What’s the Difference Between Onshoring and Reshoring?

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In our current political climate, the discussion of manufacturing is hotter than ever. More than anything, the discussion of bringing manufacturing back to the United States is at the forefront. And terms like reshoring, onshoring, and outsourcing have all been thrown around. So, what do these terms mean and what does it mean for the current state of the manufacturing industry in the United States?

Well first, let’s break down what each term means. Reshoring is the act of bringing manufacturing back to a country. This could mean a factory that moved overseas coming back to the United States or a factory that started overseas opening a factory here. For example, Brooklyn Factory Hemsmith opened a factory in the US in addition to having one overseas.

On the other hand, onshoring is sourcing or moving a brand’s production to a factory within national borders. Brooklyn factory Accurate Knitting recently helped brands like Target and Sears onshore their production. There are several logistical advantages to onshore production — lead times, quality, accessibility, etc. — in addition to financial ones — lack of import tax.

Lastly, nearshoring is exactly as it sounds. It is sourcing or moving production to a factory in your region. So, for the United States, Canada and Mexico could be considered nearshoring. Even though there are still taxes, there are often trade agreements which minimize or eliminate the costs.

In terms used for moving production overseas is offshoring

So, which is the best for your company? Well, that’s where a fifth term comes in — bestshoring. Ask yourself, what the benefits of each are for your company. Consider why this brand chose the U.S. If you think producing in the United States is for you, check out the over 11,000 American factories on Maker’s Row!