Reshoring sounds like the work of a sailor who didn’t get it right the first time, but it is actually one of the newest job-creating trends in the USA. In essence, reshoring is the act of bringing jobs that were previously offshored to other nations back to America. This work has been seen in a variety of industries, such as IT and manufacturing. The latest company to commit to reshoring is American Keg, the only steel barrel keg manufacturer in America.
Reshoring: A History of Change
Reshoring is a direct response to the 1980s trend of offshoring. In that time, companies all over the U.S and the developed world began to reduce the cost of labor by sending factory work into cheaper, less developed countries like China, Mexico and Thailand. In these countries, workers could create their products at a much smaller cost thanks to lax labor laws and favorable currency exchanges. Thanks to this, factory jobs in the U.S. have declined.
Fast forward three decades, and businesses are beginning to see the growing problems in offshoring.
- Quality control: With fundamental work being done outside of managerial oversight, many companies have experienced the expensive burden of being away from production.
- Shipping time/cost: With factories outside of the nation, shipping and supply lines have become much more expensive and time-consuming for companies to run.
- Security: An understandable problem for companies is ensuring they protect their property, physical or intellectual. When products are hundreds — if not thousands — of miles away, things can be stolen, corrupted or lost.
With this and so much more, many companies all over the world are bringing back their operations to the nations in which they primarily operate, in other words: reshoring.
Benefits of Working in America
Besides bring back hundreds of jobs, reshoring has a slew of economic benefits for companies and the nation. It allows for advancement in technology to take its place in development, the leveraging of favorable macroeconomic conditions and greater efficiency in supply warehouses.
Besides these helpful incentives, here are some primary factors that make reshoring so persuasive:
- Time zone: Working on a schedule is difficult if you’re operating in two separate time zones. This is especially true for industries that need to make quick turnarounds for their products, like the IT industry.
- Currency fluctuation: The volatile value of money makes it difficult to work outside of a single currency when construction is on a budget. By sticking to a single nation’s currency, you minimize the risk of missing budget estimates.
- Marketing: Competing with other companies has become more and more difficult. Companies have begun to notice the positive effect that “Made in America” has had on their marketing. Marketing like this creates a moral incentive marketers can bank on.
American Keg’s Tall Order
American Keg, located in Pennsylvania, is the only steel barrel keg manufacturer in America. As odd as it may sound, for eight years kegs were not being made in America. Because of this, American brewers saw a keg shortage. Noticing this demand, the small company Geemacher was born. That company grew into American Keg. Kegs are heavy items that can be dangerous to lift, and having a company produce them in the U.S. is beneficial to domestic beer suppliers.
American Keg’s kegs come at a slightly higher price than its Chinese counterparts, but they also come specialized with the popular one-sixth and one-half keg sizes that overseas makers don’t readily have. The vicinity to American brewers also helps American Keg stay competitive, since it can churn out quick/emergency orders for American customers.
The Industry in Reshoring
Reshoring keg-making has created a competitive company in Pennsylvania. By simply ensuring the unique requests and timely delivery of its products, American Kegs has placed itself above other providers. It is because of companies like this that industry leaders should be aware of the many benefits of reshoring.