Nearshoring to Mexico: advantages and savings for foreign companies
By Editorial
October 31, 2022
During the last two decades, the
offshoring phenomenon -- which
consists on having production contracts with overseas suppliers, mainly located in Asia -- has lost appeal. Everyday
there are more companies considering
to relocate part of their supply chain to countries geographically closer to
their last mile warehouses.
This phenomenon it´s very clear in North
American region and is known as nearshoring.
Nearshoring: Paradigm Change
According to the analysts, the
main reasons that made the global enterprises stop looking Asia region as an investment destination for
manufacturing operations are
the cost increments
– especially in workforce – and the trade war with the
United States.
Regarding the first point, the “World Salaries Report” of the International Labour Organization, reveals that real salaries in China doubled between 2008 and 2019, far exceeding the global growth rate.
Wage growth rate, 2006-2019

All this happened while there
were problems with intellectual property piracy, cases of labor exploitation
and supply delays caused by environmental disasters or health emergencies as the COVID-19 outbreak.
All these
cases, create a problem for the worldwide supply chain.
Why is Mexico so important
in Nearshoring?
For Mexico and the United States,
the understanding come mainly from the trade agreement signed by
the two countries and Canada (T-MEC). Trade that consolidates North America region as one of the biggest
supply regions in the world. As a result, Mexico since 2020 remains to be the main
comercial ally for the United States, with a commercial exchange of 86 billion
dollars, according to the United States’ Commerce Department report.
Nearshoring to Mexico have huge benefits for strategic areas of the Mexican economy, such as
the automotive industry. Michelin
Tires manufacturing factory in Leon, Guanajuato is an example: starting operations in 2016 and has attracted many suppliers
and contractors to Bajío region.
This example is just one of many in a country
that demands a quick growth of all industrial sectors with a high-quality infrastructure.
Therefore, Frontier Industrial has become a Proven solution for
Industrial real estate market and a solid consultant for any companies that
requires an industrial facility, industrial land lot with all services
“shovel-ready” or a Build -to- suit project in the most active markets of
Mexico.
For more information: www.frontierindustrial.mx
Mail. industrial@artha.com.mx