U.S. Manufacturing Orders and Freight Rates from China in Steep Decline as Domestic Manufacturing Grows

Patriot Medical Devices
12/13/2022

U.S. manufacturers and businesses are quickly reducing the number of products and materials they are ordering from China. Shipping and logistics managers are starting to prepare docks and fulfilment centers for a significant delay in goods delivery. Shipping carriers have been addressing this decrease in demand by adjusting the total capacity ships are allowed to depart with.

“The unrelenting decline in container freight rates from Asia, caused by a collapse in demand, is compelling ocean carriers to blank more sailings than ever before as vessel utilization hits new lows.”

– Joe Monaghan, CEO of Worldwide Logistics Group

U.S. Manufacturing Orders Down 40%

U.S. manufacturing orders are down 40% according to CNBC’s Supply Chain Heat Map.¹ This decline in orders is suggesting that Chinese manufacturing facilities are going to shut down two weeks prior to the Chinese Lunar New Year. This is much earlier and represents less than the previous year’s highs of manufacturing working days in China. Fewer working days means less product shipped to the West, which will result in less product being delivered on time starting the New Year.

“This slowdown in manufacturing and shipping from China will undoubtedly create slowdowns and bottlenecks of product delivery. This will delay delivery of critical products needed to keep Americans safe and healthy during the winter flu and COVID season.”

– Tyler Needham, President of Patriot Medical Devices

Shipping Giant’s Earnings Growth

The growing dependency on foreign manufacturing is evident in shipping giant’s earnings over the last two years. In many cases, shipping companies made 10 times the amount they made in previous years.² This shows how dramatically underdeveloped American manufacturing really is. The United States paid the price of expensive shipping costs and even higher product costs at the peak of the pandemic, due to U.S. companies relying completely on foreign product.

Third quarter earnings before interest and taxes per 20-foot equivalent unit shipped.

How to Protect Your Business

Ensure your business is prepared for a slowdown in shipping from China by securing a domestic distributions system. Product deliveries could get significantly delayed and products and materials you need will be affected. Patriot Medical Devices provides secure, high-quality distribution of medical PPE products. Together, we can secure American distribution systems of medical products by supporting American-made businesses.