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Global supply chains are shifting. Companies are rethinking where they make goods and how they move them, and that’s changing freight demand in important ways. In 2024, U.S. reshoring and foreign direct investment (FDI) announcements added roughly 244,000 jobs, a continuation of a strong reshoring trend that’s reshaping manufacturing footprints and logistics needs.
Whether a company brings production fully home (reshoring) or moves it closer to its main market (nearshoring), the effects ripple through transport networks, carriers, and warehouses. Below, find out what reshoring and nearshoring mean, how they differ, and most importantly how they change freight flows and demand so you can plan ahead.
Reshoring and Nearshoring Defined
What is Nearshoring?
Nearshoring means moving production closer to the company’s main market, but not necessarily back to the home country. It shortens lead times, improves responsiveness, and reduces transport risk. For freight, this means more intra-regional container flows, shorter sea legs, and more road/rail last-mile loads.
Examples of Nearshoring
Whirlpool, a major US appliance maker, has long leveraged nearshoring: several of its Mexican manufacturing plants export a large portion of their production back to the US and Canada.
A newcomer in the country, Tesla’s arrival in Mexico came with an estimate $5 billion investment. The factory is said to cover 1,600 hectares and will bring in thousands of jobs.
What is Reshoring?
Reshoring is bringing production back into the company’s home country. This helps businesses regain control of their supply, reduce geopolitical exposure, protect IP, and meet local content requirements or sustainability goals. Among its key effects on freight are an increase in domestic freight volumes (road and rail), fewer long-haul ocean movements, and a shift toward inbound shipments of raw materials rather than finished goods.
Examples of Reshoring
Among the biggest examples of reshoring this year is GE Appliances investing heavily in US manufacturing. The company has shifted its production of washing machines from China back to its Appliance Park production complex in Louiseville, Kentucky through a $490 million investment.
Generac Holdings is also making a similar move. Known for its power generators, Generac has begun shifting some production from China to nearer its headquarters and customer base. Specifically, it’s expanding capacity in Georgia, citing the need for shorter lead times and reduced shipping complexity.
Whether a company brings production fully home (reshoring) or moves it closer to its main market (nearshoring), the effects ripple through transport networks, carriers, and warehouses.
Reshoring and Nearshoring Pros and Cons
Reshoring and nearshoring are gaining momentum as companies rethink where and how their products are made. But what does reshoring and nearshoring actually mean for freight and logistics? And how does it reshape the way goods move across the country?
Let’s explore their benefits and challenges.
Benefits of Reshoring
Reduced Transit Time and Variability
Offshore production often means long shipping routes, unpredictable schedules, and the occasional port or customs delay. When production happens locally, those issues shrink dramatically.
With reshoring, you get:
Faster replenishment — Your products don’t need to travel halfway around the world.
Smaller inventory buffers — Shorter lead times reduce the need for holding months of stock “just in case.”
Fewer emergency air shipments — With predictable local supply, you avoid costly last-minute airfreight to keep shelves filled.
If your business struggles with stockouts, long lead times, or volatile freight schedules, reshoring immediately improves stability.
Stronger Supply Chain Control
When suppliers are offshore, visibility can be low and oversight can be difficult. Reshoring brings everything closer. This leads to easier supplier oversight, so you can visit factories, check processes, and resolve issues without time zone or travel barriers.
It also ensures consistent product quality with fewer handoffs and reduced damages or defects with short-distance movements. And if demand shifts, you can adjust production quickly instead of waiting weeks for new shipments to arrive.
Boost to Domestic Transport Demand
Moving production back home reshapes how freight flows across the country. Instead of relying on international carriers, companies increasingly tap into road and rail networks.
This creates more predictable regional freight lanes, higher domestic trucking, and intermodal, and steadier demand for local logistics partners. For freight operators, this shift opens up new opportunities, especially carriers who specialize in regional distribution, dedicated routes, or contract logistics.
