Executive Briefings

Study Suggests Shorter, Intra-Regional Routes Develop as Near-Shoring Becomes More Attractive

Shorter supply chains resulting from near-shoring could have an impact on future airfreight volumes, if new research from logistics provider BDP International proves to be an accurate indicator.

An international supply chain survey conducted by BDP, its Centrx consulting unit and Temple University's Fox School of Business suggests that historic global trade flows from manufacturers in the East to consumers in the West are undergoing a gradual shift toward shorter intra-regional routes as companies seek to reduce the distance between the production and consumption of their goods.

Researchers surveyed more than 200 companies throughout the world, with annual revenues ranging from $100m to over $10bn. Of the supply chain executives surveyed, 87 percent indicated their companies are considering moving production closer to end markets, or have already begun to do it.

"There are three principal reasons for this phenomenon," said Arnie Bornstein, BDP's executive director of marketing and corporate communications. "First, emerging nations are starting to trade with one another, shortening world trade flows. Second, Asia, Latin America and the Middle East have growing middle classes driving demand for consumer goods. And third, it makes both operational and economic sense to have shorter supply chains, where goods are produced and consumed within the same part of the world."

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An international supply chain survey conducted by BDP, its Centrx consulting unit and Temple University's Fox School of Business suggests that historic global trade flows from manufacturers in the East to consumers in the West are undergoing a gradual shift toward shorter intra-regional routes as companies seek to reduce the distance between the production and consumption of their goods.

Researchers surveyed more than 200 companies throughout the world, with annual revenues ranging from $100m to over $10bn. Of the supply chain executives surveyed, 87 percent indicated their companies are considering moving production closer to end markets, or have already begun to do it.

"There are three principal reasons for this phenomenon," said Arnie Bornstein, BDP's executive director of marketing and corporate communications. "First, emerging nations are starting to trade with one another, shortening world trade flows. Second, Asia, Latin America and the Middle East have growing middle classes driving demand for consumer goods. And third, it makes both operational and economic sense to have shorter supply chains, where goods are produced and consumed within the same part of the world."

Read Full Article