October 20, 2022 | Insights
Reshoring, A New Age of Short Haul Logistics
October 20, 2022 | Insights
Companies around the world are encountering no shortage of roadblocks in today’s global supply chain. Between COVID-19 shutdowns, tariffs, geopolitical unrest, and extreme weather, parts and products are being held in manufacturing facilities, on boats, and in warehouses longer than ever.
In light of the seemingly never-ending delays and shipping bottlenecks, one thing has become clear: offshore facilities are being increasingly regarded as a supply chain liability.
The Rush to Reshore
Reshoring isn’t an entirely new concept. After decades of inexpensive offshore production, people began questioning the practice around 2010. Some groups cited labor conditions, others the environment or American jobs and economy—and called for some version of reshoring or nearshoring. The movement slowly gained traction among the public until the pandemic hit. Now it’s a #1 priority for manufacturers.
In the 2021 Thomas State of North American Manufacturing Report, it’s revealed that “83% of manufacturers indicate that they are ‘likely’ to ‘extremely likely’ to reshore.”
What is Reshoring?
Reshoring involves bringing all aspects of a supply chain back into the market it serves, or shrinking the manufacturing footprint, to create a supply chain that’s harder to disrupt. For reshoring to be effective, manufacturers also need to localize their supply chain. That means moving their suppliers closer to the manufacturing facility. Geographical proximity removes steep port tariffs, container shortages and shipping delays from the equation.
The Impact of Reshoring on Logistics
What does this reorganization of the supply chain ecosystem mean for North American logistics?
The influx of manufacturer-supplier clusters popping up in Canada, the US, and Mexico is shifting us from the east-west (port to port) supply chain network to an increasingly north-south model—and that’s causing two major changes for the transportation industry:
- Decrease in long distance FTL freight
- Increase in short haul needs
Distribution Strategy for Scalable Short Haul Needs
The key for preparing for tomorrow’s supply chain is having the right systems in place that make your operation efficient and scalable. A recent Deloitte article explains that technology and data are essential components of manufacturing facilities for achieving supply chain excellence. The same goes for distribution centers and logistics in general.
Having an advanced yard management platform is essential. It can not only give you a bird’s eye view of your yard operations, making it easier to track trailers and their contents with timestamps—but a YMS platform also provides data that unlocks new efficiencies within the yard. No matter your yard volume, every move counts.
Big Opportunity in Yard Data
A fully integrated yard management program offers total supply chain visibility and an entire network of logistics data. That means at any given moment, a yard manager will know what (and how many) incoming trailers to expect that day, which trailers are scheduled to be picked up, and they’ll have the systems (and trailers) in place to turn inventory as quickly as possible.
YMS programs also allow you to see which yard operations work best. For example, where the ideal holding zone locations are, or what the most efficient paths are for certain types of moves. This type of data can be slightly different from yard to yard and industry to industry. But shaving seconds or even minutes off every move can save money and significantly increase your team’s capacity without requiring staff or equipment changes.
How Yard Data Increased Efficiency for Major Tech Retailer
For one $40 billion retail giant, implementing a structured, measurable YMS program went a long way in improving productivity and reducing incidents and delays in their network. NSSL worked closely with them to design a Shuntware® program that integrated several lines of business, including in-store and online sales. The time studies from this new program show that their yard efficiency improved from an average of four shunts per hour to six shunts per hour. Read the full case study on how Shuntware® helped to improve yard efficiency.
Strategic Partners for Yard Optimization
The pandemic and resulting supply chain disruption has underscored the need for greater visibility and localization when it comes to manufacturing and logistics. As more organizations continue reshoring, they will require greater supply chain infrastructure to support these operations. Shunting (modern yard management) and yard data will prove critical to success as we move into a post-pandemic era.
At National Shunt, we work with companies in every market to deliver sophisticated yard strategies that drive business forward and allow companies like yours to stand out from the competition—no matter what the supply chain throws our way next.
Interested in seeing what our team can bring to your yard? Request a free, no obligation yard assessment.