Is on-shoring the next consumer trend?

Author: Peter West
1st February 2017

On-shoring, or sourcing locally, is becoming a staple for the modern consumer. Consumers may be motivated by their support for local production, while some may argue it is for quality reasons. Others will side with the environmental factor as less transportation is needed with on-shoring.

With not much thought the list could go on with even some pretty unique arguments. In reality, it is quite hard to make any arguments by isolating one factor. For instance, production in modern and advanced countries is probably more mechanized. This makes harvesting quicker and more efficient, compared to the harvesting process in less developed countries where manual labor is employed to replace the machinery. So, let’s bring down some myths:

With on-shoring and buying local in let’s say USA, you are in fact supporting the local grower which is a great thing. On the other hand you are supporting him and his machinery, while if you bought produces from let’s say Peru, you would probably be supporting more than 11 people, which is also great since the nation is struggling to develop. With the same purchase, you can either support 1 person or more than 11 people. From the FAO country profiles, it can be seen that Peru has an agricultural labor force 60% bigger than the USA, and an available land space 7 times smaller for agricultural purposes, so the relation is more than 11 workers to 1 needed in the South American country.

The machinery makes it more efficient and quick of course, but the machinery runs on fuel, which emits carbon dioxide. But, of course you could argue that, if sourced from Peru, various transport modes are required to reach the USA. Still, given the amount of cargo modern vessels can carry, the emissions of carbon dioxide per ton carried are extremely low, which makes it the best option in comparison with trucking. A modern vessel releases 10-40 grams of carbon dioxide per metric ton of freight, while a modern truck emits 60-150 grams. Of course this argument can go on because of the many additions we could bring to the calculation, but the aim is to show that there isn’t a clear-cut answer to the environmental issue when it comes on-shoring/off-shoring.

There are people on low incomes in all nations, in developed and underdeveloped economies. With this comes the issue that in many instances, on-shoring in more advanced economies makes produces more expensive than their off-shored equivalent. A brief example is the case of Australia, where locally grown bananas are 2-4 times more expensive than those sold in New Zealand, which are actually imported. So, it’s great to support the local farmer, but what about making food accessible for the people of your country who can’t afford it? Again, supporting a fellow countryman and its machinery is great, but so is feeding the rest of the population who can’t live of his produces because their price is not affordable.

It is clear that the matter is not as easy as yes for on-shoring or yes for off-shoring. It is more about considering all the factors and what the consequences for each decision may be and making a personal decision. There is no right or wrong answer, as even after considering the “objective” arguments, the decision remains a complex and subjective consumer choice.

For more information, please contact the team at Maia Global on to see what we can do to help your business.