A recent article by Patrick Burnson appearing in Logistics Management suggests major manufacturers such as Caterpillar, Ford, Boeing, and GE plan to relocate current offshore manufacturing operations in the U.S. over the next 2-3 years. The current trend toward reshoring is a function of rising wage inflation in countries such as China combined with gains in U.S. productivity, a shrinking landed cost gap (the cost of shipping goods from origin to their final destination), and higher shipping costs associated with increasing fuel prices.
No doubt, China will be hardest hit by the reshoring movement. According to research performed by the Hackett Group, exports to the U.S. currently support between 15 and 20 million Chinese manufacturing jobs. Closer to home, reshoring is welcome news to American workers who stand to benefit from the return of well-paying jobs in the manufacturing sector. Here at Litco, we applaud the strides being made to bring manufacturing jobs back to the U.S. and look forward a continued economic recovery.
