Nearshoring & LTL Shipping: Why It Makes Good Business Sense

Businesses always search for ways to optimize their operations, reduce costs, and improve efficiency. One significant shift that has gained momentum in recent years is nearshoring — the practice of moving manufacturing or sourcing closer to home. Nearshoring offers a range of benefits that can enhance both cost savings and operational efficiency.

Understanding Nearshoring and LTL Shipping

Nearshoring refers to relocating business operations or production from distant countries to neighboring countries. For example, a company based in the U.S. might move production from China to Mexico or Canada. This is often driven by the desire to reduce costs, lessen political risks, and avoid the challenges associated with long supply chains.
LTL Shipping is a method of freight transportation where smaller shipments are consolidated with other goods to fill up a truck. Unlike full truckload (FTL) shipping, which requires an entire truck to be filled by a single shipment, LTL shipping enables businesses to pay only for the portion of the truck that their goods occupy. LTL is a highly cost-effective option for companies with smaller loads that don’t need a full truckload.

1. Shorter Shipping Distances and Faster Transit Times

One of the advantages of nearshoring is the reduction in shipping distances. When goods are produced closer to the point of consumption, the time it takes to get them to market is significantly reduced.

With nearshoring, shipments from nearby regions like Mexico to the U.S. are typically quicker and more reliable. Reduced transit times result in faster replenishment cycles, allowing businesses to respond more quickly to customer demand, and ultimately improving customer satisfaction.

2. Lower Shipping Costs

Long-distance shipping, especially from overseas, often involves high freight costs, especially when using air or ocean freight. Shipping via ocean freight comes with challenges such as longer lead times, port congestion, and the risk of shipping delays. LTL shipping from nearshored locations, however, can drastically reduce transportation costs. Since the shipments are often traveling shorter distances, businesses are likely to see a significant reduction in overall shipping expenses.

Additionally, LTL shipping allows companies to share truckloads with other shipments, which further reduces the cost. With reduced costs in both transportation and labor, nearshoring makes economic sense for businesses looking to save money.

3. Improved Flexibility and Adaptability

LTL shipping provides flexibility when it comes to managing inventory. Companies with nearshored production can leverage shorter shipping times to adjust their inventory based on changes in demand. Instead of having to commit to large shipments that may sit in warehouses for long periods, nearshoring allows businesses to ship goods on smaller, more frequent LTL runs, which can be adjusted quickly in response to market conditions.

4. Lower Risk of Disruptions and Easier Customs Processes

International shipping often involves complex customs procedures, port congestion, and the risk of political instability.

With nearshoring, companies can avoid many of these challenges. For example, shipments from Mexico to the U.S. face fewer regulatory hurdles than shipments from China. Customs processes are often simpler, faster, and less costly.

5. Sustainability Benefits

Another growing concern for many companies is the environmental impact of their supply chain. Shipping goods long distances contributes to carbon emissions. With nearshoring, companies can reduce the overall carbon footprint of their supply chains by shortening transportation distances.

Incorporating LTL shipping supports sustainability goals, as consolidated shipments make more efficient use of available space on trucks, reducing the number of trucks needed for the same volume of goods. This can help reduce fuel consumption and emissions.

6. Reduced Inventory Holding Costs

Nearshoring can also help reduce the need for large inventories. When shipping distances are shorter, the lead time to replenish stock is reduced, meaning businesses don’t have to maintain as much inventory. This can have a significant impact on warehousing costs, as companies don’t need to store as much product.

Also, the ability to ship in smaller, more frequent LTL shipments helps companies maintain more efficient inventory levels, reducing the need for excess stock.

7. Increased Supply Chain Transparency and Control

With nearshoring, companies gain better control over their supply chain operations. Shipping from nearby countries generally offers better visibility into shipment status and fewer obstacles to real-time tracking. The transparency of LTL shipments helps companies monitor goods from the moment they leave the factory until they reach their final destination.

Having a clearer understanding of the shipment’s status and knowing it will arrive sooner and more reliably helps businesses manage risks and plan operations with greater certainty.

Roadrunner recently expanded service from Laredo, Texas, which is the busiest shipping port in the US, and now provides access to the entire Roadrunner Smart Network.

The combination of nearshoring and LTL shipping offers compelling advantages for companies looking to optimize their supply chains. From faster transit times and lower costs to improved flexibility and reduced disruptions, nearshoring makes it easier for businesses to navigate the complex and often unpredictable world of logistics. In an era where agility, cost-effectiveness, and sustainability are more important than ever, nearshoring combined with LTL shipping can provide companies with the tools they need to stay competitive while meeting customer expectations and enhancing their bottom lines. Trust the experts at Roadrunner to help you manage your LTL shipping.

Ship Smart. Ship with Roadrunner.

2. Capacity Constraints

Carrier Limitations: With higher demand, carriers may experience capacity constraints. It’s essential to book early to secure space.
Rate Increases: Expect potential increases in freight rates as carriers adjust to the heightened demand.

3. Weather Challenges

Unpredictable Weather: Fall can bring storms, hurricanes, rain, and even early snow in some regions, which may affect transit times and logistics.
Preparation: Stay informed about weather conditions to anticipate potential delays.

4. Peak Season Surcharges

Additional Costs: Some carriers implement peak season surcharges during high-demand periods which can impact your shipping budget.

5. Preparation and Planning

Advance Booking: Plan your shipments well in advance to avoid last-minute issues and higher costs.
Inventory Management: Keep a close eye on your inventory levels to ensure you can meet demand without incurring excessive shipping costs.

6. Carrier Relationships

Communication: Stay in touch with your carriers about your shipping needs and any changes in volume or timing.
Performance Reviews: Evaluate carrier performance regularly, especially during peak times, to ensure reliability.

7. Documentation and Compliance

Accurate Information: Ensure all shipment documentation is accurate and complete to avoid delays.
Customs and Regulations: If shipping across borders, stay updated on any changes to customs regulations that may affect your shipments.

8. Tracking and Visibility

Real-Time Tracking: Utilize tracking tools to maintain visibility over your shipments. This helps manage customer expectations and allows you to respond to any issues quickly.

9. Cost Management

Evaluate Service Options: Compare different carriers and services to find the best balance between cost and service level.
Accessorial Charges: Be aware of potential accessorial charges and budget for them to avoid surprises.

10. Sustainability Considerations

Environmental-Friendly Practices: As sustainability becomes increasingly important, consider ways to reduce your carbon footprint in shipping, such as optimizing loads or using eco-friendly packaging.

The experts at Roadrunner are here for your LTL needs because Orange & Black Has Your Back every step of the way. By understanding the above aspects of the fall LTL shipping season, you can better prepare and adapt your logistics strategies to navigate these challenges effectively.