Nearshoring: Why Smart E-Commerce Brands Are Bringing Sourcing Closer to the U.S.

Over the last two decades, globalization fueled a boom in e-commerce, with brands relying heavily on distant supply chains spanning Asia and beyond. But seismic shifts in global trade dynamics have sparked a critical question for business leaders:

Should we keep sourcing overseas, or bring production closer to home?

The answer for many is nearshoring.

This strategic pivot isn’t just a reactionary trend - it’s a proactive move reshaping how smart e-commerce brands manage costs, lead times, and risk.

Why Nearshoring Is on the Rise for E-Commerce Brands

Let’s explore the key reasons nearshoring has become the strategic advantage e-commerce leaders can’t ignore.

Taming Volatile Global Shipping Costs

Between 2020 and 2022, global ocean freight costs skyrocketed by more than 300%, driven by:

• Pandemic-related port congestion

• Container shortages

• Labor strikes and port shutdowns

• Geopolitical tensions in hotspots like the South China Sea

Although rates have stabilized somewhat, unpredictability remains.

Nearshoring mitigates this risk. Transporting goods from Mexico or Central America to the U.S. by truck or rail means:

• Shorter transit times

• Lower freight costs

• Reduced vulnerability to ocean shipping disruptions

For example, shipping a container from Shanghai to Los Angeles might take 21-30 days, whereas trucking goods from Monterrey, Mexico, to Dallas, Texas, often takes just 1-2 days—with far fewer price swings.

Speed-to-Market is Everything in Modern E-Commerce

Today’s consumers expect instant gratification. Whether buying a trendy fashion item or the latest gadget, waiting weeks for deliveries is no longer acceptable.

Long supply chains expose e-commerce brands to:

• Inventory shortages

• Costly airfreight to bridge supply gaps

• Missed market trends

Nearshoring dramatically shortens lead times. Brands sourcing from Mexico or Central America can:

• Complete manufacturing runs in as little as 1-2 weeks

• Ship goods to U.S. distribution centers in days rather than weeks

• Respond rapidly to viral trends or sudden demand spikes

Consider a fashion brand riding a TikTok trend. Producing new SKUs in Mexico allows them to deliver products to U.S. warehouses in under two weeks—a speed advantage their competitors relying on ocean freight simply can’t match.

Diversifying Away from China-Centric Supply Chains

For years, China was the default manufacturing hub for countless industries. But growing concerns have pushed brands to rethink overreliance on any single geography:

• Trade wars and tariffs

• Rising labor costs in China

• ESG scrutiny around forced labor allegations

• Intellectual property risks in sensitive industries

Nearshoring enables e-commerce brands to diversify their sourcing strategies. Countries like Mexico, Colombia, and Guatemala are emerging as reliable alternatives for:

• Textiles and apparel

• Electronics assembly

• Consumer goods manufacturing

Electronics brands, for instance, are shifting low-complexity assembly (like cables and harnesses) to Mexico while keeping advanced component manufacturing in Asia, striking a balance between cost efficiency and geopolitical risk management.

Lower Total Landed Costs, Not Just Manufacturing Costs

Nearshore manufacturing may carry slightly higher per-unit costs than Asia. However, many brands discover that their total landed costs decrease once they account for:

• Lower freight expenses

• Reduced inventory carrying costs

• Trade agreement benefits, such as duty reductions under USMCA

• Less capital tied up in long ocean voyages

For instance, a product costing $2.80 to produce in Mexico may initially seem pricier than the same item produced for $2.20 in Asia. Yet, after factoring in ocean freight, tariffs, and longer lead times, the Asian-sourced product’s landed cost might climb to $3.50, while the nearshored product holds steady at $3.10.

Sustainability and ESG Pressures Are Reshaping Sourcing Decisions

Consumers and regulators increasingly demand that brands demonstrate environmental and social responsibility. Nearshoring helps e-commerce companies:

• Lower carbon emissions by reducing ocean shipping miles

• Cut excess packaging for long-haul transit

• Enable smaller, more frequent production runs to reduce waste

• Ensure better oversight of labor conditions

Consider a beauty brand moving skincare production to Mexico. By doing so, they’ve slashed CO₂ emissions per shipment by over 40% compared to Asian sourcing, improving sustainability metrics and brand reputation.

