BY TOBY GOOLEY, MANAGING EDITOR
SUPPLY CHAIN SOUTH OF THE BORDER
strategicinsight
Mexico …
for a change
If you still think
MEXICO HAS AN IMAGE PROBLEM. AND FOR YEARS, ITS NEGAtives—both real and perceived—led U.S. companies to shy away from the
country. Its history of unpredictable regulatory changes, inconsistent customs policies, inefficient distribution, and rampant theft and drug smuggling left shippers, carriers, and third-party logistics companies (3PLs) feeling discouraged and frustrated.
In the end, cheap labor and the cost advantages of both the North
American Free Trade Agreement and the maquiladora program often
tipped the balance in Mexico’s favor. Still, the country’s drawbacks caused
many to pull up stakes and move to China.
Now, some of that lost business is returning. A devalued Mexican peso
coupled with Asia’s rising labor costs and long transit times are making Mexico attractive again.
Shippers also like the notable improvements in logistics services, technologies, and facilities.
Furthermore, Mexico’s government has made a public commitment to modernize infrastructure,
improve security, and liberalize its customs regime.
Some of the old problems persist, but if you’re making decisions about Mexico based on old
assumptions, it’s time to take a fresh look at this dynamic market. Here’s an overview of some recent
developments.
Mexico is the land of
customs delays and
ramshackle trucks, it’s
time for a fresh look.
Transportation and infrastructure
Some of the biggest differences in freight transportation can be seen out on the roads, where well-maintained toll highways managed by private companies have cut transit times for over-the-road
shipments. The trucks that travel Mexico’s highways have changed, too. In years gone by, most trucks
were old, worn-out, cab-overs—many of them taken out of service in the United States and resold in
Mexico. Some of the mom-and-pops that shuttle trailers and containers across the border still
operate aging equipment. But for truckload and less-than-truckload carriers, shiny new
Class 8 tractors are now the norm. “The transportation equipment you see in
