Why Is The Nearshoring Model A Smart Choice For Large Intralogistics Companies?
Overview
In recent years, driven by the COVID-19 pandemic crisis, nearshoring has been gaining ground as a business strategy over offshoring. Although the purpose of both models is essentially the same, the relocation of operations, production or services to other geographies, the key difference lies in geographical proximity.
While offshoring involves transferring operations to distant countries, nearshoring prioritises proximity. This allows companies to benefit from several advantages such as geographical and cultural closeness, cost reduction, ease of communication, and appropriate regulation, among others.
The shift towards a nearshoring strategy is linked to various factors such as geopolitical shocks, changing social values, and strategic shifts within companies.
Global Strategic Drivers
With the COVID-19 pandemic, the world experienced a shortage of goods due to the shutdown of production units in China, one of the countries that had benefited most from the offshoring model, alongside India, for example. This event led many companies to diversify their suppliers, thereby reducing the risk of disruptions in their supply chains and, consequently, lowering transportation costs.
In this context, the growing concern with sustainability and ESG (Environmental, Social, and Corporate Governance) practices has become increasingly important in strategic planning. According to a 2021 study by PwC, half of investors were willing to divest from companies that did not adopt measures in this area.
Benefits for Intralogistics – proximity, efficiency, flexibility
The growth in consumer demand, with Portugal included, requires intralogistics companies to adapt to market speed by developing material handling equipment and products through digitalisation and automation. Technological solutions such as the Internet of Things (IoT) or Warehouse Management Systems (WMS) aim to further optimise processes and deliver greater efficiency.
This increased pace of operations also drives the need for skilled workers, requiring investment in training and upskilling to meet market demands.
Considering these challenges, major intralogistics companies have been adapting and increasingly opting for services where proximity, efficiency, and flexibility are guaranteed. Bringing production or services closer to consumer regions is playing an increasingly important role in companies’ strategic decision-making. Portugal has become an attractive country for nearshoring, alongside Spain and Morocco.
Local Opportunities
As we have seen, nearshoring represents a structural shift in the global landscape, and Portugal has been one of the countries most positively impacted in Europe. According to Savills’ Nearshoring Index 2024, Portugal ranks among the top European countries for businesses looking to relocate their supply chains.
This is due not only to the country’s economic and political stability, which encourages investment, but also to its comparatively lower costs when compared with other Western economies, its strong commitment to sustainability, and its geographic proximity to Southern Europe, Africa, and the Americas. Portugal benefits from connections with tech hubs and several major cities in the United States, as well as a close cultural and economic relationship with southern countries such as Brazil.
In addition, when it comes to language, Portugal ranks 6th out of 116 countries and 5th among 35 European countries in the EF English Proficiency Index. Portuguese is also the 9th most spoken language in the world, with over 200 million speakers.
“At Advannor, we offer the know-how of our engineers in the areas of development, commissioning, and optimisation of intralogistics systems. Our approach is aligned with the growing trend of nearshoring, which is driving the relocation of engineering hubs within Europe. This context allows us to consistently contribute to the modernisation of intralogistics processes and the strengthening of supply chains.”
Ricardo Santos: Engineering Manager at Advannor
Advannor’s Role in the Nearshoring Ecosystem
Nearshoring is not merely a passing trend, but a strategic transformation with a lasting impact on global value chains.
In the intralogistics sector, this shift brings clear benefits in terms of efficiency, flexibility, and proximity to the end consumer, all of which are increasingly decisive factors for competitiveness. Investment in emerging technologies and the upskilling of local professionals further reinforces this strategic advantage.
As an engineering services provider, Advannor is committed to delivering the most suitable solutions. With offices in both Porto and Lisbon, the two largest urban centres in Portugal, Advannor is ideally located near a strong talent pool in the field of intralogistics.
Our services include mechanical equipment design, electrical engineering, commissioning, and warehouse management software development, among others.
More than a simple relocation strategy, nearshoring represents a unique opportunity to rebalance supply chains, strengthen local economies, and prepare businesses for a more resilient, sustainable, and interconnected future.
References:
“O Impacto do ‘Nearshoring’ na Logística Portuguesa: Oportunidades e Desafios”. APOL.
“Nearshoring: o que é e quais são os seus benefícios?”. RANGEL.
“Nearshoring’, punta de lanza para la inmologística con Iberia en el epicentro”. EL PAÍS.
“Logistics and Global Strategy: Impacts of Offshoring, Nearshoring and Reshoring on Supply Chains”.