The ongoing nearshoring trend is driving further investments in transportation and logistics near the Mexican border, as companies seek to capitalize on current and anticipated future growth opportunities.
Nearshoring involves companies relocating offshore operations to neighboring countries, with Mexico emerging as a primary focus due to its skilled yet cost-effective labor force. According to U.S. Census Bureau data, Mexico ranks as the top importer, accounting for 14.8% of imports.
Ben Enriquez, head of Mexico logistics and customs at Uber Freight, highlights the pivotal role nearshoring has played in cross-border transportation, with Mexico becoming the top U.S. trading partner in 2023. He emphasizes the positive impact of nearshoring on the Mexican economy and the favorable conditions it has created for shippers.
Uber Freight’s data reveals that companies expanding into Mexico or enhancing their operations there are projected to contribute $106 billion and 235,000 new direct employments over the next few years, marking a 21% increase in foreign direct investment from the previous year.
Ryder System is one of the companies responding to the nearshoring demand by expanding its operations on the border. The company recently announced the opening of a new multiclient warehouse and cross dock in Laredo, Texas, and an expansion of its drayage yard in Nuevo Laredo, Mexico, to accommodate continued growth and meet customer needs.
Frank Bateman, vice president of supply chain operations for Ryder, emphasizes the importance of these expansions in supporting customer growth and meeting current needs. He acknowledges the growing volumes of cross-border traffic and anticipates further growth driven by the nearshoring trend.
RXO reports a 28% year-over-year increase in cross-border activity in Q4, indicating ongoing investments in nearshoring. Demetri Venetis, president of freight forwarding at RXO, notes that while new regulations on the Mexico side initially caused delays, stakeholders have adapted, and disruptions have lessened.
Redwood Logistics also recognizes the growth potential of nearshoring and has expanded its operations in Mexico in response to the trend. Jordan Dewart, president of Redwood Mexico, cites year-over-year growth fueled by new customer acquisitions and continued expansion in various industries.
Despite the positive outlook, Dewart acknowledges that nearshoring growth has not matched initial predictions. He attributes this to factors such as the resurgence of the U.S. economy, increased demand, and evolving global dynamics.
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