The Hidden Costs of Supply Chain Diversification

The rush to exit China is creating a web of new risks:

1. Corruption Hotspots:

• Vietnam’s “coffee money” demands add 15-20% to project costs

• Mexican border officials increasingly demanding bribes (up 37% per S&P report)

2. Infrastructure Gaps:

• Indian ports struggle with 68-hour average container dwell time

• Thailand’s electrical grid can’t support planned chip fabs

3. ESG Backlash:

• Bangladesh garment factories face new EU sustainability tariffs

• Indonesian nickel mines linked to 41 toxic spill incidents

Corporate Fallout:

• Dell’s $430M write-down on failed India expansion

• IKEA’s Vietnam deforestation scandal

• Ford hits brakes on Mexico EVs due to security crisis

Expert Warning:
“Companies are swapping geopolitical risk for operational risk,” says McKinsey’s supply chain lead. “Many haven’t done proper due diligence.”