Domestic Supply Chain Summit: A Coast-to-Coast Transportation Network

The Regionalization Imperative

U.S. supply chains are undergoing their most significant restructuring since the pandemic, driven by geopolitical risks and trade policy shifts. Tariffs reimposed and expanded in 2025 on goods from China and other low-cost regions have made offshoring far more expensive, prompting companies in automotive, electronics, and consumer goods to accelerate moves toward North America. Nearshoring to Mexico has surged, with many firms piloting or committing to facilities there to leverage lower labor costs while avoiding import duties, while subsidies under acts like the CHIPS Act encourage outright reshoring to the U.S.

This creates intense pressure on domestic transportation networks. Freight volumes within North America are rising as production footprints shorten, but U.S. infrastructure—roads, rails, ports, and border crossings—remains strained by decades of underinvestment. Congestion already costs manufacturers over $25 billion annually in delays, and trucking, which handles most domestic freight, faces persistent driver shortages and rising operational expenses. Integrating Mexico and Canada more deeply into U.S. supply chains requires seamless cross-border flows under the USMCA framework, yet bottlenecks at key gateways and mismatched rail gauges or trucking regulations slow progress.

The stakes are concrete and immediate. Companies that fail to secure reliable domestic capacity risk lead-time extensions of weeks, inventory pile-ups, and margin erosion that could reach double-digit percentages on affected goods. Retailers and manufacturers dependent on just-in-time models are particularly exposed, as seen in recent warnings from supply chain leaders about hedging with buffer stocks that tie up capital. Inaction could amplify inflation in everyday products, from electronics to vehicles, while successful adaptation promises shorter cycles, lower geopolitical risk, and potentially billions in avoided tariffs.

Less visible tensions complicate the picture. Reshoring intentions outpace reality: a 2025 Kearney Reshoring Index showed imports from Asia still growing faster than domestic output, highlighting gaps in U.S. supplier depth and skilled labor. Nearshoring to Mexico offers speed and cost relief but introduces new vulnerabilities—border delays, Mexican infrastructure limits, and rising regional competition for capacity. Balancing these requires coordination across stakeholders rarely aligned: shippers seeking agility, carriers facing capital constraints, and governments juggling trade policy with infrastructure funding.