20 June, 2023 | #DatozByDatoz
Various factors have influenced the disruption of supply chains originating from Asian countries, particularly China, including the trade war with the United States, rising costs of warehousing and transportation, disadvantages in relation to trade agreements, among others.
This has placed Mexico in a highly competitive position to become a new epicenter of the supply chain. There are at least four reasons for this advantage: 1) location, bordering the United States, the largest consumer in the world; 2) free trade agreements, such as the USMCA, which give Mexico an advantage over any other country in the world; 3) skilled and specialized workforce, mainly in the border and Bajio regions; 4) potential for the development of industrial infrastructure.
As a result, a series of trends have emerged within the supply chain, in which Mexico participates or can participate, including the well-known nearshoring, friendshroring, allyshoring, anyshoring, and reshoring. These effects are so real in Mexico that the top industrial real estate markets have virtually no availability.
Nearshoring refers to the location of manufacturing processes near the market they intend to serve. The clearest example is the establishment of plants in Mexico to supply the consumer demand of the United States, particularly in the automotive, appliance, technology, and other sectors.
Reshoring, also known as inshoring or onshoring, refers to the process of bringing back production processes to the country of origin of companies in order to avoid disruptions in the supply chains.
Friendshoring, or allyshoring, is the trendy term in global trade. In practice, companies cannot always manufacture or process everything domestically, which means rebuilding the economy through production and service networks among closely linked friendly nations, such as Canada, Mexico, and the United States.
The concept of allyshoring aims to consolidate a supplier program among trading partners.