Can the U.S. Manufacturing Infrastructure Keep Up with Reshoring?

Introduction

The U.S. manufacturing sector is undergoing a reshoring boom, with companies moving production back to domestic soil to mitigate supply chain disruptions, reduce reliance on foreign suppliers, and take advantage of government incentives. However, a major concern remains: Does the U.S. have the necessary infrastructure to support large-scale reshoring?

From transportation and logistics to energy and skilled workforce availability, American manufacturing infrastructure faces significant hurdles. Without addressing these challenges, reshoring efforts could be hampered by inefficiencies, high costs, and supply chain bottlenecks—potentially driving companies back offshore.

This article examines the state of U.S. manufacturing infrastructure, the challenges reshoring companies face, and strategies for overcoming these barriers to ensure long-term success.

Key Infrastructure Challenges in U.S. Reshoring

1. Transportation & Logistics Bottlenecks

While reshoring reduces dependence on global shipping, it places greater pressure on domestic logistics networks, which are already struggling with inefficiencies.

Aging Ports & Rail Networks

• 70% of U.S. freight moves via trucking, yet port congestion and rail infrastructure limitations create delays in domestic supply chains (American Trucking Associations, 2024).
• The Port of Los Angeles and Long Beach, the largest U.S. import hubs, are not optimized for reshoring-focused exports, leading to inefficiencies in domestic distribution.

Example:

• Intel’s semiconductor plant in Ohio faces transportation challenges due to a lack of specialized rail links to quickly distribute high-tech components nationwide.

Trucking & Driver Shortages

• The U.S. trucking industry is short 80,000 drivers, impacting reshoring efforts that depend on regional distribution (American Trucking Associations, 2024).
• High fuel costs have further increased domestic transportation expenses, adding to manufacturing costs.

Solution:

• Federal and state investments in port modernization and expanded freight rail corridors could alleviate some of these logistical issues.

2. Energy & Utility Constraints

Manufacturing reshoring requires massive energy investments, but the U.S. power grid and industrial utility infrastructure are struggling to keep pace.

Electricity Demand vs. Grid Limitations

• Many states lack sufficient clean energy capacity to power advanced manufacturing plants efficiently.
• Industrial electricity costs have risen by 25% since 2020, making U.S. manufacturing more expensive compared to offshore locations (U.S. Energy Information Administration, 2024).

Example:

• TSMC’s semiconductor plant in Arizona is facing water shortages and high electricity costs, impacting its ability to operate at scale compared to Taiwan’s established infrastructure.

Water Supply Issues for Manufacturing

• Semiconductor, automotive, and chemical industries require extensive water use, yet many reshoring states face drought risks.
• The Southwest U.S., a major hub for new manufacturing investments, is experiencing long-term water shortages.

Solution:

• Investment in energy grid modernization and industrial water recycling programs could help sustain manufacturing expansion.

3. Workforce & Skills Shortage

Reshoring demands a highly skilled workforce, but the U.S. is experiencing a critical shortage of trained manufacturing workers.

• The National Association of Manufacturers (NAM) projects that 2.1 million U.S. manufacturing jobs could go unfilled by 2030 due to skill gaps.
• High-tech industries such as semiconductor and EV battery production require specialized training, yet U.S. vocational programs have lagged behind global competitors.

Example:

• TSMC’s Arizona factory is bringing engineers from Taiwan because of a lack of U.S.-based semiconductor specialists, delaying the project’s full production capacity.

Solution:

• Expanded apprenticeship programs, technical training partnerships, and workforce reskilling initiatives are critical for sustaining reshoring momentum.

4. Factory Construction & Land Availability

Building new manufacturing facilities in the U.S. is costly and time-consuming, slowing reshoring efforts.

• U.S. industrial construction costs have surged 39% since 2020, driven by higher material and labor expenses (Forbes, 2024).
• Zoning restrictions and land shortages in key manufacturing states add further delays.

Example:

• Intel’s $20 billion Ohio semiconductor project has faced land acquisition delays and regulatory hurdles, slowing progress.

Solution:

• Government-backed industrial parks and factory pre-zoning initiatives could help manufacturers secure land more efficiently.

How the U.S. Can Strengthen Its Manufacturing Infrastructure

While reshoring faces significant infrastructure challenges, strategic solutions can help manufacturers scale operations efficiently.

1. Invest in Smart Logistics & Supply Chain Technology

• Expand domestic freight rail networks to reduce reliance on trucking.
• Use AI-driven supply chain optimization tools to improve logistics efficiency.

Example:

• Amazon’s investment in AI-powered logistics centers has reduced shipping inefficiencies and could serve as a model for manufacturing supply chains.

2. Strengthen Energy & Industrial Utility Infrastructure

• Expand renewable energy capacity for industrial use.
• Build regional energy hubs in major manufacturing states.

Example:

• Tesla’s Gigafactories in Nevada and Texas integrate solar and battery storage, reducing grid dependency.

3. Expand Workforce Development & Training Programs

• Strengthen vocational schools and manufacturing apprenticeships.
• Offer tax incentives for companies investing in workforce training.

Example:

• Siemens USA’s apprenticeship programs are training a new generation of automation specialists.

4. Streamline Factory Construction & Permitting

• Federal and state agencies should fast-track approvals for critical reshoring projects.
• Develop pre-zoned industrial zones to accelerate land acquisition.

Example:

• Texas’ fast-track permitting system has attracted major EV battery and semiconductor investments.

Conclusion: Can U.S. Infrastructure Keep Up with Reshoring?

The success of reshoring hinges not just on government incentives but also on America’s ability to modernize its manufacturing infrastructure. Without addressing logistics bottlenecks, energy constraints, workforce shortages, and construction delays, reshoring efforts risk stalling or reversing.

For U.S. manufacturing executives, the best approach is to: ? Advocate for infrastructure investment at the federal and state level. ? Develop in-house workforce training programs to close skill gaps. ? Leverage AI and automation for logistics and supply chain efficiency. ? Explore public-private partnerships to accelerate factory development.

By making targeted infrastructure improvements, the U.S. can not only sustain reshoring but also position itself as a long-term global manufacturing leader.

Further Research & Resources

For executives looking to navigate infrastructure challenges in reshoring, the following resources provide valuable insights:

1. Kearney 2024 Reshoring Index – Data-driven analysis of U.S. reshoring trends.
2. Forbes: The Resurgence of U.S. Manufacturing – Insights on reshoring infrastructure and supply chain needs.
3. U.S. Energy Information Administration – Reports on industrial energy costs and grid capacity.
4. National Association of Manufacturers (NAM) – Workforce development strategies and manufacturing policy advocacy.

By taking a proactive approach to infrastructure investment and workforce development, U.S. manufacturers can turn reshoring into a long-term success story—rather than a short-lived trend.

Contact Strategic Value+ for a Free Strategic Session

The Veteran Advisors of the Strategic Value+ Collaborative are experienced and well-versed in the issues facing U.S. manufacturing companies as they pave their roads to their futures. For a fresh perspective on strategic alternatives, contact the Strategic Value+ by emailing [email protected] or schedule a free comprehensive 90-minute 360-degree strategic impact session at https://strategicvalueplus.com/contact. You have nothing to lose and a new view on your manufacturing company's future to gain.

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