A crazy number of styles on demand, including top visor embroideries and the world’s largest selection of mesh back color combinations. We’ve lowered minimums to 24 blank and 48 embroidered and now stock blank caps for next day shipping of 12 units or more.
Everything from our new value-priced union made event giveaway bags to high end duffel and messenger bags. Keep us in mind for small batch custom jobs like 300 backpacks, and styles you need to reshore for USA manufacturing.
The last union shop in America sewing knit ski caps and beanies. Our in house sewing and embroidery enables us to embroider the hats before folding and sewing, leaving a clean finish on the inside.
The only union shop in America making high end, stitched-edge binders and portfolios now in four finishes and dozens of fashion colors. Our in house embroidery enables us to embroider faux leather covers before the products are completed.
Unionwear embroiders its own hats, bags, and binders before production for cost savings, larger imprint areas, no registration problems, and sharper details. This process allows Unionwear to embroider products generally considered unembroiderable: The top of a plastic baseball cap visor. The pocket of a tote bag. The front of a leather portfolio folder.
Unionwear now offers contract embroidery services on 80 or more garments (or fewer with a minimum run charge of $615 (s)). Embroidery prices depend on the actual number of stitches it takes to duplicate your design, not on the number of colors. All baseball caps listed at unionwear.com are priced to include up to 4,000 stitches. For an estimate email artwork to sales@unionwear.com.
It was looking like a bad political swag season. And then President Biden had a terrible debate.
Unionwear owner Mitch Cahn, feeling down about the state of his political sales this election cycle, first had a sense that his fortunes might turn as he watched Biden falter during the June 27 matchup against Republican Donald Trump. The president was hoarse and stumbled over his words. “I thought, ‘He’s out,’” Cahn said.
Cahn saw an opportunity. The next morning in the office, he looked up what Kamala Harris’s campaign ordered from him during her brief presidential campaign in 2020. He decided to make $50,000 worth of navy-and-white hats that could be quickly stamped with a logo—just in case—and stocked up on raw materials.
Three weeks later, Biden was out, and Harris was in—and the hats Cahn prepared sold out on the first day of the new campaign, he said.
The change at the top of the ticket has breathed new life into Democratic voters. It has also reinvigorated the market for political merchandise. And it has been great for business for Unionwear: Cahn said he has taken orders for more than 100,000 hats for the Harris campaign since Biden announced that he would drop out of the race.
A trio of fashion publications took notice of Unionwear’s camouflage Kamala Harris hat last week and attempted to make sense of it’s skyrocketing popularity.
Women’s Wear Daily quoted Unionwear President Mitch Cahn extensively about the viral nature of the hat’s sales:
“We were completely surprised by it. We’ve been in business for 32 years. We never had an instance where we made a sample in the morning and then they had sold a million dollars’ worth of hats by the next morning,” said Cahn
as well as the hat’s universal appeal:
“We’ve been making this camo hat for years for hunters, for people in the Midwest. The idea that this hat would appeal to fans of Chappell Roan and Midwestern hunters is probably why the campaign picked it, because it has a really, really broad appeal and brings people together,” Cahn said. “Obviously the sales and the demand for it and the excitement about the hat speak for itself.”
Vogue Business focused on concepts including poltical merch as “wearable memes” and how the Dems are leaning into pop culture and gen x and listening to their constituents in a way that makes MAGA hats look stale. Vogue also addressed the speed at which Chinese-made knockoffs appeared on Etsy and Ebay.
“It raises the question: who does — and who should — profit off of a viral campaign moment? Hat manufacturer Unionwear, for one, is already doing big business. And, judging by the million-plus raised in the first day of hat sales, the Harris-Walz campaign is raising big money from merch, too. There’s no harm in smaller businesses like Etsy sellers getting in on the action… It’s another form of positive engagement…[but] brands should not hop on the trend… not on someone else’s coat-tails.”
Vanity Fair focused on the campaigns ability to go from concept to sale in 24 hours as well as the appeal of hunting camo as fashion vis a vis military camo.
Interestingly, none of the articles referenced news from earler this year predicting that union hats and shirts were becoming this year’s fashion anomoly.
Newark, NJ-based manufacturer Unionwear is making headlines with its camouflage baseball hat for the Harris-Walz campaign, which has gone viral. With the campaign selling these hats at $40 each, Unionwear President Mitch Cahn joins to discuss this unexpected success.
Newark, NJ-based manufacturer Unionwear is making headlines with its camouflage baseball hat for the Harris-Walz campaign, which has gone viral. With the campaign selling these hats at $40 each, Unionwear President Mitch Cahn joins to discuss this unexpected success.
Cahn reveals that Unionwear initially started as a baseball hat company for the fashion industry, creating merchandise for fashion brands. However, this focus only lasted about two years, shifting after the passage of NAFTA. The company then pivoted to Made in America merchandise, with a particular emphasis on political gear.
Regarding the surprising demand for the Harris-Walz camouflage hat, Cahn states, “The demand really surprised us because the hat went up for sale before we even had a production plan for it, and then they sold just tens of thousands of units really, really quickly, in a matter of hours and kept on going.” He told Yahoo Finance that the look appealed to a diverse range of consumers, including young people and hunters.
Mitch Cahn, president of the New Jersey-based supplier, says political hat sales can indicate the popularity of a candidate, noting that sales spiked after the Democratic presidential ticket changed.
This hat was an anomaly. In his 32 years making merch for presidential candidates, Mitch Cahn says he’s never seen such a sudden spike in sales.
“The numbers that they’re selling are the kinds of numbers we’ve seen for a political campaign, but over the course of months,” says the president of Newark, NJ-based supplier Unionwear (asi/73775). “Not over the course of two days.”The Harris-Walz camo hat went viral after it was released on Aug. 8.The Harris-Walz camo hat went viral when it was first announced at Kamala Harris’ and Tim Walz’s first rally together in Philadelphia on Aug. 8. Social media swooned over it.
Some say the design originated from a meme referencing popstar Chappell Roan, who sells a camo hat with orange lettering that says, “Midwest Princess.” Others say it targets rural voters who may sport camo regularly, as the former Minnesota Gov. Walz is a hunter.
Whoever the target demographic, the hat was a hit.
Cahn founded Unionwear in 1992 with six employees. One of the first orders the Made-in-the-USA manufacturer received was from Bill Clinton’s 1992 presidential campaign for 150 baseball hats.
“There was really no way for political campaigns to sell merchandise,” Cahn says, describing how political merchandise functioned more as a giveaway than a source of income in the pre-internet era. “The first time we really did substantial numbers, like six figures of units, was in 2000 with Al Gore.”
The Al Gore-Joe Lieberman ticket was the first campaign to set up an e-commerce merch website, Cahn says, and Unionwear’s hats were its primary item. Since then, the supplier has produced hats for candidates in every presidential election.
Unionwear gears up for election years. Anticipating demand for political merchandise, it tells its usual clients to avoid ordering in the summertime, updates its machinery and invests in additional employees and subcontractors.
In the early months of this campaign, Cahn says, it didn’t seem worth it.
“Sales were basically anemic,” he says. “We already decided, ‘You know what? This is not going to be a big presidential year.’”
Before President Joe Biden dropped out of the 2024 election, he was losing in his rematch with former President Donald Trump – and hat sales showed it.
Though there are nuances that can affect hat sales, like a candidate running again and people already having their merch, or a candidate taking advantage of free marketing by unofficial vendors, Cahn says he can measure the popularity of a candidate by those numbers. When Hillary Clinton was projected to win the 2016 election by a landslide, the merchandise sales didn’t match up, and Cahn wasn’t sold. (Contrast that with the high-profile popularity of Trump’s MAGA hats at the time.)
“We kept reading all the articles … that basically gave Trump no chance of winning the election, and we basically reconciled those things by saying, ‘Maybe Hillary’s supporters just don’t like baseball hats,’” Cahn says. “Turns out that was probably a pretty good indicator of how well the candidate was going to perform.”
Based on that metric, Biden was not performing well. Based on other metrics, his Democratic colleagues agreed.
Following the debate between Trump and Biden on June 28, Democrats were panicked. An increasing number of politicians called for the president to drop out, while others scolded the mutiny for not sticking by their candidate. As the chaos unfolded, Cahn hedged his bet.
“When I saw the debate, I met with the team and I said, ‘I really believe he is going to drop out of the race,’” he says. “‘If Kamala takes over, we’ll have an opportunity to sell a lot of merchandise.’”
Unionwear hit the ground running, building up inventory of blanks based on the merchandise the Harris campaign sold in 2020. When Biden officially dropped out in July, Cahn contacted distributors, campaign merchandise managers and convention groups, and orders started flowing in.
“This is a few weeks before the camo had dropped. We had already sold more merch than we anticipated selling for Biden the entire year,” Cahn says. “I didn’t think that there was going to be another kind of explosion.”
When the camo hat was released, Harris’ hat sales surged in popularity as she campaigned across the country. The numbers, Cahn says, are telling.
“They just picked a great design that resonated with a lot of people,” he says. “Baseball hats are definitely a great barometer.”
When Kamala Harris picked up the phone and asked Tim Walz to be her running mate on Tuesday morning, Minnesota’s governor was sitting on a wicker chair in his St. Paul home wearing khakis and his customary camouflage hat.
“I would be honored, Madam Vice President,” replied Walz, a former high school football coach who hunts and fishes in his free time.
Soon, his Midwestern dad vibe was fueling social media memes comparing him to pop music star Chappell Roan, who has a “Midwest Princess” camo hat in her official merch line-up.
Riffing off the memes, the Harris campaign designed and produced a prototype within hours. By that evening in Philadelphia, Walz had the soon-to-be-viral hat in hand and tweeted a photo wearing it.
The $40 Harris Walz hat – union-made by New Jersey-based manufacturer Unionwear – was an instant hit.
The initial run of 3,000 hats sold out in less than 30 minutes, and the campaign has rung up more than $1 million in hat sales since the merch dropped Tuesday. Thousands more hats are on back-order until October. Sales of the hats benefit the Harris Victory Fund.
“Is this real,” Roan wrote on X over side-by-side images of her “Midwest Princess” hat next to the new Harris-Walz camo hat.
Mitch Cahn, Unionwear’s CEO, said he has sold about 100,000 Kamala hats for the campaign, the Democratic party, the Democratic convention and other merchandisers since Harris launched her campaign on July 21.
About a quarter of those, according to Cahn, are the camo hats.
Cahn said he expected a bump in sales after Biden dropped out of the race last month. But getting “absolutely crushed with business” was a surprise.
“We are going to have to add a second shift and work weekends at least for the next two months with the demand that we anticipate,” he told USA TODAY.
Democratic presidential candidate, U.S. Vice President Kamala Harris and Democratic vice presidential nominee Minnesota Gov. Tim Walz walk out on stage together during a campaign event on August 6, 2024 in Philadelphia, Pennsylvania.
Campaigns often sell branded camo hats to appeal to red-state voters. These days, Carhartt-inspired camo has urban crossover appeal, as in vogue in New York cafes as it is on deer hunts in Minnesota. But can this upstart headpiece topple the undisputed king of campaign merch Donald Trump?
Campaign merch can generate “significant dollars,” said Bruce Newman, founding editor-in-chief of the Journal of Political Marketing and a professor of marketing at DePaul University.
Spending on promotional products during the 2024 election is expected to reach $115 million, a 34% increase from the 2020 election, according to PQ Media, a market research firm based in Stamford, Connecticut.
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“It’s definitely not at the top of the pyramid, but it pays some of the bills,” Newman said. “It’s also a marketing tool. You’re telling the world who you are and what you’ll do for them.”
A soda sip-off or an election?Tim Walz, JD Vance fight over the ‘Mountain Dew Belt’
Trump is in a class of his own when it comes to capitalizing on campaign merch, from golden sneakers to perfume. His iconic red MAGA hat is the stuff of merch legend.
Trump’s son-in-law Jared Kushner wrote in his memoir that the “Make America Great Again” hat brought in up to $80,000 a day during the 2016 presidential run, covering most of the campaign’s overhead costs.
“Trump wore the hat on his visit to the southern border, and it became the hottest thing on the internet,” Kushner wrote in “Breaking History.”
US President Donald Trump throws MAGA hats to the crowd as he holds a Make America Great Again campaign rally at Lancaster Airport in Lititz, Pennsylvania, October 26, 2020.
No one has mastered the meme-to-merch pipeline quite like the MAGA universe, which milks political highlights to market T-shirts and trinkets.
Even Trump’s scowl in his booking photo made its way onto mugs and NFTs in his campaign store. After he was taken into custody, the campaign sold bumper stickers and beverage coolers with the tagline: “NEVER SURRENDER!” Trump also sold pieces of the blue suit and red tie he wore in the mugshot.
A man wearing a “Make America Great Again” hat waits for President Donald Trump to arrive for a campaign rally at Williamsport Regional Airport on May 20, 2019, in Montoursville, Pa.
Trump campaign spokesperson Steven Cheung said the former president raised more than $4 million the day after he was booked at an Atlanta jail, at the time the highest-grossing day of the campaign.
The MAGA merchandise cottage industry roared into overdrive after Trump survived the assassination attempt at a campaign rally in Butler, Pennsylvania, hawking products featuring the bloodied but defiant former president clenching his fist.
From T-shirts emblazoned with the rallying cry “Fight! Fight! Fight!” to “You Missed” shot glasses, the merch was a hot seller online and at the Republican National Convention in Milwaukee.
“Make America Great Again” hats sit on a table during a campaign rally for former President and Republican presidential candidate Donald Trump at Sunset Park in Las Vegas, Nevada on June 9, 2024.
Will the camo hat be more than a folksy flash in the pan?
Unionwear hasn’t produced merch for the Trump campaign in the last two election cycles, but Cahn said the initial Kamala-Walz hat demand exceeds the initial demand for the MAGA hats his company made in 2016.
It’s not clear exactly how many MAGA hat sales are sold today. The Trump campaign did not immediately return a request for comment, and Cahn estimates that “most” MAGA hats are not sold by the campaign but by online and street vendors.
“Kamala has just completely taken everybody by surprise on this,” Cahn said. “We’ve seen so many units sold in such a short period of time. And as the merchandise gets out there, as more people see it, I think it’s really going to take on a life of its own.”
The political scene, after all, was not particularly advantageous for the founder of a company that typically gets steady–albeit cyclical–sales from political campaigns looking for made-in-the-USA merch. The incumbent was inert. President Biden “sold virtually no merchandise this year,” he says. “Normally, we would have seen sales beginning in April or May for the general election. We did not see that at all.”
But when Biden dropped his bid for reelection on July 21 and endorsed Vice President Kamala Harris, the game changed. And when Harris announced Minnesota governor Tim Walz as her running mate on August 6, the tide turned entirely. Within 24 hours, the Harris-Walz campaign sold about 25,000 of the $40 camouflage baseball caps manufactured by Cahn’s Newark, New Jersey-based business, Unionwear, the entrepreneur says.
Cahn’s company, which he founded in 1992 after purchasing the assets of a bankrupt baseball cap factory, has manufactured political merchandise since its inception. In its founding year, it made 150 caps for the Clinton-Gore ticket, but that line of business didn’t really take off until 2000, when Unionwear nabbed a significant order from the Gore-Lieberman campaign. “The internet made it possible for campaigns to actually sell merchandise,” Cahn says.
Since then, Unionwear–which employs about 180 workers represented by SEIU in its 70,000-square-foot facility–has manufactured merchandise for a number of presidential campaigns, including Obama-Biden, Clinton-Kaine, Trump-Pence, and Biden-Harris.
In recent years, Cahn says that his company has received increased orders for senatorial and gubernatorial races. “Campaigns are raising much more money than they used to, and they have fewer places to spend it because there are a lot of bans on political advertising on social media,” he says. “So that money’s got to go somewhere. And I think that merch is one of the places the money ends up.”
Aside from political campaigns, Unionwear gets significant orders from labor unions. In its early years, the company–then called New Jersey Headwear Corp.–secured deals with fashion brands, including Ralph Lauren, but Cahn says that the passage of NAFTA in 1994 pushed a lot of hat manufacturing overseas.
Many political candidates, however, still see value in selling merch that’s both union-made and manufactured in the United States. Cahn says that Unionwear sees more sales from Democrats, but the company ultimately takes a bipartisan approach to business. “Unions traditionally voted Democrat so they have had to really play that up and make sure all of their merchandise was union-made,” he says. “Whereas Republicans did not specifically request union-made merchandise, although we are seeing that for the first time this year.”
Unionwear is not currently manufacturing any merch for the Trump-Vance campaign, though the company did make merch for the 2016 Trump campaign. Cahn estimates that “tens of thousands of vendors and embroidery shops” have manufactured former president Trump’s “Make America Great Again” hat since then. “The Trump campaign has allowed people to do whatever they want to get the logo and the color out there,” he says.
Unionwear doesn’t mix politics with business. “If we were a restaurant, no one would ask me if we allowed both Democrats and Republicans to eat here,” Cahn says. “We can’t discriminate against anyone who wants to buy merchandise.”
And this time around, supporters of the Harris-Walz ticket really want to buy merch.
