By Richie Lin    Photo：CANVA

The widely discussed Alternative Asian Supply Chain (ALTASIA) is the result of the widening China-USA trade war. This trade war is forcing global manufacturers to look elsewhere in Asia for new production sites. However, no single country in the region comes close to replicating China’s importance as an export hub. But a crescent of 14 countries are together beginning to provide competition. This fourteen countries include Japan, South Korea, Taiwan, the Philippines, Indonesia, Singapore, Malaysia, Thailand, Vietnam, Cambodia and Bangladesh, all the way to Gujarat, in north-western India. Its members have diversified strengths, from Japan’s high skills and deep pockets to India’s low wages. This is an opportunity for a useful division of labor, with some countries making sophisticated components and others assembling them into finished products. If you are importers and whole-sellers in USA, you will feel more and more stress of managing so wide-spreading supply chain. In the past, you can rely on one single country like China to fulfill all your requirements. The ongoing tensions force buyers to face the challenges of finding reliable suppliers from multiple countries and coordinating logistics from multiple ports to the shelves in the stores. For example, every country of ALTASIA has their own regulations, laws about setting up factories, and the infrastructure like ports, electricity in ALTASIA are also different from those in China. So if buyers purchase products from countries of ALTASIA, they will have to study one country by another to find out the suitable suppliers. They would need to spend many hours and labors to collect information and run evaluations. And the logistics will become another complex problems after they start the purchasing processes. We know the transit time from Southeast Asian countries, India to USA is different from the transit time from China. They would need to send purchase orders at different time to make sure the products can arrive to shelves of the stores at their designated time. When supply chain becomes more and more complex under Sino-American trade war, it will be more convenient for the buyers and importers in the USA to find out a company to combine the international trade and logistics services.

International trade and international logistics all play important roles in the international supply chain. International trade takes responsibility of purchasing materials and products and international trade takes responsibility of arranging ocean freight, airfreight, customs clearance or any related transportations.  In our experiences, international trade and international logistics are usually handled by two different companies. Suppose you are the importers in USA, you will use a trading company to help you survey qualified factories and use a logistics company to arrange all your containers. However, it is more convenient that we combine the functions of international trade and logistics into one single company because supply chain has become more and more complex. In the past, you can use one single trading companies to find suppliers in one single country like China. But the Sino-American trade war has pushed supply chain leave China and scattered to other countries like Japan, South Korea, Taiwan, the Philippines, Indonesia, Singapore, Malaysia, Thailand, Vietnam, Cambodia, Bangladesh, and India. It will be a laborious and exhausting job for a trading company to search for qualified suppliers in several countries. They might not have accountable partners or networks in several different countries. As far as logistics companies are concerned, building up partners, networks, or even branches in several countries is necessary for transporting products all over the world. Therefore, if the importers can combine the functions of international trade and logistics into one company, this company will help to centralize the global procurement and logistics. By integrating international trade and logistics into one company will take advantage of combined resources, networks to enhance the cost effectiveness and smooth arrangements on products and transportations. Furthermore, by combining international trade and logistics, customers will have a huge data to receive reliable resources and information to face competitions all over the world. 

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.