“China Plus One” Strategy Accelerates as Supply Chains Shift Beyond Chokepoints

Global supply chains are being forced into structural change as disruption across major trade routes moves from episodic to constant. Ongoing attacks on commercial vessels in the Red Sea have pushed carriers to reroute via the Cape of Good Hope, adding 7–14 days to transit times and sharply increasing costs on Asia–Europe lanes. “Rates have at least doubled from a month ago on the most affected routes,” Reuters reported. For operators on the ground, this is no longer a temporary workaround - it is a sustained shift forcing immediate changes in how goods are sourced and moved.

For many supply chain leaders, the issue is no longer whether disruption will occur, but how much exposure remains to a small number of critical routes and origins. The pressure is showing up in day-to-day execution: longer lead times, less predictable schedules, and a growing need to make trade-offs between cost, speed, and reliability in real time.

From disruption to structural redesign

That broader transition is reflected in how manufacturers are reallocating production, with the Financial Times reporting that “Manufacturers have poured billions of dollars into south-east Asia… as part of a ‘China plus one’ strategy.” The term refers to companies maintaining operations in China while expanding production into alternative countries such as Vietnam and India to reduce concentration risk.

In response to a media query from The Supply Chainer, Nerijus Poskus, VP, Global Head of Ocean Procurement at Flexport, said this evolution is no longer a temporary adjustment but a long-term redesign of supply chain networks.

“Multinational companies are moving beyond contingency planning to make permanent, structural changes to their supply chains.”

Shifting production footprint across Asia

This shift is visible in how sourcing patterns are evolving, with production gradually redistributing across emerging manufacturing hubs.

“Data shows the 'China Plus One' strategy has expanded into a broader shift across multiple countries. While China remains the largest origin by volume, its market share dropped from 47.3% in 2018 to 36.6% in 2025."

As China’s share declines, Southeast Asia and India are absorbing a growing portion of global manufacturing output. “Vietnam more than doubled its market share to 11.7% in 2025, handling nearly 3.5 million TEUs. India also reached 4.3% with a 28% volume increase over the last two years. Early 2026 data confirms this exact momentum is continuing.”

Nerijus Poskus, VP, Global Head of Ocean Procurement at Flexport

Rerouting flows and multimodal execution

As sourcing diversifies, companies are also adjusting how goods move between regions. The focus is shifting toward reducing exposure to high-risk or congested routes, even if alternatives are not yet operating at scale.

“To bypass major shipping bottlenecks, clients are aggressively diversifying their routing.”

That diversification includes emerging corridors, though their capacity remains limited compared to traditional lanes.

“Alternative paths are no longer just temporary backups. For instance, while the Trans-Caspian route is growing rapidly - with freight volumes increasing sixfold in recent years to over 2.6 million tons - it still remains a very small share of overall global capacity compared to traditional lanes.”

This creates a new layer of operational complexity. Companies are increasingly using multimodal approaches to manage cost and service levels under volatile conditions.

“Furthermore, to balance cost and speed, companies are actively blending air and ocean freight. We are seeing high demand for multimodal solutions,” Poskus said.

These approaches are designed to provide alternatives to disrupted routes while maintaining delivery timelines.

“This service specifically addresses strained Asia-to-Europe trade lanes by combining fast-boat ocean transit from China or Vietnam to the U.S. West Coast, followed by immediate premium air freight from LAX directly into major European hubs.”

The model reflects a broader shift toward flexibility in execution, where single-mode transport is no longer sufficient. “By bypassing conflict zones, it delivers cargo in as few as 27 days at rates up to 41% below pure air freight.”

The combined shift in sourcing and routing signals a more fundamental change in supply chain design. Diversification is no longer limited to adding backup suppliers or routes, but is becoming embedded across entire networks. For supply chain leaders, the implication is that resilience now depends on flexibility across both geography and transport. As disruption becomes the norm rather than the exception, the ability to rebalance sourcing and execution in real time is emerging as a defining capability.