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On-Shoring Gains Momentum with Global Container Crisis

The current global container and shipping crisis has many supply chain executives having a new look at on-shoring. Over the last 30 years CPG supply chains have moved overseas chasing ever cheaper labor in the developing world. The economics were clear cut and dramatic. Labor cost per unit could be as little as one tenth as that in the developed world.

Underpinning the strategy was the dramatic rise of container shipping.

With a typical container moving from Asia to the US for as little as $1500.00, the shipping cost was incidental to the overall cost of the product. An example would be if a unit could be made for $1.50 per unit overseas vs $6.00 domestically. If 400 cases of 20 units could be loaded in a container, historically the trans-ocean cost would be as little as $0.19 per unit, total landed cost is $1.69 per unit.

Under the current scenario where containers may cost as much as $30,000, that landed cost has become $5.25.

The container crisis has completely eliminated the advantage of importing this product. Add to that the time and reliability that have to be sacrificed. Trans-ocean transit times have increased from 30 to 70 days. The ports are clogged and unloading times are extended. The model that has served manufacturing so well has broken down. Most experts do not anticipate this situation “normalizing” until well into 2023.

All Supply Chain executives should be looking at on-shoring some or all of their manufacturing that can be started quickly and efficiently. Let CSA Packaging be a part of your domestic solution.

Call CSA Packaging today for your kitting, bundling, assembly and wrapping needs. There is still time to save Q4!


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