Reshoring And The Inland Waterways
This week’s lead story is about the development of port facilities at the Paducah-McCracken County Riverport Authority for a new customer, PRCO America Inc., bringing in materials for making refractory brick formerly made overseas and imported. It shows the close association between the inland waterways and reshoring opportunities.
Outsourcing happened for a number of reasons, and reshoring is similarly being driven by a host of factors.
China is becoming less reliable as a manufacturing partner for many reasons. Recurring COVID-19 outbreaks following Chinese President Xi Jinping’s attempted total lockdown continue to disrupt factories, ports and supply chains within China. Container shipments to the U.S. West Coast are being “blanked” by shippers as shipping rates plunge. Xi’s policies are driving away many Western companies, causing them to relocate to Vietnam or India. Continuing U.S. tariffs against other Chinese goods, and efforts to reduce the reliance of some U.S. sectors like pharma and high tech on Chinese supply lines are also making reshoring more attractive.
The advantages of inland water transportation are a key reason for Paducah’s new customer to locate there. Some of its key customers, like Nucor, are located where they are because of proximity to the inland waterways system in the first place. The same goes for the carmakers locating in Tennessee.
Recently announced changes to what is now being called the United States Marine Highway Program widen and loosen the criteria for grant applications that can help develop ports, terminals and other infrastructure. Although PRCO America itself didn’t apply for grants, two of its customers have developed their terminals with grant assistance, and water transportation played a definite role in its decisions.
Outsourcing didn’t happen overnight, and neither will reshoring. But the transportation advantage and cost savings of inland waterways are key factors in the decisions of business of where to locate and invest.
