The Covid-19 epidemic has drastically changed the way we live by accelerating the trend towards e-commerce and delivery instead of in-store sales. When it comes to manufacturing, the current global business model requires that many of the physical goods we want to purchase are dependent on overseas manufacturers, either for parts or the actual finished goods. As a result, businesses and consumers are struggling with delayed freight times and the rising cost of freight. The level of consumer demands is driving a surge of overwhelmed ports, and companies are facing difficulties shipping and delivering products to consumers in a timely manner. The omicron variant is only adding to the issue, with record numbers of people out sick, stressing industries even further. The United States relies heavily on foreign producers when it comes to manufacturing, and Asian manufacturing companies control a majority of the United States shipping routes. 

The ultimate goal for the United States is to begin building manufacturing facilities within the country, or a short distance away, also known as “near-shoring”. Repositioning the supply chain has brought attention to the idea of shipping out of Northern Mexico, which would be just a short travel time by truck into the United States. This would offer more sustainability by reducing pollution, and lessening the amount of fossil fuels used in transportation of goods from Asian factories to the U.S. Manufacturing inside the United States will also cut the cost of freight and shipping, which have been rising dramatically since the beginning of the pandemic. 

While long-distance international trade creates a lot of obstacles, there are good reasons why so many industries have shifted to off-shore production in the last few decades. China has a huge workforce, with better and easier access to raw materials, and low-cost factories. However, having factories closer to the US would ensure better safety of products or “security of supply”. This is especially important for valuable products such as vehicles, technology, and pharmaceuticals. Industries like the automobile industry, pharmaceuticals, and semiconductors are expected to lead the “crossover” to trade within the United States, being very wealthy industries. Near-shoring in the United States would provide millions of more jobs for Americans, and provide a livable wage for factory workers. It would also speed up production times of products for buyers, and help with the problem of clogged shipping ports. 

Some industries are going to have a harder time moving than others. Setting up manufacturing is not just about getting the right people and equipment under one roof. New facilities require months or years of planning to work within zoning laws, evaluate environmental impacts of new production sites, locate material suppliers that can deliver in a cost effective manner, and more. For example, auto manufacturing is already well established in the United States because shipping cars overseas can be very expensive, and the government imposes tariffs on vehicles made outside of the country. Consumer goods such as PPE, electronics and toys are not often made here because of the labor intensive processes. While bringing manufacturing to the United States may help to circumvent supply chain issues, it doesn’t necessarily mean higher quality products, and it almost certainly would result in higher prices for many items.

Moving production facilities from one country to another is never going to be a quick or easy process, and so it’s unlikely that we’ll see benefits from these efforts in the near term. However, as a long term strategy, having a more geographically diverse selection of manufacturing options could help to smooth out operations and mitigate the effect of future supply chain disruptions. It also could be good news for a new generation of workers that may see more opportunities in manufacturing.