Quicktake: Reshoring/Nearshoring Impacts for Industrial Distribution - Modern Distribution Management

Log In

Quicktake: Reshoring/Nearshoring Impacts for Industrial Distribution

James Dorn of the Dorn Group joins MDM’s Tom Gale to discuss ‘shoring’ opportunities and strategic implications for distributors. The industry is moving from digital-defining seamless service to a broader supply chain transformation that mitigates risk for customers by creating better transparency and deeper engagement.
Offshoring has been a popular strategy for manufacturers and distributors for many years.

Offshoring has been a popular strategy for manufacturers and distributors for many years. Whether for cheaper labor or savings in operational costs, businesses have had every incentive to outsource at least some of their operations to international destinations.

Recent disruptions, such as the COVID-19 pandemic and U.S.-China trade conflicts, however, have those same businesses contemplating a return to domestic production. Reshoring — the process of returning manufacturing and production of goods from overseas to a company’s original country — has its limitations. But it could help businesses escape a chaotic international trade scene and avoid global supply chain backlogs.

In our latest Quicktake podcast, MDM CEO Tom Gale and Dorn Group CEO James Dorn discuss why it’s important for distributors to start think about reshoring to North America, and how the phenomenon might impact the future of distribution.

“I think there’s just an appetite for manufacturers to mitigate the risk in their supply chain,” Dorn said. “And they’re doing that by trying to make investments here, either onshore or near shore in Canada or Mexico, to where they can actually control their supply chain.”

“The U.S. economy is so powerful,” Gale said, “because of the power of distribution channels to flex and mold quickly to economic conditions, just market-to-market competitive landscape conditions, as well to really serve customers the way they need to be served.”

Baird, which collaborates with MDM on a quarterly market trends survey, estimated in an Aug. 25 report that industrial distributors could stand to gain $15 billion in incremental revenues as a result of reshored production at new domestic manufacturing sites. This benefits both industry giants as well as smaller distributors, according to Dorn.

“I think it also benefits the mid- and the small-size distributor, where their whole value prop is built around this local, hyper-personalized model to service some of these larger facilities and really cater to their specific needs,” he said.

Another angle to consider is the potential (re)development of rural American communities, many of which lost jobs due to offshoring.

“There are so many rural areas out there that just were devastated decades ago, when manufacturing went overseas,” Dorn said. “So, you’re going to see a revival of that. And there will be tailwinds that other businesses and communities can benefit from. So, that investment will create more jobs and more opportunities for distributors to actually become a part of that process.”

Listen to more of this discussion in the podcast player at the top of this article or by visiting MDM’s podcasts page, where you can also find our full library of previous episodes.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.