Learn about the transformation engine for business competitiveness: Nearshoring

In an interconnected business context, strategies to remain competitive are continuously evolving. One of the trends that is transforming the industrial and commercial landscape is nearshoring. This approach is emerging as a powerful transformational driver for business competitiveness, offering new opportunities to improve operational agility and responsiveness to market demand.

What is nearshoring and why is it important?

Nearshoring consists of outsourcing part of a company's services to companies in nearby or neighboring foreign countries, or bringing production closer to the territory of consumption. Unlike offshoring, which involves moving operations to remote countries, nearshoring seeks nearby locations with a similar time zone, facilitating communication and allowing faster responses and transfers.

As the World Economic Forum points out, "Nearshoring is a competitive weapon for industries. In this hypothesis, confidence in the productivity of the global logistics chain and international trade are highlighted, while seeking to save costs in nearby locations, with lower risk." (Articulo - la Republica)

Benefits of nearshoring for business competitiveness.

Implementing nearshoring can bring a number of competitive advantages for companies:

1. Supplier diversity: Expanding in the proximity of borders allows for a wider range of suppliers and can avoid future problems in the supply chain.
2. Reduced transportation time and costs: By locating the head office and subcontractors in the same geographical area, deliveries are carried out in less time and more economically.
3. Greater market knowledge: Geographical and cultural proximity facilitates the adjustment of supply to demand and the adaptation of strategies.
4. Better control of the legal environment: Labor and commercial regulations in nearby countries are usually more similar, which avoids certain setbacks in international expansion.
5. Access to more talent: Countries affected by labor shortages can find workers abroad. In addition, the establishment of multiple foreign companies in some regions leads to the emergence of sectoral clusters and helps create skilled workforces.
   

Practical strategies to maximize the benefits of nearshoring

To maximize the benefits of nearshoring, companies can implement the following strategies:

• Strategic location selection: It is necessary to choose destinations that offer an optimal combination of labor costs, infrastructure, political stability and proximity to target markets. For example, Mexico has become an attractive destination for U.S. companies due to its strategic location, skilled labor force and low cost of production.
• Effective supply chain management: Geographic proximity allows for greater visibility and control over the supply chain. Companies should leverage this advantage to implement more efficient inventory management systems and respond more quickly to changes in demand.
• Cost optimization: Although nearshoring may involve higher upfront costs than traditional offshoring, companies can optimize their long-term costs by reducing transportation expenses, minimizing inventories and improving operational efficiency.
• Investing in technology and infrastructure: To maximize the benefits of nearshoring, it is critical to invest in appropriate technology and infrastructure. This may include automated warehouse management systems, intermodal transportation solutions and advanced communication platforms.
• Local talent development: The success of nearshoring depends heavily on the availability of skilled labor. Companies must invest in training and development programs to ensure a competent and committed workforce.

The impact of nearshoring in key sectors

Nearshoring is having a significant impact on several industrial sectors. The manufacturing sector occupies 91% of the industrial spaces adapted for this new modality.

The most benefited sectors include: (Artículo- Global Engineering Group)

1. Automotive industry (44%)
2. Metal-mechanic industry (14%)
3. Plastics (7%)
4. E-commerce (6%)
5. Furniture (5.7%)
6. Construction (4%)
7. Consumer products (3.9%)

These sectors are experiencing significant growth thanks to the relocation of companies, which is generating new investment and employment opportunities in the destination countries.

Mexico's case: A nearshoring success story

Mexico has become a preferred destination for nearshoring, especially for U.S. companies. According to Mexico's National Council of the Maquiladora and Manufacturing Export Industry, "about 75% of all nearshoring manufacturing in Mexico has been located in the northern region." (Blog - NEWMARK)

This nearshoring boom in Mexico has driven demand for logistics and transportation services. Ferrovalle, says they have experienced "never before seen increases in volume," with 10% annual growth in the volume of rail cars operated and a 30% increase in the intermodal division. (Blog - NEWMARK)

The future of nearshoring and business competitiveness.

Nearshoring is emerging as a long-term trend that will continue to transform the global business landscape. Jessica Ponce de Leon, CEO of Solistica, predicts "double-digit growth over the next five years" due to nearshoring.

However, to take full advantage of these opportunities, companies must address certain challenges, such as the shortage of skilled labor and the need to improve infrastructure. As Ponce de León points out, "One challenge we have today in this industry, and I think in general, is that there is a lot of talent mobility. We are making an important emphasis on how we take care of certain positions." (Blog - T21)

In conclusion, nearshoring is becoming a crucial transformation driver for business competitiveness. By bringing production closer to consumer markets, companies can improve their operational agility, reduce costs and respond more effectively to market demands. Those organizations that can strategically leverage this trend will be better positioned to thrive in the changing global business landscape.

Solistica: A strategic ally in the nearshoring era

In this context of growth and opportunities generated by nearshoring, having an experienced logistics partner can make the difference in the success of a relocation strategy. Solística is positioned as a key ally for companies seeking to take advantage of the benefits of nearshoring.

With a vision focused on the future, Solística has developed a strategy based on three fundamental pillars:

1. Level of service and excellence: The company is committed to offering high quality logistics solutions, tailored to the specific needs of each client.
2. Employee talent: Recognizing the importance of human capital in the success of nearshoring, Solística has implemented innovative programs to attract, develop and retain key talent.
3. Infrastructure: The company continually invests in improving and expanding its logistics infrastructure to meet growing market demands.

Jessica Ponce de León, CEO of Solística, emphasizes the importance of nurturing talent in the logistics industry: "We are creating schools where employees are trained in different roles, in order to accompany them in their growth, so that they can have a career and development plan. This initiative helps to combat the shortage of transport operators and ensures a highly trained team committed to long-term projects. (Blog - T21)

With its focus on operational excellence, talent development and infrastructure investment, the company is positioned as an ideal strategic partner for companies seeking to implement successful nearshoring strategies. Its expertise and ability to adapt to changing market demands make it a key catalyst for business transformation and growth in the nearshoring era.

At Solistica, we are experts in end-to-end logistics solutions that can help you maximize the benefits of this strategy. Contact us today and find out how we can drive your business growth together.