China'S "Labor Shortage" Is Affecting The US Importers With The Butterfly Effect.

In today's economic globalization, China "

In the southeast corner of the downtown area of Losangeles, a large number of Chinese businessmen who are engaged in the import and export of clothing and textiles are concentrated. Most of them are located in various parts of southern China. Therefore, they are very sensitive to the impact of "labor shortage" on their business.

Mr. Pan, who is nearly fifty, is one of the more typical.

Helpless Mr. Pan

Mr. Pan has emigrated from Hongkong to America 20 years ago, and has been importing and selling clothing in Losangeles for over ten years, mainly from China, Guangdong, Foshan and Fujian Xiamen, and then wholesale to wholesalers and retailers in the southwest of the United States.

In 2005, when the US economy was better, Mr. Pan also tried to supply jeans to large supermarket chains such as WAL-MART. However, considering that too long the period of money withdrawal was too long and the capital flow was not smooth, he still attacked some small chain supermarkets and small wholesalers and accumulated quite stable customer base.

When talking about the butterfly effect of "labor shortage" in southern China, Mr. Pan's speech box can hardly be closed when it is opened.

He told the World Expo, "after several years of clothing import business in the United States, I felt that the Chinese year was not very good. Later, I summed up some experiences. For example, every year in the autumn, I will make more than one season's goods, because sales will increase a lot at the end of Thanksgiving Day and the peak season of Christmas.

Another reason is that during the lunar new year, Chinese manufacturers basically stopped working, no longer accepted new orders, or increased the supply price, and the delivery speed would be very slow, because most of the workers returned home to celebrate the new year.

In the past, Mr. Pan will give orders for spring clothing to Chinese manufacturers before and after the Lantern Festival. At this time, the supply price and delivery speed have basically returned to normal, but this year's situation is different. Mr. Pan's response is that the supply price has increased by nearly 2, and the delivery speed should be extended for at least 3 weeks.

The most unacceptable thing is that this year, the style of the products sent by the manufacturer is much less than that of the previous years. Even some of the so-called new ones can be clearly seen on the basis of a slight modification of the style of last year.

Mr. Pan said, "I am under great pressure recently. I am afraid that some customers will place an order with my competitors, which will directly lead to a decline in order volume and a further increase in the cost of purchase, which will soon enter a vicious cycle."

As an importer wholesaler, the most fearful thing is to encounter such a situation.

Mr. Pan's biggest supplier was a garment factory in Foshan, Guangdong. After many representations, the manufacturer said that he was very sorry, but there was no way to reduce the price of clothes in spring. There was no way to add more styles, because this year's "labor shortage" was too serious.

According to the manufacturers, before the Lantern Festival in the past, workers returning to their hometown for the new year basically returned to the factory and began to resume their normal production operations, and the styles were generally designed. But after two days of the Lantern Festival this year, workers returned to factories less than 6.

On the basis of a salary increase of 10% last year, it has been increasing to nearly 50%.

The result is that the output is insufficient, the new style is reduced, the production efficiency is reduced, and the supply cost is increased.

"Made in Vietnam"

Helplessly, manufacturers promised Mr. Pan that they could try to provide customers with clothing styles this summer and strive for a wholesale price of clothing this summer.

In this regard, although Mr. Pan expressed his gratitude in the mouth, he still felt not too down-to-earth.

He said, "at present, this kind of high cost hiring of workers is unlikely to be solved in a short time. Once the wage rises, it will be difficult to cut down. This has increased nearly half of the labor cost of iron nails, and can only be digested in the supply price."

"The business of these two years has become more and more difficult. Consumers of the United States have no purse, the appreciation of the RMB keeps rising, and the price of cotton has increased since last year, and this year's labor costs are soaring. The cost of imported clothing is higher and higher, while the quality of some products is getting worse."

Mr. Pan sighed, "but luckily, my customer base has not been on a large scale. Maybe it is because my opponent is also having the same problem, and everyone is careful to move between manufacturers and wholesalers."

Speaking of the current countermeasures, Mr. Pan said he would go to Jiangxi, Hunan and other places to inspect some clothing manufacturers with better export qualifications and disperse the orders for winter clothes and spring clothes to the other side.

"I heard that many factories in Foshan, Guangdong came from these two provinces, and there must be more local skilled sewing workers there."

