Boosting US-Mexico Trade via Nearshoring

Boosting US-Mexico Trade via Nearshoring

The nearshoring trend is poised to significantly increase US-Mexico trade in 2024. Companies across various sectors are moving their manufacturing operations closer to the United States to reduce costs, mitigate risks, and improve supply chain resilience. Mexico, with its proximity to the US, favorable trade agreements, and skilled workforce, is becoming an attractive destination for these businesses.

One of the primary drivers of this trend is the US-Mexico-Canada Agreement (USMCA), which has replaced NAFTA and offers more favorable conditions for trade. The USMCA reduces tariffs and facilitates smoother transactions across the border, making it easier for companies to operate between the two countries. This has been particularly beneficial for the automotive industry, which relies heavily on cross-border supply chains.

According to C.H. Robinson’s 2023 shipper survey, almost 40% of shippers have already taken advantage of nearshoring or are considering it. The survey highlights that shippers are looking to stabilize their operations amid uncertain economic conditions by moving closer to the US market.


Nearshoring trendNearshoring also helps companies mitigate risks associated with global supply chain disruptions, such as those caused by the COVID-19 pandemic. By relocating operations to Mexico, businesses can reduce their dependency on distant suppliers and ensure more consistent production and delivery schedules. Additionally, Mexico’s growing pool of skilled labor, particularly in manufacturing and engineering, makes it an attractive location for companies seeking to enhance their operational efficiency.

Cross-border freight traffic is expected to see significant growth in 2024, particularly in sectors like automotive, electronics, and fresh produce. Mexico’s strategic location allows for faster and more efficient transportation of goods to the US market, reducing lead times and transportation costs. The expansion of infrastructure, such as ports, highways, and logistics facilities, further supports this growth by enhancing the efficiency of cross-border trade.

Another factor contributing to the rise of nearshoring is the increasing geopolitical tensions and trade uncertainties in other parts of the world. Companies are looking to diversify their supply chains and reduce their reliance on regions that may be prone to political instability or trade disputes. Mexico, with its stable political environment and strong trade relationships, offers a reliable alternative for businesses seeking to secure their supply chains.

In summary, nearshoring to Mexico presents numerous benefits for businesses aiming to enhance their competitiveness and resilience in the global market. By taking advantage of Mexico’s proximity to the US, favorable trade agreements, skilled workforce, and growing infrastructure, companies can reduce costs, mitigate risks, and improve their overall supply chain efficiency. As the trend continues to gain momentum, it is expected to drive significant growth in US-Mexico trade in the coming years.