ifwla - Warehousing and Logistics International

36 North AmericaABOVE:A shipin dock atPort MetroVancouvermanufacturing country by shiftingmanufacturing inland, making hugetransportation infrastructure investmentsand maintaining beneficial taxand exchange rate policies. However,the long run trend in every competitivefactor indicates that manufacturingcosts will increase faster in Chinathan in competing low cost countries.This is compounded by the trend towards demand drivensupply chains that seek to postpone the final processingof the product until demand is known with certainty.Mexico is the ideal compromise of low cost andproximity to the U.S. market allowing responsiveness todemand changes. Near sourcing from Mexico willincrease and other Asian countries will grab exportshare. Products manufactured in Mexico will movedirectly by land while products exported from India aremore likely to be transported to eastern and centralU.S. markets via East Coast ports. This will reduce theshare of inbound containers via the West Coast and thesize of the market for which PMV is competitive .Some of these factors are also impacting the destinationof imported goods in North America. For examplewage rates have shifted manufacturing growth fromnorth central and east coast location to south centraland southwest locations and the population has followedas noted above.Potential Competitive ScenariosBased on likely directions in the factors identifiedabove, the following competitive environments andscenarios are posited for PMV over the near, mediumand long run. In all of these scenarios, PMV continuesto be the dominate gateway for imports from Asia destineto Canada.2010 to 2015• The world has recovered from the recession. Chinacontinues to be the main source of imports to NorthAmerica and resumes its high growth in exports to N.A.• China has maintained it competitive advantage as alow cost manufacturing center by shifting some of itsproduction to inland China where wage costs are lowerand connecting those locations to the coastal ports withhuge infrastructure improvements.• Much of the import traffic growth is to the centralU.S. with gradual shifting of economic activity furthersouth.• PMV effectively competes with Seattle – Tacoma andLA-LB for this traffic due to the reliable service reputationthat it has earned.• The reliable service was achieved through jointimprovement processes between the gateway/corridorstakeholders, joint (public-private) infrastructureimprovements funded through the APGC program andan innovative industrial relations environment affectinglabor from port to final destination.• U.S. gateway competitors make substantial infrastructureimprovements but institutional barriers preventcomparable levels of cooperation in competing U.S.gateways and corridors.• PMV captures larger share of growing traffic basefrom North Asia to central and south central U.S.2016 – 2030• China maintains its low cost country status butgrowth 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 whereIssue No. 3www.warehousinglogisticsinternational.com