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Nearshoring Your Supply Chain

The possible effects on filling, speed to market—and more.

By: Dr. Akemi Ooka

Head of Supply Chain and Sustainability Resources, IBA

As brands dealt with the aftermath of the pandemic-fueled supply chain crisis, many looked to diversify their supply chains to mitigate risk. For U.S. companies, this included onshoring to domestic operations, nearshoring to favorable trade partners like Mexico or Canada, and even friendshoring to companies in regions friendly to the U.S. government.
 
IBA hosted a panel at the July 2023 Cosmopack Las Vegas show addressing Speed to Market and Nearshoring, with Paul Speakman (VP Sales and Client Relations at Jaguar Freight Services) and Chris James (VP Sales and Marketing at Quadpack).
 
In conversation with Dr. Akemi Ooka of IBA, Speakman noted that, “Since 2018, there has been a shift away from China stemming from the Trump tariffs, but the pandemic and China’s Zero Covid Policy really fueled the tension. [Jaguar] has seen shifts in Asia from China to South Korea, Vietnam, and other SEA countries like India.”
 
He went on further, sharing that “Mexico has benefited greatly from the shift out of China…with U.S. imports from Mexico up 20% and continuing to grow” and noting that they have seen cosmetics brands moving elements of their supply chain to Mexico, particularly filling operations.
 
Chris James of Quadpack agreed that he’s seen similar shifts in the packaging world. Quadpack has initiated a sourcing center in Mexico to support nearshoring demand. James noted that China is still a low-cost region with a skilled workforce, but that Mexico is catching up.
 
He also suggested that brands can be smart about their supply chain mix—keeping unique parts and long lead materials close to home—or employing near/onshore late-stage differentiation while continuing to procure parts from overseas. For regions like Mexico or Canada, both James and Speakman noted other benefits like being in similar time zones and having shorter distances to visit supply chain partners—these lead to more effective collaboration and better visibility in the supply chain.
 
Overall, regional diversification of supply will remain a key element of supply chain strategy, as U.S. brands and investors look for high-quality, low-risk partners closer to home—especially as consumer demand remains strong.
 
About the Author
Dr. Akemi Ooka is Head of Supply Chain and Sustainability Resources, Independent Beauty Association (IBA).

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