The Top 4 Reasons to Nearshore

Writing in a recent Inc. Magazine report, this supply chain expert pointed to four key reasons for U.S. companies to move to nearshoring.

“The geopolitical climate coupled with the past several years of post-pandemic sourcing and logistics challenges has made it almost impossible for businesses not to reconsider manufacturing footprints,” wrote Steve Sensing, president of supply chain solutions for Ryder System Inc. “In response to these shifts and changing customer preferences, nearshoring has gained prominence as a cross-border trade strategy.”

Sensing pointed to four specific factors why nearshoring makes so much sense in today’s business environment

1. Nearshoring makes your products more accessible.

Moving your production, service activities and transportation to locations closer to your target markets ensures “your goods don't end up stuck somewhere you can't access them when needed.

In doing so, companies can lower transportation costs, have shorter lead times, improve supply chain agility, achieve better quality control and increase responsiveness to customer demands.

2. It can help mitigate risk.

Bringing supply chains closer to your target markets helps mitigate risks associated with global disruptions, such as natural disasters, political instability or trade disputes, Sensing wrote. It also enables quicker response and recovery when faced with such unexpected challenges.

He said truck border crossing activity between the U.S. and Mexico has risen more than 20 percent annually since the pandemic. as companies with U.S. target markets can put products on a truck that can arrive at a final-mile distribution center within days, as opposed to weeks or even months.

3. It can optimize partner collaboration.

Nearshoring often paves the way for companies to establish closer relationships with suppliers--literally and figuratively, he wrote. Being in closer physical proximity means you are in the same, or similar time zones, making it easier to maintain regular communication with suppliers facilitating easier collaboration, better issue resolution, and faster response times.

4. It allows you to create a more responsive supply chain.

As company executives have begun recognizing the fragility of operating in a single global region, they are leveraging opportunities to create resiliency in their operations now, and for the future.

Reduced costs, increased speed to market, reduced risk, shorter transit times and closer proximity to the end consumer have all made nearshoring more attractive, he writes, as “After all, the nearer your goods are to where you need them, the better, more agile and cost-effective you can be in a landscape that greatly requires it.”