Subscribe to our free, weekly email newsletter!



China will no longer be the “default” sourcing destination

By Patrick Burnson, Executive Editor
January 21, 2011

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, has joined those experts predicting a substantial boost in sourcing expenses.

“In 2011, manufacturing costs will rise,” Panjiva (http://panjiva.com/) CEO Josh Green, noted in a recent blog post.

He added that for years, China’s huge labor pool helped keep global manufacturing costs down, but wages are escalating.

“China’s move toward a more flexible Yuan amplifies the effect of wage increases. But perhaps the most important thing going on in China is the rise of its middle class — a middle class that is demanding goods and services,” Green added.

In a poll conducted with its clients, Panjiva learned that it was “jarring” for Americans to see China prosper while the U.S. held on for dear life through the Great Recession.

“Meanwhile, Chinese leaders have over a billion mouths to feed and are unwilling to take measures that could jeopardize additional growth,” Green said. “In 2011, we will continue to see an economic recovery that is uneven, and we will continue to see fear about the future as a driving force in shaping government policy.”

Green has also joined the chorus against protectionist rhetoric and more protectionist policies. While he does not see an all-out trade war, he is predicting “flare-ups” that will create headaches for sourcing executives in a variety of industries.

As a consequence, said Green, China will no longer be the “default” destination, and sourcing teams will need to grow their capabilities outside.
More of his forecast can be found at:

http://panjiva.com/blog/2011/01/03/global-sourcing-what-to-expect-in-2011#respond

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

With congestion issues and seaport gridlocks plaguing the transportation industry, air freight volumes are back on the rise. According to JLL’s annual Airport Outlook Report, global air cargo saw a 4.5 percent annual increase in 2014 and the forecast calls for 5 percent growth in 2015.

With a 3.1 cent increase, this week’s average price is $2.811, following last week’s 0.26 cent boost. The gains over the last two weeks come on the heels of a cumulative 16.3 cent decrease over the previous five weeks.

Transportation and logistics bellwether UPS began 2015 in solid fashion with first quarter revenue up 1.4 percent at $14.0 billion and operating profit up 11 percent at $1.7 billion. Earnings per share were up 14 percent at $1.12, which exceeded Wall Street expectations of $1.09, while revenue was shy of the Street’s $14.27 billion estimate.

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

Article Topics

Blogs · Supply Chain · Manufacturing · Panjiva · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA