AIR CARG O WEEK


MARKET FORECAST


NEARSHORING: WHAT IT MIGHT MEAN FOR AIRFREIGHT IN 2025


I n In the evolving global economy, nearshoring - relocating manufacturing and operations


closer to consumer markets - is poised to play a pivotal role by 2025. This strategic shift is being driven by a confluence of factors, including rising labour costs in traditional offshore hubs, geopolitical uncertainties, supply chain vulnerabilities and a growing emphasis on sustainability. For businesses, nearshoring offers an opportunity to enhance supply chain


resilience, reduce costs, and meet consumer demands for faster delivery. However, this transition will also have profound implications for the logistics industry, particularly for airfreight, which must adapt to a more regionally focused model. By 2025, nearshoring will become increasingly prevalent across various industries and regions, driven by the need for


resilient, efficient and sustainable supply chains. Examples such as


Mexico’s growth as a North American hub, Eastern Europe’s prominence in manufacturing, and Africa’s potential as a European partner demonstrate the global scope of this shift. Businesses that invest in strategic nearshoring will not only navigate current challenges but also position themselves for long-term growth in an increasingly regionalised world.


Why nearshoring will matter more Supply chain resilience was exposed at the start of the decade. The COVID-19 pandemic exposed critical vulnerabilities in global supply chains. Businesses that relied heavily on distant production hubs faced significant delays and disruptions due to factory closures, port congestion and limited freight capacity. Nearshoring mitigates these risks by shortening supply chains, enabling faster responses to disruptions, and ensuring continuity of supply. There are rising costs in traditional hubs as labour costs in countries like China have been


steadily increasing, reducing the cost advantage that once made these locations attractive. At the same time, advancements in automation and robotics have made nearshore production more viable and cost-effective, allowing businesses to produce closer to end markets without compromising efficiency. As businesses strive to meet environmental, social and governance (ESG) goals, nearshoring


offers a compelling solution. By reducing the distance goods need to travel, nearshoring helps lower carbon emissions associated with transportation. Additionally, local production supports economic development in nearby regions, aligning with social impact objectives. Rising geopolitical


tensions and a shift toward regionalisation have further underscored


the need for nearshoring. Trade agreements like the United States-Mexico-Canada Agreement (USMCA) and the European Union’s focus on strengthening regional economies incentivise businesses to prioritise local supply chains. In the age of e-commerce, consumers expect faster delivery times and greater flexibility.


Nearshoring enables businesses to meet these expectations by positioning production facilities closer to their target markets, reducing lead times and enhancing customer satisfaction.


Implications for airfreight The rise of nearshoring will significantly reshape the airfreight landscape, with both challenges and opportunities emerging for logistics providers. Nearshoring will likely reduce the reliance on long-haul airfreight routes, particularly those connecting Asia with North America and Europe. As production moves closer to consumer markets, regional airfreight routes - such as intra- North America, intra-Europe, and Latin America to the US - will see increased demand. Logistics providers will need to adjust their networks and capacities to accommodate these changes.


Emergence of regional hubs New nearshoring hubs,


such as


Mexico for the US market and Eastern European countries like Poland and Hungary for Western Europe, will rise in prominence. These regions are expected to become critical nodes in the global logistics network, with airfreight playing a key role in supporting their


growth. Freight operators must


invest in infrastructure and partnerships to establish a strong presence in these emerging hubs. While bulk goods may shift to more cost-efficient modes of sea


transport or rail, high-value, like time-sensitive


goods will continue to rely on airfreight. However, the overall volume of airfreight cargo may decline as businesses leverage nearshoring to reduce inventory levels and streamline operations.


Rise of just-in-case In


response to past disruptions, many companies have adopted “just-in-case”


inventory strategies, maintaining higher stock


levels to ensure supply chain resilience. This approach could sustain airfreight demand for urgent shipments, even as nearshoring reduces the need for long-haul transport. Airfreight will remain critical for businesses requiring speed and agility in managing inventory. Nearshoring aligns with broader sustainability goals by minimising the


environmental impact of long-distance transportation. To remain competitive, airfreight providers will need to adopt greener technologies, such as sustainable aviation fuels (SAF) and electric aircraft, to reduce their carbon footprint. Meeting these environmental demands will be essential for maintaining relevance in a nearshored economy.


Strategic considerations For businesses, the nearshoring trend offers an opportunity to reimagine supply chains for greater resilience, efficiency, and sustainability. Companies should evaluate potential nearshoring locations based on factors like proximity to key markets, availability of skilled labour and infrastructure quality. Collaborating with logistics partners to ensure seamless regional transportation will be crucial. For airfreight providers, the shift toward nearshoring requires a proactive approach to


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