Why Companies Should Onshore in Red Wing in the Wake of the Pandemic

Monday, August 31, 2020

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Business executives across the country have watched their supply chains be disrupted and product deliveries delayed in recent months due to COVID-19. Onshoring is now on the mind of many of them. Companies have offshored manufacturing operations overseas for four decades in order to save costs. Now may be the time to consider onshoring those operations.

Many companies have been forced to ask, “At what cost?” due to COVID-19. For some, the cost has been an inability to supply customers and fulfill contracts. In this scenario, onshoring is worthwhile. With 60% of U.S. manufacturing companies surveyed by Thomas reporting COVID-19 business disruptions, this is a widespread issue impacting virtually all industries. 

Moving some manufacturing processes state-side is one logical solution to reducing the risk of future disruptions. Though it may not be realistic for companies to move all of their operations back to the United States, opening U.S. manufacturing facilities as part of their global operations certainly is. There are extensive benefits to onshoring, including reduced costs and the ability to better support the local economy. Consumers will also experience a reduced lead time. 

Energy costs are low and the U.S. Energy Information Administration expects renewable energy to continue to be the fastest-growing source of electricity generation. Real estate is affordable right now, and Americans are hungry to bring more well-paying, steady manufacturing jobs back to the United States. 

In addition to companies onshoring directly, 28% of suppliers surveyed reported that they are seeking domestic sources. This will create expansion opportunities for current U.S. manufacturers. 

Why Now is the Time to Onshore Operations

#1 Available Commercial Sites

The national and statewide housing market is booming in spite of the pandemic. Red Wing has many available buildings currently listed, zoned commercial and outfitted with warehouse and distribution buildings on site. Commercial land is for sale and ready for development in Red Wing’s impressive industrial parks. Commercial properties, both turnkey and unimproved, are available for manufacturers throughout the region. Mortgage rates are low and property prices are affordable. Now is a wise time to buy and transition operations.

#2 Location

Minnesota is ranked first in the job creation index, making it an excellent location to find the workforce needed for onshoring operations. More than half of Minnesota’s Fortune 500 companies are in the manufacturing business sector, and manufacturing is one of the primary industries supporting the statewide economy. Red Wing is a small town with direct access to the amenities of one of the most exciting metropolitan areas, Minneapolis/St. Paul. It is also a desirable place to live. Red Wing offers residents a vital arts community and regional shopping resources, as well as access to the Mississippi River and a historic and restored downtown area. 

#3 Transportation Assets

Red Wing is only a short 45-minute drive from the Twin Cities. U.S. Routes 61 and 63 run through Red Wing. The city also has convenient access to several interstates — I-94, I-90 and I-35. As a port town, it is an ideal location for onshoring manufacturing operations. The working port, regional airport and railway routes enable businesses to thrive. 

Reasons to Onshore Now

COVID-19 has shown companies the scope and scale of the impact a global pandemic can make, but it’s not the only disaster that can disrupt supply chains. Environmental factors are another one, and they are becoming more of an issue. The world has suffered an increase in severe hurricanes, earthquakes, fires, etc. - all things that are unpredictable and cannot be controlled. Unfortunately, many of the same countries where U.S. companies have manufacturing operations have been hardest hit by these disasters and their infrastructure is not secure enough to withstand them. For example, the 2001 earthquake and tsunami in Japan and floods in Thailand had crippling effects on the electronics and automotive manufacturing sectors. Put simply - the global supply chain is fragile. Businesses who want to protect themselves must onshore at least part of their operations to protect their interests. 

We Can Help

The process of finding a site, obtaining permits, constructing a facility, hiring and training a workforce may seem daunting, but Red Wing has the resources to make it a simple and smooth transition. Our workforce training programs are stellar. The incentives to opening operations in Red Wing are extensive. If onshoring is part of your business protection strategy, contact us to learn more.

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