The Top Three Ways Nearshoring Will Add Value to Your Logistics Operation
With the ongoing impact of tariffs and trade wars, rising supplier labor costs, complex cultural barriers, and sheer physical distance all impacting the effectiveness that once drove outsourcing to far-flung destinations, the offshoring trend is struggling to maintain its appeal for many U.S. businesses. American companies are now looking closer to home for their outsourcing needs, which has caused substantial growth in the nearshoring movement.
Nearshoring to Latin America has been common practice for U.S. industries such as software development and logistics for decades. Business leaders who have nearshored parts of their operation to Colombia, in particular, have realized the benefit that this practice can provide to the bottom line.
Nearshoring to Colombia offers financial value for logistics operations in the following three ways:
1. Significant Reduction in Overall Labor Costs
A talent gap has left many U.S. companies struggling to fill critical logistics-related roles. American job seekers in the supply chain realm have realized that they hold all of the cards at the negotiating table and the total value of compensation packages for administrative logistics workers have soared as a result.
U.S. News reports a median salary of nearly $75,000 annually for a Logistician, while Recruiter.com shows that a non-management Logistics Analyst in the U.S. can make just shy of $90,000 per year in many areas. This doesn’t include the value of other compensation items, such as health insurance, paid time off, or retirement packages. These increasing costs have a severe impact on the bottom line of American shippers, freight forwarders, third-party logistics providers, and other logistics stakeholders—assuming they can fill the open job posting at all with the U.S. unemployment rate at record lows.
Meanwhile, American businesses who outsource certain administrative logistics functions to Colombia have realized payroll savings of 30–40% per employee. The available workforce in Colombia is bilingual and college-educated.
2. Lower Real Estate Costs
Industrial real estate is at a premium in the United States right now as shippers, carriers, forwarders, and logistics providers jockey for available space near valued primary and secondary markets. As a result, real estate prices are soaring and rents are rising steadily.
The cost of office space in Colombia is substantially cheaper than in the United States. In addition, ancillary costs of operating an office space—such as sewage, electricity, gas, water, and waste management—are much more cost-effective.
When companies source their nearshoring operations through a staffing and services provider such as Linkoast, affordable office space will typically come as part of the total package.
3. Human Resources Expenses
The Human Resources department is one of the primary expenses of any business operation. Recruiting, onboarding, training, benefits management, turnover, and ongoing employee support ultimately amount to a costly percentage of a company’s profit margin. Many of these expenses can be mitigated by using a nearshoring provider.
For example, Linkoast handles all recruiting, training, and other HR functions so that the customer can focus on their core competencies. Employees are hired and trained in line with the customer’s corporate culture and business needs, but Linkoast absorbs all legal liability and obligation to employees.
Nearshoring to Colombia with Linkoast
Linkoast operates nearshoring facilities for American shippers and other logistics stakeholders in Medellin, Colombia—known as the “Silicon Valley of Latin America.” We handle the hiring and training of a qualified bilingual staff to support logistics functions such as:
- Air/ocean documentation
- Import/export customer service
- Inside sales
- Lead generation
For more information about Linkoast and how we can provide you with substantial financial savings through nearshoring, please contact us through the form on our home page.