More U.S. imports from China are arriving at the Mexican coast, opting for a cross-border haul north towards their U.S. destinations. The routing trend has ushered in growth for ports of entry along the U.S.-Mexico border, while also reminding stakeholders of Mexico’s increased role in American trade and supply chains.
More inbound volumes making a stop south of the border
Indexes from transportation data platform SONAR reveal inbound container bookings from China to Mexico are up 127 percent over the past five years and 24 percent year-over-year.
In comparison, all-water routings from China to the U.S. have increased 36 percent over the same five-year period and 11 percent year-over-year.
The electric gains in import activity via Mexico reinforces the growth of nearshoring practices within American businesses. Nearshoring, an operating model where manufacturing and production are strategically sourced from closer, neighboring, countries, has captivated many sectors. Long beholden to faraway markets, namely China, it has become more common in the post-pandemic environment for businesses to have shifted their sourcing to Mexico.
The automotive industry has been a notable practitioner of nearshoring in manufacturing. Automakers have placed large investments in constructing their own factories or forging strategic partnerships with Mexican ones. This includes Tesla’s vision of building a gigafactory near Monterrey, a reported $10 billion investment by the automaker.
The surge in volumes from China to Mexico fairly consist of work-in-progress goods, like parts and components, to support production needs south of the border.
Aside from U.S. nearshoring interests, there is speculation that Chinese manufacturers are also routing to Mexico in an attempt to avoid U.S. tariffs, which have been become increasingly aggressive against China.
Commerce ENABLE Protocol: Leverage
Supply chain investment in Mexico has become an increasingly relevant box to check when it comes to evaluating the best value for business costs. It may not be the fit for all companies, but if it is an avenue that one explores, the perfect plan must include the right cross-border logistics provider.
Commerce Express, Inc. ENABLEs our customers to leverage our considerable purchasing power among a wide range of transportation, and other supply chain partners. Commerce Express is well-versed in stewarding our clients around evolving Customs regulations, a tightened cross-border market, and the inherent risks of shipping products between two countries.
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