Re-Shoring

With the financial markets having a tough time recovering, many companies are trying to find ways to cut back more than they may have in the past. Even politicians and government authorities are trying to help make the transition to creating more jobs domestically and keeping more money moving within the United States as opposed to moving abroad. In the past year or so there have been many attempts by both the private and public sectors to allow for companies to re-shore their products to the United States. The biggest area of this re-shoring is from China. It used to be that labor in China was significantly less so even when factoring in international shipping costs, overall production was cheaper.

Now the space between out sourcing abroad and manufacturing products domestically is closing and businesses are finding that it is not worth the trouble of manufacturing abroad. Not only have labor costs risen in China, but overseas shipping rates have increased to such amounts that the landed costs are much higher than they used to be. The other part of re-shoring to the United States is the time difference. With companies attempting to be more lean and cost effective, the ship window also becomes a bigger issue. Companies do not want to hold on to their inventory and producing abroad means a much larger shipping window. Specifically from China, the process is almost a month long between finished products leaving and arriving for re-shipping to the customers. If the products are made and shipped domestically, this extra time can be unnecessary and speed to market is much faster. The process of re-shoring can be extremely beneficial for companies and while it can be a cumbersome task, it will be an additional selling feature to mark your items "Made in America".