Amid global supply chain disruptions stemming from COVID-19 and increasingly tense relations with China, more U.S. companies are turning to a neighboring country for manufacturing solutions. Mexico’s manufacturing capabilities have become remarkably competitive against China, which is great news for U.S.-based businesses hoping to save time and money. If you’re in the process of choosing a manufacturing partner, we’re here to help you understand your options. Our team at CaliBaja has an extensive track record of producing high-quality products for a plethora of industries, and we’d love to help you, too. Here, we discuss the top reasons that Mexico is becoming a top choice for nearshoring:
Advantageous Geography
When retail giants like Walmart are turning to Mexico for manufacturing, other businesses should take note. With the cost of shipping soaring and ports clogged with traffic jams, transporting goods from abroad has become both costly and sluggish. Because Mexico and the United States share a border, shipping is simpler, more cost effective, and quicker. Just take into consideration the timeframe: it typically takes about one month to ship a container from China to the U.S., while it can take two weeks or less for goods from Mexico to reach retailers in the U.S. Lead time alone is one of the largest reasons Mexico is rising as a competitor to China in the manufacturing sector.
More Investors Are Backing Mexico
As Mexico gains traction as a major player in manufacturing, American investors are increasingly pouring money into the country. As of 2021, U.S.-based investors put more money into Mexico’s manufacturing capabilities than China’s – a first-time occurrence that’s expected to continue. During the first 10 months of 2022, Mexico exported $382 billion worth of goods to the United States. This is an increase of 20% from the same period in 2021. As more money flows into Mexico, be on the lookout for the country’s manufacturing prowess to grow.
A Shelter From Instability
Ultimately, working with Mexico for manufacturing provides a shelter from instability. We’ve learned a lot from the COVID-19 pandemic, and one of the biggest lessons is to streamline operations whenever possible. We’ve all experienced the frustrations of global supply chain disruption in the past few years, and working with a partner close to home is an excellent strategy for avoiding instability of global events out of our control.
With an increasing number of major brands opting for moving production to Mexico, we’re poised to become an even stronger manufacturing hub. If you’re interested in learning more about contract manufacturing, the CaliBaja team would love to help. It all starts with an initial consultation, so please contact us to discuss your project. We’re looking forward to speaking with you!
