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  • Foto del escritorRaul Carbajal

Nearshoring The Turning Point: The Door to Opportunit for Mexico

During the last two or three decades, the offshoring phenomenon – which consists in having production contracts with overseas country suppliers, mainly from Asia - has lost appeal.

Everyday there are more companies that consider relocating this part of their supply chain to a nearer country – in terms of where their base of operations is.

Turning point: In recent years, there has been a phenomenon known as nearshoring.

This consists of companies starting to move their entire production chain, or only a part of it, closer to the end consumer.


Why is it important to Mexico?

Nearshoring is the arrival of foreign investments for bringing production centers and processes closer to a target market and taking advantage of favorable conditions in the destination country, typically one that shares a border or is in close proximity to the company's home country. For example, a company based in the United States might choose to nearshore some of its operations to Mexico. The aim of nearshoring is to take advantage of lower labor and operational costs, while still maintaining close geographic and cultural ties, which can help to streamline communication, reduce language barriers, and facilitate collaboration.

For Mexico and the US, these conditions come mainly from the trade agreement signed by the two countries and Canada (T-MEC).

Trade openness We have 14 free trade agreements with 50 countries, including the United States

and Canada.

Young population

50.3% of the Mexican population is under 30 years old, while in China it's only 35.2% and

in Vietnam it's 44.3%.

Skilled labor at competitive costs Between 2014 and 2021, real wages in our country increased by an average of 0.2%,

while in China it increased by 6.1% and in Vietnam by 5.9%.

Low time and transportation costs In March 2022, shipping a container from China to the United States cost over $16,000, while from Mexico to the United States

it cost only $800.

The door to opportunity is open for companies looking for a North American manufacturing location that offers quality, low-cost labor and proximity to the U.S. and Canada markets. Mexico is the most cost-effective option of all nearshoring locations in this region because it has the lowest wage rates in Latin America and has a highly skilled workforce with a high level of technical expertise.

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