ifwla - Warehousing and Logistics International

36 North America
ABOVE:
A ship
in dock at
Port Metro
Vancouver
Issue No. 3
manufacturing country by shifting
manufacturing inland, making huge
transportation infrastructure investments
and maintaining beneficial tax
and exchange rate policies. However,
the long run trend in every competitive
factor indicates that manufacturing
costs will increase faster in China
than in competing low cost countries.
This is compounded by the trend towards demand driven
supply chains that seek to postpone the final processing
of the product until demand is known with certainty.
Mexico is the ideal compromise of low cost and
proximity to the U.S. market allowing responsiveness to
demand changes. Near sourcing from Mexico will
increase and other Asian countries will grab export
share. Products manufactured in Mexico will move
directly by land while products exported from India are
more likely to be transported to eastern and central
U.S. markets via East Coast ports. This will reduce the
share of inbound containers via the West Coast and the
size of the market for which PMV is competitive .
Some of these factors are also impacting the destination
of imported goods in North America. For example
wage rates have shifted manufacturing growth from
north central and east coast location to south central
and southwest locations and the population has followed
as noted above.
Potential Competitive Scenarios
Based on likely directions in the factors identified
above, the following competitive environments and
scenarios are posited for PMV over the near, medium
and long run. In all of these scenarios, PMV continues
to be the dominate gateway for imports from Asia des-
tine to Canada.
2010 to 2015
• The world has recovered from the recession. China
continues to be the main source of imports to North
America and resumes its high growth in exports to N.A.
• China has maintained it competitive advantage as a
low cost manufacturing center by shifting some of its
production to inland China where wage costs are lower
and connecting those locations to the coastal ports with
huge infrastructure improvements.
• Much of the import traffic growth is to the central
U.S. with gradual shifting of economic activity further
south.
• PMV effectively competes with Seattle – Tacoma and
LA-LB for this traffic due to the reliable service reputation
that it has earned.
• The reliable service was achieved through joint
improvement processes between the gateway/corridor
stakeholders, joint (public-private) infrastructure
improvements funded through the APGC program and
an innovative industrial relations environment affecting
labor from port to final destination.
• U.S. gateway competitors make substantial infrastructure
improvements but institutional barriers prevent
comparable levels of cooperation in competing U.S.
gateways and corridors.
• PMV captures larger share of growing traffic base
from North Asia to central and south central U.S.
2016 – 2030
• China maintains its low cost country status but
growth in exports to North America begins to slow.
• Portion of historically high growth of exports to N.A.
lost to countries in Southeast and South Asia where
www.warehousinglogisticsinternational.com