Moving Manufacturing Back to North America

In recent years, supply chain issues have been a burgeoning plague on industry. These snarls have been the result of everything from intensifying weather patterns to the pandemic. For example, with the Covid lockdown of Shanghai, it brought many industries to a standstill because they had no back up plan in place to manage that kind of supply chain disruption. Many companies are now looking at solutions that could bring jobs and goods back to North America.

This process is called “reshoring” or “nearshoring.” The Reshoring Initiative, which is an organization actively advocating for a return of manufacturing to the United States, defines the practice simply as bringing manufacturing and services back from overseas. Nearshoring is defined as bringing manufacturing and services closer to the end product region, and for us in the United States, this includes Mexico and Canada.

 Analysts from Kearney’s Reshoring Index are saying that globalization is either going to be redefined, or that we may be entering an era of de-globalization as companies are looking to establish supply chain resiliency. “There are strong indications that attitudes and strategies are changing, thanks to the pandemic, trade wars and tariffs, and ongoing resulting supply chain disruptions.”

An example of a nearshoring solution is that the toy giant Mattel announced they’d be consolidating manufacturing in their Mexico facility, and Mattel CEO Ynon Kreiz had this to say: “We believe that Mexico, given its geographical position, has a unique opportunity to position itself as a toy hub in the world.” This will be their largest manufacturing site.  

In a reshoring move, Intel Corp also announced that they would be building two new chip factories in Ohio that are set to bring 3,000 new jobs to the area.

These moves will allow for a more streamlined flow of goods and cut transportation costs as well as congestion and delay due to supply chain disruptions outside of North America.

We at SecurCapital are experienced and knowledgeable when it comes to trans-border modality and if you’re thinking of nearshoring or reshoring, reach out to your SecurCapital representative to see what we can do for you and your supply chain.