Nearshoring forecast to spice up US-Mexico trade in 2024
Cross-border operators expect 2024 to be a busy 12 months, with more tractor-trailers passing between the US and Mexico each day, carrying every thing from cars and auto parts to electronics and fresh produce.
With shippers attempting to return to normal freight seasonality amid uncertain economic conditions, Mexico is positioned to make the most of potential nearshoring opportunities, in accordance with Sri Laxmana, vice chairman of Americas at freight broker and 3PL giant C.H. Robinson.
“Mexico is a very important region for us for various reasons. We do feel that the macroeconomics and geopolitical landscape of the world is definitely changing,” Laxmana told FreightWaves.
Almost 40% of U.S. shippers have already taken advantage of nearshoring or are considering it, in accordance with C.H. Robinson’s 2023 shipper survey. Laxmana said he wasn’t surprised by the outcomes.
“We definitely have seen volatility in manufacturing here and a few locations world wide attributable to so many various things,” Laxmana said. “I believe the concept about nearshoring began being formulated, since you definitely saw Mexico’s proximity to the US.”
Laxmana has been with C.H. Robinson for 23 years. Prior to working on global forwarding for U.S., Canada and Latin America, Laxmana was vice chairman of worldwide ocean services at the corporate.
“During that point we definitely have seen volatility in manufacturing here and a few locations on the earth,” Laxmana said. “As a result of so many various things, I believe the concept about nearshoring began being formulated, since you definitely saw Mexico’s proximity with the US.”
Laxmana expects nearshoring to extend trade in 2024 attributable to conversations he has had with many purchasers about tapping into the strategy of locating manufacturing capability in Mexico to be closer to the U.S. market.
A few of the aspects causing the provision chains’ shift away from Asia to Mexico include mitigating risk, Laxmana said.
“I believe everybody had the need to amortize risk, and take a look at to think creatively, whether you’re shipping into the U.S. West Coast, moving to the U.S. East Coast or fascinated by manufacturing in a unique location,” Laxmana said. “We’ve seen manufacturing move from China to Southeast Asia. We’ve seen manufacturing for specific verticals going to India, going to Pakistan, going to different locations. So coming back, I do feel Mexico has change into this attractive destination, for various reasons.”
Laxmana said Mexico’s workforce and the many international trade agreements the country has signed with other nations — including the United States-Mexico-Canada-Agreement (USMCA) — are other considerations for shippers trying to shift production.
“The USMCA replaced the North American Free Trade Agreement, and now there’s some favorable conditions for business by reducing tariffs and smoother transactions across the border,” Laxmana said. “Then let’s talk concerning the expert workforce. The actual fact stays, Mexico has a growing pool of expert labor, particularly manufacturing and engineering. Mexico’s workforce is commonly praised for its adaptability, productivity and proficiency in English, as well. It definitely helps the broader connectivity to do what we’re searching for.”
Cross-border freight that is predicted to see significant growth in 2024 starts with auto parts and vehicles, Laxmana said.
“Actually the automotive industry goes without saying for growth,” Laxmana said. “If we take a look at a number of the investments being made, you proceed to see those very secondary original equipment manufacturers proceed to take a position. But growth really will depend on some various factors — resembling what’s the supply for raw materials? If there’s no raw materials, then it’s very difficult to fabricate, so how do you get those raw materials there? I do feel other manufacturing industries are definitely following suit, but they’ve some various factors involved prior to creating those decisions.”
C.H. Robinson is betting big on the continued expansion of commerce between the U.S. and Mexico. In September, the corporate opened considered one of the biggest distribution facilities on the Mexico border in Laredo, Texas.
The 400,000-square-foot cross-dock facility includes 154 dock doors and room for 700 trailers. C.H. Robinson’s distribution center goals to handle as many as 350 shipments a day.
“On average, we handle one in every 10 shipments down in Mexico, so we’ve got a great footprint, we’ve got a great solution,” Laxmana said. “We do feel [the Laredo distribution center] is primed for fulfillment.”
Texas receives $70M grant for hydrogen fuel stations
The state of Texas recently received a $70 million grant to accumulate to 5 hydrogen fueling stations for medium- and heavy-duty trucks in Dallas-Fort Value, Houston, Austin and San Antonio, in accordance with the Federal Highway Administration.
The grant to the North Central Texas Council of Governments from the federal government’s alternative transportation infrastructure program will construct the stations at existing truck stops inside the Interstate 10, 35 and 45 corridors.
The project will help create a hydrogen corridor from Southern California to Texas.
“This funding will help be certain that electric vehicle chargers are accessible, reliable and convenient for American drivers, while creating jobs in charger manufacturing, installation and maintenance for American staff,” Transportation Secretary Pete Buttigieg said in a press release.
Automotive manufacturer pronounces $400M factory in Mexico
China-based Shanghai Unison Aluminium Products Co. recently began construction of its first automotive manufacturing facility in Mexico.
The $400 million factory in town of San Luis Potosi will produce a spread of products, including bumpers, front subframes, instrument panel frames, battery trays and other aluminum auto parts for electric vehicles.
The 1 million-square-foot factory is scheduled to log on by the tip of the 12 months, creating 3,000 jobs. A few of Shanghai Unison’s clients include Tesla, Volvo and BMW. The corporate was founded in 1994.
Texas logistics park receives $1.5M grant to expand services
The TexAmericas Center recently received a $1.5 million grant that can be used to expand its logistics capabilities, in accordance with a news release.
The TexAmericas Center is a mixed-use industrial park within the northeast corner of Texas, about 20 miles west of Texarkana and 180 miles east of Dallas. The middle is near Texas’ borders with Arkansas, Louisiana and Oklahoma.
“We’re thrilled to receive this funding and look ahead to using it for enhancing the rail capabilities on our campuses,” TexAmericas Center CEO Scott Norton said in a press release.
Texarkana is a serious east-west and north-south rail center, with seven rail lines converging in the world and over 125 trains passing through each day. Union Pacific, Kansas City Southern, Texas Northeastern Railroad and Lone Star Rail Automotive Service currently serve TexAmericas and the encircling area.
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