As global trade and consumer demands continue to grow, supply chains are facing a range of challenges, from rising labor costs to geopolitical instability. Because of this, nearshoring has emerged as a popular strategy for companies looking to optimize their supply chains. A survey conducted by Deloitte found that 54% of companies plan to nearshore some of their operations in the next two years.
Nearshoring involves moving operations closer to the finished product’s place of consumptions. Most times, this means companies moving operations in Asia and Europe to North America. The goal is to reduce costs, increase speed to market, and improve efficiency by taking advantage of lower labor costs, shorter transit times, and closer proximity to your end consumer.
Research conducted by the Boston Consulting Group found that nearshoring can help companies to reduce lead times by up to 50% and cut logistics costs by up to 30%. These studies suggest that nearshoring can be an effective strategy for companies looking to optimize their supply chains.
Optimizing Supply Chains from Port to Door
In the past few years, many companies realized just how dependent they are on manufacturing and products in Asia and around the globe. Roadblocks, port delays, and factory closures meant empty shelves inside warehouses and distribution centers, and disgruntled customers.
The need for nearshoring isn’t a secret. However, until recently, many companies ignored the benefits of nearshoring products or, at the very least, diversifying their vendor portfolio with a multi-shoring strategy.
Today, supply chain executives recognize the fragility of operating in a single global region, and have the opportunity to create resiliency in their operation now, and for the future. Ultimately, companies want the flexibility to react to different demands of the end consumer, and nearshoring is one strategy that lets them.
Let’s say a product from a consumer goods manufacturer isn’t selling because it’s not trendy among celebrities and influencers on social media channels. Or you need to entice the sale with additional gifts, such as free accessories. Nearshoring gives you the flexibility to react to changing demand. Inventory can be easily transitioned and delivered because it is closer to the point of sale.
The overall goal is to create a more responsive supply chain that adjusts to meet consumer expectations and is resilient amidst disruption. By nearshoring, companies can customize, change or amplify any order and meet greater demand.
Big North American Footprint
At Ryder, the depth and breadth of our end-to-end supply chain solutions allow companies to overcome the disruption that is challenging operations, and build a resilient operation that is flexible and efficient. The strength of our operations in Canada, Mexico, and the U.S., and Canada put Ryder in a leading position to help companies that want to nearshore their operations.
Our network is driven by innovative technology, one of North America’s largest fleets of trucks, an expansive infrastructure of maintenance facilities and warehouses, and some of the most talented people in the industry. We develop relationships with local authorities and have one of the strongest supply chain networks across North America, enabling us to deliver comprehensive, safe, secure, and fast cross-border solutions. We recruit, train, and manage drivers, warehouse workers, and technicians, invest in the latest and most efficient vehicles, excel in safety, and comply with associated regulations.
These solutions help improve speed to market, get you closer to customers, and allow you to gain access to new markets by leveraging an established infrastructure and geographic footprint.