Slow-steaming by shipping lines and the reduction of currency and supply chain risks will spur more original equipment manufacturers to locate new manufacturing sites closer to the U.S. or move existing facilities from Asia, according to Rich Bolte, chairman and CEO of logistics service provider BDP International.
“I think in the next five years this process could hasten and we will see a renaissance of North American manufacturing,” he told the JOC. “There are higher costs in places such as China, and shipping is slower so supply chains are stretched. We now hear more about supply chain security than we do about just-in-time from our customers.”
In terms of transportation demand, this will mean more emphasis on growth in north-south trades and intraregional shipping in North America and in other parts of the world where Bolte expects the trend for near- and re-shoring to accelerate.
Philadelphia-based BDP is considering expanding its operations in Mexico, where demand for logistics services is forecast to boom. “Mexico itself is investing in the necessary infrastructure from both a public and private standpoint,” Bolte said. “As a result, BDP is expanding its relationship with key asset owners in Mexico. “We have a joint venture in Mexico and we are looking at potential acquisitions on the Mexican-U.S. border to further enhance our service offerings.”
Another major catalyst for OEMs shifting production to the U.S. is the exploitation of shale gas. This has transformed the U.S. into a cheap energy market for industrial consumers, a significant factor for many manufacturers, especially heavy users in the chemical, metals and petrochemicals sectors.
“Energy in the U.S. is cheaper than in Saudi Arabia now,” Bolte said. “It’s totally changing industrial demographics with at least 80 different petrochemical plants now under construction in the U.S. When they come on stream, chemicals and petrochemicals will start being exported. This is a big market for companies like us.”
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