Notebook ODM is again tested by logistics The expiration of the contract of dock workers on the West Coast of the United States is facing variables

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On February 9, according to the "Electronic Times", sources said that the shortage of laptop chips and parts is not so serious, but logistics bottlenecks will bring challenges to ODM and brand manufacturers. It is worth noting that the contracts of tens of thousands of dockworkers on the West Coast of the United States expire in June 2022. If labor negotiations break down, the logistics crisis will worsen further.

The laptop supply chain has been in a state of chaos since the outbreak of the epidemic. Due to continued material shortages, previously stable supply networks have been unable to cope with rising demand and insufficient supply. At present, this issue has not been resolved, but there are signs of improvement. Panel driver ICs have eased, while power management ICs and Type-C ICs are still undersupplied, but lead times have been shortened.

DIGITIMES Research noted that in the fourth quarter of 2021, the gap in ICs and panels improved significantly. With the first quarter of 2022 traditionally being the off-season and the release of new 8-inch wafer capacity, the expected impact of the supply-demand gap on terminal shipments has fallen to less than 5 percent. Even though IDMs capacity is still insufficient, brand manufacturers have found alternative solutions from design firms.

However, despite indications that the shortage of materials has eased, the lifting of the logistics crisis is still far away. Ahead of the Spring Festival, Acer Chairman and CEO Chen Junsheng noted that logistics tensions continue to worsen, not only in Europe and the United States, but also in Asia, where container turnover is declining. Rail transport from China to Europe is also tight, resulting in a doubling of transport times.

At the end of 2021, Acer's laptop shipments to the U.S. market are expected to be distributed to all channels after April 2022. This situation is not limited to Acer. In fact, other brand factories are currently shipping to the U.S. from China-based ODMs, all in preparation for the back-to-school demand in June and July.

ODM pointed out that the current problem is not in the sea, but in the logistics of how to deliver the product to the consumer after the container arrives at the port. Once the container arrives at port, it needs dockers to unload it from the ship. However, since the outbreak of the epidemic in the United States, there has been a shortage of manpower in the port. For ports that are already short of manpower, this exacerbates transport difficulties.

In addition, the International Terminals and Warehouses Union (ILWU) is expected to sign a new agreement with the workforce in June. The success of collective bargaining will determine the extent to which the logistics crisis worsens. Market analysts have warned that freight rates will rise to new highs in 2022 if negotiations break down.

Renegotiations between dockworkers and warehouse unions often lead to disputes. The agreement, which will end in June 2022, includes 29 ports and more than 20,000 dock workers. The impact of the pandemic has widened the logistics and transportation problems, and the workforce will seize the opportunity to raise wages. However, it remains uncertain whether management is willing to make these concessions.

If ports on the west coast of the United States were to strike over labor disputes, ports around the world would be more crowded. Ships will have to divert through the Panama Canal to the East Coast. This will not only increase transit time and freight rates, but also create more uncertainty. Chen Junsheng also recently pointed out that some of Acer's containers fell into the sea due to excessive wind and waves while waiting to enter the port.

Once the goods are unloaded from the port, they must be transported to various channels. This requires rail or truck transport, which also faces a labor shortage. According to the American Trucking Association's estimates, trucking accounts for 72 percent of logistics transportation. However, the U.S. lacks 80,000 truck drivers, up from 60,000 before the pandemic.

Due to logistics congestion, the brand factory requires ODM to ship in advance under the mentality of "early birds have worms to eat". But ODM can only ship in advance if it gets a container. Containers are difficult to ship today. When the manufacturer's products cannot be shipped, these products can only go into the ODM warehouse, where the rent can become expensive, and then the two parties have to negotiate the price again. (Proofreading/Aaron)