After the June 27 debate between Biden and Trump, Cahn had an inkling that the former would eventually step down from the Democratic ticket. “That’s when we started to prepare for a potential surge in orders,” he says. The company shifted some of its production deadlines from September to October to free up capacity and made thousands of baseball caps that were ready to be embroidered; if necessary, the company could outsource that part of production to other embroidery shops to accommodate a surge.
After Biden dropped out of the race on July 21, Unionwear saw an influx of orders from merchandise houses that were working with the Harris campaign. “The Tuesday after Biden dropped out, we received a very large number of orders from people who had tested [merch] on Monday, and saw sales of Kamala merchandise exceed their expectations,” Cahn says. “That’s when they said, ‘Get ready for when the ticket is announced because that is when we’re really going to do our big push.’ We got ready.”
For a typical presidential campaign year, Unionwear anticipates selling 2,000 hats a day–a rate that Cahn says Harris has surpassed. Sales of Harris-Walz merchandise have outpaced projections, he adds, but the real viral hit is the campaign’s camouflage hat, with the running mates’ names inscribed in orange.
“We were not anticipating a camouflage hat,” Cahn says. “I don’t know if they were either.” The design isn’t unfamiliar to Unionwear–the company has manufactured similar hats for hunting organizations and labor unions–but it captures a diverse demographic. The design is a play on traditional hunting gear, but for those in the know, it’s also a reference to a similar hat currently sold by the 26-year-old Missouri native popstar Chappell Roan, who has skyrocketed in popularity in recent months and, this weekend, drew the largest crowd in Lollapalooza history, a spokesperson for the music festival told CNN.
After seeing Walz in a camouflage hat on Tuesday–in the video Harris posted of the governor accepting his position as her running mate–the Harris-Walz campaign design team conceptualized the camo hat by around noon that day and developed prototypes by 1:30 p.m., Fast Company reported.
Cahn says that Unionwear messengered a camouflage Harris-Walz hat to Philadelphia–ostensibly the one that Walz himself was photographed wearing Tuesday evening–and the company prepared samples to be shot for the campaign’s website. Since Tuesday, several others, including Walz’s daughter Hope, and members of the band Bon Iver, which performed at the Harris-Walz Wisconsin rally Wednesday, have sported the design.
The hat’s original run of 3,000 hats sold out in 30 minutes, according to the campaign, and now the product is currently on preorder, with an expected ship date of October 14. In spite of the wait time, customers are still placing orders.
“My head is spinning, because I had had the realization that this was going to be the first time we were going to have a nice, relaxing summer. Then, Kamala entered the race, and her merch sales have really exceeded [those of] anyone else who’s sold merch for a presidential campaign before in such a short time,” Cahn says. “It’s been a remarkable turnaround, and everybody at our factory is excited about this.”
President Joe Biden’s decision to drop out of the 2024 presidential race has caused a ripple effect in the promotional products industry.
After selling “virtually no Biden merchandise” this year, Unionwear President Mitch Cahn says the Newark, New Jersey-based supplier’s entire inventory was cleaned out on Monday morning by the two companies that primarily handle the Democratic Party’s promotional products.
“We had already written off the 2024 merch business, so this is definitely a shot in the arm,” Cahn says. “We assumed something was going to happen with Biden dropping out, but I didn’t expect it to happen so fast. I guess they’re really preparing for a big merch push for [Vice President Kamala] Harris.”
Shortly after tweeting a signed letter announcing the suspension of his campaign, Biden tweeted his endorsement of Harris, who has launched her own campaign and has secured enough delegates to become the presumptive 2024 Democratic nominee, ABC News reported.
Non-profit fundraising platform ActBlue announced that grassroots supporters had raised $46.7 million by 9 p.m. EST on Sunday following Harris’ campaign launch.
Promo’s Quick Response
Considering the breakneck pace of the promo industry, it should come as no surprise that distributors began cancelling orders for Biden-Harris merch immediately following Biden’s announcement, according to Cindy Scardino, marketing project manager at Gill Studios – the No. 26 supplier in the PPAI 100.
The Kansas-based firm specializes in lawn signs, bumper stickers and other promo products in high demand during election season.
“We haven’t received any Harris-only orders at this time; the news is too fresh in the grand scheme of things of what’s to come in the next three-plus months,” Scardino says. “I imagine once the Democratic Party has a consistent direction, the orders will begin flowing into our union production facility.”
Another Made-in-the-USA and union shop, Unionwear has been manufacturing campaign merchandise for candidates of both parties for more than 30 years. While Biden’s merch sales in 2020 were “fantastic,” Cahn says they were basically nonexistent during this election season. That may have been related to him being (at the time) the incumbent, as former President Barack Obama’s merch sales “went down considerably” from 2008 to 2012, according to Cahn.
“The political merch business is very heavy with print on demand, which really started growing in the 2020 primaries when there were so many Democratic candidates,” Cahn says. “This year, there has been a lot of blank merchandise in the print on demand business because there really weren’t any primaries. They stocked up in the beginning of the year, and now these guys are sitting on a lot of blank units.”
Cahn says this is also the third presidential election in a row where baseball caps are by far the most sought-after item, outpacing T-shirts and bags.
Cahn added there’s a lot of attention being paid to unions this election cycle because there’s a strong possibility that the International Brotherhood of Teamsters, one of the largest and most powerful labor unions in North America, could break from tradition and endorse a Republican candidate.
Sean O’Brien, the head of the Teamsters, spoke at the 2024 Republican National Convention in a historic first for the labor organization.
“We’ve seen a lot of merch companies saying it has to be union-labeled and union-printed,” Cahn says. “We’ve even had requests from the Republican side for that.”
From https://www.ppai.org/media-hub/promo-industry-expects-boon-after-biden-exits-race/
In a recent in-depth interview with Jeffrey Kanige for NJBiz Conversations Podcast, Unionwear founder and president Mitch Cahn shared valuable insights into various aspects of his company. Unionwear manufactures baseball hats, bags, and thousands of other accessories for businesses, government organizations, and industries that value Made in USA products.
Here are five expanded key takeaways from the engaging conversation:
The Importance of Made in USA Products: Unionwear emphasizes the significance of manufacturing products right at their Newark facility, ensuring every item they produce carries the Made in USA label. This commitment to quality and integrity holds immense importance for their diverse clientele, which includes political campaigns, military organizations, and major American brands like GM and Budweiser.
Business Decisions vs. Patriotism: While Cahn admits that patriotism alone doesn’t drive the sales of Made in USA products, businesses choose Unionwear because they appreciate the company’s alignment with their own branding goals. Clients want to convey that they support the US economy and American workers, which Unionwear’s products express effectively.
Embracing Automation for Growth: Unionwear is actively integrating AI and robotic solutions to enhance their manufacturing processes and remain cost-competitive. With the help of NJEDA’s Manufacturing Voucher Program (MVP) grant, the company plans to install the first fully automated tote bag production line in North America by 2024. This forward-thinking approach ensures that Unionwear stays ahead in the industry while adapting to new technology-driven trends.
Reshoring and Manufacturing in New Jersey: Cahn acknowledges the challenges of running a union shop in New Jersey due to high costs, but he remains positive about the benefits offered by the state’s infrastructure. The population density, skilled workforce, and access to ports make New Jersey an ideal business location for Unionwear. Moreover, Cahn points out that the company has managed to capitalize on supply chain disruptions and leverage New Jersey’s robust infrastructure to maintain a competitive edge.
The Perfect Storm for Made in USA Products in the Next Five Years: Cahn is optimistic about the growth potential for Unionwear’s Made in USA merchandise, particularly over the next five years, describing it as a “perfect storm” for the company. Besides the 2024 election year driving demand for their products, Unionwear will benefit from other significant events, such as the 250th birthday celebration of the United States, the World Cup coming to New Jersey, and the Olympic Games in Los Angeles. These events are expected to bolster the popularity of Made in USA products, presenting ample opportunities for Unionwear to thrive and expand.
Overall, Unionwear’s commitment to producing high-quality, Made in USA goods, combined with its willingness to invest in advanced technologies and adapt to market trends, positions the company well for continued success in the years ahead.
As we approach the 2024 presidential election, labor unions are becoming an increasingly important factor in shaping the political landscape. Union membership may have declined from its peak of 35% in the 1950s to 11% today, but support for unions is growing and their political clout is on the rise.
Public opinion on unions remains relatively high, with 67% of Americans approving of labor unions according to Gallup polling data. This support, despite the decline in union membership, suggests that people recognize the value of unions in advocating for workers’ rights and benefits.
Interestingly, there is a significant difference between Democrats and Republicans when it comes to their views on unions. A striking 88% of Democrats approve of unions, while 47% of Republicans do so. The considerable support from the Republican base hints at a shift towards a more populist approach on labor issues and a break from traditional party lines.
High-profile strikes have also played a role in shaping public opinion and the political environment. Examples include the United Auto Workers Union and the Screenwriters and Actors Guilds. These strikes provide opportunities for political figures to align themselves with workers’ rights, potentially swaying voter opinions in their favor.
Recent gains in organizing have also contributed to the influence of Unions, with the UAW just winning its first criticial election for Volkswagen in Tennessee.
With the increasing support for unions and their growing presence in high-profile labor disputes, the impact on the 2024 presidential election is set to be significant. Candidates from both parties may choose to align their platforms with labor rights in order to appeal to this broad base of Americans who view unions favorably.
Three of the six critical battleground states–Michigan, Nevada, and Pennsylvania, have among the highest percentages of union members. But this does not necessarily mean Democrats are guaranteed victory, as Republicans are chasing union approval, with several national unions reluctant to back President Biden yet.
Labor issues could be a critical battleground with strong potential for bipartisan appeal. As the focus on economic concerns such as wage increases, retirement benefits, and working conditions resonates with voters’ experiences, labor rights may be a pivotal issue in the upcoming election.
In conclusion, while union membership may be shrinking, the influence of unions on the political landscape is growing. As the 2024 presidential election approaches, the support for unions and labor rights is likely to significantly shape candidates’ platforms, campaign strategies, and voter mobilization efforts, highlighting the enduring importance of labor unions in American political and social life.
News 12’s Syma Chowdhry and photojournalist Matt Nash visited Unionwear in Newark for their Made in NJ series. They focused on Unionwear as a national company that makes things for union members to wear. Full video here.
New Jersey’s innovation landscape shines brighter with the upcoming celebration of INNOVATE100 leaders on May 14th in New Brunswick. Among the honorees is Unionwear, recognized for its innovative contributions to American manufacturing. This recognition fuels our enthusiasm to maintain our commitment to continuous improvement.
We are known for our high-quality, made-in-USA baseball caps and sewn bags, which have drawn attention from the INNOVATE100 initiative. Our commitment to incorporating advanced technology and automation underscores the value of skilled manufacturing traditions.
The event at the New Brunswick Performing Arts Center is not just a book and digital project launch; it’s a platform to highlight Unionwear and our colleagues’ pioneering achievements in domestic manufacturing.
Unionwear congratulates President Mitch Cahn on being named to the both the 2024 ROI Power List of 100 NJ Executives (first time) and the NJBIZ Power 100 (fourth time). Mitch is one of only 30 NJ executives who have appeared on the annual listing of the most influential New Jerseyans in business every year since 2021, a short list that includes the Mayor of Newark and the leaders of Rutgers, Amtrak, Campbell Soup, Prudential, Atlantic Health, PSE&G, J&J, and Shoprite.
Unionwear has found a drawing of our Newark building, probably done from a hot air balloon, in 1902. The building looks almost identical, but now we are adjacent to the Newark City Subway line, and every plot of land for miles is fully developed. The company that occupied our factory in 1902 manufactured parts for the cotton gin. Prior to construction, during the Civil War, this property was the Union Army Training Grounds. Unionwear turns 32 this year, but we have used the image to show how we might have advertised 125 years ago.
Since its inception in 1992, Unionwear has been committed to preserving the art of American craftsmanship by manufacturing high-quality and durable baseball caps and sewn bags. Known for its unwavering dedication to authenticity and reliability, Unionwear is the trusted choice for businesses, athletes, and the promotional products industry. In today’s competitive global landscape, Unionwear stands out by leveraging innovative processes and advanced technology to create premium products while embracing the unique value of products made in the USA. Needle’s Eye has written a great piece on Unionwear, summarized here:
The Journey of Unionwear:
Unionwear faced challenges when the fashion industry moved production offshore. Initially, the company focused on producing caps and hats for popular fashion brands like Polo Ralph Lauren, Izod, Gant, Barneys, and several skateboard and hip-hop lines. As the fashion industry shifted production towards countries with lower labor costs, Unionwear adapted by targeting B2B clients who value the “Made in USA” label and offering custom products with a competitive edge.
Automation and Lean Processes:
Unionwear recognized the need to evolve in order to survive in the challenging and competitive market. The company invested in automation, advanced technology, and lean manufacturing to streamline production processes while maintaining high-quality standards. Automation has allowed Unionwear to reduce overhead costs, enabling the company to manufacture locally at competitive prices.
For example, Unionwear now utilizes Pathfinder’s M5-180 multi-ply cutting system in its production processes. This has resulted in a 30% increase in fabric utilization compared to traditional die-cutting methods. With only two people manning the Pathfinder system, Unionwear now produces 3,000 hats and 2,000 bags per day, whereas seven people were needed for the same output previously.
Embracing Lean Manufacturing:
Lean manufacturing is another key component of Unionwear’s strategy for success. Amid significant global competition, the company has adopted lean manufacturing principles to eliminate waste, reduce lead times, and ensure maximum efficiency. This approach focuses on creating value for clients by streamlining processes, reducing inefficiencies, and optimizing resources. This has enabled Unionwear to expand its product offerings, respond quickly to market demands, and ensure consistent, high-quality products.
Continuous Improvement and Growth:
Unionwear’s commitment to continuous improvement has led to the company’s growth and expansion over the years. In 2017, Unionwear successfully restructured its operations, raising funds to add new product lines, expand web offerings, and automate labor-intensive processes. The company has also ventured into new niches like medical packaging, travel gear, safety products, and workwear to cater to emerging market demands.
The Future of Unionwear:
With a strong foundation in automation and lean manufacturing principles, Unionwear is taking confident strides towards a promising future. As the era of cheap imports comes to an end, the company is well-positioned to continue its upward trajectory and further establish itself as a leader in American manufacturing.
The success of Unionwear is a testament to the power of innovation, dedication, and the unwavering commitment to domestic manufacturing. By investing in advanced technology, streamlining processes, and prioritizing customer satisfaction, Unionwear has managed to survive and thrive in an ever-evolving market.
Conclusion:
Unionwear is a shining example of how American businesses can revolutionize their operations and remain competitive in the global market through automation and lean processes. The company’s unwavering commitment to quality, innovation, and American craftsmanship has set them apart from others and ensured lasting success. As a customer of Unionwear, you can trust that you’re supporting a truly American brand that values its communities, workers, and the future of the American dream. Together, we can continue to uplift and support domestic manufacturing and promoting genuine, high-quality products made in the USA.
Joe Biden has made a point of highlighting products made in the USA. One such example is Unionwear, a brand passionate about delivering high-quality and durable baseball caps and sewn bags, with a focus on supporting the American workforce and local communities. The President has clearly taken notice, as he’s been spotted proudly sporting various Unionwear hats on multiple occasions.
It’s no surprise to see our Commander-in-Chief favoring Unionwear hats, showcasing some of the finest work that American craftsmanship has to offer. Biden has been spotted in four different Unionwear models within the past year, including the UAW hat, the Beau Biden Foundation hat, and two distinct commander-in-chief hats. Unionwear is truly honored to have the leader of the free world modeling their American-made products.
This spotlight on Unionwear proves that when it comes to quality, durability, and versatility, choosing homegrown products can make all the difference. Despite facing challenges and an ever-evolving market, Unionwear’s unwavering commitment to excellence sets them apart from the competition. Their dedication to supporting the American dream, both for their workers and consumers, has caught the attention of none other than President Biden himself.
Embrace the Unionwear difference today and join the prestigious ranks of those who wear these authentic, straightforward, and resourceful American-made products. If it’s good enough for the President, it’s good enough for all who believe in the industrious and patriotic spirit of America.
Now that the Republican Primary Season is over, it’s time to make a case that losing candidates were disadvantaged by poor merchandise. Looking at reviews of the Republican primary candidates’ merchandise, it’s evident that the mistakes they made were fatal to their campaigns.
Retail politics has evolved significantly in recent years thanks to the rise of technology. Candidates now use customized merchandise to elicit small-dollar donations, engage with supporters, and trial how they market themselves and gauge public response. Campaign store offerings have become tailored and designed to appeal to popular conversations on social media platforms like Instagram, Twitter, and TikTok.
Merchandise not only generates income and garners support but also provides valuable information to candidates about what resonates with voters and helps them adjust their messaging accordingly. However, a problem has emerged with the creation process. The WinRed platform, which is used by most Republican candidates, offers free storefronts for them. While this is helpful in providing easy access to design, source, produce, and distribute merchandise, it does have one significant drawback: all of the stores powered by WinRed look almost identical.
The result is a lack of distinction between candidates, which may go unnoticed by those who have already decided on their preferred candidate. However, for undecided voters shopping around for a candidate, this similarity could create confusion and impede their decision-making process.
