6 November 2023 (Lloyd's List)- CONTAINER sailing distance data does not support the notion that nearshoring is taking off as a significant trend, according to a recent report by Sea-Intelligence.

Doubts have been raised about the idea that environmental policies and geopolitics will remake supply chains as consumers source goods from closer to home.

The consultancy said if manufacturing moved substantially closer to end markets, the sailing distance of containerised cargo by sea should have largely decreased.

However, that is not the case based on its analysis of data from Container Trade Statistics.

Except for two brief significant declines in mid-2020 and late 2022, the three-month average sailing distance per teu shows no pronounced downward trend.

Sea-Intelligence believes the temporary drop, coupled with a sharp weakening of cargo demand, reflects market conditions more than nearshoring.

However, the firm acknowledged limitations in examining only the travelling distance of seaborne cargo without measuring other aspects, such as land transport.

There is also an argument that rather than relocating entire supply chains, companies are selectively nearshoring certain items or components, which would not be reflected in overall trade patterns.

Revealing such a trend would require more fragmented analysis of trade flows for individual goods.

Nevertheless, the shipping data was analysed specifically for North America and Europe, major consumer regions where nearshoring would be most likely.

Sea-Intelligence said the large downwards spikes in North America are seasonally caused by Chinese New Year and Golden Week.

“In essence, we see that the sailing distance has increased compared with a pre-pandemic baseline, hence giving no support to the notion of nearshoring,” it said.

Intra-North American container shipments were also examined, as a rise in this volume could indicate more regional production. However, the volume has declined as a percentage of total container imports into the region.

Similarly in Europe, average sailing distances of imported containers ticked upwards over the past year rather than decreasing.

And intra-Europe container shipping has not grown relative to volumes from outside Europe.

“The trend is clearly declining and not increasing, lending no support to the notion of increased nearshoring,” said Sea-Intelligence