Amid growing discussions on the concept of nearshoring following the supply chain disruptions brought on by the COVID-19 pandemic, a recent Sea-Intelligence analysis noted that current data gives "no support" to the notion that this concept is gaining traction.
The Danish maritime data analysis firm said a side-effect of nearshoring would be a shortening of supply chains as some production will move closer to the end-consumer but not so close as to fully eliminate the need for container shipments.
"This should, therefore, show up as a reduction in the average sailing distances," Sea-Intelligence said.
"But does the data support such a trend of increasing nearshoring?"
The Danish maritime data analysis firm noted that since the onset of the pandemic, there has been "considerable focus" on the concept of nearshoring, where production is brought closer to the consumers, countervailing the strong trend of production offshoring seen over the previous decades.
But the data it gathered seems to prove otherwise.
[Source: Sea-Intelligence]
It noted that Figure 1 shows the average sailing distances of containers imported into North America and Europe. The large downward spikes are seasonally caused by Chinese New Year and Golden Week.
"For North America, we see that the sailing distance has increased compared to a pre-pandemic baseline, hence giving no support to the notion of nearshoring," commented Alan Murphy, CEO of Sea-Intelligence.
He added that for imports into Europe, although a marginal decline can be seen early in the pandemic period, this has been reversed, and it would be more correct to conclude that over the past year, there has been a gradual increase in the sailing distance for cargo coming into Europe.
"Furthermore, when analysing container trade volume data from Container Trade Statistics, we find that intra-Europe container volumes, as a share of total European container imports, have been gradually declining since the height of the pandemic."