It appears that losing candidates might have missed the opportunity to capitalize on the power of merchandise in their campaigns [1] [2]. The ineffective use of the WinRed platform and their failure to stand out from the crowd in their online merch stores seems to have been detrimental. Whether they underestimated the importance of tailored and visually appealing merchandise or simply made poor strategic decisions, it is evident that candidates must pay more attention to their merch game if they want to succeed in the ever-evolving political landscape.
“The regular guy look”… a joke from the Rodney Dangerfield movie “Easy Money”, has come to life in California. One trend that has seemingly come out of nowhere is the donning of union T-shirts and hats, thanks largely to surging favorability ratings of unions and the visibility of thousands of movie stars and celebrities wearing union logo gear.
A New York Times article described Neil Gaiman, the best-selling writer of “The Sandman” and “Coraline,” wore a black T-shirt nearly every day for the past 36 years before switching to a red T-shirt in support of the Writers Guild of America (W.G.A.) strike. The W.G.A. went on strike in early May after failing to reach an agreement with Hollywood producers on a new contract, including compensation for work on streaming services and the use of artificial intelligence. The strike saw heavy involvement from creative workers in New York and Los Angeles, contributing to the widespread visibility of T-shirts advertising support for the W.G.A. and other creative workers’ labor unions.
As the strike dragged on, more and more celebrities donned union paraphernalia in solidarity with striking workers. This visibility, combined with the public’s increasing support for unions, has solidified union T-shirts and hats as the hot fashion statement for 2024.
Wearing matching union gear, such as T-shirts and hats, on the picket lines and beyond has helped project an aura of solidarity and visually represent the strength in numbers and collective power that unions embody. Furthermore, various online retailers, such as WGAStrikeShirts.com, have emerged to sell W.G.A. and SAG-AFTRA strike paraphernalia, with proceeds going to the Entertainment Community Fund, a charity that supports the entertainment industry workers. As a result, these garments not only serve as a fashion statement, but also as a means of financially supporting the workers they represent.
As we approach the 2024 presidential election, labor unions will become an increasingly important factor in shaping the political landscape. With public opinion on unions remaining relatively high, it is clear that people recognize the value of unions in advocating for workers’ rights and benefits. Unions are estimated to spent over $800 million on the 2024 election, much of it on giveaway merch designed to demonstrate their political clout. For the first time Unions are being courted by both Democrats and Republicans for their support.
In conclusion, wearing union T-shirts and hats is not only a trendy fashion statement but also a powerful symbol of support for workers’ rights and the labor movement at large. As public opinion continues to favor unions and their importance in the political landscape, the popularity of union logo wear will only rise further, making it a lasting fashion statement for years to come.
The New Jersey Society of CPA’s has written a great article about Unionwear’s pandemic “hustle and grit”.
In the age of globalization, domestic manufacturing often takes a backseat to cheaper alternatives. But the coronavirus pandemic has proven that prioritizing local sourcing and production is essential for ensuring long-term national security and fostering sustainable economic growth. Unionwear, a Newark-based manufacturer of union-made hats, bags, and binders, is leading the charge in championing US-based production. Their powerful story of resilience during the pandemic demonstrates how embracing innovation, collaboration, and a lean manufacturing mindset can propel a small business towards growth and success.
Lean Manufacturing: The Backbone of Unionwear’s Resilience
Unionwear has maintained a competitive edge in the market for over 25 years, despite facing stiff competition from low-wage countries. At the core of their resilience lies a lean manufacturing mindset that focuses on eliminating bottlenecks, streamlining production, and optimizing resources. This approach enabled the company to pivot quickly during the pandemic, supplying healthcare workers with personal protective equipment (PPE), keeping the majority of their workforce employed, and protecting the business from collapse.
Overcoming challenges through collaboration and innovation
When faced with unprecedented challenges during the pandemic, Unionwear relied on the hustle and grit of its employees and external partners to overcome obstacles. The company developed innovative workarounds, such as sourcing supplies from other industries, collaborating with competitors, and engaging local communities to find home-based sewers.
They didn’t simply sell PPE or flaunt their “Made in USA” label; they sold determination and resourcefulness. By taking calculated risks, sharing best practices, and embracing change, Unionwear positioned itself as a bastion of hope amidst an uncertain economic climate.
Adapting and thriving during the pandemic
Navigating the uncharted waters of a global crisis required Unionwear to rethink its strategy, leading to a substantial shift in workstyles and priorities. The adoption of remote work for administrative staff necessitated a strict adherence to process, while employees showcased an increased focus on safety, accountability, and shared responsibility.
Although budgeting and projections proved difficult during the pandemic, the company seized the opportunity to invest in growth by building a new government business segment and eagerly anticipating a resurgence in demand for event-related merchandise.
Lessons learned and a brighter future
Unionwear emerged from the pandemic as a testament to the power of adaptability, creativity, and perseverance. The experience highlighted the importance of remaining open to new opportunities, fostering an agile production environment, and fostering a results-oriented culture.
Now poised for long-term success, the company remains vigilant in monitoring market trends, anticipating challenges, and capitalizing on opportunities for growth.
Conclusion
Unionwear’s story serves as a shining example of resilience in the face of adversity. By remaining true to their roots and embracing innovation, they are not only contributing to America’s rich manufacturing legacy but also inspiring other small businesses to follow suit.
As we move forward in a post-pandemic world, companies like Unionwear remind us that we can overcome any challenge by working together and committing to a common goal. By investing in domestic manufacturing and prioritizing quality, we can create a sustainable economy that works for everyone – one meticulously-crafted hat and bag at a time.
NJMEP’s Mike Womack wrote an article in Manufacturing Matters about Unionwear, summarized here.
The Secret Behind Unionwear’s Domestic Manufacturing Achievement
At a time when so many American industries struggle to maintain their presence on home soil, Unionwear stands proud as a testament to determination, innovation, and a skilled workforce. Mitch Cahn, President of Unionwear, built the company on the foundation of American manufacturing, particularly in the baseball hats and sewn bags sectors. Unionwear’s unwavering commitment to domestic manufacturing and its unique approach to workforce development have ensured its continued success in a fiercely competitive global market.
Unionwear’s Origin: The Birth of a Hat Company
Unionwear began in 1992 with Mitch Cahn’s vision to create baseball hats for the burgeoning fashion industry. At the time, baseball hats were primarily worn in sporting events and promotional activities. However, Cahn observed a growing trend of baseball hats in popular culture that was not yet reflected in the retail space.
Cahn recognized an opportunity and seized it, purchasing the equipment from a defunct baseball hat factory in Jersey City and hiring its original six employees. Fast forward to today, and Unionwear boasts around 135 full-time employees and a successful track record in the textile industry.
The Workforce Secret: Maximizing Employee Potential
Unionwear’s achievements are a direct result of its commitment to its workforce. The company utilizes automation not as a tool to replace jobs, but to optimize the productivity of existing employees. By investing in state-of-the-art technology and continuously improving its manufacturing processes, Unionwear can keep pace with – and even outshine – its rivals in the industry.
The Challenge of Training and Development
But technology is just one piece of the puzzle; another crucial factor lies in the development of Unionwear’s human capital. Mitch Cahn emphasizes the importance of ongoing training and nurturing employees to reach their full potential, noting that the management’s role is to ensure workers are well-versed in the best practices for the company.
In a world where skilled laborers are becoming a scarce resource, Unionwear has found a way to attract and retain talent by offering a well-structured onboarding program that clearly defines employees’ roles and responsibilities. This streamlined process, alongside effective vetting and analysis of candidate strengths, ensures that new hires are set up for success from day one.
The NJMEP Partnership: A Win-Win Collaboration
For nearly two decades, Unionwear has worked closely with the New Jersey Manufacturing Extension Program (NJMEP), which provides vital support to manufacturers in the state. The NJMEP has placed professionals in a variety of non-production roles within the company, helping to fill vacancies and strengthen its workforce further.
The NJMEP partnership is particularly valuable as Unionwear seeks to attract young talent to the manufacturing industry. With an average full-time manufacturing employee salary approaching six figures annually in New Jersey, the opportunity for a well-paying, challenging career in the sector should be more than enough to grab the attention of job seekers.
The Unwavering Commitment: Keeping Manufacturing Domestic
What truly sets Unionwear apart from other manufacturers is its commitment to domestic manufacturing, using continuous improvement, lean manufacturing, automation, and technology to produce high-quality products in a fiercely competitive global market. The company remains dedicated to ensuring its workforce is equipped with the skills required to drive its ongoing success, with sustainability and growth at the forefront of its agenda.
In conclusion, Unionwear is an inspiring example of how a small, determined manufacturer can flourish on American soil. Its dedication to developing its workforce and providing high-quality products has made the company a shining beacon and a case study for other companies seeking to make their mark in domestic manufacturing. As a company built on true American values and an undying patriotism, Unionwear symbolizes the successful marriage of skilled labor and visionary leadership – truly, a story of manufacturing success made in the USA.
According to The National Law Review, the FTC announced an enforcement action against the manufacturer of Pyrex-brand products for allegedly marketing certain glass measuring cups as “Made in USA” and “American as Apple Pie” while importing those products from China.
In its complaint, the FTC alleges that Instant Brands, the manufacturer of Pyrex products, moved production of Pyrex measuring cups from the U.S. to China between May 2021 and March 2022. The FTC claims the company continued to market the imported products online as domestically made.
As part of the consent order, the company will be required to pay a $129,416 judgment and agree to several restrictions on its ability to claim that its products are made or assembled in the United States.
Furthermore, the order prevents Instant Brands from making unqualified U.S.-origin claims for its products unless it can show that the final assembly or processing occurred in the United States using all or virtually all U.S.-sourced components.
The order also requires Instant Brands to clearly disclose the extent to which a product contains foreign parts, ingredients, or processing to make a “Made in USA” claim.
The FTC has been cracking down on companies who claim to be made in USA but in fact are not. Unionwear welcomes these enforcement actions to make made in USA both realistic and honest.
Fortune features a story on a distinguished professor who has studied supply chains for the last 2 decades. This professor believes that the supply chain has been forever changed due to the pandemic.
He asserts that the global supply chains that modern companies depend on were turned upside down after COVID-19 emerged in China, resulting in shortages of nearly everything. Three years later, retailers continue to struggle to keep some products in stock, and overall stress in supply chains remains high. Many companies that didn’t go bust during the pandemic have been rethinking their supply chains and implementing changes to make them more resilient.
The professor lists some ways companies can, and should, adjust due to changes which are likely permanent.
1. Bringing supply chains home
Supply chains that span the globe are more vulnerable to problems outside of a company’s control, such as an earthquake or a citywide lockdown.
That’s why companies have been relocating suppliers and production facilities closer to home to ensure they can withstand disruptions and maintain business continuity. A recent survey found that U.S. transport and manufacturing reshored about 350,000 jobs in 2022. This trend not only has support from government subsidies but retailers as well. Walmart, one of the world’s biggest retailers, has committed to help its suppliers reshore by increasing its purchases of U.S.-made products by $350 billion over the next decade.
Since the pandemic, companies have since learned that being able to see what is happening along their supply chains is critical to adapting to disruptions. Companies have been investing a lot of tech, including state-of-the-art software to better communicate with suppliers to cloud computing for efficient data storage, AI tools to make better decisions and robotics for automating processes. This will likely continue in future.
There’s more at the article. It’s very well written and sourced. Have a look.
Thomas / Xometry explains what they believe will be the top trends in the supply chain for 2023.
1. There will be an increase in reshoring and near-sourcing
High freight costs, labor shortages, and factory shutdowns, transportation delays, and geopolitical conflicts, have compelled many organizations to rethink their approach to supply chain management. Reshoring manufacturing back to the USA is the best option in our opinion. But nearshoring might also be beneficial and practical for the supply chain. In fact, Fortune says 2023 could be “a nearshoring jackpot for the Americas.”
2. Product-as-a-Service
Product-as-a-service (PaaS) sees vendors combine physical products and services to better fulfill customer needs. For example, equipment manufacturers may lease specialized machinery with a subscription.
3. Crowdsourced Delivery
Last-mile delivery is proving particularly challenging, thanks to high warehousing costs, inefficient routes, lack of visibility, and transportation delays. Retailers began experimenting with crowdsourced delivery, where they leverage networks of local couriers. This approach could revolutionize same-day shipping. Think of it like Uber for packages.
4. Better Worker Conditions for Truckers
The U.S. was short almost 78,000 truck drivers in 2022. The shortfall can be attributed to including increased demand, a retiring workforce, and fewer younger drivers entering the industry. It also could be due to bad pay, a trend which seems to be shifing. In 2023, companies will likely implement referral bonuses and tenure pay to better retain their drivers. As well, it says in 2023, safety will be incentivized over productivity,
5. High Supply Chain Costs
Between January and June, for example, the price of regular motor gasoline rose by 49% in 2022 and the price of diesel fuel rose by 55%. Meanwhile, the ongoing war in Ukraine has seen a decline in food supplies and transportation bottlenecks.
Retailers might look to transform existing retail spaces into fulfillment centers, a tactic taken by Walmart, which is in the process of converting many of its 4,700 stores to mini-warehouses.
Another key trend in warehousing is that the vast majority of spaces are at capacity, with industrial warehouse vacancies sitting at around 1% (as of September 2021). Demand has gotten so high that some tenants are opting to lease space before it is actually required. It’s projected that another 400 million square feet will be needed by the end of 2025 to meet demand at current growth rates. So, turning workplaces into warehouses might happen sooner rather than later.
7. Major Skills Gaps Remain
A shortage of laborers, including truckers, is driving up wages and, ultimately, consumer prices. It’s also impacting recruitment. In fact, one in five people were likely to switch jobs in the next 12 months, and it’s projected that there will be more than two million manufacturing roles left vacant by 2030. As such, firms will need to do much more to upskill and retain their workforce.
8. Technology Investments
61% of supply chain leaders said technology is a source of competitive advantage. Meanwhile, 34% of supply chain leaders noted that adapting to innovative technology will be the most critical strategic change in the future. The top supply chain technology trends of 2022 included digital twins, autonomous things, sustainability tools, and analytics everywhere.
The Reshoring Initiative reported that third quarter 2022 reshoring and foreign direct investments (FDI) reached record levels, registering 15% higher than the second quarter with a strong fourth quarter looking to result in a total of more than 350,000 jobs reshored for all of 2022.
Reshoring says that 2022 projection of jobs would mark a nearly 40% improvement over 2021’s total of 255,000. Since 2010, the total jobs announced would top 1.6 million.
New investments in U.S. manufacturing by domestic and foreign companies briefly slowed their historic pace in the second quarter as inflation soared, but following the passage of the Inflation Reduction Act and Chips and Science Act, investment once again resumed.
For the third year in a row, reshoring outpaced foreign direct investment (FDI), which the initiative believes reflects the peaking of globalization and U.S. incentives to bring manufacturing back. “It also indicates that U.S. headquartered companies are understanding the benefits to localized production that many foreign companies have understood for decades,” the Reshoring Initiative states.
A poll release from Xometry/Zogby reports that 55% of American CEOs whose companies depend on manufacturing to produce and deliver their goods have plans to reshore their operations, and 95% of them said they would do so this year.
The vast reshoring effort is also fueling a new modernization wave, with CEOs investing in robotics, automation, and digital workflow tools as they ramp domestic production.
The survey reveals executives believe supply chain concerns will persist well into the foreseeable future. 89% don’t expect supply chain disruptions to abate any time soon, and 64% agree that there is enough manufacturing capacity in America to address the world’s supply chain concerns.
“Major legislation like the CHIPS and Science Act, the Inflation Reduction Act and the Infrastructure law helped buoy reshoring in 2022, and we expect that trend to accelerate in 2023 as companies further build supply chain resilience,” said Randy Altschuler, CEO of Xometry. “CEOs recognize that tapping into America’s vast manufacturing infrastructure can help solve most of the world’s supply chain problems. As they bring production back to the States, CEOs are also modernizing shops across the country, deploying digital workflow technologies, investing in new processes, and embracing automation.”
Automation, robotics and digital workflow tools are among the modernization efforts
“The resilience of American manufacturing and enterprise in general is astounding,” said Jeremy Zogby, Managing Partner of Zogby Strategies. “CEOs are optimistic and embracing innovation, which are the most-important factors that will drive resilience and manufacturing in 2023.”
According to a survey conducted by CNBC, more than half of logistics managers do not expect the supply chain to return to normal until 2024 or after. Among other reasons, bloated inventories have kept warehouses packed, and respondents said they saw a 400% increase in warehouse prices as space decreases.
Sixty-one percent of respondents said their current supply chain is not operating normally, compared with 32% that said it is functioning normally. When questioned when they see a return to normalcy, 22% were unsure, 19% said 2023, and 30% said 2024.
The dour outlook comes after almost three years of global supply chain problems, which began with the Covid outbreak. Survey respondents said they are still placing orders six months in advance to ensure their arrival.
When asked if they believed the Biden administration understood the challenges the supply chain was facing, 59% of respondents said it did not.
Earlier this year, for example, the administration rolled out a pilot supply chain data sharing program called Freight Logistics Optimization Works, or FLOW. The Department of Transportation told CNBC there are currently 46 participants in the program.
