Proficient Sourcing LLC exists to help OEM’s find excellent manufacturing suppliers. We found a forecast of what the future might hold that’s both chilling and encouraging. Check out this source and keep us in mind if it’s at all accurate.
“[After WWII] the Americans had …become THE determining factor in issues European and Asian…industrial and trade based, cultural and military. …The Americans…offered their wartime allies a deal. The Americans would use their navy to patrol the global ocean and protect the commerce of all. And so globalization was created with the consequence that countries could get needed things from anywhere and send their goods anywhere.”
This, according to the recent book The End of the World Is Just the Beginning by Peter Zeihan, describes the foundation of the past 7 decades of worldwide prosperity that witnessed “the fastest economic growth humanity has ever seen”.
But this author believes this period is coming to an end and offers a bewildering array of information to describe what’s coming in the relatively near future. Primarily, if the US Navy withdraws from the policing role, there is no significant deep-water navy that can adequately replace it. This means global ocean travel may be exposed to increasing piracy, fees, and other factors that will seriously curtail trade.
This would mean a complete readjustment of trade relationships, with almost all countries suffering significantly. There is only one country with all positive factors under this future, and it’s the US. We may be the big beneficiaries after a period of difficulty! Good news if we get through all this. Our domestic manufacturing shops could be new supplier choices for anyone looking to avoid foreign entanglements. Here are some examples of why this may come about and the consequences.
There are 3 major manufacturing environments: Asia, Europe and NAFTA. Of these, the author concludes that Asia is the least sustainable.
“The Asians perceived western consumption as their path to stability and wealth. … Japan vanguarded the process, but it didn’t take long for Taiwan, South Korea, Southeast Asia, and China to follow. Decades of exports, growth, and stability enables most of these players to steadily climb up the value chain.”
But:
“The four Northeast Asian economies do not get along. Only America’s two largest overseas military deployments—in South Korea and Japan—keep the locals from being at each other’s throats. …The Northeast Asians are politically, strategically, and culturally incapable of the degree of trust required to form their own version of NAFTA, much less the kind of joint decision making that defines the EU.”
Then there’s this good news for us: “Most studies in the past half decade have indicated that by 2021, most manufacturing processes were already cheaper to operate in North America than in either Asia or Europe. …The North American system sports high labor variation, low energy costs, low transport cost to end consumers, nearly unlimited greenfield siting options, stable industrial input supplies, and high and stable capital supplies.”
If you are interested in excellent domestic manufacturing suppliers, please consider the varied network we can access immediately!
And here’s another encouraging factor from the End of the World…book: “…the North American continent faces few security threats. …On average, North American products face less than 1/3 the supply chain disruptions the Germans are likely to feel, and 1/10 that of the Asians.”
This book is full of fascinating forecasts, and those dealing with critical materials such as cobalt (vital for rechargeable batteries), steel, aluminum, copper, and many others.
Sounds like if all this is really going to happen, prepare for massive reshoring. And it could mean considerable prosperity once things settle down. But it could be a very bumpy ride on our horizon.