It’s coming home: how global events have reinvigorated reshoring

Recent global events are accelerating reshoring in unexpected ways. Katie Reed, marketing manager at injection moulder BEC Group explores the impact on the UK plastics industry.

Reshoring in large numbers started in the mid 2010’s when UK manufacturers began to seek out shorter lead times, better service, and greater control over goods being produced elsewhere across the globe. Britain’s exit from the EU in 2020 increased costs and bureaucracy from European imports into the UK and fueled the return of the “Made in Britain” image. Large multinationals such as Clarks, McLaren and Cadbury brought large parts of their production back to the UK and invested heavily.

The global spread of the COVID-19 pandemic in 2020 showed the huge cracks that existed in lengthy global supply chains, highlighting their vulnerability and the lack of UK-based manufacturing for even basic goods such as masks and medical supplies.   

Whilst Brexit and the pandemic greatly fractured fragile supply chains the world over, geopolitical conflicts, the rising costs of fuels and shutdowns in China have contributed to this further- hundreds of container ships have been stuck outside Chinese ports, unable to unload and offload goods for weeks due to shutdowns. The Ever Given container ship blocking the Suez Canal in March 2021 for six days delayed 16 million tons of freight, affecting industry giants such as IKEA and Lenovo which had products on board. Higher demand for shipping containers due to many of these circumstances have led to an increase of 350% in the cost of shipping from China to the UK.

These events and factors made it clear that the “just in time” model of manufacturing doesn’t cut it anymore; decision makers must now establish the best course of action to shore-up their supply chains and make certain resilience for the short and long term.

In the past twelve months, BEC’s enquiries for new projects involving reshoring have increased by 30%. What was once a contributing factor to finding a new toolmaker has become a primary motivator for businesses. BEC are not the only ones - Make UK found that 42% of manufacturers surveyed in 2022 has increased the proportion of suppliers in Great Britain. BEC’s Sales Manager Holly Cummins describes the trends: “More and more we are seeing companies that offshored decades ago for cheap products delivered quickly being let down. After taking a hammering during the pandemic they can no longer take the financial hit- bringing production back makes sense for the long term of their company”.

A recent reshoring project for BEC Group came from Rolatube Technology - based in the South -West, retailing innovative products for marine and commercial environments. Prior to working with BEC, Rolatube carried out their tooling and moulding in the Far East. Upon getting in touch with one of our toolmakers and discussing the project, Rolatube decided to manufacture many of their tools with us in the UK. When asked why they had decided to relocate their manufacturing, Steve Mogg, Global Partner Executive commented, “The receipt, review and approval of samples has been made substantially easier as a result.  In addition, we wanted to minimise the carbon footprint of the product by increasing locally sourced content, something we are continuing to work on”. In deciding to come to a UK manufacturer, Rolatube were able to feel the benefit of greater control over the entire process - both in terms of time and quality. Rolatube have continued to work with BEC on a further six projects from the initial reshoring project.

Ecoegg, retailers of an eco-dryer ball decided to bring back tools back to the UK due to the many issues they’d experienced manufacturing in China, including missed deadlines, damaged tools, poor production quality and increasing costs. “We brought our tools back from China after a number of challenges. BEC demonstrated the benefits of keeping production local and proved that cost isn’t the only factor to consider when selecting a supplier” Dawn White, Director at EcoEgg. Many of the tools brought back to BEC were in poor condition, needing modifying and significant repairs. As costs of production and imports rise, often UK manufacturers are competitively priced as well as the benefits of being able to oversee production.

At BEC Group, reshoring has been one of many contributing factors in customers working with us for some time. Whilst previous reshoring projects from customers have focused on quality and control, we are now having far more discussions around the increased costs of production and imports as well as long lead times and missed deadlines.

Reshoring to a UK manufacturer first and foremost allows for greater control over the entire process, from design through to production. Contrary to many offshore manufacturers, strong communication between toolmakers, moulders and their customers is key to their success; ensuring tools are made to be as efficient as possible, mouldings made to exacting quality standards and every step of the journey communicated to customers.

The popular belief for many years has been that it is cheaper and more convenient to tool in the Far East - in more recent times this hasn’t been the case - particularly when the spiralling costs of container shipping and higher wages in Asia are taken into account, as well as the costs from supply chain disruption and missed deadlines. Many UK manufacturers are now competitive, and in some cases cheaper than these counterparts.

Whilst the initial cost of re-shoring is high both financially and administratively, de-risking supply chains for the short and long term is a wise investment, particularly when political uncertainty and rising costs are taken into account. Dual-supply is another option that reduces risk, but involves a higher initial outlay. It comprises keeping the original manufacturer and sourcing another one closer to home- it can be a great way to take steps to reshore and guarantee a better continuity of supply.

The future of reshoring is intrinsically tied to global trends. If geopolitical conflicts continue and inter country relations remain strained, the costs of fuel, electricity and import costs will remain high. In turn, reshoring will continue to grow. In addition, brands have begun to consider the environmental impact of producing and shipping from across the other side of the world and reducing their carbon footprints Environmental levies are likely to be introduced on companies based on their emissions and environmental efforts- the plastic packaging tax introduced this year is undoubtedly the first of many.

If UK suppliers and manufacturers are to keep up with the increase in capacity brought from reshoring, skill shortages which have affected many in the industry will have to be plugged, and a focus on British manufacturing as a stable career will have to return. Investments must also be made be made into facilities to keep up with demand. If carried out successfully, reshoring will be a key player in steadying the UK economy in a post-pandemic, post-Brexit world.