Supply chain interruptions require a new strategy: is nearshoring the answer?

Supply chains all around the world have had an important change since the Covid-19 Pandemic spread.. Shipment tariffs have risen, increasing up to 12 times compared to the values they had before 2020, this cause of the airports and ports’ lockdown and, shipping periods delays.

Experts like Hugo González, vice president of the World Organization for Cities and Logistics Platforms, affirms that it’s necessary to rethink the operation of the global logistics system. Under these circumstances, nearshoring seems to be an ideal way for doing so. That’s why nearshoring to Mexico is, more than ever, offering big opportunities for foreign companies.  

Advantages for manufacturers and regional supply chain

Nearshoring to Mexico offers numerous advantages compared with a manufacture process developed in Asian countries, here is a review of some of these:

● Lower shipment periods.

● Qualified Workforce.

● Operations and Logistics in a similar and more convenient time zone difference (3-hours maximum).

● No trade rates and low fees, guaranteed with the USMCA free trade agreement.

● High-quality Class-A industrial infrastructure.

● A well-developed and diversified industrial sector.

As examples of industries that have taken advantage of nearshoring in Mexico, we can mention the automotive industry, which has in Mexico a manufacturing cluster in the states of Aguascalientes, San Luis Potosi, Queretaro, Guanajuato, Puebla and Nuevo León; there’s also a high development of aerospace industry and Tier 1 in Queretaro.

Manufacturing is also a big area of opportunity in the northern states, such as Baja California, Chihuahua or Nuevo Leon, where cities such as Tijuana offer a place for operations near the US-Mexico border limit.  

Mexico as a solid nearshoring ally 

Mexico has an important industrial sector, with a high-quality workforce, ideal location and a recognized presence in the automotive, aerospace, and medical manufacture:

● World’s 6th place in automotive manufacturing, and 4th place in automotive parts exports.

● 6th place in aerospace components for the United States.

● World’s 8th place in medical devices exports.    

  Industrial BTS projects can make a difference

Nearshoring to Mexico, also brings a new challenge, that involves the upgrade of the infrastructure and construction of Class A industrial facilities that could support any type of company needs. Therefore, a BTS “Build-to-suit” project is a good option for foreign companies that look for:

● Best industrial sites in the most active markets of the country.

● High Quality Construction Specifications.

● Security and Privacy

● Plug & Play infrastructure.

● International Design guidelines.

As nearshore seems to be the key of future logistic operations, nearshoring to Mexico could be an opportunity for US and north America manufacturers to improve their operations and upgrade the quality of their products. Cutting down the potential impacts of commercial tensions and the trade war between the United States and China.

Frontier Industrial,  Proven Solution for Industrial Real Estate Market has the knowledge and experience to guide you through all this process, providing valuable information and resources so you can take advantage of nearshoring to Mexico.

  Contact any of our experts at frontierindustrial.mx/en