Rethinking Distance: Why Reshoring and Nearshoring Are Gaining Ground

Tracy Mathena
Jul 20
3 min read

A few years ago, I sat in on a supplier strategy meeting where the dominant question was, “Where can we find it cheaper?” Today, that question has evolved into something much more urgent:

“Where can we find it closer, safer, and faster—without sacrificing flexibility?”

The era of long, low-cost global supply chains is being redefined by something most of us didn’t factor heavily enough: risk.

The Risk That Changed the Rules

In the past five years, supply chain leaders have had to contend with:

Tariffs that made sourcing unpredictable overnight
Border closures and shipping congestion
Regional conflict and political instability
Intellectual property threats in certain countries
A renewed focus on national security and trade compliance

It’s no longer just about cost—it’s about control.

That’s why reshoring (bringing production back to the home country) and nearshoring (moving it closer to the point of consumption) are no longer fringe strategies.

They’re going mainstream—fast.

Total Cost of Ownership > Landed Cost

Here’s the trap I see too many organizations fall into:

They compare offshore vs. domestic options based on landed cost—materials, labor, freight—and call it a decision.

But what about:

Inventory carrying costs from longer lead times?
Stockouts and expediting charges when the ship gets stuck at port?
Quality issues and rework costs from overseas suppliers?
Currency risk and compliance overhead?
Or even the PR and brand risk of global disruptions?

This is where Total Cost of Ownership (TCO) analysis comes in—not as a spreadsheet exercise, but as a strategic framework. Because the cheapest supplier on paper often ends up being the most expensive one in practice.

Regionalization: The New Global Strategy

The goal isn’t always to bring everything “back home.” Sometimes it’s about spreading your bets.

That’s why smart companies are investing in regional supply networks:

U.S. manufacturing with a North American tiered supplier base
Dual sourcing: offshore for volume, nearshore for responsiveness
EU-based production for European customers
Mexico, Central America, or Eastern Europe as cost-competitive nearshore options

It’s not “either-or” anymore. It’s “and-also”—with contingency built in.

Consulting Focus: What Organizations Are Asking For

In my experience, when companies begin exploring reshoring or nearshoring, they’re looking for more than location analysis. They want help thinking through the ripple effects:

Total Cost of Ownership Modeling: We go beyond unit cost and freight—factoring in time, flexibility, risk, and working capital impact.
Dual Sourcing Strategy: When does it make sense? How do you manage the complexity? What’s the ROI of reduced disruption?
Supplier Diversification Roadmaps: Not just adding suppliers, but rethinking where and how we source. Including qualification timelines, tooling costs, and logistics alignment.

The Payoff of Being Closer

Yes, there are costs to reshoring or nearshoring—but there are also powerful gains:

Shorter lead times
Improved quality control
Tighter collaboration with engineering and operations
Lower inventory buffers
Easier compliance with ESG, labor, and trade policies

And let’s not forget the ability to pivot faster—a currency that’s only growing in value.

It’s Not a Reversal. It’s an Evolution.

I don’t believe we’re witnessing the “end of globalization.” I believe we’re witnessing the evolution of global strategy—from cost-driven to risk-informed.

It’s not about moving everything closer. It’s about moving the right things closer.

If you're starting this journey, here’s what I recommend:

Map your current supply risk exposure
Run a true total cost model
Start small—pilot a nearshore supplier and measure results
And most importantly, bring cross-functional voices to the table (procurement, ops, finance, compliance)