Proximity to the United States is no longer enough to attract investors to Mexico

Proximity to the United States is no longer enough to attract investors to Mexico

The nearshoringa trend that consists of migrating business or manufacturing activities to a country closer to the consumer market, becomes relevant in an environment such as the one after the pandemic, in which serious doubts arose about the viability of concentrating the production of key inputs in a single country, especially one very far from the manufacturing plants.

This was the case in the automotive industry, that globally was affected by the shortage of components from Asia. To counter this, the nearshoring has been the answer, but its potential might require an additional boost to detonate.

According to Malithi Fernando, ITF analyst, digitization and the search for more sustainable transport are part of the work that should accompany post-pandemic logistics, which is why they also represent an attractive environment for manufacturing companies. , since by 2050 the demand for freight transport is expected to grow 2.6 times worldwide compared to before the pandemic.

“We must align the COVID-19 economic stimulus packages to also combat climate change,” explains the specialist to Expansion during the celebration of the International Transport Forum (ITF).

In addition to a contribution to the environment, an economic benefit is necessary. According to an analysis by the consulting firm CBRE, transportation accounts for up to 70% of logistics spending costs, so it is key to add more storage capacity in regions with the potential to attract more manufacturers.

“We need to change some logistics to use more rail, which is more sustainable than road transport,” says Neil Pedersen, executive director of the Transportation Research Board (TRB). “We’re going to see a lot of changes in the North American region, and I think this is going to be one of the big ones,” he adds.

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Mexico has a particular attraction within the North American region, both due to its proximity to the United States and due to the renewal of its free trade agreement with that country, among other items. But Neil Pedersen, executive director of the Transportation Research Board (TRB), believes that in order to maintain the confidence of investment companies, requires the rule of law.

“Companies make long-term commitments when they have to in terms of manufacturing and supplies. These are industries that want to make sure there really is a commitment,” he concludes.