How will the “Nearshoring” Trend Affect the Transportation Map?

Similar to the shifts in Just-In-Time inventory, manufacturers and shippers are considering more of a rebalancing than a wholesale rewrite of the rules of global trade. Still, these changes are significant enough to redraw the maps of domestic shipping, especially within the LTL market.

“Nearshoring” or “friend-shoring” manufacturing is creeping its way into boardroom discussions. Countries like Mexico stand to gain new manufacturing investments due to its lower labor costs and proximity to the US.

But, nearshoring comes at a cost and will require strategic investments in capacity. According to many economists and industry experts, to support this trend, companies will need to redraw their regional transportation maps, reevaluate their infrastructure, and rethink their strategies as overland routes into countries come into greater use and load is balanced across historically underutilized seaports.

“There has been a big shift in the volume coming into east coast ports,” said Thom Albrecht, CFO and Chief Revenue Officer at Reliance Partners. “Places like Savannah, Georgia and Norfolk, Virginia have made millions of dollars of investments in their ports over the past few years, and those investments are paying off in increased volume.”

In the coming years, both shippers and carriers will need to increase their agility, flexibility, and ability to handle rapid change. Carriers who are caught flatfooted by these changes court existential risk for both themselves and their customers.

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