Abstract

Lengthy and highly variable customs’ clearance processes and service times at ports of entry, along with the associated emissions generated from transporting cargo from far away production sites can severely erode the efficiency of offshoring within global supply chain networks. Nearshoring, namely the practice of allocating manufacturing capacity next to demand points, is a corporate countermeasure to such concerns. This paper proposes a novel, Total Landed Cost decision-making methodology for the identification of the optimal mixture of nearshore/offshore production capacity allocation and the optimal port of entry, while taking into account free trade and sustainability-related issues for global supply chain networks. Various “what-if” analyses of interest to practitioners (C-level executives, corporate planners, and regulators) are conducted, and interesting managerial insights are discussed.