Instead of long-haul containers arriving from overseas, the focus shifts to efficient, agile domestic supply chains.
Environmental and Reputational Gains
Sustainability is no longer optional. Customers, regulators, and investors expect businesses to reduce emissions and operate responsibly.
Reshoring can help you do that. Shortening transport legs often let companies see lower transport emissions, reduced reliance on carbon-heavy airfreight, and stronger sustainability credentials.
This isn’t only good for the planet but also improves brand reputation. More businesses now highlight local manufacturing as proof of responsible operations.
Challenges of Reshoring
Higher Production Costs
Let’s be honest: producing locally is often more expensive. Labor costs are significantly higher. Overheads like utilities, compliance, and taxes may also increase. Unit costs can rise unless processes are automated or scaled effectively.
This doesn’t mean reshoring is a bad choice, but it requires clear cost modelling and realistic expectations.
Infrastructure Strain
When production shifts back home, so does freight volume. But domestic infrastructure doesn’t always scale overnight. Local ports, warehouses, intermodal terminals, and last-mile distribution hubs may struggle to handle the increased demand. This can lead to bottlenecks unless businesses work closely with logistics partners and plan for network capacity.
Supply Substitution and New Freight Complexity
One common misunderstanding is that reshoring simplifies supply chains. Often, it just changes the type of freight coming in.
Instead of importing finished goods, companies may start importing critical components, materials, and specialized parts. This can create new dependencies and keep some level of international freight alive.
Freight planners must rethink lead times for components, supplier diversification, new freight lanes and modes, and inventory strategies for key inputs. Reshoring doesn’t eliminate complexity. Rather, it shifts it.
Labor and Skills Gaps
Advanced manufacturing relies on people with specialized skills. And those skills aren’t always easy to find locally.
Common challenges include:
Shortages of skilled machine operators
Gaps in engineering or technical talent
Competition with other industries for labor
Longer onboarding and training times
Without the right workforce, reshoring plans may slow down or fail to scale.
Benefits of Nearshoring
Lower Transport Costs and Faster Transport Times
Shifting production close to home reduces long-haul shipping and cuts down on the total landed cost. This is simply because goods no longer need to move across multiple oceans or rely on costly long-haul carriers.
A shorter route also means fewer touchpoints, which reduces handling risk and the likelihood of delays. It allows for much faster replenishment. Businesses no longer wait weeks or months for inventory to arrive from far-off suppliers. Instead, they benefit from quicker turnarounds and greater confidence in delivery timelines.
Improved Responsiveness
With suppliers located closer, businesses can react to market changes almost immediately. This makes it much easier to respond to spikes in demand or sudden shifts in consumer behavior.
As responsiveness improves, companies rely less on large safety stock buffers and emergency freight solutions. Inventory levels can stay lean without sacrificing service levels. This reduction in inventory dependency not only cuts holding costs but also gives businesses more freedom to adapt to changing market trends without tying up cash.
Flexible Scaling
Nearshoring tends to support closer collaboration between buyers and suppliers. Being in similar time zones, or just a short flight apart, makes scaling production smoother.
Suppliers can increase or decrease output quickly, share demand forecasts more effectively, and work through issues without long communication gaps. This agility becomes a major competitive advantage during peak seasons or rapid growth.
Growth in Regional Logistics Networks
As more businesses adopt nearshoring, regional logistics networks see a meaningful increase in activity. Ports within the region handle more short-sea shipments, feeder services benefit from greater frequency, and inland carriers gain new volumes as goods move across shorter routes. This shift creates opportunities for multimodal operators, regional 3PLs, warehousing providers, and cross-dock facilities.
For freight companies, this means new revenue streams built on more frequent, faster deliveries rather than long, unpredictable ocean movements.
Challenges of Nearshoring
Capacity and Capability Limitations
Nearby countries may not have the same manufacturing scale or advanced capabilities as traditional offshore hubs. Some industries rely on specialized equipment, advanced processes, or highly trained labor that may not be immediately available in the region. As a result, companies may face growing pains as they transition production closer to home.