Supply Chain Brain has another great article on the benefits of nearshoring. While we at Unionwear prioritize reshoring manufacturing back to the USA, sometimes nearshoring, or friendshoring, is a good option as well.
This is because bringing manufacturing closer to home is a more attractive alternative to the offshoring business operation model. Although offshoring provides numerous benefits, numerous supply chain crises have put both suppliers and retailers at a disadvantage.
Thus, most businesses are considering nearshoring to optimize operations and supply chains. This reshoring and/or nearshoring ensures faster speed to market and quicker transit from manufacturers to customers. On top of that, suppliers and retailers also enjoy the ease of operating in a more convenient time zone.
“Everybody that had extended, long supply chains got clobbered during the pandemic, and one of the solutions is moving your location closer to your market,” former Redwood Mexico president, Troy Ryley, said recently. “The advantage of shorter lead times increases cash-to-cash cycles and provides an edge that many shipping customers cannot match.”
However, while both nearshoring and reshoring are sometimes used interchangeably today, they are not the same.
Nearshoring includes partnering with suppliers, manufacturers and other necessary entities within a supply chain that is located in countries near the company. For instance, a U.S. company might practice nearshoring by working with a supplier in Mexico instead of China.
Reshoring, on the other hand, is the act of bringing manufacturing and production services back to the country or region in which the company operates. For example, a company centered in North Carolina might practice reshoring by working with manufacturers in Georgia.
As global supply chains continue to face several cross-border trade challenges — particularly when importing items from Asia — many companies are adopting nearshoring, investing millions of dollars to situate plants near their target markets. For instance, many manufacturers with a main customer base residing in the United States and Canada are now establishing factories in Mexico.
Supply Chain Brain cites a new report saying 77% of supply chain organizations claim to currently prioritize sustainability, or to have plans to prioritize it, in the coming year.
Moreover, 8 in 10 supply chain organizations currently have sustainability efforts underway. However, less than half of the respondents (38%) indicated their companies are able to actually measure the results of their efforts.
Despite the high interest in sustainability, only 14% of the companies are using or have plans to use electric vehicles (EVs) in the near term — although nearly half indicated they don’t know enough about EVs to make a decision.
“There’s no question the economy is having a major impact on all aspects of business, and the supply chain certainly is no exception,” said Satish Natarajan, DispatchTrack co-founder and chief executive officer. “At the same time, the C-suite recognizes that the last-mile delivery experience is crucial to customer retention, so they have to find a way to reduce costs without breaking their promise to customers.”
Other key findings include:
The majority of respondents, 75%, consider supply chain logistics to be part of their company’s overall business strategy.
Companies worry there will be a dip in demand — but they are much more concerned about rising costs.
Delivery execution (42%) ranked highest on respondents’ “opportunities for improvement” list for last-mile efficiency
73% of companies are still struggling with driver shortages.
According to Manufacturing.net, a new Xometry poll, produced in concert with Forbes and Zogby, “reveals nearly two-thirds (64%) of the CEOs say they are currently reshoring or nearshoring their operations or planning to.”
This momentum from manufacturing leadership dovetails with consumer commitments to support made-in-the-USA products.
In late 2020, The Reshoring Institute – a non-profit dedicated to bringing manufacturing back to the United States – revealed the results of its latest “Made in USA” survey and sentiment appears to have shifted a bit. In this most recent report, 69% surveyed said they prefer made-in-the-USA products and three-quarters are willing to pay 10 or 20% more for them.
The American labor shortage has created challenges for companies looking to bring back production to U.S. shores.
Furthermore, as the Reshoring Initiative points out in its most recent newsletter, the march out of China is a long one. They cite Bloomberg Intelligence experts who claim it would take eight years to get just 10% of Apple’s production out of China.
That said, the Reshoring Initiative characterizes the following impactful variables that could influence more companies to bring production the United States:
The CHIPS Act, kicking off a new era of industrial policy.
High natural gas prices in Europe.
A strong manufacturing economy, setting the state for “a manufacturing resurgence in the United States,” according to McKinsey.
Add to that the challenges facing one specific locale that’s been recipient to a large volume of manufacturing goods once produced in America: China.
The country’s “Zero COVID policy” continues to wreak havoc on production rates in key regions, as well as increasing costs for manufacturing amid a backdrop of rising debt and a housing crisis. Additionally, “Economic and political instability will lead foreign companies to decide that China is no longer such an attractive market and will shift elsewhere, including to the U.S., Canada and Mexico.”
There seems to be a concurrent rise in American consumers’ willingness to support the objectives with their wallets.
According to The Hustle, Taiwanese chip maker Taiwan Semiconductor Manufacturing Company is upping its US investment in Arizona from one $12B plant to $40B across two plants.
“This is an incredibly significant moment,” said Apple CEO Tim Cook yesterday as he joined President Biden in announcing a critical win for US manufacturing.
In short, the world has put all of its eggs in one basket. TSMC is responsible for 92% of global advanced semiconductor production, and its chips are critical components in iPhones, military equipment, cars — you name it. If China were to ever invade Taiwan, we’d see global disruption unlike anything we’ve seen before.
The Trump administration first pushed TSMC to break ground on a $12B fab in Arizona. This year, the Biden administration doubled down on these efforts with the $53B incentive-filled CHIPS and Science Act, and now this.
We may soon be able to look at the back of an Apple product and read, “Designed in California. Made in the USA. At least Partially.”
This is happening for many reasons. Supply chain issues surrounding the pandemic is one.
Russia’s invasion of Ukraine and Chinese President Xi Jinping telling the Communist Party Congress that he is prepared to invade Taiwan is another. Meanwhile, U.S. multinational corporations realize how vulnerable they are because of China’s willingness to weaponize and politicize supply chains.
The author thinks it’s time for the United States to begin accelerating reshoring, rebuild American industries and put reindustrialization into overdrive.
Shortages of critical components have led many politicians and corporations to take a hard look at America’s vulnerabilities. They have to face the fact that the U.S. is now at the mercy of rogue nations like China. The Coalition for a Prosperous America’sDomestic Market Share Index (DMSI) also shows that domestic producers’ share of their home market fell to a record low of 63.8 % in Q2 of 2022. If the U.S. is to be less vulnerable to shortages, trade disruptions, natural disasters, war and blackmail, we must develop a strategy to accelerate reshoring production and jobs.
Furthermore, globalization and the decades-long multinational corporation rush towards finding the lowest price anywhere may be weakening.Larry Fink, of Black Rock Financial, said in his 2022 letter to shareholders that “supply chain disruption caused by the pandemic and Russian invasions of Ukraine has put an end to globalization we have experienced over the last three decades.”
Here’s another issue we are seeing. Besides losing our technology and inventions to our competitors, we have lost the skilled workers, the know-how, the suppliers and the capital investment that come with investing into production at scale. Reshoring the industrial commons is going to take an investment in basic industries that are ubiquitous to manufacturing processes.
One trend we can foresee at Unionwear is, when companies reshore to the US, they will find we have a major skills gap. We aren’t the only ones either.
According to this article from Casting Source, unpredictable global disturbances spotlighted the need to reshore essential product ecosystems. But this won’t be easy, as firms need to overcome the manufacturing workforce skills-gap. Indeed, forty-five percent of manufacturing executives surveyed have already turned down business opportunities due to lack of workers.
How? U.S. manufacturers need to engage a wider, more diverse labor pool by increasing diversity, equity, and inclusion (DEI); add flexibility models to attract and retain talent; overcome misperceptions of manufacturing careers; re-skill and up-skill existing workers; and adopt public-private partnerships to provide training that aligns with the needs of business and industry. They also need to embrace lifelong learning for employees to keep them engaged.
You can only reshore to the US if there are enough people to do the work. Not only that, but people need to stay on the job once they get there. There is a lot more detail at the article. Have a look here.
American Machinist has an article which we at Unionwear agree with for reshoring to stick, manufacturers need to modernize.
For decades, U.S. manufacturers reaped considerable production-cost savings by moving their operations offshore, primarily due to the low cost of foreign labor. And although the reshoring trend began around 2010, the past few years have seen a sharp increase in reshoring manufacturing, due in part to rising labor costs worldwide. Obviously, the Covid-19 pandemic had a lot to do with accelerating the trend as well.
Another notable factor motivating U.S. manufacturers to reshore is a wholesale shift in perspective, from price-per-part cost modeling to a total-cost-of-ownership mindset. This includes direct costs, such as record-high shipping rates, managing offshore vendors, and overstocking to buffer against future supply shocks. Then there are indirect costs, including loss of control of intellectual property, risks to reputation, and changing ESG standards.
Two of the top trending factors currently influencing manufacturers’ decisions to reshore are noteworthy: social and ethical concerns due to human rights abuses in China, and Walmart’s $350-billion commitment to sourcing U.S.-made products.
Other factors trending up include manufacturers inventory shortfalls due to supply-chain disruptions, rising freight costs, and the ability to mitigate high U.S. labor costs with automation.
Whatever the motivation, reshoring has outpaced foreign direct investment (FDI) in job creation for three consecutive years, creating a wealth of new employment opportunities in domestic manufacturing.
However, the future of U.S. manufacturing remains to be seen. Businesses will undoubtedly experience some growing pains as they transition away from long-held practices.
For reshoring to truly stick, manufacturers must offer improved products and impeccable customer service that will surpass foreign manufacturers.
Their efforts should involve tactics including but not limited to:
• Maintaining quick responsiveness to RFQs;
• Communicating proactively about ways to lower customer costs or decrease lead times;
• Providing failsafe security and IP protection;
• Consistently delivering orders on time.
Manufacturing added 32,000 jobs in October, according to data released by the Bureau of Labor Statistics on Friday. America’s factories are booming, gaining an average 37,000 jobs per month in 2022.
Alliance for American Manufacturing President Scott Paul said:
“Factory jobs continue to be a reliable engine of job growth, particularly for workers who aren’t seeking a four-year degree. The investments made over the past year in infrastructure, clean energy, EVs, and semiconductors should continue to pay job dividends next year and beyond. But there are threats to this growth: an overzealous Fed, global headwinds, and unwelcome pressure to lower tariffs and Made in America requirements.
“Congress and the administration should stay focused and continue to build on the policy support that has laid a foundation for factory job growth. Today’s jobs numbers show what can happen when we begin to put an industrial policy in place.”
Harvard Business Review has a great article on how Maersk designed their supply chain to be more resilient.
They accomplished this by taking a systems approach to innovation — one that is aligned to the enterprise strategy, solves relevant problems for internal and external customers, develops clear interfaces with partners, and builds and maintains broad organizational capacities. This can bring clarity, resilience, and scalability to efforts to build the supply chain of the future, one that other firms can learn from.
Instead of taking a limited approach to innovation, Maersk’s leaders adopted a systems approach that integrates strategy, processes, and talent in a coordinated way. The only way to ensure agility and resilience is by addressing systemic issues intentionally, focused on the long term, brings together clear priorities, has well-designed repeatable processes, robust governance, and a skilled team.
Specifically, Maersk created a dedicated innovation center in 2021 that has used the following three systems-design principles:
1. Keep a clear focus on enterprise priorities.
The innovation center focused on to port-transload operations — moving the contents of international containers from ocean carriers into 53-foot truck trailers — which was a major bottleneck in North America. It created the Pacific Transload Express, a 117,000-square-foot, 103-door transload facility located a short train trip away from the chaos of Vancouver’s three major container terminals, reducing the volatility of door-to-door times for container shipments from 35 to 75 days to 35 to 40 days. By eliminating more than 100,000 local truck trips per year, it reduced CO2 emissions by more than 15%, advancing Maersk’s goal of being carbon neutral by 2040.
2. Create an effective governance system and clear interfaces with internal and external partners.
The lines of reporting for its innovation center extend up to the C-suite, ensuring that it has the full support of senior management and key operational leaders. There is an innovation council, whose members include Maersk’s North American regional managing director and the unit’s executive vice presidents of operations and corporate operations. External stakeholders providing input to the council include multiple universities (e.g., the MIT Center for Transportation & Logistics), government entities such as the New Jersey Economic Development Authority, the commercial robotics firm Boston Dynamics, and multiple startups. Having the perspective of all these key parties ensures that the innovation center remains focused on the most relevant problems and that it can pivot quickly when an initiative creates new ones.
The innovation group also maintains its own relationships in the VC and startup world to increase its access to new, disruptive technologies and bring an outside-in perspective to their initiatives.
3. Ensure that the center is fully resourced and employs clear and repeatable processes.
Maersk’s leaders thought carefully about the innovation’s center location and chose a dedicated office space in Jersey City, New Jersey, which is far from Maersk North America’s headquarters in suburban Florham Park, New Jersey. The talent they sought was in the metropolitan New York City area, and the urban location was a short PATH train ride from Manhattan. In addition, the site’s distance from the regional unit’s headquarters in Florham Park would provide the psychological and physical separation necessary to ensure that the innovation center didn’t simply default to Maersk’s long-established methodologies.
To keep its teams tied to Maersk’s strategy and remove the need to reinvent the center’s operating model every time it investigated a new idea, clear, repeatable processes were designed and communicated. Instead of leaping from idea to proof of concept, its innovation process begins with the identification of a problem, the stakeholders most affected by it, and its economic and operational impacts.
The Outcome
By November, 2022, Maersk had piloted more than 23 initiatives, seven of which are being rolled out at scale, and two of which were canceled. The net result is a 46% reduction in the lead time variability of shipments from Asia to North America, as well as significant savings. But at an industry conference that same month, North America Regional Managing Director Narin Phol cautioned against complacency. “Supply chain disruption is a constant,” he said. “Don’t take anything for granted.”
The Biden-Harris Administration is announcing a new set of public and private sector commitments aligned with President Biden’s Federal Buy Clean Initiative, which leverages the Federal Government’s power as the largest purchaser in the world to advance low-carbon construction materials across its procurement and funded infrastructure projects.
Partnerships between state, Tribal, regional, local and industry leaders are critical to ensure that Buy Clean investments in clean manufacturing and climate-resilient infrastructure benefit all Americans across the country.
President Biden’s Action Plan to Accelerate Infrastructure recognizes that over 90% of bipartisan Infrastructure Law funding is delivered by non-federal agencies, underscoring the need for strong partnerships across public and private sectors. Building on recent Administration announcements through the Federal Buy Clean Initiative, the actions to create more, good paying manufacturing jobs while tackling the climate crisis.
Last month, the Administration announced a major set of Buy Clean initiatives, including a policy to prioritize the Federal Government’s purchase of steel, concrete, asphalt, and flat glass that have lower embodied emissions across their lifecycle—including manufacturing, transportation, installation, maintenance, and disposal. These construction materials account for nearly half of all GHG emissions from U.S. manufacturing.
Strong partners in the manufacturing sector are innovating and investing in scaling up production of lower-carbon materials. At the same time, design, architecture and engineering firms are integrating cleaner materials into project designs, and major corporate purchasers are sending clear demand signals.
An article at Mondaq.com goes into some detail about the many opportunities presented by the recently passed Inflation Reduction Act (IRA).
Among other things, the Act saw the introduction of a number of new and expanded tax credits aimed at onshoring American manufacturing, representing opportunities for manufacturing within critical industries, in particular those industries that are key players in the Biden administration’s goal to address climate change. The incentives range from tax credits directly to manufacturers of certain equipment to incentives for taxpayers to purchase equipment from American manufacturers.
Many of the tax credits will go into effect on January 1, 2023. Treasury and the White House have stated that they will work with industry to ensure that the regulations have a broad consensus and can benefit both large and small manufacturers. Credits are available on an annual basis for eligible components sold beginning in 2023, going through 2032 (with a phaseout beginning in 2030).
One example: a new production tax credit was introduced with the IRA. Eligible components include components within wind, solar, and battery projects, such as PV cells, PV wafers, solar modules, blades, nacelles, inverters, and battery cells and modules, among many others.
The IRA also expanded a tax credit that provides incentives for solar manufacturers, among other clean energy producers, for purchasing and commissioning property to build a manufacturing facility before January 1, 2025.
For taxpayers that don’t have the tax appetite to claim the credits on their returns directly, the IRA enacted two new provisions that may help taxpayers take advantage of these credits. Manufacturers can receive a direct cash payment from Treasury for the first five years for which the manufacturer would otherwise have been eligible for the credit.
FastCompany has an article explaining why the supply chain is still kind of a mess, and when experts believe it will finally return to normal.
Here are six trends experts are seeing regarding the supply chain.
1. GOVERNMENT INTERVENTION REMAINS A POSSIBILITY
While governments have tried to clear a path as much as possible for shipping companies, they’ve resisted a direct hands-on approach through this crisis. That might change, however.
“One of the ways governments are starting to respond to the challenges these dynamics present is to look more closely at supply chains and supply chain resilience as a national security imperative,” the report reads. “If this continues–as it seems likely to do–government intervention with trade and sourcing is likely to become a more pronounced challenge for supply chain managers. The war in Ukraine has amplified and accelerated trends already set in motion.”
