Latin America became one of the best locations for nearshoring or PEO (professional employer organization) services. The popularity of Colombia, Peru, and Mexico as PEO and nearshoring destinations, which was already growing, was boosted by the pandemic and recent armed conflicts in Europe.
COVID-19 infected more than just bats and humans, it seems like supply chains also took the hit, with 94% of Fortune 100 companies reporting major disruptions in their supply chains due to the pandemic. Since production was reduced due to the fall in demand caused by the pandemic, the world is experiencing a recovery during which supply cannot match increasing demand. This inevitably results in a significant increase in the price of raw materials and final products.
Furthermore, Wages in China are rising and Ocean freight rates from Asia to the United States have increased more than ten times during the pandemic. All these changes happening simultaneously mean international companies are forced to rethink their structure. The first step is taking their production and other outsourced services closer to home. This is where nearshoring comes into play.