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Get exclusive intel on trilateral cooperation within the USMCA. See how the US, Canada, and Mexico are working together to dominate the manufacturing landscape.

We deliver informative insights and research on how the three North American economies are collaborating to create the world's most cutting-edge products.

 

Made in North America.

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What is nearshoring?
Nearshoring is the practice of outsourcing business processes or manufacturing to a nearby country. This is often done to reduce costs while maintaining a certain level of control over the outsourced operations.
What are the nearshoring trends?

The primary trend in nearshoring is a growing preference for companies to move manufacturing and business operations closer to their home markets, particularly to neighboring countries, driven by factors like supply chain resilience, cost-effectiveness, faster delivery times, and reduced geopolitical risks, with regions like North America seeing significant activity in nearshoring practices.

What is the difference between nearshoring and offshoring?
Nearshoring and offshoring are both strategies used by companies to outsource business processes or manufacturing, but they differ in terms of geographic location, the level of control involved, and which regional economy it benefits.
Is nearshoring the same as reshoring?

While both nearshoring and reshoring involve a shift in business operations, they differ in their geographic scope. Reshoring entails returning operations to the company’s home country, while nearshoring involves relocating them to a nearby one.

Nearshoring: A guide to benefits & strategies

Nearshoring-domestic-business

A BOOMING MARKET

Drivers to Nearshoring in Mexico

North American manufacturers are facing a unique confluence of trends that is creating historic opportunities for the region.

The three phenomena:

  • Production lines are shifting from Asia to be closer to North American markets
  • The transition from gasoline-powered vehicles to electric vehicles  is requiring a significant transformation of manufacturing capabilities
  • Manufacturers in the U.S. are seeing a great challenge in staffing their operations in the era of flex time, flex space, gaming, and influencing
Nearshoring-advantages

NEARSHORING

The impact of geographical diversification

Geographical diversification is becoming a key strategy for companies seeking to optimize their operations and enhance their competitiveness globally. Western companies, in an effort to get closer to their markets and reduce costs, are relocating part of their operations to Mexican territory.

This movement is driven by:

  • Pursuit of operational efficiencies and lower operating costs
  • Desire to mitigate risks associated with dependence on distant markets, especially in the context of political and trade tensions
  • Long-term strategic considerations on how to position oneself favorably in an uncertain and competitive global market
Nearshoring-Expert-Logistics

Strategic Location

Logistics and the strategic location of inventories

Companies that achieve synergy between the location of their inventories and the preferences of their customers, leveraging market trends and adapting to new realities, will not only survive but thrive. 

The key lies in three important factors: 

  • The ability to anticipate changes
  • Knowing how to adapt quickly to adopt a strategic approach to inventory management
  • Making the right logistics decisions, which will be crucial for long-term success
$ M

of Merchandise Crosses USMCA Borders every Minute

%

of the Content in Mexican Exports to U.S. is Made in the USA

the year Mexico became the Top Trading Partner to the U.S.

%

Growth of Mexico's Industrial Sector more than Double 10-Year Average

$ B

Expected Growth of Sectors Benefiting from USMCA in Next 5 Years

%

YOY Growth of "Nearshoring" in Earnings Calls Since 2022

%

Percent of Trade between USMCA Countries is Intermediate Goods

+ M

Additional Jobs that Could be Created by Nearshoring in Mexico

Sources: Brookings, Wilson Center, USTR, Deloitte, Morgan Stanley, Bloomberg, Brookings, Deloitte

 

What is the "tech-shoring"?

Mexico stands out for its rich human capital and growing specialization in technological sectors, attracting investments in innovative areas such as e-commerce. This trend is called "tech-shorings", similar to nearshoring, but emphasizing Mexico's evolution toward a more diversified economy with greater capacity to attract foreign investments in high-value-added sectors.

Technology clusters in mexico

Nearshoring-technology-clusters-1