Our team at MARKS Design and Metalworks have been asking the same questions about the import supply chain that beverage producers are struggling with. For years, we’ve offered a line of value-priced import tanks to provide our customers with options for lower price-points. But recently we concluded that the import option from overseas was becoming increasingly unsustainable.
Here’s how we came to that conclusion.
Let’s say you are interested in purchasing some new brewery equipment. Getting tanks from an overseas manufacturer used to be a great option for helping keep craft brewing equipment costs in line. But now you’re discovering, like we did, that importing raw materials and finished products from overseas can have a lot of hidden costs and unforeseen delays that may sour the sweet taste of those surface savings.
Is the price you agreed to the actual price you will pay?
Using Asia as an example, our experience with researching the costs and delivery timelines showed us that shipping time on product can be three to four months, and that is only an estimate. Costs of shipping from China, for instance, are up more than 100%. And then there are the tariffs on stainless steel and other imports from overseas as well as continuing political uncertainty. This can, and has for our company, resulted in unexpected additional costs by the time the order reaches its destination. So, is an overseas import still the value it once was?
The disruption to the world supply chain is significantly impacting the trade in imported brewery equipment. We conducted an in-house case study of key factors to understand the supply chain issues from our closest overseas option, China. We found that shipping from a warehouse in China to a West Coast U.S. port took an average of 35 days in 2019. The average today is 111! Costs of freight from China have increased 150% in the past two years. This is due to congestion at shipping ports, lack of shipping containers, and the rising cost of fuel.
We found the uncertainty in final costs and delivery timelines was unsustainable for our business, so we began to search for other options.
In looking for alternatives, we had several criteria:
• An import manufacturer that could build to American specifications.
• Little to no tariffs.
• Reliable shipping.
• Reasonable cost.
We wanted to find, and offer our customers, a value-priced option for cellar tanks that met our quality standards. Our team found the answer on our southern border. We discovered a partnership with a company, under the United States-Mexican-Canada Agreement (USMCA), would improve delivery times and decrease the tariffs our customers paid.
Stainless steel from Mexico does not have the tariffs that currently are in place on Chinese steel. Shipping is more reliable by using standard trucking. Costs of shipping are substantially less, with less fuel consumed in the process.
Our research led us to Legacy Manufacturing in Mexico. After thorough evaluation, we decided this was the solution to the overseas supply chain bottlenecks we had been struggling with. Legacy had experience in manufacturing for American companies. The quality of the Mexican import was better than many comparable import tanks, plus, Legacy was willing to build to MARKS’ design and quality specifications. We saw the value and created a partnership.
When you are looking for that new brewery or for expansion of an existing production facility, getting American-made custom fabricated equipment is always the best option. But sometimes a value-priced quality import might make the most sense.
MARKS Design and Metalworks is a U.S. leader in fabricating custom stainless-steel tanks and equipment for the brewery industry. Before placing your order for an overseas import, please check out our new line of Legacy value-priced, quality cellar tanks, manufactured in Mexico, as a great alternative. Considering a Legacy cellar tank, made in Mexico, might be the right alternative for you, it is for MARKS.