Nearshoring makes manufacturing in Mexico more attractive
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Nearshoring makes manufacturing in Mexico more attractive
Manufacturing within the scheme of nearshoring, or proximity, positions Mexico as one of the best destinations for this industry.
The nearshoring scheme is created when a company seeks to transfer work to companies that are less expensive and that are geographically closer to the main consumer markets of the goods they produce, with the objective of generating benefits in logistics and transportation.
Thus, companies can increase their responsiveness to their customers’ needs, with shorter delivery times and greater flexibility in the face of crises that may disrupt the supply chain.
Mexico is among the top 20 manufacturing centers within the nearshoring scheme worldwide.
Mexico is an attractive country for the nearshoring scheme because of its low labor costs, which has made the country an important manufacturer near the large U.S. consumer market, establishing itself as a key destination.
In addition to labor costs, service costs, infrastructure and trade openness are determining factors in making Mexico a key player in the nearshoring scheme.
Another aspect that can make up for labor costs is the automation of production processes, which is important in high cost markets and can provide protection against possible labor market disruptions.
Additionally, with the entry into force of the new United States-Mexico-Canada Agreement (USMCA), Mexico became a key player for global companies seeking to maintain a competitive position in the North American market.
Opportunities for the Mexican industrial market
The following are advantages of the Mexican industrial market:
- Safe and fast supply chains. Instead of waiting three to four weeks for a transpacific shipment, the overland transport of supplies from Mexico to the United States typically takes three to four days, which reduces the risk level of the entire chain, as well as transportation and storage costs for handling smaller inventories.
- Accessibility and direct contacts: The time difference of up to 3 hours facilitates communication, supervision visits and productive or design processes can be quickly modified to follow the changing pace of the market.
- Lower tariffs: With the entry into force of the USMCA and free trade agreements signed with more than 40 nations, Mexico benefits from the reduction or elimination of tariffs and taxes on inputs and imported and exported products.
Oradel Industrial Center, located in Nuevo Laredo, Tamaulipas offers competitive advantages for companies seeking to establish their manufacturing and logistics operations in the US-Mexico border. The industrial park is only 10 miles away from the international bridges to the United States.
