ATLANTA: UPS says interest in near-shoring has more than tripled since 2010 with 27 percent of high-tech logistics executives adopting it as a strategy to improve customer service.
In its fourth annual “change in the chain” survey of 337 high-tech manufacturers, done by IDC Manufacturing Insights, UPS says 77 percent of those surveyed want to improve service levels by bringing production closer to demand and almost 55 percent cite improving control over quality and intellectual property.
Another result of near-shoring will be to cut logistics costs and reduce overall CO2 emissions.
Worldwide, those planning to near-shore vary by region with Latin America (44 percent); Europe (26 percent) ; Asia (24 percent) and North America (19 percent).
UPS says near-shoring also varies by company size, with both small companies ($5-$250 million annual revenue) and the very large (greater than $1 billion), leading the near-shoring shift.
The survey also shows that while 41 percent of high-tech executives expect exports to grow faster over the next two years, 39 percent think growth will remain at current levels. The remaining 20 percent expect no growth or a decline in the next 24 months.
For companies that expect hi-tech exports to grow at faster levels, emerging market expansion remains difficult with 50 percent of respondents saying the cost-benefit of China or other low cost manufacturing countries remain a compelling reason for the status quo; 46 percent cite the current location of key suppliers; 40 percent cite an immovable infrastructure while 33 percent say their manufacturing is also close to a growing consumer market.
Some 15 percent of those surveyed note that a key lesson learned from emerging market expansion is an early adoption of a logistics partner to assist with market entry, says UPS.