Document Type

Research Paper

Publication Date

Summer 6-21-2023

Abstract

Reshoring is a relatively new trend across the world, particularly in developed nations like the US and European countries. Its impact on the economy and transportation and logistics is expected to be significant. However, there is a lack of research on the reasons behind companies' decision to reshore, the major players involved, the economic implications, and how to align transportation for maximum benefit. To address this gap, a study was conducted using location quotients, which compare the economic composition of smaller areas to a base geographical area. Two datasets were used: the US Census Bureau's County Business Patterns employment dataset and Esri's US Business Locations dataset. Results show that location quotients greater than one indicated a more specialized economy in each industry subsector or group in a county compared to the national economy. This study also develops a Reshorability Index (RI) that can measure the readiness of outsourced products to be brought back to the US. The study highlights the impact of reshoring on the US transportation and logistics, with a focus on the ports importing necessary commodities. Companies are expected to prioritize lowering transportation costs, resulting in a shift towards North-Eastern, South-Eastern, and Eastern ports in the US. While reshoring will reduce the burden on US ports, it may put pressure on local and regional transportation infrastructures. The findings of this research are transferable and implementable in the industry, as demonstrated by a pilot implementation at Bridgestone APM company, USA, which resulted in over $4 million in 301 tariff savings for the company.

Publication Title

Progress in Material Handling Research

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