72 n STRAP July/August 2026 www.drivesncontrols.com Many UK manufacturers are offshoring their production in response to the UK’s soaring energy costs. But is there another way? Leon Huang, CEO of RapidDirect – an AI-powered manufacturing platform that bridges the gap between local design and global production – introduces the concept of “hybrid shoring” as a strategic alternative to complete offshoring. The warning lights are flashing red for British industry. A stark joint report released in February 2026 by the Confederation of British Industry (CBI) and Energy UK laid bare the financial reality facing the country's manufacturing sector. With 40% of businesses indicating they will scale back investment due to the burden of high energy bills, the UK is standing on the precipice of widespread deindustrialisation. Despite wholesale prices stabilising globally, UK business electricity costs remain roughly 70% higher than they were before the invasion of Ukraine, and nearly 90% of businesses have seen their energy bills rise over the past three years. British manufacturers are now grappling with industrial energy prices that are nearly double the EU median for medium-sized businesses and the highest among all G7 members. This extreme competitiveness gap is already manifesting in the wider economy. The UK's trade in goods slumped to a record £248.3bn deficit in 2025, and energyintensive sectors are buckling under the pressure. While the government has proposed reducing electricity prices for 7,000 “heavy users”, industry leaders have criticised the move as a temporary fix that leaves thousands of businesses entirely exposed. Faced with the ultimatum of soaring bills or shutting down plants, many UK companies feel pressured into full-scale offshoring. However, industry experts argue that a binary choice between staying local and bleeding cash, or moving entirely overseas and losing operational control, is an outdated way of looking at the supply chain. When your foundational costs like energy are double that of your international competitors, you cannot simply work harder to make up the margin. You have to fundamentally restructure how you build your product. We are seeing a significant shift toward what we call “hybrid shoring”. Instead of uprooting an entire business, some UK manufacturers are getting highly strategic. They keep their high-value, low-energy operations such as R&D, design and final assembly local, but route their energy-heavy production phases to global networks. This hybrid model relies heavily on the digitalisation of the manufacturing sector. Historically, splitting production across borders was a logistical nightmare for medium-sized enterprises. Today, intelligent manufacturing platforms allow businesses to upload designs, receive instant manufacturing analyses, and farm out specific, energy-intensive processes such as injection-moulding or large-scale sheet metal fabrication, to regions where power and production costs are significantly lower. The CBI report highlighted a frustrating “net-zero catch-22” for UK firms. Businesses want to invest in green, clean energy infrastructure to lower their long-term costs, but their available capital is being consumed by their current, inflated utility bills. Leveraging a distributed global network can help to alleviate this capital bottleneck. Innovation requires breathing room. If a company is spending every spare pound on simply keeping the factory lights on and the machines running, then innovation dies. By using an on-demand manufacturing network for the heavy lifting, UK businesses can lower their overhead immediately. That freed-up capital is exactly what they need to invest back into their local workforce, clean energy transitions, and product development. It is about using global technology to protect local ingenuity. As ministers and industry bodies debate the long-term structural reforms needed for the UK's ageing energy grid, businesses cannot afford to wait. The survival of the UK manufacturing sector may not depend on government subsidies, but on how quickly it can adopt intelligent, collaborative manufacturing models to weather the storm. n Is hybrid shoring the answer to high energy costs? As well as having its own factory, China-based RapidDirect has a network of more than 700 vetted manufacturers across China that specialise in a variety of manufacturing processes, to which it can farm out contract work for UK customers. It claims to have more than 20,000 customers worldwide and says it can deliver manufactured items to Europe in 3-10 days.
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