Companies that ship in goods from China have adopted a strategy to diversify their supply chains. Hawaiʻi shipping company Matson is shifting its service to accommodate this China Plus One strategy.
The China Plus One strategy is where companies diversify their supply chains by adding new sources in a second country. That's other than China, where tariffs have impacted exports to the U.S.
These Plus One companies are often in other Asian countries such as Vietnam, Cambodia or Thailand.
Diversifying supply chains like this helps U.S. businesses cut risk in their operations.
Some companies have been using this strategy for years, since tariffs increased during the first Trump administration. More companies are doing it, and Hawaiʻi's largest shipping company is following suit.
Matson CEO Matt Cox says his company's strategy is to move with his customers. That means when they open a new plant in Cambodia, Matson will be able to carry their cargo.
Other smaller shipping carriers, or Matson's feeder partners, will carry the cargo from other markets to Shanghai. There, the goods are relayed to Matson's containerships that travel to Long Beach, California.
The China Plus One strategy has made an impact on Matson's Asia operations.
Cox says that 15 years ago, about 95% of the cargo on its Asia routes was from China, with 5% coming from other Asian countries.
Today, about 20% of Matson's cargo volumes on those same routes originate outside of China.
Cox says he expects customers will continue to diversify their supply chains. But he also says China will remain a very important manufacturing center for the world and for Matson's customers.
