Nearshoring and Onshoring: Opportunities, Challenges and Globalization’s Impact
Originally published on November 25, 2024 by Kathryn Hamilton, CAE for NAIOP.
Supply chain dynamics, increased demand for “just-in-case” products, and a shift in where goods are assembled are three key drivers in a movement toward growing the manufacturing sector closer to home. NAIOP hosted an executive summit this month in Scottsdale, Arizona, to explore challenges and opportunities, and to hear from the developers, end users and experts who are influencing the trend and shaping the future.
Here are takeaways from the event:
Globalization Isn’t Affecting Every Country the Same
In the last 40 years, only 25 countries in the world saw trade double or more between 1980 and today; in contrast, 89 countries saw trade stay the same or decrease. In short: globalization is not a juggernaut that affects everyone equally. In North America, about 40% of trade happens between U.S., Mexico and Canada, down from a one-time high of 50% in the 1990s.
The Supply Chain is Smaller than We Think – and It’s Moving
When the manufacturing of a good moves abroad, past shifts have shown that it typically only shifts roughly 4,500 miles away; however, a once-in-a-generation shift in global supply chains has resulted in increased activity of supply chains changing borders. Over the last four decades, only 1-2% of supply chains had drastically moved, but in the last three years, up to 35% have moved or are in consideration to be moved. It’s an unusual fluidity and a huge opportunity for countries who haven’t been at the top of the heap.