[Pembroke (Massachusetts, USA) / Dongguan (China) 15th Reuters]–On a chilly morning, the cargo container that arrived at the warehouse of the game machine company T2M in the suburbs of Boston, USA had a hole in the pallet (loading platform). It was vacant. “It must be the work of a forklift.” CEO Fraser Townley tweeted, but thinks the product is just delivered to the warehouse.
The scratches may have been made by the T2M game console, which traveled all the way from its factory in Guangdong, China, for 10,710 miles to the suburbs of Boston. From here, the products will be delivered to major retailers such as Best Buy.
After the sudden contraction of global demand due to the new corona virus, it turned around and recovered rapidly, causing confusion in the global supply chain. Especially at this time of the year-end shopping season, manufacturers, retailers, railroads, and truck delivery companies are struggling to deliver their products to stores. The number of container ships staying at the Port of Los Angeles is the highest ever, and empty containers are piled up at the wharf.
Many manufacturers, such as T2M, who have relied on a global system to manufacture goods cheaply in remote factories, have been hit by this turmoil. Companies have cut their inventory to a minimum in building such a supply network. It has greatly benefited, but it can be disastrous if the supply network is clogged as it is today.
T2M game controllers are sold by major retail chains such as Best Buy, Wal-Mart, and Target, as well as Amazon. Some of the products are the only full-size machines made to connect to Apple’s iPhone by wire.
CEO Townley does not own its own factory, but like many consumer companies, it designs and manufactures its own equipment, leaving the manufacturing to a factory in China.
Breeze Feng, a senior design engineer at T2M’s China base, will wait until the product is manufactured at the Dongguan factory and placed in a container. The container will be shipped to Hong Kong by truck and then loaded onto a cargo ship bound for the West Coast of the United States.
According to Fen, the crisis peaked in June. It was just when I was working on packing so that it could be delivered to the United States by the end of the year. He tried to secure a container, but he couldn’t do it.
At the Dongguan factory, employees wearing blue gowns and white caps line up to assemble and check game consoles.
Feng, who was interviewed at the factory, said the situation seemed to ease in October. However, after the emergence of the Omicron mutant, “I’m still worried about whether I can return to the state I used to be.”
T2M has had to find a new route to deliver products to its Boston warehouse. The company usually receives one or two containers a month. Each unit can store 40,000 devices.
In the past, it was transported by the shortest and cheapest route via the Panama Canal, but the congestion of the port made it difficult to use this route. After arriving at the Port of Los Angeles, the container is now sent by rail to customs clearance in Newark, New Jersey, where it is trucked to a warehouse on the outskirts of Boston. The procedure is then to sort the products and deliver them by truck to a major retail distribution center in Kentucky.
But in the last few months, everything has stopped working as usual. In September, a cargo ship loaded with game consoles was stranded at the Port of Los Angeles for three weeks. To meet the deadline, Townley tried to send the product directly to Kentucky when it was unloaded, but “unfortunately, only the customs officials didn’t accept it stubbornly.”
In the end, the solution came to a direct air freight from China to Tennessee via Chicago. As a result, the cost jumped, and the cost of shipping a container from China to a warehouse was about $ 18,000. By this time last year, it was $ 3,500, more than five times as much.
When a game machine arrives at the warehouse, it does not mean that the case is settled. Having a truck driver was a daunting task, so Townley even thought about buying a truck himself, but eventually stopped.
Only small companies have the power to pass on costs to their customers. Instead, he worked hard to reduce costs. When Townley picks up the game console, he points to the colorful buttons to show it. By giving up this color and unifying it to black, it is said that the cost per unit was reduced by 0.5 dollars. The size of the game console has also been slightly reduced, and the number of plastic parts used to store the equipment has been reduced by one.
It was almost possible to identify where the holes were made in the pallets received from China. Mr. Feng of the Dongguan factory took pictures of all the pallets before storing the container, and it can be immediately confirmed that the scratches were not made before shipping. Townley is convinced that the container must have been scratched as it was unloaded by a forklift for customs clearance in New Jersey.
(Reporter by Timothy Aeppel, reporter by Xiaoyu Yin)