2. LAST YEAR’S SHORTAGES COULD TRANSFORM INTO NEXT YEAR’S OVERSUPPLY
Early this summer, Walmart, Target, and others had huge discounts on clothing and home goods because a lot of the materials they had ordered up to a year ago finally hit stores, overwhelming them with inventory. For a brief moment, supply outstripped demand. As we head toward a recession, consumer demand is likely to be reduced in the months to come. And that could make things even more challenging for the shipping/supply industry on a different level.
Put another way: Lower demand could result in oversupply.
3. THE LABOR MARKET ISN’T EXPECTED TO IMPROVE
The labor issues that have plagued so many companies for the past year are just as prevalent, if not more so, in the shipping industry. As in many industries, workers are seeking pay increases to keep up with inflation.
4. THERE MAY SOON BE A SURPLUS OF SHIPS
Next year is expected to see a rush of new vessels. Some 28% of the current installed fleet capacity is on order and just under half of that is expected to be delivered over the course of next year. That could make container rates lower, which could work out well for consumers, as shipping costs could drop.
5. CLIMATE CHANGE COULD POSE ADDITIONAL PROBLEMS
Ecoclimate issues could present just as notable a roadblock for shippers. Low levels in Germany’s waters are impacting economic activity. And in the U.S., the Mississippi River is seeing falling water levels, which has resulted in a log-jam of over 100 vessels. There are heat waves in China and hurricanes are becoming stronger than ever. All of these present an opportunity to disrupt supply chains around the world.
6. THINGS ARE GETTING BETTER
Signs are now pointing to a better year in general for supply chains in 2023. The Logistics Managers’ Index for September read “September’s future predictions hint at normalization and a return to business as usual over the next year.”
“How long will it take for this gradual improvement to get to a point where the market is fully back to normal?” the report reads. “There are multiple different ways to look at this, [but all indicate] a full reversal to normality should come in March 2023.”
Unionwear is pleased to announce that, once again, we received an A+ supplier rating from SAGE, a platform that Unionwear’s clients use to search for products.
Unionwear has received this designation many times in the past. What makes this year’s announcement special to us, however, is that we were able to achieve the rating during the pandemic and unprecedented supply chain upheavals. Since our clients are the ones who are giving us the ratings, we know that Unionwear delivers top-quality products and excellent customer service even during unprecedented disruption.
Furthermore, Unionwear is one of only a handful of union-made in USA manufacturer of hats, bags, portfolios, and other promotional products. Not only are we a union made in America manufacturer, but our business model allows us to create highly customized solutions so clients can get exactly what they want. That’s why Unionwear can claim we make “a trillion hats,” because we can create exactly what you want in a timely and cost-competitive way. Even in late-2022, clients are still struggling to get orders into their customers’ hands, and once they realize their orders are stuck, they turn to Unionwear. Thanks to our team’s hard work and customer success, we are even looking to grow our business, even as others struggle to keep up with rising costs across the board.
Everyone at Unionwear worked together to achieve this A+ status and we look forward to working with a wide variety of promotional product professionals. Email us at orders@unionwear.com to get the exact items you want on time at a fair price.
If you want to keep ahead of everything supply chain, one great resource is Supply Chain Brain. In this article, they offer four ways companies can mitigate supply chain headaches due to US-China tensions.
The gravity of the situation is compelling U.S. companies to shield their supply chains from the ensuing volatility and uncertainty. While many prepare for the impact of China’s isolation from U.S. markets, others fear significant damage to their businesses if they oust themselves from the Chinese market or supply chains.
To ensure that U.S. companies aren’t impacted by trade tensions in the near future, they must act now. Business leaders need to expand their horizons beyond China. Following are a few crucial actions they can take to help mitigate the risks emerging from the current trade conflict.
Monitor U.S.-China developments closely. Global trade conflicts almost always come along with sanctions, tariff rises, and regulatory burdens imposed by governments on both sides. Since 2018, the U.S. and China have been involved in a war of tariffs and retaliatory tariffs. The brunt of this multifaceted tension is manifesting itself through supply chain inefficiencies, disruptions in transportation routes, and hikes in tariffs and duties. To stay updated on the trends, monitor press releases and publications on various government portals like the U.S. Department of Homeland Security, U.S.-China Business Council, U.S. International Trade Commission, and U.S. Customs and Border Protection.
Diversify your supply chain, including reshoring and nearshoring manufacturing. The U.S. tariffs on Chinese imports led to rising supply chain costs, decreasing profits for the U.S. industries, and ever-increasing uncertainty. In response to this, the number of U.S. companies sourcing from other countries shot up. It’s time for all companies to start exploring new manufacturing opportunities. U.S. companies are nearshoring or relocating their supply chains closer to home in markets such as Mexico. U.S. imports from Mexico have increased around 25% in the last five years, and we see that trend continuing this year as well.
Collaborate with suppliers. U.S. companies must understand the crucial need for collaborating with their suppliers for risk mitigation. U.S. companies must start focusing on increasing transparency in their supply chains. Businesses must be able to map all the nodes in their supply chain. Deeper collaboration with existing suppliers and the use of external supply chain intelligence tools can generate real-time insights on suppliers’ suppliers, as well as other risks that are hidden in the deep tiers of supply chains.
Seek support from the government. In a recent bid to fight aggressive Chinese trade advances, the U.S. government put forth a strategic approach that focuses on investing in domestic industry, technology and infrastructure, and aligning with partners and allies to combat China’s actions globally. There are some great government initiatives such as the National Export Initiative and Trade Americas, and bodies like the Office of the United States Trade Representative, aimed at assisting U.S. exporters with their business expansion.
Now is the time to start looking at these as viable strategies to mitigate the volatility coming from China. Read more about it here.
Unionwear is a big believer in reshoring manufacturing from foreign countries — especially China — back to the USA. Obviously, it is good for the US to create more jobs. But it’s also good for business. Supply chain disruptions have crippled businesses for over two years and there is no sign of slowing, especially given the sorry state of US-China relations, and companies should get started bringing manufacturing back to the US before they find themselves in a predicament they can’t easily get out of. Freightwaves has a lengthy article on this very topic, highlighting a combination of covid, Taiwan, and Chairman Xi’s approach to business.
The most immediate impact to supply chains in Chinese president Xi Jinping’s third term will feature his signature zero-COVID policy. China’s draconian surveillance and control regime of tests, quarantines and lockdowns seemed to work well enough for a year. Xi’s policy held down infection rates and kept the economy pointed up and to the right.
When the Omicron variant’s greater infectiousness overwhelmed mask and vaccine protections, China kept forcefully applying lockdowns, massively disrupting both its own economy and trans-Pacific trade in general. The consensus of the international financial community is that China’s zero-COVID policy under Omicron has been a disaster casting a pall over the global economy.
But whether or not Xi rolls back his zero-COVID policy or not, the future of the trans-Pacific is troubled. For instance, former President Donald Trump’s tariffs set off panicked behavior by U.S. importers that roiled the trans-Pacific. Companies accelerated the timelines on their purchase orders, “pulling forward” shipments that were originally scheduled to arrive after new tariffs took effect in order to avoid paying the duties. A logjam of volume increased rates, reduced schedule reliability, congested ports and filled warehouses, especially in Southern California.
And that’s just the beginning of our troubles. In fact, we believe tensions between our two countries will likely continue into the near future, leaving open the question of whether American firms can still trust China as a reliable partner. In the near-term, we believe the answer is no.
Until fairly recently, just-in-time supply chains have worked pretty well, thanks to stable trade conditions and logistics capabilities worldwide.
Turbulence and uncertainty resulting from the Covid-19 pandemic, climate-related disruptions, geopolitical tensions between the United States and China, and the war between Russia and Ukraine have called into question the wisdom of continuing to operate factories on a just-in-time basis that are dependent on global supply chains.
These disruptions are tempting companies to revert to “just-in-case” systems that maintain inventory at various locations in the global supply chain to ensure business continuity.
According to HBR, that would be a mistake.
Just-in-time manufacturing remains the most efficient production system, especially with interest rates rising. Throwing it out and adding inventory willy-nilly would mean hurting performance without necessarily improving resilience.
A better option is to embrace a modified form of just-in-time. It entails creating stockpiles or manufacturing capacity to protect your operation from supply chain disruptions.
Toyota adopted this approach after the 2011 earthquake in Japan’s Fukushima Prefecture. It identified 500 priority parts, including semiconductor chips, whose lead times were very long and, therefore, vulnerable to disruptions. It then built a business-continuity plan requiring its suppliers to stockpile anywhere from two to six months’ worth of semiconductor chips, depending on the lead time. As a result, in the spring of 2021, Toyota did not experience any shutdown or slowdowns while rivals such as Volkswagen, General Motors, Ford, Honda, and Stellantis suffered. Any amount of buffer inventory, however, is still finite, and due to the prolonged chips shortage, Toyota eventually was affected and had to suspend production in some plants a year later.
Companies can revamp their just-in-time supply chains by identifying their contiguous parts that can be run on a just-in-time basis and then connecting these segments via buffers. These buffers could be stockpiles of inventory, excess or flexible capacity, or even warehouses or transportation shared with competitors and other companies. Thus, the company’s supply chain becomes a network of linked JIT segments connected by buffers. Creating such a JIT network requires four steps.
CNN reports that President Joe Biden’s Energy Secretary is awarding $2.8 billion in grants from the bipartisan infrastructure law passed last year. Twenty manufacturing and processing companies for projects across 12 states will receive grants, which include components affecting both the electric grid and electric vehicles.
Biden also announced the formation of the American Battery Materials Initiative, which the White House has called “a new effort to mobilize the entire government and securing a reliable and sustainable supply of critical minerals used for power, electricity and electric vehicles.”
The funding will be spent in Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee and Washington. It is expected to create 8,000 jobs, officials on a call with reporters ahead of the announcement said. The projects are expected to “develop enough lithium to supply over 2 million electric vehicles annually and establish significant domestic production of graphite and nickel,” according to the fact sheet.
Wednesday’s investment marks “the first of several rounds of investment in the battery supply chain,” a senior administration official on the call said.
The private sector, which was represented at Wednesday afternoon’s event, is expected to match the federal government’s investment.
“The recipients of federal grants to invest and build out the domestic supply chain are required to at least match the federal funding with private sector capital. They’ve more than done that in this case. So, the $2.8 billion is being leveraged for a total of a $9 billion investment today,” the official said.
Executives with Schneider Electric and Deere & Co. report that they will expand factories to three states. Deere will even reshore some production to the United States from China.
Schneider will put to work a total of $46 million at plants making circuit breakers and other electrical output products in Lexington, Kentucky, and Lincoln, Nebraska. Schneider employs about 128,000 people around the world and makes a wide range of electrical, automation and energy management products. They are doing this because they are shortening their supply chains via a series of North American investments totaling more than $100 million and adding capacity in Texas and Mexico.
Deere’s Louisiana plans call for the maker of agricultural and construction equipment to invest nearly $30 million to grow its operation in Louisiana, near New Orleans. That facility today designs sugar harvesting and earthmoving equipment and makes a range of products but will grow in the next two years to also produce medium-chassis cotton harvesters now being built in China.
The article first discusses how automation has played a central role in Unionwear’s growth, especially following the pandemic. Mitch recently invested roughly $1 million in tech upgrades to help meet demand.
Furthermore, Mitch discusses how the supply chain issues have not harmed Unionwear’s business, since they are reliant on domestic materials.
Additionally, he discusses how his made in America products are actually much more cost-effective, especially when you take into account the entire actual cost of manufacturing domestically. He is even considering manufacturing shirts in the near future as well.
Reshoring manufacturing is accelerating, largely driven by supply chain disruptions due to the pandemic. Companies are learning that they can’t get their products from overseas, especially China and Russia. While this is no doubt good for creating American jobs, there might be an unintended benefit to this as well: sustainability.
“Due to the proximity of the supply chain network, reshoring is expected to positively impact the scope 3 carbon emissions from supplier transportation and distribution,” said Makarand Karanjikar, senior vice president of supply chain deployment at Schneider Electric.
Karanjikar said the pandemic was “key in identifying vulnerabilities in supply chains and how prone they are to disruption.” Schneider Electric is aiming to have at least two sources for all of its critical parts and raw materials by the end of 2023.
“We have eliminated our dependence on any single country or region to avoid any geopolitical risks, and we are also driving some specific regionalization programs to shorten our supply chain and to manufacture close to our customers,” Karanjikar said.
Shifting operations from abroad back to the U.S. can lower greenhouse gas emissions in two ways: from avoiding emissions associated with shipping goods long distances overseas and from reducing emissions associated with production. That’s because the shorter you make the transportation cycle, the more you reduce your carbon footprint.
National Defense Magazine wrote an opinion article on why we must Americanize the US Defense Industry supply chain, and we at Unionwear agree.
The opinion piece cites that high-ranking U.S. officials and corporate executives have been saying, for years, that U.S. national security is at risk due to our military’s reliance on foreign nations for raw materials, parts and products. It is time for leaders to walk their talk and wrestle back the manufacturing and defense industrial base.
U.S. corporations have outsourced more than 5 million jobs and 91,000 manufacturing plants since 1998, according to the Economic Policy Institute. The closing of factories in the nation for the past 24 years has forced the U.S. military to increasingly rely on imports to keep forces armed and ready.
This opinion is strongly bi-partisan and should not be controversial.
President Donald Trump in 2018 identified hundreds of instances where the U.S. military was dependent on foreign countries, especially China, for critical materials. For example, an analysis from the U.S. Geological Survey at the time said the United States produced no rare earth minerals in 2017, while China accounted for 81 percent of global mining production. Rare earth minerals are used in magnets, radars and other electronics critical to defense systems.
The next administration raised the same concerns. A February report developed on the order of President Joe Biden warned of the consequences of low manufacturing investment in the United States. The study pointed out that the U.S. share of the world market in goods has continuously declined, and manufacturing output as a percentage of GDP has similarly declined, from more than 25 percent in 1947 to 11 percent at the end of 2020. The report went on to outline 64 recommendations as initial steps in a longer-term effort to build a strong and responsive supply chain in the coming years.
Despite the warnings, the situation continues to get worse. The COVID-19 pandemic highlighted the need for a continued push for onshoring and revitalizing North American manufacturing. When the outbreak began, supply lines necessary to sustain production within the defense industry were frozen, drawing attention to the vulnerability of the defense industrial base to being cut off. According to the consulting firm McKinsey and Company, only 22 percent of automotive, aerospace and defense players had regionalized production to boost their supply chain resilience by May 2020, even though they indicated previously they had prioritized the approach.
What got us here? It all boils down to companies chasing short-term profits to satisfy shareholders at the expense of loyalty to the United States, coupled with a fierce competitive landscape. Once a major manufacturer outsources, others in the industry have no choice but to follow suit to realize the same decreased costs.
It is time that the nation’s leaders heed the alarm bells, adopt the suggestions to Americanize the supply chain with haste and not let political roadblocks slow us down. We cannot afford to be hijacked by shortages, shipping delays, security threats, natural disasters or pandemics. With today’s modern technology, we can control costs and level up our workforce to jobs that will spur even greater innovation.
According to a news release, USDA Secretary Tom Vilsack announced $500 million in grants available to increase American-made fertilizer production to spur competition and combat price hikes on U.S. farmers caused by the war in Ukraine.
Grants will be used to support independent, innovative and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the U.S. and its territories.
The program will support fertilizer production that is:
Independent, and outside the orbit of dominant fertilizer suppliers. Because the program’s goal is to increase competition, market share restrictions apply.
Made in America. Products must be produced by companies operating in the U.S. or its territories, to create good-paying jobs at home, and reduce the reliance on potentially unstable, inconsistent foreign supplies.
Innovative. Techniques will improve fertilizer production methods and efficient-use technologies to jumpstart the next generation of fertilizers and nutrient alternatives.
Sustainable. Ideally, products will reduce the greenhouse gas impact of transportation, production and use through renewable energy sources, feedstocks and formulations, incentivizing greater precision in fertilizer use.
Farmer-focused. Like other Commodity Credit Corporation investments, a driving factor is providing support and opportunities for U.S. agricultural commodity producers.
Eligible entities are for‐profit businesses and corporations, nonprofit entities, Tribes and Tribal organizations, producer‐owned cooperatives and corporations, certified benefit corporations, and state or local governments. Private entities must be independently owned and operated to apply.
The maximum award is $100 million. The minimum award is $1 million. The grant term is five years.
According to a survey conducted by Xometry, CEOs whose companies depend on manufacturing to produce and deliver their goods are demonstrating supply chain resilience by investing in talent and technology while reshoring and nearshoring their manufacturing capabilities.
The quarterly survey, which tracks CEO and decision-maker sentiment at more than 150 leading companies nationally, reveals that 90% of CEOs expect supply chain concerns to stretch well into 2023.
But it reveals resilience in the face of continued disruption.
The majority of CEOs – 80% – are planning capital investments
Nearly 70% of CEOs said they are investing in employees
66% are investing in automation and workflow operations
63% are embracing emerging technologies like Artificial Intelligence (AI)
Nearly two-thirds (64%) of the CEOs say they are currently reshoring or nearshoring their operations, or planning to
25% planning to expand their offshoring capabilities and 11% are planning no changes
“In our 40 years of probing CEOs, business decision-makers and influencers, this survey of manufacturing executives certainly stands out,” said Jeremy Zogby, Managing Partner of Zogby Strategies. “The data confirms that executives, while having faced a myriad of disruptions, remain resilient and innovative, looking ahead with confidence and doubling down on talent and tech to strengthen their operations to minimize any future potential concerns.”
