Truck component manufacturers are giving stronger consideration to sourcing production from North America, as international supply chains grapple with delays and disruption and shipping from China is getting more expensive and more difficult, according to executives speaking at a panel discussion at Heavy Duty Aftermarket Dialogue in Grapevine, Texas.
As reported by Heavy Duty Trucking:
“The business model of production moving to China to support the North American market has fundamentally changed,” said Jeff Porter, president and CEO of Velvac. Velvac manufacturers mirror heads, air brake and valve components, vision systems and more for the commercial vehicle market.
Over the last four or five years, Velvac has been aiming to move much of its supply back to North America, Porter said. Recent events and supply chain constraints have only supported that mission as the right move.
“China has been a difficult place to do business in the last three years,” said Kent Jones, SAF-Holland’s president of the Americas. “It’s really changing some of the assumptions that we have had about globalization in previous decades. So as manufacturers in this industry, you really have to rethink how you can support that network.”
For SAF-Holland, Jones said the company wants to maintain its domestic economy, and is reevaluating its supply positions that were once single-sourced from China. Those positions were “highly disrupted” by the COVID-19 pandemic-induced supply chain challenges, including shipping container delays and tariff fees placed on products, he said.
Rob Phillips, founder and CEO of Phillips Connect and CEO of Phillips Industries, said the total cost is an important factor to evaluate.
He said Phillips continues to invest in Mexico at this time due to previous success in the country and the benefit of being in closer proximity to the U.S.
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