Reshoring is on the Rise

Manufacturing is on the upswing in the United States. Reshoring, a ‘mini-trend’ that started back in 2009, has enjoyed continued growth in response to supply chain concerns in the areas of delivery time, cost, risk, and customer service. The cost differential between manufacturing in the US and manufacturing offshore is narrowing as companies are looking to bring supply chain control back to the Americas. This is an attempt to give their products an edge over the competition by using the growing “Made in America” movement.

China, where the majority of imported products are manufactured, is experiencing an increase in labor cost of 15 to 20 percent annually, and transportation costs are also rising by about 10 percent each year. In the US, however, things are looking good. The nation was ranked No. 1 for manufacturing patents per capita, while investment in technology used in manufacturing has increased tremendously in the past few years. Additionally, the increased use of economic incentives to encourage expansion is yet another contribution to the attractiveness of reshoring.

Though offshoring will continue, experts predict it will be driven more by market demand than cost-efficiency. Nearshoring, meanwhile, is on the upswing in markets such as Central America and South America, and should also reduce supply chain costs. Experts predict that most companies are likely to adopt an “all shore” strategy, which includes a mixture of offshoring, nearshoring and reshoring.

It’s interesting to note that nearshoring doesn't just extend to the production of goods. In the past few years, IT and data centers have seen significant reshoring. Back office activity such as customer service, telesales, help desks, shared services, and claim processing are also seeing continued growth. All in all, this is great news for business all across the US and Canada: Trucking logistics companies will likely benefit from the increased volume that this trend will bring. The transportation of high-quality goods over shorter distances is bound to have a positive impact on brands looking to raise their product standards and keep the attention of their consumers.