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Reversal of Fortune

The foreign trade deficit is skyrocketing.

Former President Trump made “Buy American and Hire American” a priority.  During his administration, the United States made some progress.  Then the pandemic hit.

According to the U.S. Census Bureau, “The nation's international trade deficit in goods and services increased to $74.4 billion in March from $70.5 billion in February.”   That’s almost double what it was a year ago.  About three-quarters of that deficit is in consumer goods.


No wonder there is a container shortage.  No wonder we have port congestion.  The macro-economic measures tell the story.  President Biden talks about “resilient, diverse, and secure supply chain.”  Politicians can talk about it.  American industry needs to build it.

American supply chains are more vulnerable than ever.  Our supply chains are at risk.  The clock is ticking.

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It’s almost Halloween, and if your town is anything like mine, your neighbors’ yards are already littered with ghosts, witches and tombstones. 

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Keep a clear focus on enterprise priorities.

"Spot solutions are needed to help a company get through a sudden shock, but the only way to ensure agility and resilience going forward is by addressing systemic issues in a way that is intentional and focused on the long term and brings together clear priorities, well-designed repeatable processes, robust governance, and a skilled team." - Harvard Business Review

From Low Cost to Best Cost

An article published by McKinsey & Co. in August observed, “over the past year, many companies have made structural changes to their supply networks by implementing dual or multiple sourcing strategies for critical materials and moving from global to regional networks.”

This structural change pivots on the difference between low cost and best cost.  The shift extends through Tier 1 Suppliers through lower tiers.  The intent of a low-cost supply chain strategy is to present a low price to customers. A best-cost strategy adds factors beyond cost to the equation, like risk, lead time, and responsiveness.

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Digital Freight Execution: Making Win-Win Connections

As global supply chains become increasingly complicated, there are now more digital connections and business collaborations in the global shipping industry than ever before. Holding freight data in opaque, disconnected silos and relying on outdated methods of communication is not just inefficient - it’s unsustainable.

The global supply chain is no longer a linear process. Whereas before it was simply about moving freight from point A to B, now there is now a multitude of options for transporting that freight, each with its own unique set of capabilities and constraints. 

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No wonder we are short of labor in the supply chain.

America’s posture in world trade, and the underlying supply chains, are more than robust.  According to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, the United States balance of trade in goods and services deficit dropped to $70.6 billion in July.  Exports hit the highest level in real dollars since tracking began over 70 years ago.  During the recovery from Covid,, with reshoring and shifting market demands, are holding imports flat..

This success is happening despite the global disruption caused by Ukraine.  Expect our labor shortages to continue.  Expect wage pressure to continue.  Expect inflationary pressures across the supply chain to continue.

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