Multinational corporations are accelerating regionalization strategies to reduce exposure to long-haul trade disruptions. A survey of global procurement executives reveals that over 60% of respondents have near-shored at least one critical component category in the last 12 months.
Cost Vs. Resilience
While near-shoring increases unit production costs by an average of 5% to 8%, companies cite reduced lead times and lowered inventory holding costs as compensating factors. Insurance premiums for trans-oceanic freight have also driven the pivot.
Regional Winners
Industrial corridors in North America and Eastern Europe are capturing the bulk of new capital investment. Local infrastructure investments are expanding quickly to accommodate higher volume throughput.