Reshoring may not be the “cure-all” some American companies hope it will be
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Good morning. Happy Sunday ☀️
Due to endless supply chain disruptions, many U.S. companies are considering reshoring - bringing manufacturing and supply back to United States soil rather than relying on exporting material and labor from other countries. However, the global supply chain is deeply intertwined, and reshoring may not be as simple a solution as some are claiming it is.
Check out today’s featured article from Inbound Logistics regarding the pros and cons of reshoring, and why companies should consider the ramifications before jumping on a trend. ☕️
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Featured Article:
Reshoring? Not So Fast - Inbound Logistics
“Many companies are on a path to reshore manufacturing and supply back to the United States for several reasons, including capricious actions such as the Shanghai lockdown; future pandemics; retaliatory actions that deliberately choke supply as a response to sanctions; rising cost of transport lift from the East; rising labor costs in China; monetary manipulation; intellectual property risks; squeezing container supply; saber-rattling and outright war.”
Water Cooler Topics
🥷 Cargo theft is increasing as congestion at the ports leaves containers like sitting ducks. There has been a 30% rise in incidents at North American ports and inland facilities. There is also a heightened risk of insider infiltration, with 7% of incidents reported in 2021 linked directly to employee theft. Industries most targeted are electronics, food and produce, and beverages.
🚢 Ocean carriers received a verbal berating at June 15th’s Agriculture Transportation Coalition (AGTC) Annual Meeting. Agricultural exporters are expressing their frustrations after successfully lobbying for the Ocean Shipping Reform Act of 2022. This act gave the Federal Maritime Commission the ability to regulate detention and demurrage penalties. But the current windfall in profits has those same exporters frustrated with the lack of progress.
⛽️ US Gulf Coast fuel exports are in high demand this summer due to Latin America, slowing efforts to bring domestic fuel stateside. Surging to 1.88 million barrels per day, the Gulf Coast ramped up exports this month, rising 27% from what they were in June 2019. Restocking efforts in the US are being hampered by this move, and stockpiles are the lowest for this time of year since 2005.
The Ocean Shipping Reform Act has been signed into law: so, now what?
The Ocean Shipping Reform Act of 2022 was signed into law by President Joe Biden last Thursday. The law proposed changes to the ocean shipping industry meant to alleviate the consistent port congestion, delays, and rising costs that have riddled the industry for two years now.
The bill is also meant to better combat consumer price inflation which achieved a 40-year high this month. The legislation has been celebrated by many shippers who hope to see progress in supply chain disruptions.
