BUZZWORDS IN GLOBAL TRADE
There are four buzzwords in global trade which are trending nowadays.
- Offshoring
- Reshoring
- Nearshoring
- Friendshoring
WHAT IS OFFSHORING?
This is when a company moves business operations to another country.
REASONS FOR OFFSHORING:
- This new country might have cheaper labour.
- Right kind of personnel are more available in that country.
- Many a times the developed countries offshore their operations to conserve their natural resources.
IS MANUFACTURING ONLY OFFSHORED?
No. manufacturing is not the only candidate for offshoring. Departments like customer support, accounting, etc can also be offshored.
WHAT IS RESHORING?
This is the opposite of reshoring. It is also known as inshoring or onshoring.
This is when a business transfers its processes back to its home country.
WHY COUNTRIES RESORT TO RESHORING?
It might be responding to the fragility of global supply chains or favourable tariffs.
WHAT IS NEARSHORING?
It is when a company locates a process in a nearby country where labour is cheaper and channels of shipping and communication are strong.
The two countries often share a border with each other.
WHAT IS FRIENDSHORING?
Friendshoring is the new buzzword in the global trade room. In practices, businesses can’t always make or process everything domestically.
Friendshoring or Allyshoring is when they rely on countries with shared values when looking for raw materials or possible manufacturing bases.
That way, there are likely to be fewer supply chain disruptions.
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