The twisted journey a video game controller takes from a Chinese factory to a U.S. store shelf

Record ID: 1651127

  • Title: The twisted journey a video game controller takes from a Chinese factory to a U.S. store shelf
  • Date: 15th December 2021
  • Summary: PEMBROKE, MASSACHUSETTS, UNITED STATES (RECENT - NOVEMBER 5, 2021) (Reuters) (SOUNDBITE) (English) FRASER TOWNLEY, CEO OF T2M, SAYING: "This time last year, I remember being extremely upset that I was being charged somewhere between three and a half thousand dollars for a 40 foot container to get here. Now, if they ask you for $20,000, you ask, where where do I sign, where
  • Embargoed: 29th December 2021 09:46
  • Keywords: China U.S. container ships factories ports supply chain
  • Location: DONGGUAN, GUANGDONG PROVINCE, CHINA/ PEMBROKE, MASSACHUSETTS AND LOS ANGELES, CALIFORNIA, UNITED STATES
  • City: DONGGUAN, GUANGDONG PROVINCE, CHINA/ PEMBROKE, MASSACHUSETTS AND LOS ANGELES, CALIFORNIA, UNITED STATES
  • Country: USA
  • Topics: Economic Events,United States
  • Reuters ID: LVA005F85E1JB
  • Aspect Ratio: 16:9
  • Story Text: Fraser Townley eyes two gaping holes in one side of a pallet one of his workers just pulled out of the orange Hapag-Lloyd shipping container that arrived at his warehouse in Pembroke, Massachusetts from China one recent chilly morning.
    The damage could have happened anywhere along the 10,710-mile odyssey his company's gaming controllers make, from China's Guangdong province where they are manufactured to his warehouse 30 miles south of Boston, just one stop on their way to big-name retailers like Best Buy. Yet Townley, CEO of T2M, is grateful to have his products arrive at all.
    A global breakdown of supply chains in the wake of the COVID-19 pandemic, which led to a sharp contraction, then a snap back in demand that caught most businesses wrong-footed, has overwhelmed ports and left manufacturers, retailers, railroads, and truckers scrambling to get goods to shelves, especially in the crucial run up to the year-end holidays.
    The number of container ships idling off Los Angeles - the nation's busiest port complex - has hit record highs, while growing piles of empty containers crowd the docks.
    "It's impossible to get containers. And once you've got the containers, it's impossible to get the drivers. And once you've got the drivers, it's impossible to get things scheduled and timed and and what have you. So logistics has been something we've never experienced before," Townley told Reuters.
    The situation is so dire that a White House task force is working to ease the backlog, while shortages of imported goods are blamed with helping fuel an inflationary surge that has the Federal Reserve, as well as many consumers, on edge.
    The pileup casts a shadow over a globalized system that T2M and many other producers have relied on to get products made cheaply in distant factories. As companies developed these supply chains, they whittled down to the bare minimum the stocks they kept on hand. That is great for the bottom line, but a disaster when supply lines clog as they have now.
    T2M's mobile gaming controllers, including the only full-size device designed to work with a hard wire on an Apple iPhone, are sold by Best Buy and other big chains such as Walmart and Target, and on Amazon.
    Townley doesn't own a factory. Instead, like countless other consumer products companies, he designs the devices and has them made by a Chinese plant. He has a China-based employee, Breeze Feng, the company's senior structural engineer, keeping an eye on production at that factory until the goods are packed into containers to be trucked to Hong Kong for shipping to the U.S. West Coast.
    Feng said the crisis hit a boiling point in June, just as they were doing a push to get goods to the United States in time for the year-end holidays. "We went to pick up containers three times but failed," she said, explaining that they had booked slots on ships. "They didn't have a container to load our goods, so there is no way" they could ship.
    Speaking at the Chinese plant - where rows of workers in blue smocks and white caps hunched over workbenches assembling and testing controllers for T2M - Feng said it felt as though conditions were easing a bit by October.
    "But now, after the new strain (Omicron) has appeared, we are actually still worried about whether it will go back to the situation as before," she said.
    T2M has limited ability to jump to other Chinese factories in this crisis. They did, however, have to find new routes to get containers to their Boston warehouse. T2M receives one or two containers a month, each able to hold up to 40,000 controllers, and Townley closely tracks their progress.
    In the past, he would ship them to Boston via the Panama Canal, a more direct and less expensive route that had become harder to access as port traffic snarled.
    Now his normal procedure is to ship goods to Los Angeles, where his containers are put on a train to Newark, New Jersey, which is their official port of entry for U.S. Customs. From there, a truck brings his boxes to his warehouse outside Boston. Workers at the warehouse then separate out the items and ship them on to distribution centers for the big retailers on trucks.
    But nothing has been normal in recent months.
    Costs have exploded accordingly. Townley now pays about $18,000 to ship one container from China to his warehouse compared to $3,500 at this time last year. "And last year I was complaining, because we'd been buying them for $2,800."
    "The cost savings of having things made in China are being eaten up by the costs of shipping from China," he said.
    (Production: Xiaoyu Yin, Brian Snyder, Alan Devall, Jane Ross)
  • Copyright Holder: REUTERS
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