ReGlobalization and U.S. Nearshoring: The Dominican Republic Option

The SCLA Think Tank convenes twice a month, bringing together leaders from industry and academia to examine the most pressing supply chain challenges and opportunities. In February, we were pleased to feature Jim Tompkins, Ph.D., Founder and Chairman of Tompkins Ventures, who shared his insights on ReGlobalization and U.S. Nearshoring, with a focus on the Dominican Republic’s potential as a strategic logistics hub.

Key Insights from Jim’s Discussion:

ReGlobalization is not deglobalization. Instead of reversing globalization, ReGlobalization restructures supply chains through nearshoring, reshoring, and friendshoring to create greater agility, flexibility, and resilience. Companies that simply deglobalize from one region will need to globalize elsewhere.

Ongoing supply chain disruptions demand optionality. Tariffs, geopolitical shifts, natural disasters, pandemics, and evolving consumer expectations require supply chains to be structured for adaptability. Organizations that prioritize multiple sourcing and production options will be better positioned to withstand volatility.

Nearshoring is gaining momentum, but execution lags.

• 85% of companies plan to sell products regionally by 2026.
• 65% aim to source key products from regional suppliers (Accenture).
• 81% are working to bring supply chains closer to key markets (Bain).
• However, only 2% have fully implemented reshoring initiatives.

The Dominican Republic as a Nearshoring Hub

Jim provided a detailed assessment of why the Dominican Republic is emerging as a leading nearshoring location:

Strategic location

• Just 800 miles from Miami, with proximity to key U.S. markets.
• Capable of supporting two-day eCommerce fulfillment to 75% of the U.S. population.
• Increasing container traffic shifting from West Coast to East & Gulf Coast ports, presenting an opportunity for alternative logistics hubs.

Infrastructure and logistics capabilities

• 11 major ports, including DP World Caucedo, a significant transshipment center.
• 10 container shipping lines with frequent weekly U.S. departures.
• 8 international airports, including Las Americas and Punta Cana, with growing air cargo logistics.
• Expanding warehousing and 3PL services, supporting duty-free fulfillment, returns management, and last-touch customization.

Skilled and cost-effective workforce

• A highly educated, English-speaking labor force.
• Competitive wages relative to other nearshoring options.
• Increasing investment in high-value industries such as electronics, medical devices, and textiles.

Key Considerations for Companies Evaluating Nearshoring

Jim outlined the 5 L’s of ReGlobalization, critical factors for determining viable nearshoring locations:

1. Location – Impacts transportation costs, tariffs, and trade compliance.
2. Land – A significant cost factor, with limited availability in key U.S. regions.
3. Labor – A major driver of operational costs and constraints.
4. Leadership – Strong expertise is needed to optimize supply chain networks.
5. Lighthouse Digital Technology – AI-driven supply chain visibility and automation are critical to managing future disruptions.

Shifts in Trade Policy and Tariff Impact

Jim also addressed rising tariffs on China, aluminum, steel, and pharmaceuticals, which are forcing companies to rethink sourcing and production strategies. The trend toward Western Hemisphere trade partnerships makes the Dominican Republic a natural alternative for companies seeking supply chain diversification and cost savings.

Trade and Investment Landscape

• $42 billion in U.S. foreign direct investment (FDI) is currently in the Dominican Republic.
• $12.3 billion in Dominican exports to the U.S. in 2024, with total trade exceeding $20 billion.
• Free Trade Agreements (CAFTA-DR) provide competitive advantages for manufacturers.
• The Dominican Republic has maintained consistent GDP growth over 30 years, driven by manufacturing, logistics, and tourism.

Next Steps for Supply Chain Leaders

Jim’s discussion emphasized the need for companies to act now to build resilient supply chains. ReGlobalization strategies must be proactive, leveraging locations that offer both economic and logistical advantages.

For those who missed the session, more insights from Jim Tompkins are available here.

Learn more about how the SCLA Think Tank is driving supply chain innovation.

What steps is your organization taking to prepare for the next phase of supply chain transformation? Let’s continue the conversation.