Skyrocketing gas prices in Europe is forcing European manufacturers of steel, fertilizer and other feedstocks of economic activity to shift operations to the US. These firms are attracted by more stable energy prices and muscular government support, including a raft of incentives for manufacturing and green energy. Also, new spending by Washington on infrastructure, microchips and green-energy projects has heightened the U.S.’s business appeal.
“It’s a no-brainer to go and do that in the United States,” said Ahmed El-Hoshy, chief executive of Amsterdam-based chemical firm OCI NV, which this month announced an expansion of an ammonia plant in Texas.
Despite inflation and other Covid-related supply chain problems, the US has emerged relatively strong from the pandemic, especially as China continues to enforce Covid lockdowns and Europe is destabilized by war.
Good news: The Biden-Harris Administration is serious about bringing manufacturing back to the US.
The Administration announced new actions under its Federal Buy Clean Initiative in Toledo, Ohio, to spur the development of low-carbon construction materials made in America while supporting good-paying jobs. Transportation Secretary Pete Buttigieg, U.S. General Services Administration Administrator Robin Carnahan, and Deputy National Climate Advisor Ali Zaidi announced the Federal Government will prioritize the purchase of key low carbon construction materials, covering 98% of materials purchased by the Federal Government, while visiting a Cleveland-Cliffs Direct Reduction steel plant in Toledo.
The Federal Buy Clean Initiative is a part of President Biden’s economic plan—including the Bipartisan Infrastructure Law, Inflation Reduction Act, and CHIPS and Science Act—to usher in a manufacturing boom in America. The Initiative ensures that federal financing and purchasing power are creating good-paying jobs, protecting public health, enhancing American competitiveness, and strengthening national security.
The Administration will:
Prioritize the Federal Government’s purchase of steel, concrete, asphalt and flat glass that have lower levels of emissions.
Expand lower-carbon construction materials used in federally-funded projects.
Convening states to partner on Buy Clean:
Increase data transparency through supplier reporting to help American manufacturers track and reduce emissions.
Launch pilot programs to advance federal procurement of clean construction materials.
This is great news for the Made in America movement, and we look forward to learning more about how the US government will continue to build on these successes.
Fast Company shares some ideas on how the US can make EVs without China, but it won’t be easy.
China currently controls 60% of the world’s lithium mining, 77% of battery cell capacity, and 60% of battery component manufacturing. Many American EV makers, including Tesla, rely heavily on battery materials from China.
In the short term, the US needs to rely on strategic partners overseas. The recently passed Inflation Reduction Act allows imports of critical minerals from countries with free trade agreements to qualify for incentives, but not imports of battery components. This means suppliers like Korea’s LG Chem, SK Innovation, and Samsung SDI, which supply 26% of the world’s EV batteries, are shut out. In the spirit of friendshoring — that is, reshoring manufacturing to allies and key partners, the Biden administration could issue a temporary waiver that makes it easier for Korean battery makers to move more of their supply chain to the U.S.
In the mid- to long-term, a concerted trade and diplomacy effort will be necessary for the U.S. to secure critical mineral supplies. The Democratic Republic of the Congo, where 70% of the world’s cobalt is mined, and Chinese companies control 80% of those supplies. To counter this, the Biden administration’s “friendshoring” vision has a chance only if it can diversify the lithium and cobalt supply chains.
Many industries are impacted by supply chain disruptions. One of the most vital is the agricultural sector. If food doesn’t get to store shelves, that would be a big problem, so it is important to look at them as sort of a bellwether for supply chain.
According to Agweb, there are three trends to look for in 2023 when it comes to supply chains.
1. Policy
The CHIPS and Science Act, signed into action by President Joe Biden on Aug. 9, aims to open new microchip processor facilities in the U.S. This bill will strengthen the U.S. long-term economic competitiveness and national security. With the $10 billion CHIPS and Science funding secured, experts hope new manufacturing sites will start breaking ground soon. However, he says it will take time to get production up and running.
2. International Trade
A lack of tires, windshield wipers, wiring harnesses are holding up production of farm equipment, but chips are getting the bulk of attention because they are in the shortest supply. Some manufacturers are opting to ship ag equipment without tires in order to get the farmer up and running with their own tires.
The answer to these bottlenecks is in Washington, D.C. Bringing jobs back to U.S. soil through trade policy and tax code investment in workforce could be the remedy, along with “friend shoring.” which means making sure our supply chains are with countries that are friendly to us.
3. Tech Trends Change to Move Away from Supply Chain Reliance
As the world works to solder the broken supply chain back together, various industries have taken note. Resourcing will permanently change production in more ways than one. U.S.-based manufacturing will be closer to the customer. There will be more innovative, efficient equipment production. And there will be an uptick in made-to-order production.
More than 15 years ago, NY Times columnist Thomas Friedman wrote “The World is Flat.” The premise of the book was that, as the world becomes more interconnected, we will be increasingly in competition with other talented people and companies around the world.
Last week, another NY Times Columnist (and Nobel-prize winning economist) Paul Krugman wrote that world is currently becoming less flat.
Krugman cites a recent Bloomberg review of C.E.O. business presentations which found a huge surge in buzzwords like onshoring, reshoring and nearshoring, all indicators of plans to produce in the United States (or possibly nearby countries) rather than in Asia. As such, we may be seeing early indications of a partial retreat from globalization. This is happening for a couple of reasons.
First, companies talking about reshoring production often make the point that modern techniques in some cases allow them to produce with relatively few workers, making cost savings from outsourcing becoming outweighed by the logistical advantage of producing close to home.
Second, producers are learning that the world is a dangerous place, especially when you rely on countries with authoritarian regimes like China. Indeed, the arbitrariness of Xi Jinping’s Covid lockdowns have made businesses newly nervous about relying on Chinese suppliers.
A third reason is politics. Some of the recent policies the US introduced will be at least mildly protectionist. Notably, the new tax credit for purchases of electric vehicles will apply only to vehicles assembled in North America.
According to CleanTechnica, solar power manufacturer First Solar announced a $1.2 billion expansion plan, including up to $1 billion to add a fourth factory to the company’s roster in a state to be named later. About $185 million will also go to upgrade the capacity of First Solar’s operations in Ohio. Altogether, the company expects to have more than 10 gigawatts in capacity online by 2025.
The story of how we got here is not straightforward.
The US once had a lock on the global solar manufacturing scene. Bell Labs introduced the first practical solar panels in the 1950s, and US manufacturers began churning them out for the space program and other niche applications domestically and elsewhere around the globe.
By the 1980s, though, US manufacturers began losing out to Japan, and it was all over when China entered the picture. By the 1990s, the US Department of Energy was casting about for a way to revive the domestic solar industry. Labor costs were one of the leading obstacles, partly due to the use of silicon as the material of choice for solar panels. The hunt was on for new materials that would be a better fit for high volume, high throughput, automated manufacturing systems.
Additionally, few can satisfy the made-in-America purity test. Some operate under the umbrella of corporations headquartered overseas, and some assemble solar panels from parts made overseas. This purity test may seem somewhat out of step in a globalized economy, but if domestic energy security is the goal, then a soup-to-nuts domestic manufacturing base is a priority.
Thanks to some hard work by government partners and First Solar, this announcement finally came to fruition.
Democratic US Representative Marcy Kaptur of Ohio’s 9th Congressional District said this in a statement: “Northern Ohio has already revolutionized the field of solar technology. Now, through this remarkable partnership between the U.S. Department of Energy, the University of Toledo, and First Solar – our region will become a hub of next-generation energy innovation that is built right here at home by Ohio’s workers.”
According to PV Magazine, Canadian battery developer Zinc8 Energy Solutions announced its plans to begin battery production in the United States incentivized by manufacturing production credits within the Inflation Reduction Act.
Zinc8 Energy Solutions has developed a proprietary flow battery technology that can reportedly deliver power from 20 kW to 50 MW that can store and discharge energy durations from 4 to 100 hours.
Unlike lithium-ion technology, which requires new stacks to scale, Zinc8 says it has decoupled the linkage between energy and power. This means that scaling Zinc8’s technology can be accomplished by simply increasing the size of the fuel tank and quantity of recharged zinc fuel.
According to the manufacturer, the technology promises zero capacity fade over an extensive lifetime, and the batteries are non-flammable, non-toxic and sustainable with stable supply chains for mass production.
The company chose Ulster County in Upstate New York after US Senator Chuck Schumer personally called the CEO of Zinc8 to urge the company to expand their operations in Ulster County.
“Zinc8 is the jolt of electricity the Hudson Valley needs, and is proof positive that when you invest in fighting climate change you are investing in creating good-paying jobs, new economic growth, and a brighter future for our communities, As the EPA officially begins cleanup of this once-contaminated asbestos dumping ground,” Senator Schumer said. “I can think of no better way to usher in a renaissance for Ulster County than by making this the foundation for supercharging the fight against climate change with an investment in clean tech manufacturing.”
Until fairly recently, the majority of Americans didn’t think twice about the supply chain. If we wanted something, we would put it on a shopping list, go to the store, and somehow that thing would just… be there.
The phrase “supply chain” is now synonymous with a roulette wheel — sometimes the products you want are there, other times, products are out of stock.
But that’s not the entire story. The other supply chain problem is the talent supply chain of skilled labor.
While many industries are confronting a labor crunch, transportation’s talent supply chain is facing a triple threat of labor shortages that begin with recruitment and retention challenges, compounded by an imminent retirement wave, and coupled with a coming technology transition.
Just as $1 trillion of federal spending to rebuild the nation’s infrastructure is set, there is a shortage of construction workers to repair crumbling roads, ports, and rails. According to an analysis by the Associated Builders and Contractors, there were 396,000 open construction jobs in March 2022 — a full 60,000 more than the year before.
Furthermore, the coming electrification of the transportation system will ultimately require a new workforce, as well as training a new generation of workers to maintain electric vehicles and robotic systems.
Moreover, to successfully integrate the nation’s power infrastructure with the transportation system will need a specialized workforce to build, operate, and maintain an electricity generation and distribution system will also be required to meet unprecedented power demands.
The opportunity is for younger workers who have a knack for mechanics — jobs, and wages, across the transportation sector will probably surge.
Marketplace has an article quoting the Reshoring Initiative, who noted that American companies are on pace to reshore nearly 350,000 jobs this year, the highest number in recent history.
As we have said in this blog for some time, global manufacturing and logistics have seen lots of hiccups recently, helping to motivate the movement back to the U.S.
Additionally, the pandemic repeatedly shut down factories in China, while fires and flooding have done the same in Japan and Thailand. There was that ship that got stuck in the Suez Canal. Add in skyrocketing shipping costs.
The U.S. will not become a leader in manufacturing apparel or toys. But it is gaining jobs in high-tech manufacturing for things like semiconductors and electric vehicle batteries.
David Simchi-Levi, a data scientist at the Massachusetts Institute of Technology, said tensions between the U.S. and China and legislation like the CHIPS and Science Act and the Inflation Reduction Act will incentivize manufacturing in this country.
All the rage in Washington is around the Inflation Reduction Act. However, a bipartisan bill that was recently signed into law, called the Ocean Shipping Reform Act, will do more for supply chains — and, ironically for inflation — than the so-called Inflation Reduction Act. The American Prospect discusses the bill in some detail, and it is worth reading about.
Among other things, the Ocean Shipping Reform Act of 2022 (OSRA 2022), passed in June, is intended to crack down on the ocean shipping cartel. It gives the Federal Maritime Commission (FMC) authority to scrutinize shipping contracts, prevent price-gouging and extortionate fees, and facilitate exports.
The Federal Maritime Commission also signaled that it would require ocean carriers and ports to share cargo data with other stakeholders, in a bid to fight congestion. Some freight companies have already begun to share capacity information. The OSRA 2022 also finally gave the FMC the authority to force data-sharing. While bottlenecks in aggregate have been easing with the slowdown in goods demand, specific areas remain clogged, and getting early warning on the problems can mitigate shortages and price shocks.
Furthermore, the FMC also issued guidance to make it easier for cargo owners to fight unreasonable shipping charges and warned ocean carriers to stop charging companies for containers that are stuck at the ports and cannot be moved.
OSRA 2022 “turns the FMC into an enforcement agency along the lines of the Securities and Exchange Commission and the Federal Trade Commission,” Agriculture Transportation Coalition executive director Peter Friedmann told Freight Waves. While the agency needs more resources, there are indications that shippers are heeding expert advice to start complying with the law. That should filter down into lower shipping prices on every imported good.
It’s another surprisingly good thing coming out of Washington. Have a look at the Prospect article here.
CNBC reports that the US supply chain is now facing two separate hurdles: one in Europe, the other in China.
First, a heatwave in China has shut down key manufacturing facilities there. Second, negotiations between the trade union verdi and the Central Association of German Seaport Operators (ZDS) remain inconclusive.
“If no compromise will be made, we can expect further strikes which will, even more, worsen the already stressed situation in the Northern Ports,” explained Andreas Braun, Europe, Middle East, and Africa ocean product director of Crane Worldwide Logistics. “Congestion, vessel schedule, and intermodal operations are already a mess and further strikes will just contribute to it. We will not see a change back to a normal situation before Q1 2023.”
Meanwhile, high temperatures in China are forcing some manufacturers to shut down production for six days because of government planned power cuts. Power limit notices for manufacturers in Changzhou, Nanjing, Nantong, and other regions in Jiangsu province have Worldwide Logistics alerting import clients in an email that, “The sudden orderly power consumption notice has made the supply chain more challenging under (the) current situation of (the) COVID -19 epidemic.”
Yahoo! News reports that the global supply chain is going to take at least another eight years to be reconfigured.
As we have said quiteextensively, the supply chain is in chaos. And there doesn’t seem to be an end in sight. Expert Mark Millar said this opens an opportunity to reevaluate sourcing and production. One such solution is to consider a more regional approach going forward, something others have called friendshoring, others still are considering nearshoring. He also expects global supply chain reconfiguration to last through 2025 to 2030. Geopolitical instability, including the Russian invasion of Ukraine, haven’t helped to say the least. And, since future conflicts are possible, that will mean even more disruption.
How should companies fix the problem?
In the short-run, collaboration between supply chain partners is the practical way to get through the crisis. This includes finding alternative sources or transportation routes that may be more expensive but can deliver goods to their final destination.
On a medium-term basis, the disruption has created an opportunity for reevaluation after 30 years of globalization. For instance, companies might want to take a more local and regional approach in the future that would build more resilience into their supply chains and reduce emissions. Some businesses are already reconfiguring their supply chains, moving sourcing and production closer to the final destination market.
What is friendshoring? Basically, it means that the US and its strategic partners should create trade routes with partners who broadly share our values, instead of assuming 100% of manufacturing can, or should, take place in the US.
In a report on America’s supply chains earlier this year, the Biden administration warned: “The United States cannot make, mine, or manufacture everything ourselves. We must cooperate with our allies and partners to foster and promote collective supply chain resilience.”
Treasury Secretary Janet Yellen echoed this idea in a speech to the Atlantic Council. “Favoring the friendshoring of supply chains to … trusted countries, so we can continue to securely extend market access, will lower the risks to our economy as well as to our trusted trade partners.”
This is not without risks. Friendshoring is part of a “deglobalization” process, which could see further supply shocks and higher prices in the short term and lower growth in the long run.
According to Forbes Tech Council, roughly $900 billion in tech deployments fail every year because people are not trained or qualified to operate them. Apparently, artificial intelligence efforts often fail because although we upgrade our technology, we fail to upgrade our people. Indeed, we can’t use AI to automate our workforce because workers don’t yet have the skills to operate it. We have all this talent, but we don’t know how to find it.
Finding the right talent to operate AI systems is like having a library full of books with no Dewey Decimal System. If you walked into a library expecting to find the latest New York Times Best Seller, you would have to sort through thousands of titles to uncover it, if you could find it at all.
In a talent shortage, employers have to not only win the battle for in-demand talent but reskill, upskill and identify stepping-stone skills in their workforce to remain competitive.
Thus, employers need to look not just at skillsets, but candidates’ ability to learn and adapt as technology changes.
The United States isn’t always seen as an exporter, especially when it comes to manufacturing garments. But, in fact, the US really does export quite a bit. Apparel Resources reports that the USA exported $2.87 billion worth of garments from January to May in 2022.
Canada was the top destination that sourced $816.29 million worth of garments, noting an 18.1% yearly surge.
Mexico comes second with import value reaching $712.84 million, growing at the rate of 38.4%. It’s worth noting that both Canada and Mexico are trade partners to USA under USMCA agreement and enjoy preferential trade advantages.
Meanwhile, Nicaragua and Guatemala sourced $156.11 million and $93.97 million worth of garments respectively, while the UK’s import value reached US $ 89.17 million.
Yahoo! News reports that hundreds of Aston Martin supercars have been left unfinished as the beleaguered luxury carmaker struggles to procure parts amid supply chain struggles brought on by lockdowns in China and War in Ukraine.
