Companies looking to move some production from China to other Asian countries to avoid mounting US tariffs on Chinese imports face significant bumps in the road.
Manufacturers and supply chain experts say logistics infrastructure in Southeast Asia, where many goods-makers are scouting for new production sites, remains far less developed than China’s long-established connections between factories, suppliers and customers around the world.
Poor roads, sparse rail lines and congested ports in Vietnam, Thailand, the Philippines, Cambodia and other potential manufacturing destinations in Southeast Asia have stretched out delivery schedules and raised shipping costs, according to manufacturing and transportation company executives, even as companies have migrated some factory work to the region in the past decade in search of lower labour costs.