Mexico’s Nearshoring Wave

a progress spanning several years

Mexico has become an attractive location for companies to set up manufacturing operations close to the United States. This trend, known as “nearshoring,” is the result of years of investment in Mexico’s infrastructure, trade agreements, and efforts to become a manufacturing hub. This development is benefiting certain regions and industries in Mexico.

Over the years, Mexico has seen significant growth in the production of various goods, including automobiles, electronics, medical devices, and machinery. The United States plays a big role in this, with 14% of all U.S. imports by value coming from Mexico in 2022. U.S. companies have also been actively investing in Mexico.

The growth in manufacturing is particularly prominent in certain sectors, with the automotive industry leading the way. Major automakers, like BMW and Tesla, have invested billions in Mexico, especially to meet the demand for electric vehicles. This, in turn, attracts other companies to invest in Mexico to support these big manufacturers.

Mexico’s appeal to shippers and manufacturers is due to several factors. The country has a well-established industrial presence, a mature economy, and a network of existing suppliers. The free trade agreements Mexico has with various countries, including the United States, make it an attractive destination for production. The recent United States-Mexico-Canada agreement has further strengthened economic ties.

During the COVID-19 pandemic, Mexico emerged as an alternative for companies that were overly reliant on imports from Asia. The proximity to the U.S. market, coupled with existing industrial infrastructure, made Mexico a convenient choice. Shorter shipping times from Mexico compared to Asia also contribute to the appeal.

EP Logistics’ strategic presence at the U.S.-Mexico border plays a pivotal role in meeting the time-sensitive demands of businesses engaged in nearshoring. Recognizing the value of shorter lead times in today’s customer-centric and on-demand market, EP Logistics ensures that goods move swiftly across the border. This geographical advantage significantly reduces transit times, allowing companies to fulfill their customer commitments promptly.

Mexico’s growing role in U.S. supply chains is the result of years of investment and development, making it an attractive nearshoring option for companies looking to manufacture goods close to the U.S. market.

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