Over the past few years, the conversation surrounding global supply chain architecture has fundamentally shifted. The first shift we typically think of is the focus on resilience triggered by geopolitical tensions and volatility, as well as natural disasters. While slightly less prominent, tightening regulatory frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) and growing stakeholder scrutiny represent another key and impactful shift. 

Read also: Corporate Scope 3 Emissions Reporting Gains Momentum as Firms Pursue Supply Chain Decarbonization

Following this evolution, location strategy is no longer being dictated by the lowest production and labor costs. Instead, businesses are evaluating the total environmental footprint of an item, from the factory floor to final delivery, as well as the resilience of the supply chain. This has put a spotlight on nearshoring as a solution to these challenges. 

The operational resilience and speed benefits of nearshoring are clear. Nearshoring can also help create a lower carbon solution, but there are caveats. To achieve low-carbon logistics, we must look beyond just geographic proximity to understand what actually drives decarbonization in a modern supply chain. 

The potential of proximity

Moving production closer to home is an undeniably attractive proposition for businesses looking to drive down greenhouse gas emissions. Shorter transport distances naturally mean less energy consumed across the supply chain. For sectors that historically relied on long-haul shipping from distant manufacturing hubs, regionalizing operations can significantly reduce dependency on highly carbon-intensive transport modes like expedited air freight. 

Furthermore, nearshoring shrinks lead times, which improves forecasting accuracy. When businesses can react to local market demands in days rather than weeks or months, they reduce excess inventory which may otherwise contribute to carbon emissions through transport of surplus goods and disposal methods, including landfill and incineration. Combined with the benefits of preferential regional trade agreements and greater operational agility, nearshoring creates a strong foundation for a highly responsive business. 

Beyond distance 

However, we cannot assume proximity comes with automatic decarbonization. Distance is only one variable in the environmental calculation: the mode of transport, the underlying energy source and load can be more decisive than mileage alone. 

Ocean freight can reduce transport greenhouse gas emissions by approximately 70-90% on a ton-kilometer basis compared with road freight, depending on vessel/truck type, fuel, load factor and transport distance.

Beyond transport mode, the carbon footprint of the energy source itself must also be considered. At DHL, we have focused on moving alternative technologies well beyond early-stage pilots and embedding them directly into our scaled, daily global operations. 

For example, we are actively deploying low-carbon fuels for road transport, such as Hydrotreated Vegetable Oil (HVO) and biogas, which can slash transport emissions by up to 80-90% compared to fossil fuel alternatives. Where conditions allow, electric or hydrogen vehicles deliver up to a 100% reduction when powered by renewable sources. 

While market availability and regional infrastructure gaps historically limited these solutions, both have developed favorably over recent years, allowing for more frequent deployments.

The benefits of network orchestration 

If geography isn’t a silver bullet, the key to achieving carbon emission reduction lies in how the broader network is managed. Relocating production in isolation often introduces inefficiencies, such as half-empty trucks, overlapping routes and congested regional or local corridors, that can wipe out carbon savings.

By taking a more holistic approach to supply chain orchestration, evaluating mode, energy source and efficiency levers like load and inventory management, businesses can unlock the environmental benefits of nearshoring. 

At DHL, we support businesses in making this transition by combining our global scale with deep regional expertise to design and manage lower carbon solutions. Where we can’t deploy alternative solutions to diesel trucks, our scale also enables the facilitation of book-and-claim mechanisms which help customers bypass regional infrastructure limitations. 

Through our GoGreen Plus solution, businesses invest in sustainable fuels and technologies directly within our transport network. In return, they can claim the verified greenhouse gas emission reductions to lower their reported Scope 3 carbon footprint. This process is externally audited and aligned with the Corporate Net-Zero Standard by the Science-Based Target initiative (SBTi). 

From pilots to global scale 

Ultimately, achieving a more sustainable future is not a matter of choosing between nearshoring or global trade; it is about achieving industrial scale. For decarbonization to transition from a side initiative to a new global norm, low- and zero-carbon solutions must be scaled universally across all transportation networks, regardless of their geographic design. 

This transition has already moved past the testing phase. Renewable energy generation is being actively scaled up across markets globally to ensure that industrial growth occurs sustainably. We are already deploying these solutions across diverse, global economies, including markets like Thailand, Japan, India and Brazil, proving that alternative fleets are operationally viable across vastly different logistics landscapes. 

While shorter regional routes can serve as effective early deployment lanes for electric vehicle fleets, the primary focus for both regional and global networks must now transition from localized pilots toward building the consistent public charging and alternative fueling infrastructure required to sustain seamless green corridors. 

A balanced horizon

As global supply chains continue to evolve and the drive towards decarbonizing supply chains continues to accelerate, nearshoring will remain a powerful tool for building resilience and speed. But to fulfill its sustainability promise, it must be coupled with data-driven network optimization and a clear decarbonization strategy. By focusing on how we move goods rather than just where we make them, businesses can build supply chains that are truly low carbon for the long term.