How can production and sourcing help companies shift from a global to local model? What are the key trends, benefits, and challenges in undergoing such a transformation in today's market?

How companies are shifting strategies

For decades the supply chain narrative was about going bigger and wider. Companies spread production and sourcing across continents to tap into low costs and global economies of scale. But the past few years have changed that perspective. The pandemic, shifting trade policies, climate events, and geopolitical shocks have all shown how fragile long global supply chains can be. As a result, many businesses are now rethinking their strategies and turning closer to home. Maersk’s Logistics Trend Map 2025 highlights this shift, noting that supply chain diversification and regionalisation are no longer niche experiments but mainstream responses to ongoing risk. Companies are increasingly relying on regional suppliers and transport routes to build resilience and give themselves more options when disruptions occur.

This article explores the benefits and challenges of this move toward localised supply chains, and why the future may lie in balancing global reach with regional depth.

Why Regionalisation is gaining ground

1. Building resilience.
   One of the clearest lessons from recent crises is the danger that companies might be putting too many eggs in one basket. When factories closed in Asia during COVID-19, retailers in Europe and North America faced months-long shortages. By working with multiple suppliers across a region, companies reduce their dependence on any single port, factory, or political system. If one route is blocked, another nearby option can keep goods flowing. Because of this, diversification has become a boardroom priority, not just an operational detail.
2. Faster and more reliable service.
   Customers expect speed. Regional hubs and local suppliers can cut shipping times dramatically, which helps companies respond more quickly to shifts in demand. For fashion retailers, that means new collections arrive in stores faster. For food producers, it means fresher products on shelves.
3. Staying compliant with local rules.
   Every country has its own regulations on tariffs, labelling, and sustainability reporting. Producing closer to the customer market makes it easier to stay compliant and to take advantage of trade incentives. Deloitte’s analysis of reshoring and nearshoring shows that many manufacturers are rethinking their location strategies to align with new policies and reduce exposure to tariff swings.
4. Smarter inventory and cash flow.
   Shorter lead times mean businesses do not have to tie up as much money in “just in case” stock. If a regional supplier can deliver in weeks instead of months, companies can adjust more quickly to changes in demand. This reduces waste, lowers storage costs, and keeps working capital flowing.

The challenges of choosing Regionalisation

However, of course, regionalisation is not a perfect solution. Here are a few challenges that regionalisation faces:

1. Higher costs.
   Producing goods closer to home often means higher labour and input costs. Deloitte warns that reshoring and nearshoring may also put pressure on already tight manufacturing labour markets. Companies must weigh whether customers are willing to pay a premium for speed and reliability, or whether automation and new technologies can offset those higher costs.
2. Limited capacity.
   Some industries rely heavily on specialised clusters that cannot easily be replicated. Semiconductors, for example, remain concentrated in a few regions. Building new plants is costly and takes years. For many firms, regionalisation can only go so far before they hit structural limits.
3. More complexity.
   Managing multiple suppliers across several regions adds layers of planning and oversight. Companies need better visibility tools, real-time data, and strong logistics partners to coordinate these networks. Due to this, proactive risk monitoring and flexible planning as the key to making these complex webs work.
4. Policy uncertainty.
   Trade fragmentation is a growing risk. The World Bank and the WTO warn that if trade blocs harden, costs may rise and global cooperation could suffer. Regionalisation reduces some exposure but cannot fully protect companies from macro-level shifts such as sanctions, subsidies, or sudden regulatory changes.

How companies can make the most of this shift

While headlines often talk about “the end of globalisation,” the reality is more nuanced. The World Bank recently noted that global trade has remained more resilient than many expected, even expanding in early 2025 despite disruptions. What is emerging is not a collapse of global trade but a rebalancing.

Companies are keeping global connections while also investing in regional supply chains. This “multi local” approach allows them to serve customers reliably while keeping costs competitive. Deloitte’s analysis suggests that a significant share of freight that once originated in Asia may increasingly shift to the Americas and Europe, creating new patterns of trade.

So how can companies make the most of this shift?

• Start with risk mapping. Identify the most vulnerable products and routes and then decide where regional sourcing or dual supply makes sense.
• Invest in visibility. Use technology to track goods, anticipate delays, and switch routes quickly when needed, using real-time risk sensing and flexible routing.
• Balance cost and service. Look beyond factory prices and calculate the full cost of long supply chains, including delays, storage, and lost sales. In many cases, regionalisation pays off when you consider the whole picture.
• Get supported by an insightful logistic partner. Building new supply networks requires skilled workers and strong supplier relationships. Companies that invest early in training and partnership building are better placed to succeed. A logistics partner that has international coverage and knowledge can easily support with all change.

The shift from global to local strategies is not about abandoning international trade. It is about finding the right balance between reach and resilience. Regional supply chains offer companies more control, speed, and flexibility in a world where shocks are no longer rare events but regular features of doing business. By looking closer to home while keeping one eye on the global stage, businesses can create supply chains that are not only more reliable but also more sustainable and responsive to customer needs. It is less about choosing global or local and more about designing supply networks that are strong enough to thrive in an unpredictable world.

Be ready for resilience to go all the way! Discover more with Maersk Logistics Insights, and learn more about resilience, or for more logistics trends and insights, read and download The Logistics Trend Map.