Bay Area Manufacturing Businesses Can Benefit from Resilient Supply Chains, Foreign Trade Zones to Spur Growth

RK Logistics’ Rock Magnan, Reshoring Institute’s Rosemary Coates lead panel of public, private industry leaders discussing global trade dynamics, import-export opportunities and future supply chains.

The Bay Area is well situated to grow as a gateway for import-export trade and a manufacturing and distribution hub thanks to a strong logistics infrastructure and a culture of innovation that provides a breeding ground for startups as well as opportunities for existing businesses to expand.

Those were some of the topics discussed at the recent East Bay Manufacturing Summit, sponsored by the East Bay Economic Development Alliance in Fremont. The event brought together regional manufacturers, economic developers, transit officials, government and educators, and industry partners to discuss how the area can support a more dynamic, resilient and inclusive manufacturing ecosystem and regional economy.

Among the participants were Rock Magnan, senior consultant with Fremont-based RK Logistics Group, and Rosemary Coates, executive director of The Reshoring Institute. Ms. Coates moderated a panel on Supply Chain Resiliency and International Trade, which featured Mr. Magnan along with representatives from the Port of Oakland and The Governor’s Office of Business and Economic Development.

Supply chains have a seat at the strategy table.

RK Logistics specializes in supply chain services for companies in “innovation industries” like electric vehicles, EV battery logistics, supporting semiconductor manufacturing and helping start-ups graduate into more mature companies, noted Magnan. “For all our customers, supply chains have to be resilient and agile. Especially for small companies looking to grow, the supply chain has to have a seat at the [planning and strategy] table.

“If you build an effective supply chain strategy into your model at the start, it’s much easier to adjust and adapt as your business changes,” he added. “If you don’t have that strategy set early, it’s much harder to build it in later, and support the sustainable growth and consistent service your customers [and investors] demand.”

That’s especially important as supply chain costs continue to increase, Magnan added. “Rising costs for warehouse space, labor constraints and wage inflation, those are all factors that can impact supply chain reliability, and the eventual cost of goods sold. Managing these challenges so they don’t derail your business requires experience, commitment and a collaborative working relationship with your logistics provider,” he explained.

A strong third-party logistics partner brings expertise in an area that likely is not the business’s core competency, which is typically focused on designing and building a great product, Magnan noted. “That 3PL relationship brings skills and operating experience that is necessary to ensure you have control over cost and performance in your supply chain. You want to ensure goods are properly handled and secure when at rest in the warehouse, and use safe, competent trucking resources to move goods to a factory or market on time and intact. A manufacturing line that shuts down because of a missed delivery can run into thousands of dollars in downtime costs.”

The Foreign Trade Zone advantage

The Bay Area also is known as an active hub for import-export business, particularly manufacturers who have parts and components produced overseas and shipped into the U.S. for eventual assembly into a U.S-made product, noted the Reshoring Institute’s Coates. “The area’s Foreign Trade Zones (FTZ) are a strategic resource that helps businesses ensure import and export products flow without delay while effectively managing trade and tariff regulations.”

“Logistics providers that operate FTZs provide expertise and resources to help importers minimize fees and tariffs on foreign-sourced items, as well as exports,” Coates continued. “Companies with overseas sourcing partners – as well as those who export — should look early into FTZ as part of their supply chain strategy. By utilizing an experienced FTZ logistics operator you can ensure that you benefit from all the available advantages of an FTZ to make your business as competitive as possible.”

In her experience, Coates has found that companies which actively pursue international trade opportunities typically are more resilient and profitable. They also are well positioned to benefit as more and more companies look to nearshoring and reshoring, two supply chain practices that are bringing supply and production back from Asia to locations along the U.S. southern border.  “Manufacturers are looking to these alternatives as a way to shorten supply chains, cut cycle times and bring goods closer to end-user production and consumption – while reducing transport costs. They need their logistics providers to make this journey with them.”

Coates agreed as well with RK’s Magnan in the value of strong partnerships that facilitate efficient manufacturing and supply chain performance. “Companies with close connections and trusted partners across the supply chain are able find solutions faster, better manage disruptions, drive performance and benefit from agility that leads to smoother running supply chains,” she noted. “That’s how you get resilient supply chains that adjust and adapt to be successful in an ever-changing dynamic global trade and manufacturing environment.”

Founded in Silicon Valley over 30 years ago, RK Logistics Group specializes in high-performance, zero fault tolerance logistics for industries including industrial, semiconductor and automotive manufacturing, EV/lithium-ion battery storage and transport, hazardous materials and consumer goods. The company also provides retail product inventory management, store-door fulfillment, eCommerce order fulfillment, reverse logistics and dedicated/specialty transportation services.