The iconic British brand and James Bond favorite posted its eighth consecutive half-year of losses, fueled by a £134 (about $163) million knock from foreign exchange movements.
Aston Martin CEO Amedeo Felisa said: “With the supply chain challenges that impacted our first half performance expected to ease, we are now focused on accelerating deliveries of the DBX707, continuing to ramp up Aston Martin Valkyrie production, and transitioning to our next generation of sports cars.”
CNBC reports that Renault’s CEO believes there will be no sudden let up in the supply chain shortages that have dogged the autos industry, even as the carmaker dubbed its “emergency” period over.
“We don’t anticipate a sudden, complete improvement of the situation. But, in the meantime, we have learned to manage this complexity,” de Meo told CNBC’s Charlotte Reed.
“We think the situation [is] getting better; May and June were not so bad. But, of course, we are missing full transparency on supply chains because the world is becoming more complicated in general,” he said.
He added that the sourcing of raw materials would continue to be an issue for automakers but added that the company had grown more resilient.
We have seen this kind of resilience across manufacturing. Unionwear, too had to be flexible and nimble during the supply chain crisis. However, it is worth noting that these issues are mitigated by those companies which manufacture domestically.
No single cause accounts for the microchip shortage. COVID-19 has had an outsized effect on the problem, as factories and ports closed while millions of people worldwide established home offices. But other contributors include labor shortfalls, lack of raw materials, trade tensions, and the growth of 5G electronics, which require more chips than previous generations of devices.
How are they responding?
Most immediately, companies are taking whatever microchips they can get and then building more adaptive manufacturing processes to deal with the obstacles that arise from this indiscriminate approach.
Companies are also looking into ways in which rewriting software might patch some of the shortage; perhaps code can be rewritten in such a way that a single chip can do more work than it formerly did.
In other words, they are getting creative, which is what Unionwear had to do at the outset of the pandemic as well.
MIT Sloan has an article about how the Russian invasion of Ukraine is impacting the global economy, specifically regarding the supply chain.
According to Sloan, the conflict is impeding the flow of goods, fueling dramatic cost increases and product shortages, and creating catastrophic food shortages around the world, according to experts at a virtual symposium hosted by the MIT Center for Transportation and Logistics.
It is worth noting that this article was written before Russia bombed Odessa a day after declaring a cease-fire to ease hunger problems occurring around the world.
Naturally, the invasion was hardly the only contributing factor to the current global supply chain crisis, panelists at the symposium said. Significant supply chain disruptions started bubbling up during the heat of the trade wars in 2018 and 2019 and were pushed into new territory over the course of the COVID-19 pandemic, continuing to this day.
The resulting ripple effects of the war are threatening the supply of key food resources like wheat and raising the possibility of a global famine, according to Sloan.
According to the Sourcing Journal, a majority of procurement executives indicated “significant disruption” in their raw materials supply chains, with 67 percent saying the technology solutions they currently use are not likely to be able to handle the headwinds expected over the next three years.
The survey was commissioned by Ivalua, a Redwood City, Calif. cloud-based company that helps businesses manage their spending and supplier base.
UBS analyst Chris Snyder said in a note released this month the continued challenges to the supply chain could drive U.S. reshoring.
“We think the continued disruption supports our call that the pandemic could serve as a catalyst for U.S. reshoring and broader investments in supply chain resiliency,” Snyder said in his note, which also pointed to investment in automation as another way companies might bolster their supply chains in the longer term. “Our view is that the benefit of outsourcing is in structural decline (cheaper labor) and the cost is more apparent than ever (supply chain risk), tilting the scales in favor of domestic production.”
Investment bank Carl Marks Advisors and SupplyChainBrain’s survey of 107 supply chain executives, released Monday, found companies are holding more inventory, diversifying their supplier base and routing cargo to less congested ports as means of managing through issues.
Business of Fashion Magazine (sub req’d) says there is an “unprecedented” boom in the men’s market and tries to break down why.
London-based luxury retailer MatchesFashion reports that sales of men’s clothing are up 40 percent compared to the same period last year, while men’s footwear is up 50 percent. Other retailers, too, are noting the category’s growth opportunity.
“The boom in menswear is quite unprecedented,” said Michael Kliger, chief executive of German luxury e-commerce retailer Mytheresa.
Brands are betting this is a long-term shift. The Outnet launched its menswear offering in March to capitalize on the market’s “huge potential” after seeing demand from existing customers and brand partners, according to Emma Mortimer, the company’s managing director.
J.Crew will relaunch its revamped menswear category under Noah designer Brendon Babenzien in the fall.
The menswear boom is driven largely by a fashion reset. The casualization of menswear had begun far prior to the pandemic, but the new work-from-home lifestyle that emerged in 2020 has cemented new silhouettes that prioritizes comfort.
Gender fluidity plays another role in the category’s revival, widening the scope and appeal of men’s clothing.
Streetwear, meanwhile, has lost steam. Hoodies, tracksuits and sneakers are no longer hit items at Mytheresa, according to Kliger, with casual jackets, shirting and loafers now driving sales.
According to some, men used to learn about clothes or brands through your girlfriend or partner. It has become common in recent years “for men to spend time and money on clothing, to talk about it with friends” according to one source in the article.
According to MSN news, some Massachusetts towns are removing fluoride from their water due to supply chain backlogs, leaving teeth to rot.
For example, Dr. Douglas Chespak of Varinos Dental Associates says fluoride is one of the biggest fighters against cavities, but a nationwide shortage of the chemical could now impact your drinking water.
“Took out four teeth so far today, a lot of those was due to decay,” Dr. Chespak told WBZ-TV.
“[Fluoride is] basically an additive that provides, over a long period of time, a certain benefit for health,” said Alan Cathcard, Concord Department of Public Works Director.
So, if your town is facing a shortage of fluoride due to supply chain disruptions, what do you do?
Basically, just brush your teeth more and use extra mouthwash, according to experts.
The latest Bloomberg analysis shows US executives have been saying onshoring, reshoring or nearshoring at a greater rate this year than during the first six months of the pandemic, according to earnings call and conference presentations Bloomberg reviewed. There are concrete signs that many of them are going beyond just talk and acting on these plans.
New manufacturing soared 116% over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network. Massive chip factories are going up in Phoenix; Intel is building two just outside the city. And aluminum and steel plants that are being erected across the south, including in Bay Minette, Alabama; Osceola, Arkansas; and in Brandenburg, Kentucky.
Near Buffalo, New York, new semiconductor and steel output is fueling orders for air compressors that will be cranked out at an Ingersoll Rand plant that had been shuttered for years.
Scores of smaller companies are making similar moves, according to Richard Branch, the chief economist at Dodge. Granted, some new construction is to expand capacity.
But they all point to the same thing — a major re-assessment of supply chains in the wake of port bottlenecks, parts shortages and skyrocketing shipping costs that have wreaked havoc on corporate budgets in the US and across the globe.
This report from the Staffing Stream says frontline supply chain workers are quitting at a record rate. As the workforce shortage worsens, businesses are left scratching their heads as to what to do about it.
Some brands, such as Walmart and Costco, are raising wages to combat the crisis. But a Q1 survey of more than 20,000 supply chain workers shows that pay is not a top reason for turnover. It’s not even in the top five. If brands don’t start to better understand their hourly workforce, the Great Resignation may be here to stay. Here’s what you need to know to rise above it.
How to solve the problem
The number one reason hourly workers are quitting: career growth. Hourly employees are looking for long-term, rewarding careers. Yet many organizations have not embraced this idea. As a result, workers leave for companies that will offer opportunities to advance.
Furthermore, according to research, employees feel like they have little to no opportunity to provide feedback. In fact, that is the second-greatest reason for turnover. For 40% of frontline workers, management never asks for any feedback at all. But the issue doesn’t end there. Seventy percent of frontline workers who share feedback with leadership feel that their voices aren’t being heard.
It’s no wonder why management doesn’t understand why employees still quit after a pay raise. They simply aren’t listening.
In sum, get feedback from your team and give them a sense of purpose. It’s never been more critical to continuously gather real-time feedback from employees. More importantly, managers and leaders need to take action on that feedback. Then you can focus on greater pay.
MSN reports that supply chains are set to wait as unionized dockworkers and the shipping operators at the US West Coast ports negotiate a new labor contract after the previous contract expired this past Friday.
“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU),” the two sides said in a joint statement ahead of the 8:00 PM ET expiration of the current contract. “Both sides understand the strategic importance of the ports to the local, regional and US economies, and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast.”
Negotiations can exceed deadlines without seriously disrupting operations. The alternative would be costly: Data commissioned in 2014 by the National Association of Manufactures (NAM) and the National Retail Federation (NRF) estimated that port operations stopping for five days would cost the U.S. economy $1.9 billion. With the current supply chain in chaos and inflation, that sum that would certainly be higher in 2022.
The current talks, which began on May 10 in San Francisco, are unfolding at a moment when the U.S. labor movement has shown leverage amid election victories at dozens of Starbucks (SBUX) locations and “the most pro-union president leading the most pro-union administration in American history.”
As the US moves to crack down on goods that may be linked to forced labor in China’s northwestern Xinjiang region, it is demanding fashion brands importing to the US show who made their clothes and the materials in them.
A new law that came into force on Tuesday requires companies to prove any imports to the country that could be linked to the region are free of forced labor, adding an unprecedented regulatory layer to calls for greater supply chain oversight in the industry.
The law, according to Axios, is called The Uyghur Forced Labor Prevention Act. If strictly implemented, could reroute certain global supply chains away from China.
“Everyone is waiting to see how this shakes out in reality,” said Jessica Rifkin, a lawyer who leads the customs, trade and litigation practice group at Benjamin L. England & Associates.
“This has the potential to really cause widespread effects, especially if the law is enforced to a T, completely as written.”
Unsold inventory is already piling up at cotton mills in Xinjiang, according to reporting from the South China Morning Post, as foreign companies have sought to bring their supply chains into compliance with the new U.S. law.
The Biden administration has said it plans to fully enforce the law. High-risk sectors like apparel are likely to face enhanced checks from US Customs and Border Protection, even if shipping from other countries, global risk consultancy Maplecroft said in a briefing note last month.
Until now, “it’s been a free for all; there’s been no meaningful regulation,” said Scott Nova, executive director of the Worker Rights Consortium, a steering committee member of the Coalition to End Forced Labour in the Uyghur Region. “The industry likes to put out the idea that this is impossible, that the true source is some kind of unfathomable mystery. But it’s not. It just requires significant effort.”
According to the article, the Redmond-based tech giant made a joint announcement with the Communications Workers of America (CWA) union that it would “take a neutral approach” toward unionization efforts in Activision Blizzard, the video game company that it is acquiring for $70 billion.
This is surprising. The tech industry has not been kind to worker organizing. Tech companies get away with violating the law and destroying unionization efforts because the penalties for violating federal labor regulations are so trivial. And while federal law grants American employees the right to unionize without retaliation, tech giants and video game studios have fought back hard; so hard, in fact, that federal labor investigators allege they have done so illegally. That helps explain why even Microsoft is calling its own decision to adopt a “neutral” stance toward a potential unionization effort “ground-breaking.”
And while labor organizers who helped negotiate the agreement celebrate what they see as a historic moment, the broader tech workers’ movement still faces a challenging road ahead. Some pro-labor tech workers are cautioning against overstating the agreement’s impact. Ben Tarnoff, author of Internet for the People and member of Collective Action in Tech, a tech worker-run group that chronicles organizing efforts, says Microsoft’s announcement gave him a mixed reaction.
“Workers take significant risks in trying to form unions, and as for whether this makes sense as a strategy, I defer to organizers on the ground. But what [Microsoft’s] commitment to neutrality means, I couldn’t tell you,” he says. “An ungenerous interpretation of it is that they promised not to commit gross violations of federal labor law”—something that should be the bare minimum, Tarnoff says.
Yahoo! News reports that the US Congress is seeking to more than double the net worth of the national strategic mineral stockpile to lessen the defense industrial base’s reliance on adversaries such as China for supplies needed to build everything from bullets to nuclear weapons to night vision goggles.
The Senate’s annual defense authorization bill would authorize $1 billion in funding for the National Defense Stockpile in fiscal 2023 to “acquire strategic and critical minerals currently in shortfall,” per a summary of the legislation.
The fund is currently valued at $888 million, down from $42 billion in today’s dollars at its peak during the beginning of the Cold War in 1952. Lawmakers fear the National Defense Stockpile will become insolvent by FY25, absent congressional action, and are prioritizing shoring up the fund in this year’s defense appropriations and authorization cycle.
The $1 billion the Senate seeks to allocate would cover this while backfilling multiple funding requests the National Defense Stockpile has made in previous fiscal years and providing greater financial security in the years ahead.
The Washington Post reports that Lego plans to invest more than $1 billion over the next decade to build a factory near Richmond, Virginia.
The 1.7 million-square-foot factory, which is expected to open in 2025, will feature a carbon-neutral design and will employ more than 1,760 people.
The Danish toy manufacturer, a family-owned company founded in 1932 in Denmark, closed its first U.S. factory in northern Connecticut in 2006 and moved the production to Mexico.
The company would be eligible for a performance grant of $56 million if it reaches the promised levels of investment and employment, and the state will support site improvements worth up to $19 million, Youngkin’s office said.
“We are looking forward to making LEGO bricks in the US, one of our largest markets,” chief executive Niels B. Christiansen said in the news release. “The location in Virginia allows us to build a solar park which supports our sustainability ambitions and provides easy links to country-wide transportation networks. We are also looking forward to creating fantastic employment opportunities for the people of Virginia.”
The Reshoring Initiative issued a new report saying, “Rising Risks from Offshoring Drive Reshoring to a New Record High.”
According to the report, 2021 was a stellar year for U.S. reshoring and FDI, with 260,000 jobs announced by more than 1800 companies. Manufacturers looked to fill supply chain gaps of essential products, especially semiconductors, EV batteries, pharmaceuticals, PPE and renewable energy, which propelled the most-recent surge.
The article goes on to quote our very own President Mitch Cahn, citing Unionwear’s YouTube video about the costs of offshoring and benefits of reshoring manufacturing. Quoting the article:
If he [Cahn] can reshore labor-intensive apparel, readers should be able to reshore their products – and Unionwear is a great place to buy Made-in-America caps and bags for employees, customers and giveaways at conferences and trade shows.
The article has a lot more great information. Have a look.
According to a press release from the White House, President Biden took executive action to spur domestic clean energy manufacturing. This includes authorizing the Defense Production Act to lower energy costs, strengthen our power grid, and create good-paying jobs.
Last year marked the largest deployment of solar, wind, and batteries in United States history, and our nation is now a magnet for investment in clean energy manufacturing.
The US is also now on track to triple domestic solar manufacturing capacity by 2024. The expansions to domestic solar manufacturing capacity will grow the current base capacity of 7.5 gigawatts by an additional 15 gigawatts. This would total 22.5 gigawatts by the end of 2024 – enough to enable more than 3.3 million homes to switch to clean solar energy each year.
He is also taking executive action to:
Authorize use of the Defense Production Act (DPA) to accelerate domestic production of clean energy technologies, including solar panel parts;
Put the full power of federal procurement to work spurring additional domestic solar manufacturing capacity by directing the development of master supply agreements, including “super preference” status; and
Create a 24-month bridge as domestic manufacturing rapidly scales up to ensure the reliable supply of components that U.S. solar deployers need to construct clean energy projects and an electric grid for the 21st century, while reinforcing the integrity of our trade laws and processes.
As China’s COVID-containment lockdowns stall goods en route to price-conscious U.S. consumers, New Jersey manufacturer Mitch Cahn is finding traces of gold in the snapped links of the global supply chain.
Eleven miles from Manhattan, business is surging at Cahn’s textile company, which boasts a 100% local supply chain.
“We manufacture everything from scratch right here in north Newark. We have been in business for 30 years, we now have about 155 workers, and we are hoping to hire another 25 immediately,” said Cahn, founder and president of Unionwear.
Voice of America (VOA) is the largest U.S. international broadcaster, providing news and information in more than 40 languages to an estimated weekly audience of more than 311 million people. VOA produces content for digital, television, and radio platforms. It is easily accessed via your mobile phone and on social media. It is also distributed by satellite, cable, FM and MW, and is carried on a network of more than 3,500 affiliate stations.
The SCM Talent Group recently wrote an article about the chip shortage and quoted our very own Mitch Cahn about the supply chain.
In essence, the article discusses how the chip shortage, due to supply chain disruptions, will probably impact our Christmas gifts for 2022, and will have rippling effects throughout the world.
Unfortunately, it also looks like these supply chain disruptions will resonate beyond 2022.
In fact, Unionwear’s Founder Mitch Cahn doesn’t believe the global supply chain will be stabilized until at least 2023. “People have always said that making things in America is cost prohibitive, but that’s just not the case. There are A LOT of hidden costs beyond just unit price.” Cahn goes on to cite costs like tariffs, product development costs, inventory level requirements, transportation and more as obstacles to affordable global supply chains, and argues for more reshoring of manufacturing. Only time will tell if this happens on a large scale.
Design News says that the way out of the current supply chain crisis is with reshoring manufacturing.
