There have been high profile examples of “onshoring” happening in the US lately as global supply chain issues have continued to be problematic. As such, many manufacturers have been looking at bringing manufacturing to countries closer to American shores. “There’s a strong interest and drive for domestic manufacturing to increase, not only in the U.S. but in many industrialized countries,” says Jose Gomez, president of Kalamazoo, “There’s evidence that the needle is currently moving in that direction, but there are structural constraints that will limit the scale of this move.” With this opinion, there are also promo companies who have doubts as it comes to the promo industry. As Teresa Fang, Vice President of Alphabroder stated “There will certainly be efforts to bring promo supply lines closer, but the reality of the situation is that for many reasons – from labor cost to the ability to secure raw materials in a cost-effective manner – it will be very difficult to do so.”

The global supply chain disruption of the last couple years, a result of fallout from the COVID-19 pandemic, has caused problems across industries. In promo, it’s most notably led to issues like inventory shortages, higher product prices and longer production/order fulfillment times. That’s driven increased calls among some distributors and other industry stakeholders to bring manufacturing back to the U.S.
Some companies such as Intel have announced its intention to build the “largest silicon manufacturing location on the planet.” The total investment is said to top $20 billion. General Motors has contemplated investing close to $4 billion to expand electric vehicle and battery production, and Toyota said it is planning a $1.3 billion battery plant which will employ 1,750 people.  Before these were announced, Samsung had declared that it will construct a $17 billion semiconductor plant in Texas.  These companies will help drive “onshoring” in the U.S. as they bring more jobs and economic growth to the country and will be a good way to measure the success of increasing manufacturing in the U.S. 

This is good news for the Auto and Tech industry, but promo still has its doubts as it is unsure if they will be able to bring manufacturing closer. China currently manufactures the majority of promo goods sold domestically and can produce these goods for cheaper than what can be produced in the U.S. and Canada. “When I graduated from West Point in 1993, more than 50% of the apparel in the U.S. was made in the U.S.,” says Dean Wegner, founder and CEO of Authentically American “Today it’s tragically less than 3%. Apparel production moved overseas to chase cheap labor and higher profits.” Going forward, he believes Made-in-America items will account for a greater percentage of sales in promo, but viewed at scale it will be “a nominal increase in the short term. There’s not enough production capacity in the U.S. to support a significant increase.” There has been an opposing opinion from Montaubin, senior vice president for product management and sourcing at Koozie Group “It would be impossible to build an alternative supply chain overnight” “There are so many steps in the process, from qualifying the factories to navigating transportation, and that doesn’t even consider the sheer cost. We believe we will continue to rely heavily on Asia for the foreseeable future, but we wouldn’t be surprised if a small portion of the supply chain comes back to the U.S. and Central/Latin America.”

As there are many conflicting ideas, it is tough to decide on who will be right when it comes to the future of promo, and if “onshoring” will be a success in the U.S. Bottom-line: U.S. producers are out there. Some are thriving. Still, most products sold in the North American promo market will continue to be made outside these shores.  We will have to wait and see what the future hold for the promo industry when it comes to 'onshoring'