By Richie Lin.    

In the past 40 years, the developed countries led by USA outsourced the manufacturing of their products to Asian countries such as Japan, South Korea, China, Taiwan, Vietnam and Thailand. This outsourcing strategy boosted China to become the factory of the world combined with the unparalleled power driven by governmental initiatives, substantial labor forces, and foreign investments and technology. It created a most complete supply chain in one single country in the history. No matter what kind of products you want to buy, you can always find a full-fledged supply chain in China, especially in Guangdong, Jiangsu and Shanghai. People in developed world such as USA and European countries are all depending on China to provide their daily products such as clothes, shoes, houseware, furniture, and mechanical products. However, the Sino-American trade war walked hand in hand with port congestions and space shortage to create supply chain break-down from 2020 till the second quarter of 2022. This supply chain break-down is the culmination of driving the USA and European companies to switch to the nearshoring strategy. Nearshoring means companies transferring their manufacturing sites or warehouses near their customers. They can reduce the uncertainty of transit time from Asian countries when shipping lines slow down the speed of vessels and use the blank sailings to reduce the operating costs. If companies really want have better performance on delivering products as timely their customers wish, they will need nearshoring production sites or warehouses to provide materials timely. Therefore, we recommend sellers to set up overseas bounded warehouses near their customers whereas they are in USA, China, European Union, or Southeast Asian countries. Sellers don’t have to pay duty and VAT at once when products arrive at the bounded warehouse and by storing limited inventory in the overseas warehouses, customers can speed up the supply chain to handle the prompt orders from their end-users.

Suppliers and buyers all face the challenge of multiple points of origin and multiple points of consumption. They need an all-around logistics provider to provide logistics from multiple countries to multiple countries including pick up, customs clearance, freight forwarding, warehouse management and last mile door delivery. This logistics company must have full-fledged data, knowledge, experiences and networks to provide such a complicated cargo movement. Furthermore, a total logistics provider must also have well-designed IT system to provide 24 hours online tacking to track each purchase order transparently, and VMI to provide real time products in/out and inventory in different warehouses. Supply chain became more and more complicated due to nearshoring strategy. Customers need total logistics providers to optimize the flow of goods from the multiple points of origin to the multiple points of consumption.

FCL market rate reference in week 35:

• Asia main ports to USAWC USD 2100~2200 per 40GP; 
• Asia main ports to USAEC and Gulf coast USD 3100~3300 per 40GP; 
• Asia main ports for IPI points of USA is USD 4100~4600 per 40GP. 
• Asia main ports to Europe base ports and West Mediterranean: USD 2000~3500 per 40GP.

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