A recent explosion and fire in Tianjin killed 150 people, injured at least 700, and may have spread toxic chemicals over a large area of this city just south of Beijing. The impact on operations at the nearest port to the Chinese capital must factor into the decision on where to locate manufacturing and assembly operations for goods sold in the United States.
Cleanup at the Tianjin terminal has barely begun, and it is difficult to determine when port operations might return to normal, if ever. While dwarfed in importance to American importers by the Chinese ports of Shanghai and Shenzhen, US organizations can no longer dismiss overseas port disruptions as a risk “that has never happened before.”
Media photos of the disaster included shots of neat rows of burned-out, but formerly brand new, Volkswagen vehicles destroyed while they waited for processing at the port. The pictures highlight the difficulty of adapting quickly when goods are completely manufactured outside the country in which they will be sold.
It is generally easier to adjust the supply chain for components than it is for completely assembled products. This is due to size, eliminating the need for retail packaging, etc. Therefore importing components and doing final manufacturing and assembly in the United States can help avoid the spectre of your product being abandoned port side like the Volkswagens in Tianjin.
Since the disaster, the oversight of the chemical storage and exporting facility has been called into question. This raises the possibility that other ports in China may be poised for similar disruptions and highlights the need for U.S. organizations to rethink their production location strategy for goods sold in the United States.
More details on the oversight of the Chinese facility from the New York Times: