The push for strategic shoring is gaining momentum as businesses prioritize resilience and operational agility. A recent report by KPMG, The Proximity Premium, highlights a notable shift in supply chain strategies, with an expected 16% increase in the Americas’ share of U.S. supply chains. This movement reflects a growing commitment to regional and domestic sourcing, with nearly three-quarters of business leaders attesting to the benefits of strategic shoring in enhancing supply chain resilience.
The Drive Toward Proximity and Efficiency
The global business landscape has undergone significant change, spurred by geopolitical tensions, economic instability, and evolving trade regulations. These factors are pushing companies to rethink their reliance on distant suppliers. According to KPMG’s findings, 55% of executives now consider resilience and faster time to market as key motivators for transitioning to nearshoring. This approach enables businesses to strengthen their operations by consolidating locations within supply chains—from an average of 2.7 to 2.4 over the next three years.
Proximity offers multiple benefits beyond resilience. Companies that embrace nearshoring are better positioned to improve cost efficiency and resource accessibility. These advantages are crucial in today’s unpredictable trade environment, where 61% of business leaders report that global trade volatility has prompted them to refocus on regional and domestic sourcing.
The Role of Taxes and Regulation in Strategic Decisions
An often overlooked aspect of supply chain strategy is the tax environment. According to Doug Zuvich, KPMG’s Latin America Regional Managing Partner for Tax and Legal, tax considerations should be integrated into the supply chain decision-making process. “A tax-first mindset,” Zuvich explains, “allows companies to understand the interconnected factors that influence costs and operational efficiency.” Without careful tax planning, businesses may miss opportunities to optimize their supply chains from a financial perspective.
Regulatory policies and tax implications are also significant influences on strategic shoring. Thirty-one percent of executives list regulatory hurdles among their top five challenges in achieving shoring objectives. Similarly, 23% view the tax environment as a critical factor. With regulators and tax officials playing a key role, 53% of executives note that these authorities rank just below shareholders in terms of influence over supply chain decisions.
Strategic Shoring Success Stories
The results of strategic shoring are already visible. Seventy-five percent of executives report that their companies have successfully bolstered supply chain resilience through nearshoring. Additionally, 73% have seen improvements in cost efficiency, demonstrating the tangible benefits of closer, more integrated supply chains. Beyond financial advantages, strategic shoring is also contributing to sustainability goals, with 61% of executives noting that this approach helps reduce the carbon footprint associated with product distribution.
As businesses continue to navigate the complexities of the global market, strategic shoring offers a pathway to greater operational agility, cost savings, and environmental responsibility. With increased focus on regional sourcing and distribution, companies can not only mitigate risks but also position themselves for long-term growth and sustainability.
