By Cadys Wang    Photo：CANVA

Why the Shift to Europe?

Rising tariff barriers and geopolitical risks have increased the cost and complexity of traditional Asia-to-U.S. routes. In response, manufacturers and logistics providers are pursuing nearshoring strategies to Europe to:

• Reduce exposure to trade tensions
• Shorten lead times for delivery to the EU
• Enhance supply chain flexibility
• Take advantage of government incentives

Europe offers well-developed infrastructure, robust legal and trade frameworks, and close proximity to affluent consumer markets. Government initiatives—such as the European Chips Act—further sweeten the value proposition.

Examples of the Shift in Action

• TSMC is building a €10 billion semiconductor facility in Dresden, Germany, in partnership with Bosch, Infineon, and NXP. This plant will support Europe’s automotive chip needs.
• Intel is investing heavily in new chipmaking plants in Germany and Ireland.
• CATL, a leading EV battery maker, is developing a €7.3 billion plant in Hungary to support European automakers.
• Foxconn has expanded electronics assembly in the Czech Republic to serve EU clients more efficiently.

These projects underscore how various industries—from semiconductors to green energy—are leveraging Europe as a strategic hub.

Strategic Locations in Europe

Europe’s strength lies not just in its policies, but in its regional diversity and connectivity. Key logistics hotspots include:

• Germany: The epicenter of industrial and automotive manufacturing, with world-class road and rail networks.
• Netherlands & Belgium: Home to major ports like Rotterdam and Antwerp, crucial for global imports.
• Poland, Hungary, Czech Republic: Attractive nearshoring options with lower labor costs and EU compliance.
• Spain & Italy: Southern gateways for connecting with North Africa, Latin America, and the Mediterranean region.

The Role of EU Policy

Europe’s regulatory environment is actively shaping the supply chain landscape:

• European Chips Act aims to double Europe’s global semiconductor share to 20% by 2030.
• Green Deal & Fit for 55 legislation is incentivizing decarbonization in freight transport.
• Local Incentives: Many EU countries offer tax credits, land grants, and R&D funding to attract logistics and manufacturing investments.

Challenges to Consider

Relocating or expanding operations in Europe comes with its own set of challenges:

• Higher labor costs than in Asia
• Complex regulatory compliance, especially in environment, tax, and labor
• Intra-European fragmentation in language, customs handling (for non-EU goods), and infrastructure development across newer member states

Companies must evaluate total landed cost and the availability of skilled labor, automation, and logistics partners to ensure a smooth transition.

Impact on Logistics Providers

As the supply chain shifts, logistics providers are retooling to meet new demands:

• Multimodal Transport: Rail, road, and barge services are becoming essential to connect inland factories with seaports.
• Warehousing Demand: Increased need for strategically located fulfillment and bonded warehouses in central Europe.
• Digitization: Platforms for real-time tracking, customs visibility, and warehouse management are critical.
• Local Expertise: Global forwarders are actively seeking local agents and partners to handle regional nuances and ensure regulatory compliance.

Europe as a Gateway for Transshipment

Beyond nearshoring, Europe is becoming a vital transshipment node for global trade:

• Ports like Valencia and Piraeus serve as bridges between Asia, Africa, and Latin America.
• Southern Europe offers launch points for nearshoring in North Africa (e.g., Morocco, Egypt) as part of a broader Euro-Med trade strategy.

Looking Ahead

Europe is no longer just a destination—it's a strategic cornerstone of modern, diversified supply chains. As companies navigate uncertainty across the Pacific and reconsider their sourcing strategies, Europe provides the political stability, infrastructure, and market access needed to support long-term growth.

Whether you are a manufacturer looking to strengthen your European operations, or a freight forwarder hoping to expand your service network, now is the ideal time to embrace Europe's logistics advantages. We have established an excellent service network with partners across Europe. If you are interested in the European market, please contact us to create new opportunities together.

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