Global supply chains are shifting, and Australian businesses are exploring new manufacturing regions beyond China. In this blog, we examine why companies are turning to countries like Vietnam, Bangladesh, and Sri Lanka, the benefits of diversification, and how importers can build more resilient supply chains. We also discuss practical steps for managing logistics in these emerging markets and how combining freight options can help businesses stay agile.
The Changing Landscape of Global Sourcing
For years, China has been the dominant manufacturing hub for Australian imports. Rising labour costs, geopolitical tensions, and trade tariffs have prompted companies to look elsewhere for production. Zoran from ISS Shipping observes, “We’ve seen a growth in imports from places like Bangladesh and Vietnam, where a year or so ago the majority of our cargo was coming in from China.” This shift represents a significant change in sourcing strategies for Australian businesses, signalling that diversification is no longer optional but a strategic necessity.
Benefits of Diversifying Suppliers
Diversifying supply chains offers multiple advantages. Companies can reduce dependency on a single country, mitigate risks from political or logistical disruptions, and often benefit from cost efficiencies in emerging markets. It can also improve resilience against unexpected delays at ports or in manufacturing hubs. Zoran notes that this trend is not just about savings: “It’s a strategy to build resilience and reduce dependency on any single manufacturing hub.” Businesses that diversify early are better positioned to manage disruptions without compromising delivery schedules or customer satisfaction.
Practical Considerations for Australian Importers
Shifting sourcing to new regions requires careful planning. Businesses must evaluate supplier reliability, quality standards, lead times, and logistical feasibility. Building strong relationships with local suppliers is key, as is understanding regional customs and regulations. Forwarders like ISS Shipping are invaluable in helping companies navigate these emerging markets, ensuring smooth transitions and avoiding costly delays. Zoran adds, “Everything is busy. If you need your shipments to move as soon as possible, get on top of it and plan carefully.”
Air and Sea Freight Balance
Transport options are a critical factor when sourcing from emerging markets. Longer sea freight transit times from traditional hubs, coupled with unpredictable port congestion, have made air freight a practical alternative for urgent shipments. Zoran explains, “With sea freight taking longer, customers have needed to hit deadlines, so they’ve looked at air freight options.” Combining air and sea freight allows businesses to balance speed, cost, and reliability, ensuring they meet deadlines without overspending.
Technology and Data Management
Diversifying into new regions also requires robust operational tools. Digital platforms, AI, and shipment-tracking software can streamline communications, automate documentation, and provide visibility across complex supply chains. Zoran highlights the importance of technology, saying, “We try to keep up with technology. We are looking at AI for smoother transitions in our data flow and operational processes.” Leveraging technology makes it easier to manage multiple suppliers, freight methods, and contingency plans.
Planning and Flexibility Are Key
To successfully diversify supply chains, proactive planning and flexibility are essential. Companies should schedule shipments well in advance, maintain open communication with logistics partners, and monitor global developments closely. Zoran emphasises, “Planning shipments well in advance and building in contingencies is more vital than ever.” Businesses that adopt these practices can avoid delays, reduce costs, and maintain a reliable flow of goods.
Seizing Opportunities in Emerging Markets
While challenges exist, emerging supply hubs present a unique opportunity for Australian businesses. Vietnam, Bangladesh, Sri Lanka, and other Southeast Asian countries offer potential cost savings, faster growth, and a more resilient logistics strategy. Forward-thinking companies that explore these regions early can gain a competitive edge, while those who rely solely on traditional markets may face increased risk and uncertainty.
