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Nearshoring: Mexico emerging as a logistics hub

Nearshoring: Mexico emerging as a logistics hub
Nearshoring: Mexico emerging as a logistics hub

A recent article by SMART Logistics points out that nearshoring is gaining momentum in global logistics, and Mexico is front and center. 

SMART Logistics is an international freight forwarding company. In a latest post the company says, “Mexico is currently one of the most promising economies in the Americas and has a logistics sector that is constantly evolving. Its geography offers a notable strategic advantage in the context of nearshoring.” 

What is nearshoring? Nearshoring is when a company moves its production closer to its customers to cut costs and avoid logistical problems. Recently, many companies worldwide are considering this strategy to prevent supply chain issues.

Mexico’s logistics advantage 

The business world has all taken stock of global events in recent months, especially with the ongoing Red Sea crisis. 

Mexico’s geographical location is its most significant advantage, especially for US-based companies. The short distance allows for faster transportation of goods and easier management of supply chains.

Trade agreements 

Trade agreements are important especially when it comes to international trade. They also help companies establish new markets, and make trade easier between countries. 

The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020. This agreement has reinforced trade relationships and provided a stable framework for businesses to operate across borders.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) provides Mexico with access to markets in Asia-Pacific, enhancing trade opportunities with countries like Japan, Australia, and Canada. 

The EU-Mexico Trade Agreement facilitates trade between Mexico and EU countries, reducing tariffs and expanding market access for goods and services.

There is another reason Mexico is front and center. The country is undergoing a manufacturing revival. Mordor Intelligence reports most of the country’s export income comes from manufactured goods. “The rise in production and exports, backed by nearshoring, supported the end-user segment’s growth,” reads the report. 

NOW READ: DP World unveils industry-first vehicle solution for Mexico-US trade route

Photo Credit: Canva

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

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