Border factories feel pressure from freight delays on the west coast | WGN 720 radio


Industry Executives Report Shipping Problems And Shortage Of Computer Chips To Move To Suppliers Closer To Home

Dozens of freighters are seen anchored offshore, sharing space with about a half-dozen oil rigs, before heading for the Port of Los Angeles-Long Beach on Tuesday, October 5, 2021 (AP Photo / Eugene Garcia)

EL PASO, Texas (Border report) – The glut of container ships off the coast of California spills over into border manufacturing plants that depend on raw materials and parts from Asia.

Some of these factories have to plan work stoppages, cut shifts and even carry out layoffs to make up for lost production, said Thor Salayandia, president of the Juarez Chamber of Industry and Manufacturing.

“At the end of the day, all of this translates into a loss of production and wages. We are concerned that delays in getting supplies to Mexico could lead to massive layoffs in the short term, ”he said.

According to the Associated Press, more than half a million containers are waiting to be unloaded from ships at California’s two largest ports. Labor and transportation shortages are mainly to blame.

“It affects our auto manufacturing plants which have components sourced from China,” said Jerry Pacheco, president and CEO of the New Mexico-based Border Industrial Association. “It’s not about shutting down businesses, but our auto factories don’t have what they need to produce what they make. They make adjustments and keep working with what they have.

Shipping delays are the latest misfortune to befall border factories, known as the maquiladoras. Many of these manufacturers have struggled with a shortage of computer chips – a key component for automakers – for the past few months.

Thor Salayandia, president of the Juarez Chamber of Industry, talks about the shortage of computer chips and shipping delays from Asia hampering production at auto factories in Juarez. (Border report photo)

Juarez is an “auto town,” so as many as two of its three factories have already adjusted to lower production schedules, Salayandia said. This is bad news not only for many of the more than 300 factories in Juarez, but also for some of their 330,000 workers. Factories cut 7,000 jobs until the end of August, he said.

Pacheco and Salayandia say container ship issues strengthen the case for a relocation – by shifting their supply chains from distant Asia to neighboring Latin America.

“It’s a great opportunity to realign these supply chains, these logistics that weren’t as efficient or consolidated as we thought. That’s why we need to talk about paying more attention to the needs of manufacturers in Mexico, ”said Salayandia.

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