US manufacturers move to China

American manufacturers and retailers are increasingly shifting their distribution capabilities to China, in a move they hope will increase efficiency in their supply chains, according to the FT.

Instead of using their warehouses in the US, manufacturers are having a growing number of products sorted, packaged and labelled in China, and sending the goods directly to retailers and consumers.

However, most companies are avoiding building their own warehouses in China, choosing instead to use facilities provided by their logistics partners, such as UPS and DHL. UPS plans to have 50 warehouses in China by the end of this year and to open 10 more next year.

In China, a warehouse worker costs approximately $2 (£1.14) an hour, compared with $14-15 in the US, president of transport consultancy, SJ Consulting, Satish Jindel, told the FT.

Although small products like iPods have long been delivered to retailers and consumers directly from China, companies like UPS are hoping to expand the concept to larger, lower-value ocean-going goods, like shoes and clothes, which will enter the US truck network upon arrival in the country.