Nearshoring is the relocation by a business, or businesses, of some or all of its production or other business processes from a more distant country to a closer country.
This contrasts with offshoring, in which a business, or businesses, move some or all of its business processes to a distant country, most commonly to take advantage of substantially lower wages. And it is often a reaction to changing circumstances at the offshore location, such as rising labor costs or political and regulatory problems. Nearshoring differs from reshoring, which is the returning of the business processes to a company's original country.
Nearshoring can offer a number of advantages for a company. For example, proximity can facilitate more frequent visits by managerial and technical personnel. Being in the same or similar time zone can facilitate communications by telephone or videoconferencing. Raw materials and completed products can be shipped faster and at lower cost. Often there are also much greater cultural similarities between nearby countries than between widely separated countries, thereby improving communication and reducing cultural friction.
Nearshoring and reshoring can offer substantial environmental benefits. The main one is usually that long distance shipping of products is reduced or eliminated, thereby reducing the air and water pollution from transporting parts and completed products long distances by ship or aircraft. Also, air pollution is reduced by eliminating the need for management, technical and other personnel to fly long distances to visit production facilities.