How often have you gone to your favorite coffee spot to order your usual drink for the barista to apologize and let you know that they cannot make it because they don’t have certain ingredients? If you don’t drink coffee, perhaps you noticed that your favorite restaurant or grocery store has been out of an item for several months. Or even that new couch you ordered takes months to get delivered. The challenges brought by the convenience of e-commerce (where manufacturers are shipping to personal homes and businesses versus large retailers) amplified thanks to Covid-19. The issues in the supply chain have affected a variety of industries, from appliances to vehicles, and have only become more highlighted since March 2020.
During the height of Covid-19, there was a spike in spending amongst American consumers. Although people weren’t going out to spend money, they were buying items to fit their new lives in quarantine, creating their own home offices and gyms. Most items ship from China, and with the increase of orders, there was a strain on the availability of shipping ports in Asia. This caused considerable delays in delivery. When items were finally delivered, the number of things that arrived in U.S. ports was more than truck drivers could handle, so those deliveries continued to pile up, adding additional time to the shipping of goods.
Due to the growing supply chain issues, there has been a spark of discussion regarding onshoring amongst American companies. Former President Donald Trump was a major proponent of reshoring with his imposition of tariffs and trade wars with other countries. This discussion has continued to develop among American-based companies that may partner with overseas plants and factories to manufacture their parts. Ensuring that companies get their products is more important than getting low costs on labor and materials. General Motors, Toyota, Micron Technology, and Samsung have revealed plans to create plants or conduct research development in the United States. This move could be immensely beneficial to the American public and the economy.
Why does this matter?
The start of reshoring opens thousands of manufacturing jobs for Americans. Currently, 12.5 million Americans work in manufacturing. About 25 years ago, that number was upwards of 17 million. Manufacturing is one of the professions in that people without a college degree can make a middle-class salary to provide for their families. Even in rural cities, those employed in manufacturing make more than service workers and have good benefits.
Additionally, reshoring can cause a significant decrease in the shipping time for goods since the manufacturing plants will be in the continental U.S. Additionally, companies will streamline the time between placing orders and receiving them. The days of heavily relying on overseas factories to provide parts and all the challenges associated with the issues at ports, shipyards, and factories could end. It won’t be automatic but more so a gradual process. Are you in favor of U.S. manufacturing?