"Distance is the biggest issue," he says. "It is one thing to chase labor costs, but that doesn't tell the whole story. A manufacturer may save 15, 20 or even 30 percent on labor, but face substantially more in transportation costs vs. the cost of moving from a coastal factory to the ports."
That is where third-party logistics companies like come in, Spudic says. "If we can help our customers reduce those inland costs then there are true savings to be realized."
Dimerco has been operating in China since 1991, "so we have a good handle on the actual, realized costs associated with these decisions and we can help our customers understand their true landed costs," he says. "Customers will continue to seek ways to lower their costs, so the challenge for logistics organizations is to put together solid programs that provide competitive rates without compromising service integrity."