Global supply chain chaos continues to threaten nearly every American company in some capacity as consumers lose patience with product delays and low inventory.
As the U.S. grapples with the ongoing chaos, manufacturers and nonprofit organizations alike are pushing for reshoring to bring production back to the states and meet the needs of their customers.
Rosemary Coates, a leading voice in national reshoring conversation, has this to say:
The pandemic has had a significant impact on global supply chains. With factories closing and opening and then closing again, first in China and then in the rest of the world, shortages and inconsistent deliveries were felt across the globe. Production stopped at some factories due to a lack of parts. Airlines stopped carrying cargo and passengers from Asia. Container ships reduced their sailing schedules and ports of call. Huge swings in demand for products caused havoc for manufacturers. As consumers, we suffered shortages of everyday products such as toilet paper, disinfecting wipes, and toys for the holidays.
Reshoring of US manufacturing is poised to surge 38% year over year, according to the Reshoring Initiative. “If 2H2021 progresses at the same rate as 1H2021, reshoring and foreign direct investment (FDI) job announcements for 2021 are projected to be over 220,000 — 38% above an excellent 2020 and, by far, the highest yearly number recorded to date,” according to the organization’s website.
“We’ve seen an uptick in domestic companies wanting to reshore manufacturing over the last couple of years and anticipate a 10 to 15% increase in production in the next 12 months due to reshoring,” said Tammy Barras, President of Westec Plastics of Livermore, CA. “One company we’re working with currently has products running overseas, but they’ve recently decided to build molds and run production domestically. They have seen production delays and increased costs due to inflation and supply shortages overseas. Several customers have requested only domestic tooling to avoid the uncertainty of the current economic climate.”
“I’ve been in the plastics business for 28 years and the tide is changing,” said Jon Hubers, Sales and Operations Manager for Crescent Plastics in Evansville, IN. “The phone is ringing with customers wanting to source USA parts because of the headaches with long lead times and increased shipping costs from China. We have two major OEMs reshoring parts and have found their costs to be lower. These positive changes make me very optimistic about future business.”
Unionwear’s Youtube video, which helps educate ad specialty distributors on which industries buy USA made promo products, just hit 100,000 views! This is further proof that the supply chain crisis, general global chaos, and more Chinese lockdowns are shaking up the swag business and sparking real interest in made in America promotional products
Yahoo News reports that New York Sen. Kirsten Gillibrand introduced the pro-labor federal ‘‘Fashioning Accountability and Building Real Institutional Change (FABRIC) Act.’’
The bill tackles reshoring tax incentives, the piece-rate pay system, joint liability and more in one fell swoop.
Among the features in store, the bill would create a $40 million domestic garment manufacturing support program with incentives like a 30 percent tax credit for reshoring garment manufacturing as well as a handsome grant program included in the package.
The bill would extend protections under the Fair Labor Standards Act of 1938 to prohibit employers from paying employees in the garment industry by piece rate (guaranteeing minimum wage as the floor to build upon incentives) — a loophole Gov. Gavin Newsom closed in California by signing the Garment Worker Protection Act, or SB 62, into law last year after a crusade by the GWC.
In its current draft, manufacturers and contractors in the garment industry would also be required to register with the Department of Labor. Registration fees to the Labor Department will help stoke the revitalization of the domestic manufacturing landscape. Meanwhile, manufacturer information gathered will aid recordkeeping and transparency measures.
“The bill is quite simple. It just mandates a fair work environment and fair worker treatment, and it authorizes some resources to do this,” said Gillibrand. “The combination of that investment plus the fact that it’s asking for broader, better treatment of workers [is] a combination that has appeal, and so we’re going to ask for a vote between now and end of the year.”
It’s always a little surprising to see us in the news. ROI NJ recently named Unionwear president Mitch Cahn a top-100 manufacturing influencer in New Jersey.
To quote the posting:
Cahn started Unionwear in 1992 with six sewers and a contract to make baseball hats for Ralph Lauren. Now, the company is one of the largest private employers of Newark residents, is the leading manufacturer of union “Made in the USA” hats, bags and binders for the promotional, fashion and uniform markets. During the COVID-19 pandemic, Unionwear stepped forward and shifted production to manufacturing face masks for the frontline health care workers.
We proudly employ over 150 unionized manufacturers right here in Newark and are excited about the future. Thank you again ROI NJ for the distinction.
ASI Central reports that contract talks involving unionized West Coast port workers could lead to slowdowns or stoppages that ultimately delay inventory replenishment, exacerbating stock gaps.
Importers in the promotional products industry are concerned that antagonistic negotiations could cause slowdowns or work stoppages at the ports, which have already been plagued by backups in the rampant importing rush that’s occurred in the economic bounce-back from COVID-19.
Negotiations began this week between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). ILWU represents 22,000 dockworkers that labor at 29 West Coast ports, including the ports of Los Angeles and Long Beach, through which about 40% of cargo containers imported to the U.S. flow.
Teresa Fang, vice president of supply chain at alphabroder — the second-largest supplier in promo — told ASI Media that, should slowdowns or stoppages occur, importers will scramble to reroute shipments to other ports, such as those on the East Coast. That comes with potential challenges and complications.
“East Coast port congestion will then be something to watch for as everyone makes moves to mitigate the risks on the West Coast,” said Fang.
Why? According to Rosemary Coates, who was on the forefront of helping companies leave the US for Chinese manufacturing, put it bluntly. “You’ve taught the Chinese manufacturer how to manufacture your goods. You’ve sent them the blueprints. You’ve told them what the processes are. You’ve told them who all of your suppliers are across China. They’re not going to go to sleep at night, wake up in the morning and forget how to make your goods. They’re going to come to work in the morning and keep making your goods and put a different label on it.”
Now that companies are looking to reshore their manufacturing, they find themselves competing against their own items with different labels on them — for a lot less money.
So, it seems that the big push to manufacture overseas was not a great long-term strategy.
In any event, if you are looking to reshore your manufacturing, you might want to be mindful of this unintentional side-effect of cutting costs at any cost.
Scott Paul, president of the Alliance for American Manufacturing, recently interviewed Unionwear president Mitch Cahn on how having a unionized manufacturing facility in Newark, NJ gave him a strategic advantage for 30 years. Below is a quick summary of the podcast.
Getting started
Mitch got his start in 1992 when he started manufacturing hats to fashion brands as well as hemp-made hats – both of which were basically non-existent at the time. Once manufacturing largely went offshore by the mid-1990s, Unionwear started selling products mainly to unions. Then in 2000, the Al Gore for President campaign ordered hundreds of thousands of hats which revolutionized the company. The headcount peaked at 175 before the pandemic and now has around 160 people, making hats, bags and other items for the federal government as well as private companies selling made in America products.
Newark’s manufacturing history
Mitch went on to say that he is a proud fifth-generation Newark-area resident whose family-owned large businesses in the late-19th century in the area. Upon doing research, he learned that there were hundreds of manufacturers in Newark, and he led the charge in highlighting the role that manufacturing continues to play in the city. Given Newark’s location near one of the largest ports in the US and direct access to New York City, Unionwear probably could not operate as it does today if it moved to a lower-cost, more rural area of the country.
Surviving the Great Resignation
One of the biggest advantages Unionwear has been that they haven’t had to bid-up wages to retain staff during the current talent crunch. They were already paying good wages and benefits, so they did not need to raise prices to compensate. And, they have worked closely with the union literally from the very beginning. Thanks to their close partnership, the union has provided referrals to other unions, contract opportunities, and much more. In certain circumstances, it is actually cheaper to buy union-made American goods compared to China, especially when it comes to custom, small-batch orders.
Now, Unionwear is investing heavily in business process automation to reduce the need for more labor during this labor shortage, which will make Unionwear a much more competitive and efficient manufacturer if, and when, the supply chains return to normal. This automation will likely not result in job losses. In fact, as the automation takes hold, Unionwear will likely repurpose current staff into different positions. For example, instead of spending years training someone to get to the top of their sewing ability, Unionwear will be investing in machines to automate those processes and, again, move those employees into more interesting positions in the company.
Even with the labor shortage, Unionwear is well-positioned to bring in top talent. As a union shop, Unionwear offers 20 days of paid time off (PTO), good health benefits, and of course highly competitive wages. Unionwear also has very low turnover – that’s because the longer someone stays, the more benefits they will receive, including an increase in wages over time.
Pivoting during the pandemic
When the pandemic hit, nearly all of Unionwear’s work stopped, and ended up nearly going out of business. After speaking with the head of the union, the team quickly pivoted to making PPE – face shields and washable gowns – for front-line healthcare workers who were coming to work wrapped in trash bags. Since we had most of the raw materials available and were located right in the shadow of New York City, Unionwear was making and distributing PPE to frontline healthcare workers fairly quickly. One important lesson: our team can make just about any item, quickly. It gave our team a lot of confidence to take risks which will help operate more efficiently.
Advice for future manufacturers
When asked if he has any advice on starting a business, Mitch said they should read “The Lean Startup” first. Then, he recommends they plan to lose money at first and find a subcontractor to manufacture at first, then simultaneously build their manufacturing, peeling some manufacturing away to their own facility bit-by-bit, so you can grow without the pain of paying payroll. He would also recommend connecting with their local Manufacturing Extension Program (MEP.) It helps to not figure things out on their own.
Finally, it is exciting for Mitch to see how people frequently wear Unionwear’s hats. In fact, nearly every Democratic and Republican presidential convention is filled with people wearing Unionwear hats. It is very gratifying to know we are making a real impact while providing good-paying jobs here in New Jersey.
Note: an earlier version of this post incorrectly said the president of the Alliance for American Manufacturing’s name was Scott Hall. The correct name is Scott Paul, and the post has been changed to reflect this. We regret the error.
Thomas explains that large companies, including General Motors, Lockheed, Micron, Intel, and more are reversing the offshoring trend and bringing manufacturing jobs back to the USA.
Although the supply chain crisis has driven home the need to reshore manufacturing, other factors are also involved. Many companies have realized that keeping processes closer to home can be much more reliable and secure.
General Motors, for example, will be investing $7 billion to build four electric vehicle (EV) manufacturing facilities in Michigan. The decision to build a new battery factory, convert an existing factory to focus on electric pick-ups, and upgrade two vehicle assembly plants, will create 4,000 jobs in Michigan, where GM was founded.
GM views this as a key tenet of their overall strategy, given that they have the largest EV portfolio of any automaker. The investment includes forging stronger links with reliable suppliers to ensure a more resilient and North American-focused supply chain.
Not only that, but there are also foreign-direct investments (FDI) coming in as well. Toyota is investing $1.29 billion into a battery factory in North Carolina, which should create 1,750 new jobs, and initially produce enough lithium-ion batteries for 800,000 EVs and hybrid vehicles a year, with plans to expand to up to 1.2 million.
Since the earliest days of COVID, China has practiced a zero-tolerance policy to prevent COVID from spreading.
After the initial onslaught of cases around Wuhan and pockets throughout China, the government declared victory and boasted about its superior method of containment compared to Western democracies.
This approach made sense in the earliest days, when we didn’t understand the risks of the virus and there was a general lack of understanding of how it virus spread.
Now, two years later and billions of doses of vaccines in arms have allowed Western countries to open back up. Indeed, additional draconian lockdowns seem impractical and an overreach.
China still hasn’t changed its approach, however. They recently locked down two of its three largest cities: Shanghai, a global financial center, and Guangzhou, a massive manufacturing and distribution city. Shanghai’s port is the largest in the world, and Guangzhou is the fourth-largest. Combined, the two cities alone handle nearly three times the amount of cargo that the entire U.S. imports each year.
Chinese lockdowns, furthermore, are not like Western lockdowns. Not leaving the house means not leaving the house. There are reports that if you become sick, you suffer without medical care, no matter how dire your condition is.
Basically, Chinese people are held prisoners in their own homes. If you leave, you are subject to arrest and egregious penalties.
Shanghai’s lockdowns began on April 2, and Guangzhou’s began on April 11. According to a report in Reuters, at least 373 million people – who contribute 40% of China’s GDP – have been affected.
This has obviously crippled China’s supply chain, not to mention the rest of the world. Container volumes out of Chinese ports began to drop on April 6th and as of April 15th, have declined by more than 31%. This will have a ripple effect which will impact not just China, but also the rest of the world, possibly forever.
Mitch joins other New Jersey awardees, including Governor Phil Murphy, Sen. Cory Booker, the CEOs of Campbell Foods and NJ Transit, just to name a few.
“If it’s got to be Made in America, there’s a good chance it was made in Newark. That’s where Cahn‘s company Unionwear is based. The manufacturer makes uniforms, hats and other promotional clothing, serving as the go-to source for political candidates who cannot be caught wearing or hawking anything marked Made in Some Other Country. Like many, Unionwear saw higher-than-average turnover during the past year, dropping its employee count down to 155. But, Cahn said the company is aiming to get to 180 employees by May. While local partners work to build manufacturing capacity here in New Jersey, a measure making its way through Congress could lend support to the industry at large. Following the breakdown of supply chains over the past year, Cahn – who also serves on the New Jersey Manufacturing Extension Program’s board of directors – explained the proposal could help to move certain manufacturers out of the shadows. “It is easy to find products,” he told NJBIZ this month. “It is next to impossible to find capabilities. When there is a national emergency and the federal government needs supplies immediately, there is currently no way to locate who has the capability and capacity to fill gaps in critical infrastructure.”
Congratulations again to Mitch and all the awardees!
DW reports that companies have indeed been reshoring and are starting to view our previous offshoring initiatives with a bit of confusion.
Thanks to the coronavirus and other unexpected challenges, especially the resulting (and ongoing) supply chain crisis, have sparked lots of unexpected issues, including inflation. As a result, more and more firms are cutting their costs and reshoring production to the US. As early as 2019, when the trade spat between China and the US was in full swing, American firms sought to decrease their dependence on the Asian market.
According to industry organization Reshoring Initiative, some 1,800 US firms are intending to reshore parts, or their entire, businesses this year. Some 220,000 new jobs are to be created in the US this way. Over a decade ago, only 6,000 new jobs were created in the country as a result of reshoring activities.
For instance, in March of this year, Intel announced it would pump some $20 billion into two new semiconductor plants in Arizona. General Motors is reshoring its battery production to Michigan where a new hub for lithium-based products will soon emerge. As steel prices have skyrocketed, producer US Steel has decided not to build its new $3 billion factory abroad, but rather in Alabama or Arkansas. Reshoring activities are also being considered by Lockheed, General Electric and ThermoFisher Scientific.
Still, more needs to be done. Reshoring expert Harry Moser thinks the US administration needs to step up to make this transition viable. “Our manufacturing costs are about 15% higher than Germany’s and 40% higher than China’s,” said Moser who headed a medium-sized engineering company for 22 years.
A study from Kearney, a global management consulting firm, shows that large portions of offshored manufacturing may soon be returning thanks to companies combining their nearshoring production to Mexico, Central America, and even Canada, with manufacturing and assembly in the United States.
According to Kearney’s ninth annual reshoring index, a unique barometer for tracking the extent to which America is reshoring manufacturing back from low-cost countries, US imports of manufacturing goods from the tracked countries totaled 14.49 percent of US domestic gross manufacturing output, up from 12.95 percent in 2020.
Instead of simply reshoring every manufacturing facility to the USA, Kearney takes a look at “nearshoring” manufacturing, where certain aspects of manufacturing are set up closer to the US.
Redefined, reshoring is likely to catch on faster in some industries than it does in others. “We are seeing a significantly increased focus from apparel and footwear companies on finding reshoring and nearshoring opportunities as a way to both mitigate supply chain disruptions and increase sustainability,” said Brian Ehrig, partner, apparel sector lead, and consumer practice sustainability lead.
Pet Business reports that, somewhat unsurprisingly, customers are prioritizing pet food that is made in the USA. While this has been popular for some time, they report that since 2020, the call from consumers for these products across industries has skyrocketed.
The inspiration for domestic manufacturing isn’t entirely based on a desire to make a better product. Some view made in USA as a strategic advantage, according to Elena Kalogeropoulos, chief executive officer at Chasing Our Tails.
“I would like to see people talk about, not only things that are Made in the USA, but a great differentiator—if your manufacturer can share with you—is finding out what states we are celebrating,” Kalogeropoulos explains. “It might be a handshake between the Carolinas and Florida or Texas and Colorado. What would be a great thing is if we could celebrate our states. It could give brick and mortars a little bit of a push if they find out who in their store is from their area.”
That company views American manufacturing as an opportunity to remain transparent, allowing consumers to trace the source of their products.
One big reason for the increase in demand for Made in USA has been the supply chain challenges since the COVID-19 pandemic. While conditions at ports around the U.S. have improved over 2021, the backlog has created enormous delays and caused costs to skyrocket.
Dad Caps
Five Panel Hats
Mesh Back Hats
In Stock Blanks
Snapback Hats
Stretchfit Hats
Duffel Bags
Backpacks
Tote Bags
Computer Bags
Sling Messenger Bags
Cooler Bags
Cuff Hats
Beanies
Scarves
Zipper Folders
Stitched Folders
Accordion Folders
Ring Binders
Letter Folders
Clipboards
Union Made In USA
