Many of Warner’s automotive supply clients are diversifying where they source product. Some are doing so in response to the sanctions levied against China and Russia, while others are creating supply redundancies to limit further disruptions in a volatile global market.
This trend has resulted in many clients entering into new sourcing relationships and re-evaluating how their supply contracts allocate risk. If you are contracting with a new source, below are some key considerations to keep in mind.
For more information from Warner’s Automotive Industry Group, visit their webpage here.
Attorney Spotlight - Lance Zoerhof
Lance Zoerhof is a litigator with over 20 years’ experience counseling auto suppliers on supply chain disputes and risk avoidance.
“The auto supply chain work has an added layer of complexity to it – unique to automotive,” he explains, “which I enjoy.” This experience is what Lance leans on to advise suppliers in the furniture, agricultural, home appliance, power tool and product fulfillment industries, among others – and helps them navigate similar issues, in addition to resolving disputes at trial or arbitration.
Lance works with clients at all levels of the supply chain, ranging from Tier 1 suppliers to tooling manufacturers, as well as aftermarket parts suppliers. And, his supply chain matters are regularly international in scope. “Often a client’s product will be sourced out of China, Taiwan, Mexico, Canada or some other international location, or some of the components of a product may come from outside the U.S.,” he explains. “This creates additional logistical and regulatory hoops to jump through as well as different procedural rules coming into play to resolve disputes within the supply chain.”
He goes on to explain that, “Right now, those sourcing overseas are also experiencing runaway demurrage, detention and other costs associated with delays. That has resulted in a dramatic increase in suppliers asking if these costs should be allocated within their supply chains.” Lance helps his suppliers proactively mitigate risks associated with these costs and represents suppliers in these types of disputes.
Additionally, determining where the product originates, in respect to tariffs, is another hot issue. Moving manufacturing processes from one country to another may be an appropriate response to increased tariffs. Those moves have resulted in suppliers entering into new relationships. And new relationships birth new risks that need to be properly assessed and allocated within the supply chain – Lance’s area of expertise.
Lance is recognized among Michigan Super Lawyers for Business Litigation. Check out Lance’s full bio here.
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