Integrated third-party logistics solutions, expanded and improved intermodal service offerings, and creative collaborations to optimize transport resources are making cross-border shipping easier than ever.
Rising wages in China, long transit times across the Pacific, and fluctuating gas prices are fueling a nearshoring trend among manufacturers serving the North American market, and Mexico is reaping the benefits. Companies are pouring billions of dollars into new production capacity—so much so that by 2019 the country could surpass China as the Unite d States' top trading partner, according to Mexico outsourcing solutions provider The Offshore Group.
Mexico has transitioned from a simple assembler of products to "an exceedingly sophisticated manufacturer," the Offshore Group states. The country's government has aggressively sought free trade agreements with other nations to foster growth. Mexico now has such agreements with 44 countries, and some type of free trade policy affects 90 percent of its trade.
Sourcing product from Mexico can be especially advantageous for North American businesses. "Product originating in Mexico can reach North American customers in one week or less, versus 20 to 30 days from Asia," says Troy Ryley, managing director for Transplace Mexico, a division of Frisco, Texas-based third-party logistics (3PL) provider Transplace. "This helps drive transport costs down, increases speed to market, and reduces inventory cost. It also simplifies forecasting."
U.S.-Mexico cross-border trade is not without challenges, however. Factors such as divergent regulatory regimes, capacity shortages, customs complexities, infrastructure issues, and congestion complicate the logistics picture. The good news is, improved service offerings and creative transport solutions help streamline the border-crossing process and optimize capacity.