Relocation offers opportunities to Mexico for its logistics: SE


The relocation offers opportunities to Mexico for its logistics, with better costs to reach the North American market compared to Asia, highlighted Tatiana Clouthier, Secretary of Economy.

To exemplify this, the official indicated that a typical truck transportation service to enter the city of Memphis, Tennessee, from Mexico has a cost of 2,111 dollars and takes four days, while from China its cost rises to 6,453 dollars and her period lengthens to 31 days.

Proximity, that we did nothing for it, simply that we have the great gift that nature gave us to live next to the United States, allows us to take advantage of costs versus other countries,” Clouthier said while participating in a conference organized by Americas Society/Council of the Americas (AS/COA) this Thursday.

This advantage is exacerbated by the high transport costs derived from the increase in oil prices, which have exceeded 100 dollars per barrel.

Relocation to places closer to the final consumer is of special interest to Mexico due to several factors, including the trade war between the United States and China, the increase in the cost of raw materials, the risks in the supply chains evidenced by the Covid-19 pandemic and with Russia’s invasion of Ukraine.

“Mexico is ideally positioned to continue being a key partner in North America,” said Luz María de la Mora, undersecretary of Foreign Trade of the Ministry of Economy in that same forum, after highlighting the United States as the world’s largest importer and the certainty provided by trade agreements to deal with differences.

Controversies between countries are always latent, but De la Mora emphasized the mechanisms to resolve them, as is now the case in the rules of origin of the automotive industry in the Treaty between Mexico, the United States and Canada (T-MEC), with a panel that is about to rise.

In addition to its geographical location, Mexico has the advantage of being a country with solid material and institutional foundations for international trade.

In 2020, it ranked eleventh as the largest exporting country in the world and since 2020 it has a new free trade agreement with the United States, unlike other regions such as the European Union or China that continue to face tariffs on US imports.

The Ministry of Finance has disclosed that the interest in Mexico for the relocation of production chains to countries closer to the final consumption markets has been shown in surveys and announcements of possible investments.

For example, globally, a World Bank survey conducted in March 2021 with multinationals found that, among the 56 companies that plan to increase investments in the future, 45% will increase their investments to diversify their geographic locations and 32% will increase their investments to bring production closer to its final consumers.

Clouthier put the Spanish language as another advantage of Mexico, explaining that more and more Americans speak it, especially on the border, where it is common for her to converse in that language with governors from the southern United States.

Without specifying the name, the official made this comment in relation to the logistical advantages: “There is an important project that I am sure will begin to be carried out very soon, which connects from Sinaloa, and I was saying to Texas, but I think that we are no longer going to use Texas; We are going to find that it connects to New Mexico, because we cannot leave our eggs in one basket and be hostage to those who want to use trade as a political stocking.”

Recently there were disruptions in trade between the United States and Mexico due to the order of the governor of Texas, Greg Abbott, to inspect all cargo trucks that share the border with his state (Tamaulipas, Nuevo León, Chihuahua and Coahuila).

Advantages of Mexico related to relocation:

• Cheaper transportation and logistics cost to reach the US market.

• Shared production with the United States and Canada in various industries, including the automotive, aeronautical, electrical-electronic and food industries.

• Network of trade agreements, including the Treaty between Mexico, the United States and Canada (T-MEC) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TIPAT).

• Skilled, cheap workforce and within the framework of a recent structural reform in labor matters.

• The language, with a bilingual Spanish-English population, both in the United States and in Mexico.

• Time zone, which allows greater synergy while industrial plants or services are in operation in North America.

• A large export and import base in Mexico in relation to the size of the economy.

• Mexico is far from armed conflicts.

[email protected]



Leave a Comment