The pros of outsourcing manufacturing overseas are well documented. Labor is cheap, regulations are looser -- you’ve probably heard them all. The cons of offshoring? Not so obvious.
Take shipping, for example. From the amount of money you’ll actually pay to the final quality of what you receive, your product's journey can be fraught with danger.
Let’s look at the issues outsourced manufacturing presents when it’s time to bring your product back home.
Cons of Offshoring: Shipping
1. Not as Cheap as You Think
The cost of shipping from a remote town in China -- a popular offshoring choice -- is significantly higher than shipping within the United States. If considering offshoring, it helps to calculate the "landed cost" to determine your final expenses. Typically this means the cost of your goods after arrival at your doorstep and duty cost owed to Uncle Sam.
And if you do insist on offshoring, get used to it being shipped in bulk. Chinese manufacturers will only take orders in large quantities, so you’ll have to make room for an entire container of the part you need.
Worst of all, if disaster strikes at sea (which, as you’ll read in a moment, is not far-fetched), you will miss out financially while your shipment is delayed -- or even have to pay all over again if the load is lost. Since you have to buy in large quantities, an “uh-oh” moment can cost you dearly.
2. Shipping Takes Forever
Shipping by sea takes at least 30 days -- yikes. Depending on your inventory, this means you’re spending up to a month out of stock.
And that’s if your shipping enjoys smooth sailing on its way to you. If your container gets damaged or rough seas shut down your shipment, you’re in limbo until another container can make its way to you.
You could opt for air shipping, but then your expenses might be even higher, depending on how much revenue you’d lose waiting for a by-sea delivery.
Whether by sea or through the air, you’ll likely have to deal with language barriers and other communication hang-ups if you have questions about your shipment. Instead of calling one person, odds are you’ll have three people you need to get on the line before your issue is addressed -- a process that can take days.
Translation: If your shipment stalls or fails, the turnover time is huge.
3. Your Product Is at Risk
Shipping is more dangerous than you think. Hurricanes, squalls, or even human conflict are considerations for overseas transportation.
(Fun Fact: Hurricanes, cyclones, and typhoons are all the same thing. They’re just different names for the same type of storm, used in different areas of the world.)
A rough trip across the ocean sometimes results in long delays in arrival time, as Hyundai found out in 2013. Even worse, you can lose entire loads at sea.
Simply put, your product is at higher risk on a long trip abroad. Several dozen manufacturing shipments per year are lost worldwide. Buying shipping insurance is a must.
4. What You See Isn’t What You Get
Face it: Your metal is going to rust during the trip, especially if it’s raw steel. Traveling across the ocean for weeks, surrounded by saltwater -- these are awful conditions for your metal part.
Why jump through all these hoops to end up with a product that’s already sustained wear and tear? If your application requires aesthetically pleasing metal, you’re especially in trouble.
How a Made-in-the-USA Manufacturer Gets it Right
Now that you’ve seen the bad, take some time to appreciate the good of all-American manufacturing when it comes to shipping.
Based on truckload size, an efficient U.S. manufacturer can get a shipment of tubing to your doorstep within three days if the material you need is in stock. Even if the vendor has to order the material first, it can still get your product to you within a week.
So if you have a project that demands a reliable timetable, domestic manufacturing is the only choice.
The Cons of Offshoring Are Many
Shipping is one of the most sneakily harmful cons of offshoring, but it’s hard from the only downfall. Product quality, public relations, and other considerations should be on your mind when you decide whether to keep your design American-made. Do your research before you make a potentially costly and ill-advised decision to offshore your product.