As for whether to find alternative suppliers in Southeast Asia and Vietnam, Mr Pan clearly stated that he is still familiar with the business environment and cultural atmosphere of mainland China, and that business communication and pportation are relatively convenient.

But he also said he felt the competitive pressure from some Vietnamese clothing importers.

"Vietnamese also went through the lunar new year, but I didn't hear that there was a shortage of work time for their parents. So they came from Vietnam and the prices were not expensive, but the style and quality were not as good as what we imported from southern China.

I still have the confidence to retain my main customers.

Later, he interviewed Mr. Lin, who works in the wholesale import and export business of socks in New York and other places by telephone. His age is several years younger than that of Mr. Pan, but his experience as an importer in the United States has been several years.

Mr. Lin, who grew up in Ruian, Zhejiang, told reporters that he had encountered the bottleneck of supply before and after the Spring Festival. Therefore, considering the choice of manufacturers, the main suppliers are now familiar with their hometown, Ruian.

80% of the workers in Ruian come from the rural areas, and have formed a rule or habit for a long time. During the golden week, there are enough workers to volunteer on duty. Of course, they will get reasonable overtime pay, and the rest is only the office staff, which basically does not affect the production and shipment.

"Our factory has worked hard for the management of workers, and has also increased some human interest besides improving welfare. Therefore, holidays can also ensure smooth supply, and appropriately increase labor costs is acceptable."

"There are still many cost factors that lead to higher supply price, such as price rise of raw materials and accessories, packaging and freight prices," he said. But we insist on independent brands in the US market, and there is still a guarantee of operating profits.

If it is a large supermarket chain supplier to do OEM processing, the profit margins will be very limited, and then encounter the situation that the manufacturers will not be able to start up due to inadequate start-up, so the business will be very difficult to do.

Mr. Lin, who resolutely does not make OEM processing, adds that "Korean Importers from the United States mostly come from mainland China. Their brand management concept is worth learning by our Chinese counterparts. The way of low price competition can not digest those factors that are difficult to control.

In fact, in the past ten years, the recognition of American consumers to Chinese made products is getting higher and higher. As long as our products maintain excellent quality and high performance price ratio, the market can be bigger and bigger.

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As for Mr. Pan, who is looking for new suppliers in the labour rich inland provinces, Mr. Lin said that for the time being, it would be very difficult for the supply chain to fully guarantee the quality of products to move away in a short time.

He said, "you can pplant a few trees, but it's hard to move a forest. In terms of socks and leather shoes manufacturing, there are all kinds of supporting supply chain in southern Zhejiang, small to sewing accessories, big to carton boxes, efficient logistics system, and a unique commodity distribution center like Yiwu. Where can we completely reproduce it?"

When a reporter mentioned that some American importers were turning their eyes to Vietnam and India, Mr. Lin did not think it was necessary to make a fuss.

He said, "at least for the socks processing industry that I know, the competitiveness of Chinese manufacturers is still very strong.

Let me give you an example. In 2005, a hosiery factory in Zhuji, Zhejiang moved to Vietnam. The main purpose was to circumvent the import quota of textiles in the United States, and save about 20% of the labour cost.

But three years later, it will have to be withdrawn, because the matching supply chain can not be formed. Even if the sewing needle is broken, it is necessary to ask the master to repair it in the country. The maintenance of the machine and equipment is more time-consuming and laborious.

Mr. Lin also expressed the belief that as time goes on, some textile processing industries in Southeast Asian countries such as Vietnam and Thailand will become more mature. But after all, the scale of production is limited, so it is difficult to catch up with the mature supply chain that China has built over 30 years.

According to him, due to the great demand of Chinese manufacturers for socks production equipment, the equipment manufacturers in Italy only do business in Chinese and have no time to take account of orders from other countries.

Mr. Lin also said, "although I have never been to South Asian countries, I know that my colleagues and customers are ordering there. It is said that there are only two specifications for the packaging cartons of some socks manufacturers in India, because there is no matching carton manufacturer, and Pakistan can only make black and white socks, because there is no corresponding color printing and dyeing factory.

I think there are some factors of management culture. We Chinese are good at learning from each other's strengths and weaknesses, which is very important for cultivating and improving the supply chain of processing industry. We should overcome the adverse impact of rising raw material costs and labor costs. "