Challenges E-Commerce Brands Should Consider

Nearshoring isn’t a one-size-fits-all solution. Brands should weigh:

• Limited manufacturing capacity for some specialized goods in nearshore regions

• Higher labor costs than Southeast Asia

• Infrastructure gaps in certain countries

• Complex customs compliance for cross-border shipments

Yet, for many, the strategic advantages far outweigh these hurdles.

The Future of Nearshoring in E-Commerce

Nearshoring isn’t merely a defensive strategy - it’s a growth accelerator. By relocating sourcing closer to home, e-commerce brands unlock:

• Faster speed-to-market

• Improved resilience against global shocks

• Cost efficiencies across the supply chain

• Stronger ESG compliance

• The flexibility to adapt to shifting consumer demands

Brands that seize this opportunity will not only survive future disruptions but also thrive in an era where agility and customer experience define success.

How to Start Your Nearshoring Journey

For e-commerce brands considering nearshoring:

• Analyze your current cost structures. Look beyond production costs to total landed cost calculations.

• Map out potential nearshore partners. Evaluate countries based on product type, labor skills, and infrastructure.

• Assess customs and compliance processes. Trade agreements like USMCA offer significant advantages—but only if you navigate regulations correctly.

• Model different supply chain scenarios. Simulate how nearshoring impacts speed, cost, and risk.

Nearshoring is more than a buzzword; it’s a strategic response to the complexities of modern e-commerce. Brands that bring sourcing closer to the U.S. position themselves for greater agility, sustainability, and resilience.

In the fast-paced world of e-commerce, speed matters. Nearshoring might just be the smartest move your brand can make. Contact Advanced International Freight today and let's find a solution that works for your business.

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Frequently Asked Questions about Nearshoring

What is nearshoring in e-commerce?

Nearshoring in e-commerce refers to relocating manufacturing and sourcing operations closer to a brand’s primary consumer market. For U.S. e-commerce companies, it typically involves shifting production from distant regions like Asia to nearer countries such as Mexico, Central America, or parts of South America. The goal is to reduce shipping times, lower costs, and minimize risk.

How does nearshoring help reduce shipping costs?

Nearshoring significantly cuts shipping costs by replacing long ocean freight routes with shorter, more predictable land transportation like trucking or rail. Instead of waiting weeks for shipments from Asia, e-commerce brands can receive goods from nearshore locations in just days, avoiding volatile freight rates and reducing overall logistics expenses.

Is nearshoring only for large e-commerce brands?

Not at all. While large brands may be early adopters, small and medium-sized e-commerce businesses also benefit from nearshoring. Faster lead times, lower inventory costs, and smaller minimum order quantities make nearshoring an attractive option for businesses of all sizes looking to stay agile and competitive.

What products are commonly nearshored for the U.S. market?

Common nearshored products include:

• Apparel and textiles

• Electronics assembly and components

• Consumer packaged goods

• Automotive parts and accessories

• Footwear and leather goods

These industries benefit from the skilled labor, geographic proximity, and trade agreements offered by nearshore regions.

Are there downsides to nearshoring?

Nearshoring has many advantages but also some challenges:

• Higher labor costs than Southeast Asia for certain industries

• Limited manufacturing capacity for specialized products in some regions

• Infrastructure or logistical gaps in certain countries

• Complex customs and regulatory compliance

However, for many brands, the benefits of speed, flexibility, and risk reduction outweigh these challenges.

How do trade agreements like USMCA support nearshoring?

Trade agreements such as the United States-Mexico-Canada Agreement (USMCA) lower or eliminate tariffs on goods produced in member countries. This significantly reduces the total landed cost for e-commerce brands sourcing products from Mexico or Canada. It also simplifies compliance and makes cross-border trade more efficient and predictable.

Is nearshoring a sustainable sourcing strategy?

Yes! Nearshoring contributes to sustainability by:

• Lowering carbon emissions from reduced transportation distances

• Cutting packaging waste needed for long-haul shipping

• Allowing smaller, more frequent production runs to minimize inventory waste

• Providing better oversight of ethical labor practices

As consumers demand greater environmental and social responsibility, nearshoring helps e-commerce brands align sourcing strategies with ESG goals.

How can an e-commerce brand start exploring nearshoring?

Brands should:

• Analyze total landed costs, not just manufacturing prices

• Research suppliers in nearshore regions

• Understand trade regulations and duty implications

• Model how faster lead times could impact inventory levels and customer experience

• Work with logistics partners experienced in cross-border operations

Starting with a small pilot production run is a practical way to test nearshoring’s benefits without overcommitting resources.