The world's supply chain has largely been manufactured and shipped from China as the supply chain has grown exponentially over the last couple of decades.
China surpassed the USA last year to become the world's largest economy with a slightly higher GDP of $17 trillion. Their middle class is growing rapidly and is eager to acquire modern conveniences.
Many remember the days when "Made in China" meant junk. They have grown well past that era.
China's population has over 1.4 billion people making up over 19% of the world. The US, while slightly larger in geographic size, has 325 million people, equaling less than a quarter of China's population. China's one child policy, which began in 1980, is still in effect, but there are many exceptions, especially if the first child is a female.
SeaRates.com provides a very broad range of time, distance, rates, shipping lines, lanes and other data needed to make logistics decisions for supply chains. They even have an app for $399.
North American carriers who are not in this chain are missing one of the biggest opportunities for freight. The world is clearly global in commerce and this should be a new mega growth opportunity for carriers.
Challenges:
We witnessed a huge logistics logjam in the Long Beach/LA port earlier this year caused by a Longshoreman's strike that significantly slowed down the delivery of goods made in China destined for the USA.
The Maersk triple e class container vessels are enormous and will never fit through the Panama Canal at 18,000 TEU and 398 meters long. However, the cost savings they offer for other lanes are significant. The unloading process takes so long to unload the whole ship that containers that can be offloaded in the first wave command the highest price premium. The last ones are the lowest price.
Meanwhile, China has turned little islands at the bottom of the China Sea into an airstrip, infuriating multiple neighboring countries.
China's recent surprise devaluation of their yuan shows they are still in a learning curve in mastering their country's economics. Even more importantly, it clearly shows what their economy impacts can be on the world is measured in real time on the world's stock markets.
The biggest Chinese brands that the USA is familiar with are ecommerce distribution companies like Alibaba, Baidu and Tencent Holdings. Generally, we are more familiar with China performing manufacturing of global brands on a "white label" basis for Apple, Samsung, etc.
China has made a remarkable change out of the Stone Age and into the 21st century while remaking some of its Marxist tendencies. China is still a communist state that has taken in broad manufacturing, but keeping democracy, free speech, free press and most of the US Constitution at bay.
China has cut a deal with Russia to buy their oil.
There has been a significant history of hacking into data banks, liberally taking patent information and manufacturing fake items that look very much like the originals.
Make no mistake, China is simultaneously the chief competitor of the USA and our biggest opportunity.
Rob Shirley is CEO of ExpresShip www.xpship.com, a strategic consultancy in the global supply chain. Contact him at rsxpship@gmail.com.
