for nearshorers, costs are king

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For nearshorers, costs are kingInventory and freight costs may be tamed, but labour costs bite

© The Economist Intelligence Unit, 2016.

Source: AlixPartners survey of 143 senior executives from manufacturing and distribution, March 2014.

What are the biggest challenges you have had or expect to have with nearshoring?Respondents were asked to select three choices. Top ten results.

What are the biggest advantages you would expect from a nearshoring decision?Respondents were asked to select three choices.

Capacity, customer approval, localising supply

36%

Availability of skilled labour

33%

Quality and consistency

30%

Labour costs

44%Local regulations

29%

Cross-border transport

16%Personnel

16%

Customs regulations

13%In-country transport

13%Security

14%

Smaller wage gap 7%

Intellectual property security

12%

Lower input costs

13%

Better quality control

19%

Time-zone advantage

18%

Lower inventory costs

67%Lower freight costs

59%Duty and tax benefits

27%

Proximity to customer

42% Fewer supply disruptions

30%