking hardware in our offices. None.”
That’s not a guess. Aon ran a field test that validated the concept of a totally wireless office. That may be surprising news for most businesses, but for the companies that provide those in-office networking services now, that’s an ominous forecast.
“They need to ask, ‘Where will new business models and value creation occur?’ and alternatively, ‘Where will the destruction of legacy business models happen?’” says Gandhi.
Learn The Components Of 5G
To understand how 5G could affect each company, business leaders have to know what it actually is. The increased speed gets most of the attention, but it’s far more than a bandwidth boost.
Bandwidth: Some high-band demonstrations have shown 5G bandwidth reaching 10 gigabits per second—more than 100 times the speed of 4G—but limited to short-range outdoor coverage. Low-band 5G spectrum enables a much farther signal, indoors and out, with reliably higher bandwidth than 4G.
Latency: Latency is how long it takes data to get from one point to another. High latency means there’s a delay between pushing a button and the desired result. 5G could reduce latency by 50 to 100 times.
Edge computing: Edge computing in 5G will allow services to execute at a cell site level. By reducing the distance data must travel, this could provide advantages for certain applications—from real-time predictive and prescriptive analytics to IoT technology.
Scale: 5G may be able to support 10 to 100 times more devices per square kilometer than current technologies, including both standard mobile devices used today and the IoT sensors that experts expect to proliferate in the 5G era.
Battery efficiency: Thanks to lower latency and edge computing, 5G is expected to dramatically expand battery life—think IoT sensors that last for years, enabling faster data transmission, analysis and insights that will help businesses be even more agile.
The opportunities and disruption will emerge from the collective impact of these multiple factors, explains Gandhi. “It’s the way all of these components intertwine that creates the exponential value that begins to enable the fourth industrial revolution—the experience economy.”
Map Out Every 5G Touchpoint
With an understanding of the scope and components of 5G, businesses can begin the process of evaluating how next-generation networks could disrupt their operations or offerings.
First, says Gandhi, business leaders need to map out their organization’s touchpoints. Examples could include the consumer experience, the enterprise experience, shipping and so on. “You have to consider the full value chain of whatever product or service you’re thinking about—end to end.”
Once those touchpoints are mapped out, evaluate each for how 5G might enable or destroy current operations or offerings.
An auto insurance company, for example, might identify a threat in one of its major touchpoints: collisions. As 5G enables autonomous vehicles, Department of Transportation researchers anticipate there will be fewer collisions, injuries and fatalities. That will lower risk, which will in turn lower premiums, which will lower revenue.
“If I’m an insurer, the negative impact to revenue through these advancements in technology is significant, potentially forcing companies out of business,” says Gandhi. And once business leaders identify these opportunities and obstacles, it’s time to get creative. “If 5G is going to enable me, how do I bring in the right leadership to think through the strategy? If it’s on the destruction side, what do I need to do to change my model so that I can be on the right side of what survives?”
Find Solutions Through Partnerships
Though the answers will be different for every business, Gandhi thinks forging new partnerships will be universally key.
“You won’t be able to do this alone,” says Gandhi. It’s only by building relationships and fostering ecosystems of innovation that businesses will be able to survive the potential disruption of 5G. But those survivors will have a green field of opportunities to innovate and capitalize on what’s next for their industries.
In education, for example, 5G could enable the delivery of high-quality teaching resources to classrooms in remote locations—as long as collaborative partnerships are in place. “[5G] will democratize education,” says Gandhi.
This principle will likely hold across industries—though the partnerships will be as varied as the array of business challenges and opportunities that emerge with 5G.
The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.
“Using China as a hub…that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.
China’s economy is getting hit much harder by the coronavirus outbreak than markets currently recognize. Wall Street appeared to be the last to realize this last week. The S&P 500 fell over 8%, the worst performing market of all the big coronavirus infected nations. Even Italy, which has over a thousand cases now, did better last week than the U.S.
China On Hold
On January 23, Beijing ordered the extension of the Lunar New Year holiday, postponing a return to work. The coronavirus was spreading fast in the epicenter province of Hubei and the last thing China wanted was for that to be repeated elsewhere. Travel restrictions and quarantines of nearly 60 million people drove business activity to a standstill.
The most frightening aspect of this crisis is not the short-term economic damage it is causing, but the potential long-lasting disruption to supply chains, Shehzad H. Qazi, the managing director of China Beige Book, wrote in Barron’s on Friday.
Chinese auto manufacturers and chemical plants have reported more closures than other sectors, Qazi wrote. IT workers have not returned to most firms as of last week. Shipping and logistics companies have reported higher closure rates than the national average. “The ripple effects of this severe disruption will be felt through the global auto parts, electronics, and pharmaceutical supply chains for months to come,” he wrote.
That China is losing its prowess as the only game in town for whatever widget one wants to make was already under way. It was moving at a panda bear’s pace, though, and mostly because companies were doing what they always do – search the world with the lowest costs of production. Maybe that meant labor costs. Maybe it meant regulations of some kind or another. They were already doing that as China moves up the ladder in terms of wages and environmental regulations.
Under President Trump, that slow moving panda moved a little faster. Companies didn’t like the uncertainty of tariffs. They sourced elsewhere. Their China partners moved to Vietnam, Bangladesh and throughout southeast Asia.
Enter the mysterious coronavirus, believed to have come from a species of bat in Wuhan, and anyone who wanted to wait out Trump is now forced to reconsider their decade long dependence on China.
Retail pharmacies in parts of Europe reported that couldn’t get surgical masks because they’re all made in China. Can’t Albania make these things for you? Seems their labor costs are even lower than China’s, and they are closer.
The coronavirus is China’s swan song. There is no way it can be the low-cost, world manufacturer anymore. Those days are coming to an end. If Trump wins re-election, it will only speed up this process as companies will fear what happens if the phase two trade deal fails.
Picking a new country, or countries, is not easy. No country has the logistic set up like China has. Few big countries have the tax rates that China has. Brazil surely doesn’t. India does. But it has terrible logistics.
Then came the newly signed U.S. Mexico Canada Agreement, signed by Trump into law last year. Mexico is the biggest beneficiary.
The blog of Logistics at MGEPS at UPV 