Why UK supply chains are nearshoring in 2024

The impact of Brexit, COVID-19, ongoing European conflicts and inflation have forced companies to rethink their sourcing strategies. This environment has led to a growing trend towards nearshoring – bringing supply chains closer to home.

Brexit border checks

Since the implementation of Brexit border checks, UK companies have faced significant hurdles when importing goods from the EU. The new regulations have resulted in longer wait times and increased uncertainty.

Technical issues and a lack of familiarity with the new processes have further complicated matters – driving up costs and delaying critical supplies. These delays are especially problematic for perishable goods, which risk spoiling before reaching the market. Due to the increased red tape, many businesses are turning to domestic suppliers to avoid these complications.

Mitigating supply chain risks

With the pandemic, war in Ukraine and various climate-induced events – the past five years have seen numerous disruptions to global supply chains. Long-distance sourcing, particularly from countries like China, is becoming less reliable due to bottlenecks instigated by COVID-19, trade disputes and geopolitical tensions. Other incidents such as shipping attacks in the Red Sea and trade wars among major economies have created further risks.

To counter these challenges, UK companies are increasingly looking to nearshore their supply chains, which offers greater reliability and predictability. This strategic shift is helping companies build more resilient and sustainable supply chains, better equipped to handle future disruptions and maintain continuity in an unpredictable global landscape.

Enhanced control over production

Bringing supply chains closer to home provides companies with greater control and flexibility over their production processes. Nearshoring simplifies communication and reduces lead times, allowing businesses to swiftly adapt to changing customer demands.

For example – a manufacturer looking to modify a product in response to market trends can do so more efficiently with local suppliers. This ability to quickly respond to market dynamics is crucial for maintaining a competitive edge.

Promoting sustainability

Sustainability is another driving force behind the nearshoring trend. A Gartner report indicates that 75% of supply chain leaders prioritise circular economy initiatives. Shorter supply chains reduce the environmental impact by cutting down on transportation emissions.

Additionally, localising supply chains allows companies to comply with stringent environmental regulations, enhancing their sustainability credentials. The UK and EU’s commitment to green energy and sustainability programs further supports these efforts, making nearshoring an environmentally responsible choice.

Enhancing supply chains with technology

As companies adapt to these new challenges, technology plays a crucial role in optimising supply chain operations. The 2024 supply chain survey reveals that nearly half of supply chain professionals (47%) plan to invest in artificial intelligence, with significant investments also directed towards advanced cybersecurity (42%) and data analytics (41%). These technologies are essential for enhancing operational efficiency and resilience.

The volatile nature of the supply chain industry requires businesses to be agile and adaptable. Transportation Management Systems (TMS) are becoming indispensable tools for achieving this agility; these enable companies to forecast risks, manage costs and optimise demand planning. For example, TMS can help logistics providers plan efficient routes, reducing fuel consumption and operational costs. Real-time data from a comprehensive software solution also allows businesses to anticipate delays and take proactive measures to mitigate them.

TrackTrans

By sourcing closer to home, companies are reducing risks, improving control over production and enhancing their environmental footprint. The adoption of the latest technologies are also further strengthening their ability to adapt and thrive in a dynamic market.

Being able to quickly adapt is critical, hence why organisations are using TrackTrans’ integrated TMS, warehouse management system (WMS) and electronic proof of delivery (ePOD) to introduce agility into their operations. A modern, flexible software solution enables businesses to forecast risks, costs and demand, allowing hauliers to correctly optimise their transportation fleets.

Try our free demo and get your business in gear today.