This limitation can also lead to hybrid supply models, where some components are produced regionally while others still come from offshore suppliers. For freight planners, this creates a more complex web of transport needs, requiring a careful balance between international and regional logistics networks.
Infrastructure Constraints
Many nearshore regions operate smaller ports and have less-developed inland transport networks.
This may mean more complexity in managing inland trucking, limited intermodal capacity, and bottlenecks at key hubs during peak periods. Smaller ports can become congested, inland road and rail networks may struggle with increased freight volumes, and container handling capacity may lag behind growth in production.
Freight operators need to plan for varying reliability and transit times across different countries.
Political and Economic Risks
Nearshoring reduces exposure to global geopolitical volatility, but local risks still exist. Regional economies can face currency fluctuations, changing regulations, labour strikes, or shifts in trade agreements, all of which may impact costs or transit times.
Proximity helps, but it doesn’t remove the need for strong risk management. Businesses must continue to monitor risk and build flexibility into their supply chain strategies. Freight providers should also be ready to adapt quickly to regulatory changes, border adjustments, or economic shifts that affect regional flows.
New Logistics Flows Need a New Plan
Moving production closer to home fundamentally changes freight patterns. Companies need to rethink their carrier relationships, renegotiate service levels, and redesign inventory strategies around faster, more frequent shipments. Even warehouse placement and replenishment cycles may require a complete refresh.
It’s a huge change to switch from long, infrequent global shipments to shorter, more regular regional movements. Freight operators may need to invest in short-sea container services, develop more regional warehousing, or adopt cross-dock setups that support high-frequency distribution.
Bring Your Supply Chains Closer
Reshoring and nearshoring are reshaping freight demand in a big way, pushing supply chains to become more regional, responsive, and resilient. As more businesses bring production closer to home, we’re seeing a clear shift toward domestic distribution, short-sea movements, and faster, more frequent transport cycles. That means new pressures and new opportunities for freight operators, carriers, and logistics teams.
If you’re rethinking your supply chain or planning for these shifts, now’s the time to make sure your transport systems can keep up. A platform like Transvirtual’s Transportation Management Solution gives you the visibility, control, and automation you need to handle shorter lead times, tighter delivery windows, and higher shipment frequency. With real-time tracking, smarter routing, and seamless carrier management, you can stay ahead of demand changes and support a more regionalized logistics strategy with confidence.
- What’s the difference between nearshoring and reshoring?
Nearshoring means moving production to a nearby country, while reshoring brings manufacturing back home. Both aim to shorten supply chains, reduce risk, and improve delivery speed.
- Why are companies shifting to nearshoring and reshoring?
Businesses want shorter lead times, lower transport costs, and more responsive supply chains. Nearshoring and reshoring also help companies avoid long-haul disruptions and improve collaboration with suppliers.
- How does nearshoring affect freight and logistics?
It increases demand for regional transport, short-sea shipping, and local warehousing. Instead of long import cycles, freight moves in smaller, more frequent volumes.
- Is reshoring good or bad?
Reshoring isn’t strictly good or bad. It depends on your supply chain, your costs, and the type of freight you move. For many businesses, it’s a smart move because it reduces long-haul transport, shortens lead times, and improves control over production. It also supports more regional and domestic freight activity, which can strengthen local logistics networks.
But reshoring does come with challenges. Local production can be more expensive, and businesses may need to rethink their transport planning, warehousing, and inventory strategies. It also requires building new supplier relationships and adjusting to new logistics flows.
Overall, reshoring can deliver major benefits if you’re aiming for speed, reliability, and resilience, but it works best when supported by the right technology and partners. Solutions like Transvirtual help by giving you real-time visibility, efficient routing, and streamlined freight workflows to manage more frequent, regional deliveries.
