What are the Benefits of Nearshoring in the Current Climate?
We have looked at the difference between Nearshoring and Offshoring (see here) as a form of outsourcing, but now we want to outline the benefits of Nearshoring for your business in the current climate.
For the most part, 2020 has been a fairly uncertain time for many individuals, and the apprehension has been no different for organisations. The process of conducting business with partnerships, suppliers, supply chain logistics service providers and others within a close-knit environment is increasingly becoming the norm. Travelling by plane and staying further afield has become more complex with the risk of quarantine and self-isolation becoming commonplace. This could mean that business dealings and the circles they move in could become smaller and smaller and find alternative transport solutions in a bid to keep things moving within the current circumstances.
As we know, Nearshoring is a type of outsourcing that allows businesses to appoint certain processes, such as warehousing and logistics services, to companies or individuals in outside organisations, in order to be more efficient and reduce costs. When companies are deciding which kind of outsourcing to implement they can often overlook the proximity of the organisation, but this should be an important part of the decision making process. So how is nearshoring particularly beneficial at this time?
The further apart companies are from their off or nearshoring supply chain logistics providers, the more expensive it can be to delivery shipments which, of course, includes the cost of time. Companies based geographical nearer to each other will share similar working hours meaning logistics and warehousing problems can be fixed in real time without having to wait long periods of time for responses, this is critical when timely decision making is key.
This is a clear advantage at this time when freight forwarding services are limited due to travel between countries being unstable, unreliable, and office hours are not what they once were with many staff working from remote locations.
Some of the key benefits to nearshoring are similar time zones and cultural practices as well as better communications as language barriers tend to be less of an issue. This has a huge knock on effect as a language barrier can all too often slow down communications and hinder warehousing activities that should otherwise be more efficient.
With organisations operating in close proximity it offers a somewhat more secure environment whilst it is unclear when and where the next peak of COVID-19 will occur. This kind of risk would be better managed with supply chain service providers and associates who are all located within the same country or close proximity with each other.
During uncertain times cost is a big focus, cutting unnecessary spending and focusing on running efficiently and cost effectively. Nearshoring outsourcing means certain logistics and warehousing activities can be delegated to a lower cost organisation which is better prepared to deal with the requirements.
Warehousing and logistics companies who have survived the pandemic thus far have adapted and learnt better, more efficient ways to compete under increased pressure. How and where you outsource depends largely on the goals and objectives of your organisation, however with the combined uncertainties of Brexit and the current pandemic, keeping outsourced operations close to home has evident advantages.
As an international freight management services provider and with operations across Europe, Xpediator is well positioned to support businesses with their offshoring and/or nearshoring supply chain logistics and distribution requirements.
Contact us today to see how our international freight forwarding and courier services can help your business.