Site Selection Shift: Cost Is Out, Resilience Is In

Site selection is changing fast: resilience is beating pure low-cost analysis. DiDi Caldwell, CEO of Global Location Strategies, breaks down how manufacturers are weighing energy, labor, logistics, tariffs, border risk and community pushback when deciding where to put new capacity. She also explains why companies are delaying irreversible bets, why North America has an edge, and how NIMBY fights are slowing major industrial projects. If you work in freight, industrial real estate, economic development or supply chain strategy, this is the new playbook to watch.

Companies are pausing major capacity commitments and prioritizing flexibility over cost optimization as tariffs and geopolitical pressure upend decades of supply chain assumptions, according to Didi Caldwell, president and CEO of Global Location Strategies. The shift marks a structural departure from the low-cost location models that drove offshoring for much of the past 30 years, with energy availability, logistics infrastructure, and workforce readiness now carrying equal or greater weight in site decisions.

“We’ve gone from modeling cost to modeling resilience,” Caldwell said. Companies are now stress-testing locations across multiple scenarios rather than optimizing for a single set of conditions, she explained — choosing sites that remain economically feasible even as tariff regimes, energy prices, and labor markets fluctuate.

Caldwell said the Canadian border has emerged as a particular pressure point. “We’ve spent 60 years or so treating the Canadian border as if it were more or less like a state border, and now all of a sudden it is a place where there’s real risk associated with that,” she said. That recalibration is pushing companies toward reversible near-term decisions while deferring large, irreversible investments in new capacity. The trend is visible in deal flow: while billion-dollar-plus announcements continue, much of the active project work is now in the mid-market tier — supplier and support facilities responding to previously announced mega-projects.

“I joke and say that I’ve been doing this for about 30 years. I spent the first half of my career moving companies outside of the United States, and I’ve spent the second half of my career moving them back in,” Caldwell said, linking the reversal to the shale revolution and the U.S. transition from a net energy importer to the world’s largest net energy exporter.

Energy now anchors the location calculus in a way it did not a generation ago. Caldwell noted that 40% of heavy industry costs are energy-related, and that advances in AI and automation are making manufacturing increasingly capital- and energy-intensive. She frames labor, energy, and logistics as the three primary cost drivers for manufacturing operations, arguing that North America’s energy advantage — combined with its scale as a consumer market — makes the reshoring math straightforward for many project types, provided the labor constraint is solved through workforce development or automation.

NIMBYism is emerging as one of the most concrete obstacles to executing that reshoring thesis. Caldwell cited an aluminum smelter project her firm sited in northeastern Oklahoma roughly a year ago that is now under a community moratorium extended to April of next year. The project, which she described as multibillion-dollar and expected to employ thousands, would reduce U.S. dependence on imported primary aluminum. She advised economic developers to engage communities before projects arrive — securing buy-in for industrial land use designations and infrastructure plans well ahead of any specific announcement — and noted that site selectors are increasingly disclosing company identities earlier in the process to build community support, a shift from standard confidentiality practice.

For companies looking beyond North America, Caldwell pointed to Colombia and Argentina as emerging destinations. Colombia, she said, offers favorable U.S. trade agreements, existing industrial infrastructure, and faster project approvals, and is already attracting manufacturers bypassing Mexico due to labor availability constraints there. Argentina, despite decades of political instability, offers natural resources, a highly educated population, and what Caldwell called a more capital-friendly regulatory direction under its current government — factors she said could make it “the surprise entry into this economic development competition” over the next 20 years.

• Companies are deferring irreversible capacity decisions and favoring flexible, mid-market projects as tariff and geopolitical uncertainty persists.
• Energy costs, now 40% of heavy industry expense, have become a primary site selection driver as the U.S. became the world’s largest net energy exporter.
• NIMBYism is stalling projects including a multibillion-dollar Oklahoma aluminum smelter under a community moratorium extended to April of next year.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.